FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF TEEKAY LNG PARTNERS L.P., AS AMENDED
Execution
Copy
FIRST
AMENDED AND RESTATED
AGREEMENT
OF LIMITED PARTNERSHIP
OF
AS AMENDED
NYC:103990_15.DOC
TABLE
OF CONTENTS
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ARTICLE
I
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DEFINITIONS
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Section
1.1
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Definitions.
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1
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Section
1.2
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Construction.
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22
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ARTICLE
II
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ORGANIZATION
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Section
2.1
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Formation.
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22
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Section
2.2
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Name.
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22
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Section
2.3
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Registered
Office; Registered Agent; Principal Office; Other Offices
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22
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Section
2.4
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Purpose
and Business.
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23
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Section
2.5
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Powers.
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23
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Section
2.6
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Power
of Attorney.
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23
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Section
2.7
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Term.
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25
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Section
2.8
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Title
to Partnership Assets.
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25
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ARTICLE
III
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RIGHTS
OF LIMITED PARTNERS
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Section
3.1
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Limitation
of Liability.
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25
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Section
3.2
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Management
of Business.
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26
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Section
3.3
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Outside
Activities of the Limited Partners.
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26
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Section
3.4
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Rights
of Limited Partners.
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26
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ARTICLE
IV
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CERTIFICATES;
RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION OF
PARTNERSHIP INTERESTS
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Section
4.1
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Certificates.
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27
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Section
4.2
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Mutilated,
Destroyed, Lost or Stolen Certificates.
|
27
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Section
4.3
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Record
Holders.
|
28
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Section
4.4
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Transfer
Generally.
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29
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Section
4.5
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Registration
and Transfer of Limited Partner Interests.
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29
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Section
4.6
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Transfer
of the General Partner’s General Partner Interest.
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30
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Section
4.7
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Transfer
of Incentive Distribution Rights.
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31
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Section
4.8
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Restrictions
on Transfers.
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▇▇
|
▇▇▇▇▇▇
▇▇▇ PARTNERS L.P.
FIRST
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, AS AMENDED
NYC:103990_15.DOC
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ARTICLE
V
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CAPITAL
CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
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Section
5.1
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Organizational
Contributions.
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32
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Section
5.2
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Contributions
by the General Partner and its Affiliates.
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32
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Section
5.3
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Contributions
by Initial Limited Partners and Distributions to the General Partner
and
its Affiliates.
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33
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Section
5.4
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Interest
and Withdrawal.
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33
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|
Section
5.5
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Capital
Accounts.
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33
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Section
5.6
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Issuances
of Additional Partnership Securities.
|
36
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Section
5.7
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Limitations
on Issuance of Additional Partnership Securities.
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37
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Section
5.8
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Conversion
of Subordinated Units.
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37
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Section
5.9
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Limited
Preemptive Right.
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39
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Section
5.10
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Splits
and Combinations.
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39
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Section
5.11
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Fully
Paid and Non-Assessable Nature of Limited Partner
Interests.
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40
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ARTICLE
VI
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ALLOCATIONS
AND DISTRIBUTIONS
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Section
6.1
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Allocations
for Capital Account Purposes.
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40
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Section
6.2
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Allocations
for Tax Purposes.
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47
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Section
6.3
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Requirement
and Characterization of Distributions; Distributions to Record
Holders.
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49
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Section
6.4
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Distributions
of Available Cash from Operating Surplus.
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50
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Section
6.5
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Distributions
of Available Cash from Capital Surplus.
|
52
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Section
6.6
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Adjustment
of Minimum Quarterly Distribution and Target Distribution
Levels.
|
52
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Section
6.7
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Special
Provisions Relating to the Holders of Subordinated Units.
|
52
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Section
6.8
|
Special
Provisions Relating to the Holders of Incentive Distribution
Rights.
|
53
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Section
6.9
|
Entity-Level
Taxation.
|
53
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ARTICLE
VII
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MANAGEMENT
AND OPERATION OF BUSINESS
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Section
7.1
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Management.
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54
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Section
7.2
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Certificate
of Limited Partnership.
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56
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Section
7.3
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Restrictions
on the General Partner’s Authority.
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56
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Section
7.4
|
Reimbursement
of the General Partner.
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57
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Section
7.5
|
Outside
Activities.
|
▇▇
|
▇▇▇▇▇▇
▇▇▇ PARTNERS L.P.
FIRST
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, AS AMENDED
NYC:103990_15.DOC
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Section
7.6
|
Loans
from the General Partner; Loans or Contributions from the Partnership
or
Group Members.
|
59
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Section
7.7
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Indemnification.
|
60
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|
Section
7.8
|
Liability
of Indemnitees.
|
61
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|
Section
7.9
|
Resolution
of Conflicts of Interest; Standards of Conduct and Modification of
Duties.
|
62
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Section
7.10
|
Other
Matters Concerning the General Partner.
|
64
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|
Section
7.11
|
Purchase
or Sale of Partnership Securities.
|
64
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Section
7.12
|
Registration
Rights of the General Partner and its Affiliates.
|
64
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Section
7.13
|
Reliance
by Third Parties.
|
66
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ARTICLE
VIII
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BOOKS,
RECORDS, ACCOUNTING AND REPORTS
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Section
8.1
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Records
and Accounting.
|
67
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|
Section
8.2
|
Fiscal
Year.
|
67
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Section
8.3
|
Reports.
|
67
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ARTICLE
IX
|
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TAX
MATTERS
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Section
9.1
|
Tax
Returns and Information.
|
68
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Section
9.2
|
Tax
Elections.
|
68
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Section
9.3
|
Tax
Controversies.
|
68
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Section
9.4
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Withholding.
|
69
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Section
9.5
|
Conduct
of Operations.
|
69
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ARTICLE
X
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ADMISSION
OF PARTNERS
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Section
10.1
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Admission
of Initial Limited Partners.
|
69
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Section
10.2
|
Admission
of Substituted Limited Partners.
|
69
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|
Section
10.3
|
Admission
of Successor General Partner.
|
70
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|
Section
10.4
|
Admission
of Additional Limited Partners.
|
70
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|
Section
10.5
|
Amendment
of Agreement and Certificate of Limited Partnership.
|
71
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ARTICLE
XI
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WITHDRAWAL
OR REMOVAL OF PARTNERS
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|
Section
11.1
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Withdrawal
of the General Partner.
|
71
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Section
11.2
|
Removal
of the General Partner.
|
72
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Section
11.3
|
Interest
of Departing Partner and Successor General Partner.
|
▇▇
|
▇▇▇▇▇▇
▇▇▇ PARTNERS L.P.
FIRST
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, AS AMENDED
NYC:103990_15.DOC
|
Section
11.4
|
Termination
of Subordination Period, Conversion of Subordinated Units and
Extinguishment of Cumulative Common Unit Arrearages.
|
74
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|
Section
11.5
|
Withdrawal
of Limited Partners.
|
75
|
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ARTICLE
XII
|
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|
DISSOLUTION
AND LIQUIDATION
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|
Section
12.1
|
Dissolution.
|
75
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|
Section
12.2
|
Continuation
of the Business of the Partnership After Dissolution.
|
75
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|
Section
12.3
|
Liquidator.
|
76
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|
Section
12.4
|
Liquidation.
|
77
|
|
Section
12.5
|
Cancellation
of Certificate of Limited Partnership.
|
77
|
|
Section
12.6
|
Return
of Contributions.
|
77
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|
Section
12.7
|
Waiver
of Partition.
|
78
|
|
Section
12.8
|
Capital
Account Restoration.
|
78
|
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ARTICLE
XIII
|
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|
AMENDMENT
OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
|
||
|
Section
13.1
|
Amendments
to be Adopted Solely by the General Partner.
|
78
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|
Section
13.2
|
Amendment
Procedures.
|
79
|
|
Section
13.3
|
Amendment
Requirements.
|
80
|
|
Section
13.4
|
Special
Meetings.
|
80
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|
Section
13.5
|
Notice
of a Meeting.
|
81
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|
Section
13.6
|
Record
Date.
|
81
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|
Section
13.7
|
Adjournment.
|
81
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|
Section
13.8
|
Waiver
of Notice; Approval of Meeting; Approval of Minutes.
|
81
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|
Section
13.9
|
Quorum
and Voting.
|
82
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|
Section
13.10
|
Conduct
of a Meeting.
|
82
|
|
Section
13.11
|
Action
Without a Meeting.
|
83
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|
Section
13.12
|
Right
to Vote and Related Matters.
|
83
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ARTICLE
XIV
|
||
|
MERGER
|
||
|
Section
14.1
|
Authority.
|
84
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|
Section
14.2
|
Procedure
for Merger or Consolidation.
|
84
|
|
Section
14.3
|
Approval
by Limited Partners of Merger or Consolidation.
|
85
|
|
Section
14.4
|
Certificate
of Merger.
|
86
|
|
Section
14.5
|
Amendment
of Partnership Agreement.
|
86
|
|
Section
14.6
|
Effect
of Merger.
|
▇▇
|
▇▇▇▇▇▇
▇▇▇ PARTNERS L.P.
FIRST
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, AS AMENDED
NYC:103990_15.DOC
|
ARTICLE
XV
|
||
|
RIGHT
TO ACQUIRE LIMITED PARTNER INTERESTS
|
||
|
Section
15.1
|
Right
to Acquire Limited Partner Interests.
|
87
|
|
ARTICLE
XVI
|
||
|
GENERAL
PROVISIONS
|
||
|
Section
16.1
|
Addresses
and Notices.
|
89
|
|
Section
16.2
|
Further
Action.
|
89
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|
Section
16.3
|
Binding
Effect.
|
89
|
|
Section
16.4
|
Integration.
|
90
|
|
Section
16.5
|
Creditors.
|
90
|
|
Section
16.6
|
Waiver.
|
90
|
|
Section
16.7
|
Counterparts.
|
90
|
|
Section
16.8
|
Applicable
Law.
|
90
|
|
Section
16.9
|
Invalidity
of Provisions.
|
90
|
|
Section
16.10
|
Consent
of Partners.
|
▇▇
|
▇▇▇▇▇▇
▇▇▇ PARTNERS L.P.
FIRST
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, AS AMENDED
NYC:103990_15.DOC
FIRST
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF TEEKAY LNG PARTNERS
L.P., AS AMENDED
THIS
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF TEEKAY LNG
PARTNERS L.P. dated as of May 10, 2005, as amended as of May 31, 2006, is
entered into by and between Teekay GP L.L.C., a ▇▇▇▇▇▇▇▇ Islands limited
liability company, as the General Partner, and Teekay Shipping Corporation,
a
▇▇▇▇▇▇▇▇ Islands corporation, as the Organizational Limited Partner, together
with any other Persons who become Partners in the Partnership or parties hereto
as provided herein. In consideration of the covenants, conditions and agreements
contained herein, the parties hereto hereby agree as follows:
ARTICLE
I
DEFINITIONS
|
Section
1.1
|
Definitions.
|
The
following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in this
Agreement.
“Acquisition”
means
any transaction in which any Group Member acquires (through an asset
acquisition, merger, stock acquisition or other form of investment) control
over
all or a portion of the assets, properties or business of another Person for
the
purpose of increasing the operating capacity or revenues of the Partnership
Group from the operating capacity or revenues of the Partnership Group existing
immediately prior to such transaction.
“Additional
Book Basis”
means
the portion of any remaining Carrying Value of an Adjusted Property that is
attributable to positive adjustments made to such Carrying Value as a result
of
Book-Up Events. For purposes of determining the extent that Carrying Value
constitutes Additional Book Basis:
(i) Any
negative adjustment made to the Carrying Value of an Adjusted Property as a
result of either a Book-Down Event or a Book-Up Event shall first be deemed
to
offset or decrease that portion of the Carrying Value of such Adjusted Property
that is attributable to any prior positive adjustments made thereto pursuant
to
a Book-Up Event or Book-Down Event.
(ii) If
Carrying Value that constitutes Additional Book Basis is reduced as a result
of
a Book-Down Event and the Carrying Value of other property is increased as
a
result of such Book-Down Event, an allocable portion of any such increase in
Carrying Value shall be treated as Additional Book Basis; provided,
that
the amount treated as Additional Book Basis pursuant hereto as a result of
such
Book-Down Event shall not exceed the amount by which the Aggregate Remaining
Net
Positive Adjustments after such Book-Down Event exceeds the remaining Additional
Book Basis attributable to all of the Partnership’s Adjusted Property after such
Book-Down Event (determined without regard to the application of this clause
(ii) to such Book-Down Event).
NYC:103990_15.DOC
1
“Additional
Book Basis Derivative Items”
means
any Book Basis Derivative Items that are computed with reference to Additional
Book Basis. To the extent that the Additional Book Basis attributable to all
of
the Partnership’s Adjusted Property as of the beginning of any taxable period
exceeds the Aggregate Remaining Net Positive Adjustments as of the beginning
of
such period (the “Excess Additional Book Basis”), the Additional Book Basis
Derivative Items for such period shall be reduced by the amount that bears
the
same ratio to the amount of Additional Book Basis Derivative Items determined
without regard to this sentence as the Excess Additional Book Basis bears to
the
Additional Book Basis as of the beginning of such period.
“Additional
Limited Partner”
means
a
Person admitted to the Partnership as a Limited Partner pursuant to Section
10.4
and who
is shown as such on the books and records of the Partnership.
“Adjusted
Capital Account”
means
the Capital Account maintained for each Partner as of the end of each fiscal
year of the Partnership, (a) increased by any amounts that such Partner is
obligated to restore under the standards set by Treasury Regulation Section
1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under Treasury
Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b) decreased by (i)
the
amount of all losses and deductions that, as of the end of such fiscal year,
are
reasonably expected to be allocated to such Partner in subsequent years under
Sections 704(e)(2) and 706(d) of the Code and Treasury Regulation Section
1.751-1(b)(2)(ii), and (ii) the amount of all distributions that, as of the
end
of such fiscal year, are reasonably expected to be made to such Partner in
subsequent years in accordance with the terms of this Agreement or otherwise
to
the extent they exceed offsetting increases to such Partner’s Capital Account
that are reasonably expected to occur during (or prior to) the year in which
such distributions are reasonably expected to be made (other than increases
as a
result of a minimum gain chargeback pursuant to Section
6.1(d)(i)
or
6.1(d)(ii)).
The
foregoing definition of Adjusted Capital Account is intended to comply with
the
provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith. The “Adjusted Capital Account” of a Partner
in respect of a General Partner Interest, a Common Unit, a Subordinated Unit
or
an Incentive Distribution Right or any other Partnership Interest shall be
the
amount which such Adjusted Capital Account would be if such General Partner
Interest, Common Unit, Subordinated Unit, Incentive Distribution Right or other
Partnership Interest were the only interest in the Partnership held by such
Partner from and after the date on which such General Partner Interest, Common
Unit, Subordinated Unit, Incentive Distribution Right or other Partnership
Interest was first issued.
“Adjusted
Operating Surplus”
means,
with respect to any period, Operating Surplus generated with respect to such
period (a) less (i) any net increase in Working Capital Borrowings with respect
to such period and (ii) any net reduction in cash reserves for Operating
Expenditures with respect to such period to the extent such reduction does
not
relate to an Operating Expenditure made with respect to such period, and (b)
plus (i) any net decrease in Working Capital Borrowings with respect to such
period, and (ii) any net increase in cash reserves for Operating Expenditures
with respect to such period to the extent such reserve is required by any debt
instrument for the repayment of principal, interest or premium. Adjusted
Operating Surplus does not include that portion of Operating Surplus included
in
clauses (a)(i) and (a)(ii) of the definition of Operating Surplus.
NYC:103990_15.DOC
2
“Adjusted
Property”
means
any property the Carrying Value of which has been adjusted pursuant to
Section
5.5(d)(i)
or
5.5(d)(ii).
“Affiliate”
means,
with respect to any Person, any other Person that directly or indirectly through
one or more intermediaries controls, is controlled by or is under common control
with, the Person in question. As used herein, the term “control” means the
possession, direct or indirect, of the power to direct or cause the direction
of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
“Aggregate
Remaining Net Positive Adjustments”
means,
as of the end of any taxable period, the sum of the Remaining Net Positive
Adjustments of all the Partners.
“Agreed
Allocation”
means
any allocation, other than a Required Allocation, of an item of income, gain,
loss or deduction pursuant to the provisions of Section
6.1,
including, without limitation, a Curative Allocation (if appropriate to the
context in which the term “Agreed Allocation” is used).
“Agreed
Value”
of
any
Contributed Property means the fair market value of such property or other
consideration at the time of contribution as determined by the General Partner.
The General Partner shall use such method as it determines to be appropriate
to
allocate the aggregate Agreed Value of Contributed Properties contributed to
the
Partnership in a single or integrated transaction among each separate property
on a basis proportional to the fair market value of each Contributed
Property.
“Agreement”
means
this First Amended and Restated Agreement
of Limited Partnership of Teekay LNG Partners L.P., as it may be amended,
supplemented or restated from time to time.
“Assignee”
means
a
Person to whom one or more Limited Partner Interests have been transferred
in a
manner permitted under this Agreement and who has executed and delivered a
Transfer Application as required by this Agreement, but who has not been
admitted as a Substituted Limited Partner.
“Associate”
means,
when used to indicate a relationship with any Person, (a) any corporation or
organization of which such Person is a director, officer or partner or is,
directly or indirectly, the owner of 20% or more of any class of voting stock
or
other voting interest; (b) any trust or other estate in which such Person has
at
least a 20% beneficial interest or as to which such Person serves as trustee
or
in a similar fiduciary capacity; and (c) any relative or spouse of such Person,
or any relative of such spouse, who has the same principal residence as such
Person.
“Available
Cash”
means,
with respect to any Quarter ending prior to the Liquidation Date:
(a) the
sum
of (i) all cash and cash equivalents of the Partnership Group (or the
Partnership's proportionate share of cash and cash equivalents in the case
of
Subsidiaries that are not wholly owned) on hand at the end of such Quarter,
and
(ii) all additional cash and cash equivalents of the Partnership Group (or
the
Partnership's proportionate share of cash and cash equivalents in the case
of
Subsidiaries that are not wholly owned) on hand on the date of
NYC:103990_15.DOC
3
determination
of Available Cash with respect to such Quarter resulting from Working Capital
Borrowings made subsequent to the end of such Quarter, less
(b) the
amount of any cash reserves (or the Partnership's proportionate share of cash
reserves in the case of Subsidiaries that are not wholly owned) established
by
the General Partner to (i) provide for the proper conduct of the business of
the
Partnership Group (including reserves for future capital expenditures and for
anticipated future credit needs of the Partnership Group) subsequent to such
Quarter, (ii) comply with applicable law or any loan agreement, security
agreement, mortgage, debt instrument or other agreement or obligation to which
any Group Member is a party or by which it is bound or its assets are subject
or
(iii) provide funds for distributions under Section
6.4
or
6.5
in
respect of any one or more of the next four Quarters; provided,
however,
that
the General Partner may not establish cash reserves pursuant to (iii) above
if
the effect of such reserves would be that the Partnership is unable to
distribute the Minimum Quarterly Distribution on all Common Units, plus any
Cumulative Common Unit Arrearage on all Common Units, with respect to such
Quarter; and, provided further, that disbursements made by a Group Member or
cash reserves established, increased or reduced after the end of such Quarter
but on or before the date of determination of Available Cash with respect to
such Quarter shall be deemed to have been made, established, increased or
reduced, for purposes of determining Available Cash, within such Quarter if
the
General Partner so determines.
“Board
of Directors”
means
the board of directors or managers of a corporation or limited liability
company, as applicable, or if a limited partnership, the board of directors
or
board of managers of the general partner of such limited
partnership.
“Book
Basis Derivative Items”
means
any item of income, deduction, gain or loss included in the determination of
Net
Income or Net Loss that is computed with reference to the Carrying Value of
an
Adjusted Property (e.g., depreciation, depletion, or gain or loss with respect
to an Adjusted Property).
“Book-Down
Event”
means
an event that triggers a negative adjustment to the Capital Accounts of the
Partners pursuant to Section
5.5(d).
“Book-Tax
Disparity”
means
with respect to any item of Contributed Property or Adjusted Property, as of
the
date of any determination, the difference between the Carrying Value of such
Contributed Property or Adjusted Property and the adjusted basis thereof for
United States federal income tax purposes as of such date. A Partner’s share of
the Partnership’s Book-Tax Disparities in all of its Contributed Property and
Adjusted Property will be reflected by the difference between such Partner’s
Capital Account balance as maintained pursuant to Section
5.5
and the
hypothetical balance of such Partner’s Capital Account computed as if it had
been maintained strictly in accordance with federal income tax accounting
principles.
“Book-Up
Event”
means
an event that triggers a positive adjustment to the Capital Accounts of the
Partners pursuant to Section
5.5(d).
NYC:103990_15.DOC
4
“Business
Day”
means
Monday through Friday of each week, except that a legal holiday recognized
as
such by the government of the United States of America or the State of New
York
shall not be regarded as a Business Day.
“Capital
Account”
means
the capital account maintained for a Partner pursuant to Section
5.5.
The
“Capital
Account”
of
a
Partner in respect of a General Partner Interest, a Common Unit, a Subordinated
Unit, an Incentive Distribution Right or any other Partnership Interest shall
be
the amount which such Capital Account would be if such General Partner Interest,
Common Unit, Subordinated Unit, Incentive Distribution Right or other
Partnership Interest were the only interest in the Partnership held by such
Partner from and after the date on which such General Partner Interest, Common
Unit, Subordinated Unit, Incentive Distribution Right or other Partnership
Interest was first issued.
“Capital
Contribution”
means
any cash, cash equivalents or the Net Agreed Value of Contributed Property
that
a Partner contributes to the Partnership.
“Capital
Improvement”
means
any (a) addition or improvement to the capital assets owned by any Group Member
or (b) acquisition of existing, or the construction of new, capital assets
(including, without limitation, liquefied natural gas carriers, crude oil
tankers and related assets), in each case if such addition, improvement,
acquisition or construction is made to increase the operating capacity or
revenues of the Partnership Group from the operating capacity or revenues of
the
Partnership Group existing immediately prior to such addition, improvement,
acquisition or construction.
“Capital
Surplus”
has
the
meaning assigned to such term in Section
6.3(a).
“Carrying
Value”
means
(a) with respect to a Contributed Property, the Agreed Value of such property
reduced (but not below zero) by all depreciation, amortization and cost recovery
deductions charged to the Partners’ and Assignees’ Capital Accounts in respect
of such Contributed Property, and (b) with respect to any other Partnership
property, the adjusted basis of such property for United States federal income
tax purposes, all as of the time of determination. The Carrying Value of any
property shall be adjusted from time to time in accordance with Sections
5.5(d)(i)
and
5.5(d)(ii)
and to
reflect changes, additions or other adjustments to the Carrying Value for
dispositions and acquisitions of Partnership properties, as deemed appropriate
by the General Partner.
“Cause”
means
a
court of competent jurisdiction has entered a final, non-appealable judgment
finding the General Partner liable for actual fraud, gross negligence or willful
or wanton misconduct in its capacity as a general partner of the
Partnership.
“Certificate”
means
a
certificate (i) substantially in the form of Exhibit A to this Agreement, (ii)
issued in global form in accordance with the rules and regulations of the
Depositary or (iii) in such other form as may be adopted by the General Partner,
issued by the Partnership evidencing ownership of one or more Common Units
or a
certificate, in such form as may be adopted by the General Partner, issued
by
the Partnership evidencing ownership of one or more other Partnership
Securities.
NYC:103990_15.DOC
5
“Certificate
of Limited Partnership”
means
the Certificate of Limited Partnership of the Partnership filed with the
Registrar of Corporations of the ▇▇▇▇▇▇▇▇ Islands as referenced in Section
7.2
as such Certificate of Registration may be amended, supplemented or restated
from time to time.
“Citizenship
Certification”
means
a
properly completed certificate in such form as may be specified by the General
Partner by which an Assignee or a Limited Partner certifies that he (and if
he
is a nominee holding for the account of another Person, that to the best of
his
knowledge such other Person) is an Eligible Citizen.
“Claim”
(as
used in Section
7.12(c))
has the
meaning assigned to such term in Section
7.12(c).
“Closing
Date”
means
the first date on which Common Units are sold by the Partnership to the
Underwriters pursuant to the provisions of the Underwriting
Agreement.
“Closing
Price”
has
the
meaning assigned to such term in Section
15.1(a).
“Code”
means
the United States Internal Revenue Code of 1986, as amended and in effect from
time to time. Any reference herein to a specific section or sections of the
Code
shall be deemed to include a reference to any corresponding provision of any
successor law.
“Combined
Interest”
has
the
meaning assigned to such term in Section
11.3(a).
“Commences
Commercial Service”
and
“Commenced
Commercial Service”
shall
mean the date a Capital Improvement is first put into service following
completion of construction and testing.
“Commission”
means
the United States Securities and Exchange Commission.
“Common
Unit”
means
a
Partnership Security representing a fractional part of the Partnership Interests
of all Limited Partners and Assignees, and having the rights and obligations
specified with respect to Common Units in this Agreement. The term “Common Unit”
does not refer to a Subordinated Unit prior to its conversion into a Common
Unit
pursuant to the terms hereof.
“Common
Unit Arrearage”
means,
with respect to any Common Unit, whenever issued, as to any Quarter within
the
Subordination Period, the excess, if any, of (a) the Minimum Quarterly
Distribution with respect to a Common Unit in respect of such Quarter over
(b)
the sum of all Available Cash distributed with respect to a Common Unit in
respect of such Quarter pursuant to Section
6.4(a)(i).
“Conflicts
Committee”
means
a
committee of the Board of Directors of the General Partner composed entirely
of
two or more directors who are not (a) security holders, officers or employees
of
the General Partner, (b) officers, directors or employees of any Affiliate
of
the General Partner or (c) holders of any ownership interest in the Partnership
Group other than Common Units and who also meet the independence standards
required of directors who serve on an audit committee of a board of directors
established by the Securities Exchange Act of
NYC:103990_15.DOC
6
1934,
as
amended, and the rules and regulations of the Commission thereunder and by
the
National Securities Exchange on which the Common Units are listed.
“Contributed
Property”
means
each property or other asset, in such form as may be permitted by the ▇▇▇▇▇▇▇▇
Islands Act, but excluding cash, contributed to the Partnership. Once the
Carrying Value of a Contributed Property is adjusted pursuant to Section
5.5(d),
such
property shall no longer constitute a Contributed Property, but shall be deemed
an Adjusted Property.
“Contribution
Agreement”
means
that certain Contribution, Conveyance and Assumption Agreement, dated as of
the
Closing Date, among the General Partner, the Partnership, the Operating Company,
Teekay Shipping Corporation and the other parties named therein, together with
the additional conveyance documents and instruments contemplated or referenced
thereunder.
“Cumulative
Common Unit Arrearage”
means,
with respect to any Common Unit, whenever issued, and as of the end of any
Quarter, the excess, if any, of (a) the sum resulting from adding together
the
Common Unit Arrearage as to an Initial Common Unit for each of the Quarters
within the Subordination Period ending on or before the last day of such Quarter
over (b) the sum of any distributions theretofore made pursuant to Section
6.4(a)(ii)
and the
second sentence of Section
6.5
with
respect to an Initial Common Unit (including any distributions to be made in
respect of the last of such Quarters).
“Curative
Allocation”
means
any allocation of an item of income, gain, deduction, loss or credit pursuant
to
the provisions of Section
6.1(d)(xi).
“Current
Market Price”
has
the
meaning assigned to such term in Section
15.1(a).
“Departing
Partner”
means
a
former General Partner from and after the effective date of any withdrawal
or
removal of such former General Partner pursuant to Section
11.1
or
11.2.
“Depositary”
means,
with respect to any Units issued in global form, The Depository Trust Company
and its successors and permitted assigns.
“Economic
Risk of Loss”
has
the
meaning set forth in Treasury Regulation Section 1.752-2(a).
“Eligible
Citizen”
means
a
Person qualified to own interests in real property in jurisdictions in which
any
Group Member does business or proposes to do business from time to time, and
whose status as a Limited Partner or Assignee does not or would not subject
such
Group Member to a significant risk of cancellation or forfeiture of any of
its
properties or any interest therein.
“Estimated
Incremental Quarterly Tax Amount”
has
the
meaning assigned to such term in Section
6.9.
“Estimated
Maintenance Capital Expenditures”
means
an estimate made in good faith by the Board of Directors of the General Partner
(with the concurrence of the Conflicts Committee)
NYC:103990_15.DOC
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of
the
average quarterly Maintenance Capital Expenditures that the Partnership will
incur over the long term. The Board of Directors of the General Partner (with
the concurrence of the Conflicts Committee) will be permitted to make such
estimate in any manner it determines reasonable. The estimate will be made
at
least annually and whenever an event occurs that is likely to result in a
material adjustment to the amount of Maintenance Capital Expenditures on a
long-term basis. The Partnership shall disclose to its Partners any change
in
the amount of Estimated Maintenance Capital Expenditures in its reports made
in
accordance with Section
8.3
to the
extent not previously disclosed. Except as provided in the definition of
Subordination Period, any adjustments to Estimated Maintenance Capital
Expenditures shall be prospective only.
“Expansion
Capital Expenditures”
means
cash expenditures for Acquisitions or Capital Improvements. Expansion Capital
Expenditures shall not include Maintenance Capital Expenditures. Expansion
Capital Expenditures shall include interest (and related fees) on debt incurred
and distributions on equity incurred, in each case, to finance the construction
of a Capital Improvement and paid during the period beginning on the date that
the Partnership enters into a Capital Improvement and ending on the earlier
to
occur of the date that such Capital Improvement Commences Commercial Service
or
the date that such Capital Improvement is abandoned or disposed of. Debt
incurred or equity issued to fund such construction period interest payments,
or
such construction period distributions on equity paid during such period shall
also be deemed to be debt or equity, as the case may be, incurred to finance
the
construction of a Capital Improvement.
“Event
of Withdrawal”
has
the
meaning assigned to such term in Section
11.1(a).
“Final
Subordinated Units”
has
the
meaning assigned to such term in Section
6.1(d)(x).
“First
Liquidation Target Amount”
has
the
meaning assigned to such term in Section
6.1(c)(i)(D).
“First
Target Distribution”
means
$0.4625 per Unit per Quarter (or, with respect to the period commencing on
the
Closing Date and ending on June 30, 2005, it means the product of $0.4625
multiplied by a fraction of which the numerator is the number of days in such
period, and of which the denominator is 91), subject to adjustment in accordance
with Sections 6.6
and
6.9.
“Fully
Diluted Basis”
means,
when calculating the number of Outstanding Units for any period, a basis that
includes, in addition to the Outstanding Units, all Partnership Securities
and
options, rights, warrants and appreciation rights relating to an equity interest
in the Partnership (a) that are convertible into or exercisable or
exchangeable for Units that are senior to or pari passu with the Subordinated
Units, (b) whose conversion, exercise or exchange price is less than the
Current Market Price on the date of such calculation, (c) that may be
converted into or exercised or exchanged for such Units prior to or during
the
Quarter immediately following the end of the period for which the calculation
is
being made without the satisfaction of any contingency beyond the control of
the
holder other than the payment of consideration and the compliance with
administrative mechanics applicable to such conversion, exercise or exchange
and
(d) that were not converted into or exercised or exchanged for such Units during
the period
NYC:103990_15.DOC
8
for
which
the calculation is being made; provided,
that
for purposes of determining the number of Outstanding Units on a Fully Diluted
Basis when calculating whether the Subordination Period has ended or
Subordinated Units are entitled to convert into Common Units pursuant to
Section
5.8,
such
Partnership Securities, options, rights, warrants and appreciation rights shall
be deemed to have been Outstanding Units only for the four Quarters that
comprise the last four Quarters of the measurement period; provided,
further, that if consideration will be paid to any Group Member in connection
with such conversion, exercise or exchange, the number of Units to be included
in such calculation shall be that number equal to the difference between
(i) the number of Units issuable upon such conversion, exercise or exchange
and (ii) the number of Units that such consideration would purchase at the
Current Market Price.
“General
Partner”
means
Teekay GP L.L.C.,
a
▇▇▇▇▇▇▇▇ Islands limited liability company, and its successors and permitted
assigns as general partner of the Partnership.
“General
Partner Interest”
means
the ownership interest of the General Partner in the Partnership (in its
capacity as a general partner without reference to any Limited Partner Interest
held by it) which may be evidenced by Partnership Securities or a combination
thereof or interest therein, and includes any and all benefits to which the
General Partner is entitled as provided in this Agreement, together with all
obligations of the General Partner to comply with the terms and provisions
of
this Agreement.
“Group”
means
a
Person that with or through any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting (except voting pursuant to a revocable proxy or consent given to such
Person in response to a proxy or consent solicitation made to 10 or more
Persons) or disposing of any Partnership Securities with any other Person that
beneficially owns, or whose Affiliates or Associates beneficially own, directly
or indirectly, Partnership Securities.
“Group
Member”
means
a
member of the Partnership Group.
“Group
Member Agreement”
means
the partnership agreement of any Group Member, other than the Partnership,
that
is a limited or general partnership, the limited liability company agreement
of
any Group Member that is a limited liability company, the certificate of
incorporation and bylaws or similar organizational documents of any Group Member
that is a corporation, the joint venture agreement or similar governing document
of any Group Member that is a joint venture and the governing or organizational
or similar documents of any other Group Member that is a Person other than
a
limited or general partnership, limited liability company, corporation or joint
venture, as such may be amended, supplemented or restated from time to
time.
“Holder”
as
used
in Section
7.12,
has the
meaning assigned to such term in Section
7.12(a).
“Incentive
Distribution Right”
means
a
non-voting Limited Partner Interest issued to the General Partner, which
Partnership Interest will confer upon the holder thereof only the rights and
obligations specifically provided in this Agreement with respect to Incentive
Distribution
NYC:103990_15.DOC
9
Rights
(and no other rights otherwise available to or other obligations of a holder
of
a Partnership Interest). Notwithstanding anything in this Agreement to the
contrary, the holder of an Incentive Distribution Right shall not be entitled
to
vote such Incentive Distribution Right on any Partnership matter except as
may
otherwise be required by law.
“Incentive
Distributions”
means
any amount of cash distributed to the holders of the Incentive Distribution
Rights pursuant to Sections 6.4(a)(v),
(vi)
and
(vii)
and
6.4(b)(iii),
(iv)
and
(v).
“Indemnified
Persons”
has
the
meaning assigned to such term in Section
7.12(c).
“Indemnitee”
means
(a) the General Partner, (b) any Departing Partner, (c) any Person who is or
was
an Affiliate of the General Partner or any Departing Partner, (d) any Person
who
is or was a member, partner, director, officer, fiduciary or trustee of any
Person which any of the preceding clauses of this definition describes, (e)
any
Person who is or was serving at the request of the General Partner or any
Departing Partner or any Affiliate of the General Partner or any Departing
Partner as an officer, director, member, partner, fiduciary or trustee of
another Person, provided that that Person shall not be an Indemnitee by reason
of providing, on a fee-for-services basis, trustee, fiduciary or custodial
services, and (f) any Person the General Partner designates as an “Indemnitee”
for purposes of this Agreement.
“Initial
Common Units”
means
the Common Units sold in the Initial Offering.
“Initial
Limited Partners”
means
Teekay Shipping Corporation and the General Partner (with respect to the
Incentive Distribution Rights received by it pursuant to Section
5.2),
and
the Underwriters, in each case upon being admitted to the Partnership in
accordance with Section
10.1.
“Initial
Offering”
means
the initial offering and sale of Common Units to the public, as described in
the
Registration Statement.
“Initial
Unit Price”
means
(a) with respect to the Common Units and the Subordinated Units, the initial
public offering price per Common Unit at which the Underwriters offered the
Common Units to the public for sale as set forth on the cover page of the
prospectus included as part of the Registration Statement and first issued
at or
after the time the Registration Statement first became effective or (b) with
respect to any other class or series of Units, the price per Unit at which
such
class or series of Units is initially sold by the Partnership, as determined
by
the General Partner, in each case adjusted as the General Partner determines
to
be appropriate to give effect to any distribution, subdivision or combination
of
Units.
“Interim
Capital Transactions”
means
the following transactions if they occur prior to the Liquidation Date: (a)
borrowings, refinancings or refundings of indebtedness (other than Working
Capital Borrowings and other than for items purchased on open account in the
ordinary course of business) by any Group Member and sales of debt securities
of
any Group Member; (b) sales of equity interests of any Group Member (including
the Common Units sold to the Underwriters pursuant to the exercise of the
Over-Allotment Option; (c) sales or other voluntary or involuntary dispositions
of any assets of any Group Member other than (i) sales or other dispositions
of
inventory, accounts receivable and other assets in the ordinary course of
business,
NYC:103990_15.DOC
10
and
(ii)
sales or other dispositions of assets as part of normal retirements or
replacements; (d) the termination of interest rate swap agreements; (e) capital
contributions; and (f) corporate reorganizations or restructurings.
“Issue
Price”
means
the price at which a Unit is purchased from the Partnership, after reflecting
any sales commission or underwriting discount charged to the
Partnership.
“Limited
Partner”
means,
unless the context otherwise requires, (a) the Organizational Limited Partner
prior to its withdrawal from the Partnership, each Initial Limited Partner,
each
Substituted Limited Partner, each Additional Limited Partner and any Departing
Partner upon the change of its status from General Partner to Limited Partner
pursuant to Section
11.3
or (b)
solely for purposes of Articles V,
VI,
VII
and
IX,
each
Assignee; provided,
however,
that
when the term “Limited Partner” is used herein in the context of any vote or
other approval, including without limitation Article XIII,
such
term shall not, solely for such purpose, include any holder of an Incentive
Distribution Right except as may otherwise be required by law.
“Limited
Partner Interest”
means
the ownership interest of a Limited Partner or Assignee in the Partnership,
which may be evidenced by Common Units, Subordinated Units, Incentive
Distribution Rights or other Partnership Securities or a combination thereof
or
interest therein, and includes any and all benefits to which such Limited
Partner or Assignee is entitled as provided in this Agreement, together with
all
obligations of such Limited Partner or Assignee to comply with the terms and
provisions of this Agreement; provided,
however,
that
when the term “Limited Partner Interest” is used herein in the context of any
vote or other approval, including without limitation Article XIII,
such
term shall not, solely for such purpose, include any holder of an Incentive
Distribution Right except as may otherwise be required by law.
“Liquidation
Date”
means
(a) in the case of an event giving rise to the dissolution of the Partnership
of
the type described in clauses (a) and (b) of the first sentence of Section
12.2,
the
date on which the applicable time period during which the holders of Outstanding
Units have the right to elect to continue the business of the Partnership has
expired without such an election being made, and (b) in the case of any other
event giving rise to the dissolution of the Partnership, the date on which
such
event occurs.
“Liquidator”
means
one or more Persons selected by the General Partner to perform the functions
described in Section
12.4.
“Maintenance
Capital Expenditures”
means
cash expenditures (including expenditures for the addition or improvement to
the
capital assets owned by any Group Member or for the acquisition of existing,
or
the construction of new, capital assets) if such expenditure is made to
maintain, including over the long term, the operating capacity of the capital
assets of the Partnership Group, as such assets existed at the time of the
expenditure. Maintenance Capital Expenditures shall not include Expansion
Capital Expenditures. Maintenance Capital Expenditures shall include interest
(and related fees) on debt incurred and distributions on equity incurred, in
each case, to finance the construction of a replacement asset and paid during
the period beginning on the date that the Partnership enters into a binding
obligation to commence constructing a replacement asset and ending on the
earlier to occur of the date that such replacement asset Commences Commercial
Service or the date that such replacement asset is
NYC:103990_15.DOC
11
abandoned
or disposed of. Debt incurred to pay or equity issued to fund the construction
period interest payments, or such construction period distributions on equity
shall also be deemed to be debt or equity, as the case may be, incurred to
finance the construction of a replacement asset.
“▇▇▇▇▇▇▇▇
Islands Act”
means
the Limited Partnership Act of the Republic of the ▇▇▇▇▇▇▇▇ Islands, as amended,
supplemented or restated from time to time, and any successor to such
statute.
“Minimum
Quarterly Distribution”
means
$0.4125 per Unit per Quarter (or with respect to the period commencing on the
Closing Date and ending on June 30, 2005, it means the product of $0.4125
multiplied by a fraction of which the numerator is the number of days in such
period and of which the denominator is 91), subject to adjustment in accordance
with Sections 6.6
and
6.9.
“National
Securities Exchange”
means
an exchange registered with the Commission under Section 6(a) of the Securities
Exchange Act of 1934, as amended, supplemented or restated from time to time,
and any successor to such statute, or the Nasdaq Stock Market or any successor
thereto.
“Net
Agreed Value”
means,
(a) in the case of any Contributed Property, the Agreed Value of such property
reduced by any liabilities either assumed by the Partnership upon such
contribution or to which such property is subject when contributed, and (b)
in
the case of any property distributed to a Partner or Assignee by the
Partnership, the Partnership’s Carrying Value of such property (as adjusted
pursuant to Section
5.5(d)(ii))
at the
time such property is distributed, reduced by any indebtedness either assumed
by
such Partner or Assignee upon such distribution or to which such property is
subject at the time of distribution, in either case, as determined under Section
752 of the Code.
“Net
Income”
means,
for any taxable year, the excess, if any, of the Partnership’s items of income
and gain (other than those items taken into account in the computation of Net
Termination Gain or Net Termination Loss) for such taxable year over the
Partnership’s items of loss and deduction (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss)
for
such taxable year. The items included in the calculation of Net Income shall
be
determined in accordance with Section
5.5(b)
and
shall not include any items specially allocated under Section
6.1(d);
provided,
that
the determination of the items that have been specially allocated under
Section
6.1(d)
shall be
made as if Section
6.1(d)(xii)
were not
in this Agreement.
“Net
Loss”
means,
for any taxable year, the excess, if any, of the Partnership’s items of loss and
deduction (other than those items taken into account in the computation of
Net
Termination Gain or Net Termination Loss) for such taxable year over the
Partnership’s items of income and gain (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss)
for
such taxable year. The items included in the calculation of Net Loss shall
be
determined in accordance with Section
5.5(b)
and
shall not
NYC:103990_15.DOC
12
include
any items specially allocated under Section
6.1(d);
provided,
that
the determination of the items that have been specially allocated under
Section
6.1(d)
shall be
made as if Section
6.1(d)(xii)
were not
in this Agreement.
“Net
Positive Adjustments”
means,
with respect to any Partner, the excess, if any, of the total positive
adjustments over the total negative adjustments made to the Capital Account
of
such Partner pursuant to Book-Up Events and Book-Down Events.
“Net
Termination Gain”
means,
for any taxable year, the sum, if positive, of all items of income, gain, loss
or deduction recognized by the Partnership after the Liquidation Date. The
items
included in the determination of Net Termination Gain shall be determined in
accordance with Section
5.5(b)
and
shall not include any items of income, gain or loss specially allocated under
Section
6.1(d).
“Net
Termination Loss”
means,
for any taxable year, the sum, if negative, of all items of income, gain, loss
or deduction recognized by the Partnership after the Liquidation Date. The
items
included in the determination of Net Termination Loss shall be determined in
accordance with Section
5.5(b)
and
shall not include any items of income, gain or loss specially allocated under
Section
6.1(d).
“Nonrecourse
Built-in Gain”
means
with respect to any Contributed Properties or Adjusted Properties that are
subject to a mortgage or pledge securing a Nonrecourse Liability, the amount
of
any taxable gain that would be allocated to the Partners pursuant to Sections
6.2(b)(i)(A),
6.2(b)(ii)(A)
and
6.2(b)(iii)
if such
properties were disposed of in a taxable transaction in full satisfaction of
such liabilities and for no other consideration.
“Nonrecourse
Deductions”
means
any and all items of loss, deduction or expenditure (including, without
limitation, any expenditure described in Section 705(a)(2)(B) of the Code)
that,
in accordance with the principles of Treasury Regulation Section 1.704-2(b),
are
attributable to a Nonrecourse Liability.
“Nonrecourse
Liability”
has
the
meaning set forth in Treasury Regulation Section 1.752-1(a)(2).
“Notice
of Election to Purchase”
has
the
meaning assigned to such term in Section
15.1(b).
“Omnibus
Agreement”
means
that Omnibus Agreement, dated as of the Closing Date, among Teekay Shipping
Corporation, the General Partner, the Partnership, and the Operating
Company.
“Operating
Company”
means
Teekay LNG Operating L.L.C.,
a
▇▇▇▇▇▇▇▇ Islands limited liability company, and any successors
thereto.
“Operating
Company Agreement”
means
the Limited Liability Company Agreement of the Operating Company, as it may
be
amended, supplemented or restated from time to time.
NYC:103990_15.DOC
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“Operating
Expenditures”
means
all Partnership Group (or the Partnership's proportionate share of expenditures
in the case of Subsidiaries that are not wholly owned) cash expenditures,
including, but not limited to, taxes, reimbursements of the General Partner,
repayment of Working Capital Borrowings, debt service payments and capital
expenditures, subject to the following:
(a) Payments
(including prepayments and prepayment penalties) of principal of and premium
on
indebtedness other than Working Capital Borrowings shall not constitute
Operating Expenditures; and
(b) Operating
Expenditures shall not include (i) Expansion Capital Expenditures or actual
Maintenance Capital Expenditures, but shall include Estimated Maintenance
Capital Expenditures, (ii) payment of transaction expenses (including taxes)
relating to Interim Capital Transactions or (iii) distributions to
Partners.
Where
capital expenditures consist of both Maintenance Capital Expenditures and
Expansion Capital Expenditures, the General Partner, with the concurrence of
the
Conflicts Committee, shall determine the allocation between the portion
consisting of Maintenance Capital Expenditures and the portion consisting of
Expansion Capital Expenditures, and the period over which the Maintenance
Capital Expenditures will be deducted as an Operating Expenditure in calculating
Operating Surplus.
“Operating
Surplus”
means,
with respect to any period ending prior to the Liquidation Date, on a cumulative
basis and without duplication,
(a) the
sum
of (i) $10 million, (ii) all cash and cash equivalents of the Partnership Group
(or the Partnership's proportionate share of cash and cash equivalents in the
case of Subsidiaries that are not wholly owned) on hand as of the close of
business on the Closing Date, other than cash reserved to terminate interest
rate swap agreements, (iii) all cash receipts of the Partnership Group (or
the
Partnership's proportionate share of cash receipts in the case of Subsidiaries
that are not wholly owned) for the period beginning on the Closing Date and
ending on the last day of such period, other than cash receipts from Interim
Capital Transactions (except to the extent specified in Section
6.5),
(iv)
all cash receipts of the Partnership Group (or the Partnership's proportionate
share of cash receipts in the case of Subsidiaries that are not wholly owned)
after the end of such period but on or before the date of determination of
Operating Surplus with respect to such period resulting from Working Capital
Borrowings and (v) the amount of distributions paid on equity issued in
connection with the construction of a Capital Improvement or replacement asset
and paid during the period beginning on the date that the Partnership enters
into a binding obligation to commence construction of such Capital Improvement
or replacement asset and ending on the earlier to occur of the date that such
Capital Improvement or replacement asset Commences Commercial Service or the
date that it is abandoned or disposed of (equity issued to fund the construction
period interest payments on debt incurred (including periodic net payments
under
related interest rate swap agreements), or construction period distributions
on
equity issued, to finance the construction of a Capital Improvement or
replacement asset shall also be deemed to be equity issued to finance the
construction of a Capital Improvement or replacement asset for purposes of
this
clause (v)), less
NYC:103990_15.DOC
14
(b) the
sum
of (i) Operating Expenditures for the period beginning on the Closing Date
and
ending on the last day of such period and (ii) the amount of cash reserves
(or
the Partnership's proportionate share of cash reserves in the case of
Subsidiaries that are not wholly owned) established by the General Partner
to
provide funds for future Operating Expenditures; provided,
however,
that
disbursements made (including contributions to a Group Member or disbursements
on behalf of a Group Member) or cash reserves established, increased or reduced
after the end of such period but on or before the date of determination of
Available Cash with respect to such period shall be deemed to have been made,
established, increased or reduced, for purposes of determining Operating
Surplus, within such period if the General Partner so determines.
Notwithstanding
the foregoing, “Operating
Surplus”
with
respect to the Quarter in which the Liquidation Date occurs and any subsequent
Quarter shall equal zero.
“Opinion
of Counsel”
means
a
written opinion of counsel (who may be regular counsel to the Partnership or
the
General Partner or any of its Affiliates) acceptable to the General
Partner.
“Option
Closing Date”
means
the date or dates on which any Common Units are sold by the Partnership to
the
Underwriters upon exercise of the Over-Allotment Option.
“Organizational
Limited Partner”
means
Teekay Shipping Corporation in its capacity as the organizational limited
partner of the Partnership pursuant to this Agreement.
“Outstanding”
means,
with respect to Partnership Securities, all Partnership Securities that are
issued by the Partnership and reflected as outstanding on the Partnership’s
books and records as of the date of determination; provided,
however,
that if
at any time any Person or Group (other than the General Partner or its
Affiliates) beneficially owns 20% or more of any Outstanding Partnership
Securities of any class then Outstanding, all Partnership Securities owned
by
such Person or Group shall not be voted on any matter and shall not be
considered to be Outstanding when sending notices of a meeting of Limited
Partners to vote on any matter (unless otherwise required by law), calculating
required votes, determining the presence of a quorum or for other similar
purposes under this Agreement, except that Common Units so owned shall be
considered to be Outstanding for purposes of Section
11.1(b)(iv)
(such
Common Units shall not, however, be treated as a separate class of Partnership
Securities for purposes of this Agreement); provided,
further, that the foregoing limitation shall not apply (i) to any Person or
Group who acquired 20% or more of any Outstanding Partnership Securities of
any
class then Outstanding directly from the General Partner or its Affiliates,
(ii)
to any Person or Group who acquired 20% or more of any Outstanding Partnership
Securities of any class then Outstanding directly or indirectly from a Person
or
Group described in clause (i) provided that the General Partner shall have
notified such Person or Group in writing that such limitation shall not apply,
or (iii) to any Person or Group who acquired 20% or more of any Partnership
Securities issued by the Partnership with the prior approval of the board of
directors of the General Partner.
“Over-Allotment
Option”
means
the over-allotment option granted to the Underwriters by the Partnership
pursuant to the Underwriting Agreement.
NYC:103990_15.DOC
15
“Partner
Nonrecourse Debt”
has
the
meaning set forth in Treasury Regulation Section 1.704-2(b)(4).
“Partner
Nonrecourse Debt Minimum Gain”
has
the
meaning set forth in Treasury Regulation Section 1.704-2(i)(2).
“Partner
Nonrecourse Deductions”
means
any and all items of loss, deduction or expenditure (including, without
limitation, any expenditure described in Section 705(a)(2)(B) of the Code)
that,
in accordance with the principles of Treasury Regulation Section 1.704-2(i),
are
attributable to a Partner Nonrecourse Debt.
“Partners”
means
the General Partner and the Limited Partners.
“Partnership”
means
Teekay LNG Partners L.P., a ▇▇▇▇▇▇▇▇ Islands limited partnership, and any
successors thereto.
“Partnership
Group”
means
the Partnership and its Subsidiaries treated as a single consolidated
entity.
“Partnership
Interest”
means
an interest in the Partnership, which shall include the General Partner Interest
and Limited Partner Interests.
“Partnership
Minimum Gain”
means
that amount determined in accordance with the principles of Treasury Regulation
Section 1.704-2(d).
“Partnership
Security”
means
any class or series of equity interest in the Partnership (but excluding any
options, rights, warrants and appreciation rights relating to an equity interest
in the Partnership), including without limitation, Common Units, Subordinated
Units and Incentive Distribution Rights.
“Percentage
Interest”
means
as of any date of determination (a) as to the General Partner (in its capacity
as General Partner without reference to any Limited Partner Interests held
by
it), 2.0%, (b) as to any Unitholder or Assignee holding Units, the product
obtained by multiplying (i) 98% less the percentage applicable to paragraph
(c)
by (ii) the quotient obtained by dividing (A) the number of Units held by such
Unitholder or Assignee by (B) the total number of all Outstanding Units, and
(c)
as to the holders of additional Partnership Securities issued by the Partnership
in accordance with Section
5.6,
the
percentage established as a part of such issuance. The Percentage Interest
with
respect to an Incentive Distribution Right shall at all times be
zero.
“Person”
means
an individual or a corporation, firm, limited liability company, partnership,
joint venture, trust, unincorporated organization, association, governmental
agency or political subdivision thereof or other entity.
“Per
Unit Capital Amount”
means,
as of any date of determination, the Capital Account, stated on a per Unit
basis, underlying any Unit held by a Person other than the General Partner
or
any Affiliate of the General Partner who holds Units.
NYC:103990_15.DOC
16
“Pro
Rata”
means
(a) when modifying Units or any class thereof, apportioned equally among all
designated Units in accordance with their relative Percentage Interests, (b)
when modifying Partners and Assignees or Record Holders, apportioned among
all
Partners and Assignees or Record Holders in accordance with their relative
Percentage Interests and (c) when modifying holders of Incentive Distribution
Rights, apportioned equally among all holders of Incentive Distribution Rights
in accordance with the relative number or percentage of Incentive Distribution
Rights held by each such holder.
“Purchase
Date”
means
the date determined by the General Partner as the date for purchase of all
Outstanding Limited Partner Interests of a certain class (other than Limited
Partner Interests owned by the General Partner and its Affiliates) pursuant
to
Article
XV.
“Quarter”
means,
unless the context requires otherwise, a fiscal quarter, or, with respect to
the
first fiscal quarter after the Closing Date, the portion of such fiscal quarter
after the Closing Date, of the Partnership.
“Recapture
Income”
means
any gain recognized by the Partnership (computed without regard to any
adjustment required by Section 734 or Section 743 of the Code) upon the
disposition of any property or asset of the Partnership, which gain is
characterized as ordinary income because it represents the recapture of
deductions previously taken with respect to such property or asset.
“Record
Date”
means
the date established by the General Partner for determining (a) the identity
of
the Record Holders entitled to notice of, or to vote at, any meeting of Limited
Partners or entitled to vote by ballot or give approval of Partnership action
in
writing without a meeting or entitled to exercise rights in respect of any
lawful action of Limited Partners or (b) the identity of Record Holders entitled
to receive any report or distribution or to participate in any
offer.
“Record
Holder”
means
the Person in whose name a Common Unit is registered on the books of the
Transfer Agent as of the opening of business on a particular Business Day,
or
with respect to other Partnership Securities, the Person in whose name any
such
other Partnership Security is registered on the books that the General Partner
has caused to be kept as of the opening of business on such Business
Day.
“Registrar”
means
the Registrar of Corporations as defined in Section 4 of the ▇▇▇▇▇▇▇▇ Islands
Business Corporation Act.
“Registration
Statement”
means
the Registration Statement on Form F-1 (Registration No. 333-120727) as it
has
been or as it may be amended or supplemented from time to time, filed by the
Partnership with the Commission under the Securities Act to register the
offering and sale of the Common Units in the Initial Offering.
“Remaining
Net Positive Adjustments”
means
as of the end of any taxable period, (i) with respect to the Unitholders holding
Common Units or Subordinated Units, the excess of (a) the Net Positive
Adjustments of the Unitholders holding Common Units or Subordinated Units as
of
the end of such period over (b) the sum of those Partners’ Share of Additional
Book Basis Derivative Items for each prior taxable period, (ii) with respect
to
the General Partner (as holder of the General Partner Interest), the excess
of
(a) the Net Positive Adjustments of the General
NYC:103990_15.DOC
17
Partner
as of the end of such period over (b) the sum of the General Partner’s Share of
Additional Book Basis Derivative Items with respect to the General Partner
Interest for each prior taxable period, and (iii) with respect to the holders
of
Incentive Distribution Rights, the excess of (a) the Net Positive Adjustments
of
the holders of Incentive Distribution Rights as of the end of such period over
(b) the sum of the Share of Additional Book Basis Derivative Items of the
holders of the Incentive Distribution Rights for each prior taxable
period.
“Required
Allocations”
means
(a) any limitation imposed on any allocation of Net Losses or Net Termination
Losses under Section
6.1(b)
or
6.1(c)(ii)
and (b)
any allocation of an item of income, gain, loss or deduction pursuant to
Section
6.1(d)(i),
6.1(d)(ii),
6.1(d)(iv),
6.1(d)(vii)
or
6.1(d)(ix).
“Residual
Gain” or “Residual Loss”
means
any item of gain or loss, as the case may be, of the Partnership recognized
for
United States federal income tax purposes resulting from a sale, exchange or
other disposition of a Contributed Property or Adjusted Property, to the extent
such item of gain or loss is not allocated pursuant to Section
6.2(b)(i)(A)
or
6.2(b)(ii)(A),
respectively, to eliminate Book-Tax Disparities.
“Second
Liquidation Target Amount”
has
the
meaning assigned to such term in Section
6.1(c)(i)(E).
“Second
Target Distribution”
means
$0.5375 per Unit per Quarter (or, with respect to the period commencing on
the
Closing Date and ending on June 30, 2005, it means the product of $0.5375
multiplied by a fraction of which the numerator is equal to the number of days
in such period and of which the denominator is 91), subject to adjustment in
accordance with Sections 6.6
and
6.9.
“Securities
Act”
means
the Securities Act of 1933, as amended, supplemented or restated from time
to
time and any successor to such statute.
“Share
of Additional Book Basis Derivative Items”
means
in connection with any allocation of Additional Book Basis Derivative Items
for
any taxable period, (i) with respect to the Unitholders holding Common Units
or
Subordinated Units, the amount that bears the same ratio to such Additional
Book
Basis Derivative Items as the Unitholders’ Remaining Net Positive Adjustments as
of the end of such period bears to the Aggregate Remaining Net Positive
Adjustments as of that time, (ii) with respect to the General Partner (as holder
of the General Partner Interest), the amount that bears the same ratio to such
additional Book Basis Derivative Items as the General Partner’s Remaining Net
Positive Adjustments as of the end of such period bears to the Aggregate
Remaining Net Positive Adjustment as of that time, and (iii) with respect to
the
Partners holding Incentive Distribution Rights, the amount that bears the same
ratio to such Additional Book Basis Derivative Items as the Remaining Net
Positive Adjustments of the Partners holding the Incentive Distribution Rights
as of the end of such period bears to the Aggregate Remaining Net Positive
Adjustments as of that time.
“Special
Approval”
means
approval by a majority of the members of the Conflicts Committee.
NYC:103990_15.DOC
18
“Subordinated
Unit”
means
a
Unit representing a fractional part of the Partnership Interests of all Limited
Partners and Assignees and having the rights and obligations specified with
respect to Subordinated Units in this Agreement. The term “Subordinated Unit” as
used herein does not refer to a Common Unit. A Subordinated Unit that is
convertible into a Common Unit shall not constitute a Common Unit until such
conversion occurs.
“Subordination
Period”
means
the period commencing on the Closing Date and ending on the first to occur
of
the following dates:
(a) the
first
day of any Quarter beginning after March 31, 2010 in respect of which (i) (A)
distributions of Available Cash from Operating Surplus on each of the
Outstanding Common Units and Subordinated Units and any other Outstanding Units
that are senior or equal in right of distribution to the Subordinated Units
with
respect to each of the three consecutive, non-overlapping four-Quarter periods
immediately preceding such date equaled or exceeded the sum of the Minimum
Quarterly Distribution on all Outstanding Common Units and Subordinated Units
and any other Outstanding Units that are senior or equal in right of
distribution to the Subordinated Units during such periods and (B) the Adjusted
Operating Surplus generated during each of the three consecutive,
non-overlapping four-Quarter periods immediately preceding such date equaled
or
exceeded the sum of the Minimum Quarterly Distribution on all of the Common
Units and Subordinated Units and any other Units that are senior or equal in
right of distribution to the Subordinated Units that were Outstanding during
such periods on a Fully Diluted Basis, plus the related distribution on the
General Partner Interest, during such periods and (ii) there are no Cumulative
Common Unit Arrearages; and
(b) the
date
on which the General Partner is removed as general partner of the Partnership
upon the requisite vote by holders of Outstanding Units under circumstances
where Cause does not exist and Units held by the General Partner and its
Affiliates are not voted in favor of such removal.
For
purposes of determining whether the test in subclause (a)(i)(B) above has been
satisfied, Adjusted Operating Surplus will be adjusted upwards or downwards
if
the Conflicts Committee determines in good faith that the amount of Estimated
Maintenance Capital Expenditures used in the determination of Adjusted Operating
Surplus in subclause (a)(i)(B) was materially incorrect, based on circumstances
prevailing at the time of original determination of Estimated Maintenance
Capital Expenditures, for any one or more of the preceding three four-Quarter
periods.
“Subsidiary”
means,
with respect to any Person, (a) a corporation of which more than 50% of the
voting power of shares entitled (without regard to the occurrence of any
contingency) to vote in the election of directors or other governing body of
such corporation is owned, directly or indirectly, at the date of determination,
by such Person, by one or more Subsidiaries (as defined, but excluding
subsection (d) of the definition) of such Person or a combination thereof,
(b) a
partnership (whether general or limited) in which such Person or a Subsidiary
(as defined, but excluding subsection (d) of the definition) of such Person
is,
at the date of determination, a general or limited partner of such partnership,
but only if more than 50% of the partnership interests of such partnership
(considering all of the partnership interests of the partnership as a single
class) is owned, directly or indirectly, at the date of determination, by such
Person, by one
NYC:103990_15.DOC
19
or
more
Subsidiaries (as defined, but excluding subsection (d) of the definition) of
such Person, or a combination thereof, or (c) any other Person (other than
a
corporation or a partnership) in which such Person, one or more Subsidiaries
of
such Person, or a combination thereof, directly or indirectly, at the date
of
determination, has (i) at least a majority ownership interest or (ii) the power
to elect or direct the election of a majority of the directors or other
governing body of such Person, or (d) any other Person in which such Person,
one
or more Subsidiaries (as defined, but excluding subsection (d) of the
definition) of such Person, or a combination thereof, directly or indirectly,
at
the date of determination, has (i) less than a majority ownership interest
or
(ii) less than the power to elect or direct the election of a majority of the
directors or other governing body of such Person, provided that (A) such Person,
one or more Subsidiaries (as defined, but excluding this subsection (d) of
the
definition) of such Person, or a combination thereof, directly or indirectly,
at
the date of the determination, has at least a 20% ownership interest in such
other Person, (B) such Person accounts for such other Person (under U.S. GAAP,
as in effect on the later of the date of investment in such other Person or
material expansion of the operations of such other Person) on a consolidated
or
equity accounting basis, (C) such Person has directly or indirectly material
negative control rights regarding such other Person including over such other
Person’s ability to materially expand its operations beyond that contemplated at
the date of investment in such other Person, and (D) such other Person is (i)
formed and maintained for the sole purpose of owning or leasing, operating
and
chartering no more than 10 vessels for a period of no more than 40 years, and
(ii) obligated under its constituent documents, or as a result of a unanimous
agreement of its owners, to distribute to its owners all of its income on at
least an annual basis (less any cash reserves that are approved by such
Person).
“Substituted
Limited Partner”
means
a
Person who is admitted as a Limited Partner to the Partnership pursuant to
Section
10.2
in place
of and with all the rights of a Limited Partner and who is shown as a Limited
Partner on the books and records of the Partnership.
“Teekay
Restricted Businesses”
has
the
meaning assigned to such term in the Omnibus Agreement.
“Third
Liquidation Target Amount”
has
the
meaning assigned to such term in Section
6.1(c)(i)(F).
“Third
Target Distribution”
means
$0.65 per Unit per Quarter (or, with respect to the period commencing on the
Closing Date and ending on June 30, 2005, it means the product of $0.65
multiplied by a fraction of which the numerator is equal to the number of days
in such period and of which the denominator is 91), subject to adjustment in
accordance with Sections 6.6
and
6.9.
“Trading
Day”
has
the
meaning assigned to such term in Section
15.1(a).
“Transfer”
has
the
meaning assigned to such term in Section
4.4(a).
“Transfer
Agent”
means
such bank, trust company or other Person (including the General Partner or
one
of its Affiliates) as shall be appointed from time to time by the Partnership
to
act as registrar and transfer agent for the Common Units; provided,
that if
no Transfer Agent is
NYC:103990_15.DOC
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specifically
designated for any other Partnership Securities, the General Partner shall
act
in such capacity.
“Transfer
Application”
means
an application and agreement for transfer of Units in the form set forth on
the
back of a Certificate or in a form substantially to the same effect in a
separate instrument.
“Underwriter”
means
each Person named as an underwriter in Schedule I to the Underwriting Agreement
who purchases Common Units pursuant thereto.
“Underwriting
Agreement”
means
the Underwriting Agreement dated May 4, 2005 among the Underwriters, the
Partnership, the General Partner, the Operating Company, and Teekay Shipping
Corporation, providing for the purchase of Common Units by such
Underwriters.
“Unit”
means
a
Partnership Security that is designated as a “Unit” and shall include Common
Units and Subordinated Units but shall not include (i) a General Partner
Interest or (ii) Incentive Distribution Rights.
“Unitholders”
means
the holders of Common Units and Subordinated Units.
“Unit
Majority”
means,
during the Subordination Period, at least a majority of the Outstanding Common
Units (excluding Common Units owned by the General Partner and its Affiliates)
voting as a class and at least a majority of the Outstanding Subordinated Units
voting as a class, and after the end of the Subordination Period, at least
a
majority of the Outstanding Common Units.
“Unit
Register” means
the
register of the Partnership for the registration and transfer of Limited
Partnership Interests as provided in Section 4.5.
“Unpaid
MQD”
has
the
meaning assigned to such term in Section
6.1(c)(i)(B).
“Unrealized
Gain”
attributable to any item of Partnership property means, as of any date of
determination, the excess, if any, of (a) the fair market value of such property
as of such date (as determined under Section
5.5(d))
over
(b) the Carrying Value of such property as of such date (prior to any adjustment
to be made pursuant to Section
5.5(d)
as of
such date).
“Unrealized
Loss”
attributable to any item of Partnership property means, as of any date of
determination, the excess, if any, of (a) the Carrying Value of such property
as
of such date (prior to any adjustment to be made pursuant to Section
5.5(d)
as of
such date) over (b) the fair market value of such property as of such date
(as
determined under Section
5.5(d)).
“Unrecovered
Capital”
means
at any time, with respect to a Unit, the Initial Unit Price less the sum of
all
distributions constituting Capital Surplus theretofore made in respect of an
Initial Common Unit and any distributions of cash (or the Net Agreed Value
of
any distributions in kind) in connection with the dissolution and liquidation
of
the Partnership theretofore made in respect of an Initial Common Unit, adjusted
as the General Partner determines to be appropriate to give effect to any
distribution, subdivision or combination of such Units.
NYC:103990_15.DOC
21
“U.S.
GAAP”
means
United States generally accepted accounting principles consistently
applied.
“Withdrawal
Opinion of Counsel”
has
the
meaning assigned to such term in Section
11.1(b).
“Working
Capital Borrowings”
means
borrowings used solely for working capital purposes or to pay distributions
to
Partners made pursuant to a credit facility or other arrangement to the extent
such borrowings are required to be reduced to a relatively small amount each
year (or for the year in which the Initial Offering is consummated, the 12-month
period beginning on the Closing Date) for an economically meaningful period
of
time.
|
Section
1.2
|
Construction.
|
Unless
the context requires otherwise: (a) any pronoun used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs shall include the plural and vice versa;
(b)
references to Articles and Sections refer to Articles and Sections of this
Agreement; and (c) the term “include” or “includes” means includes, without
limitation, and “including” means including, without limitation.
ARTICLE
II
ORGANIZATION
|
Section
2.1
|
Formation.
|
The
General Partner and the Organizational Limited Partner have previously formed
the Partnership as a limited partnership pursuant to the provisions of the
▇▇▇▇▇▇▇▇ Islands Act and hereby amend and restate the original Agreement of
Limited Partnership of Teekay LNG Partners L.P. in its entirety. This amendment
and restatement shall become effective on the date of this Agreement. Except
as
expressly provided to the contrary in this Agreement, the rights, duties
(including fiduciary duties), liabilities and obligations of the Partners and
the administration, dissolution and termination of the Partnership shall be
governed by the ▇▇▇▇▇▇▇▇ Islands Act. All Partnership Interests shall constitute
personal property of the owner thereof for all purposes and a Partner has no
interest in specific Partnership property.
|
Section
2.2
|
Name.
|
The
name
of the Partnership shall be “Teekay LNG Partners L.P.” The Partnership’s
business may be conducted under any other name or names as determined by the
General Partner, including the name of the General Partner. The words “Limited
Partnership” or the letters “L.P.,” or similar words or letters shall be
included in the Partnership’s name where necessary for the purpose of complying
with the laws of any jurisdiction that so requires. The General Partner may
change the name of the Partnership at any time and from time to time and shall
notify the Limited Partners of such change in the next regular communication
to
the Limited Partners.
NYC:103990_15.DOC
22
Section
2.3 Registered
Office; Registered Agent; Principal Office; Other Offices
Unless
and until changed by the General Partner, the registered office of the
Partnership in the ▇▇▇▇▇▇▇▇ Islands shall be located at Trust Company Complex,
Ajeltake Island, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, and the
registered agent for service of process on the Partnership in the ▇▇▇▇▇▇▇▇
Islands at such registered office shall be The Trust Company of the ▇▇▇▇▇▇▇▇
Islands, Inc. The principal office of the Partnership shall be located at Teekay
Shipping Limited, TK House, Bayside Executive Park, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇, ▇.▇. ▇▇▇ ▇▇-▇▇▇▇▇, Nassau, Commonwealth of the Bahamas or such other
place
as the General Partner may from time to time designate by notice to the Limited
Partners. The Partnership may maintain offices at such other place or places
within or outside the ▇▇▇▇▇▇▇▇ Islands as the General Partner determines to
be
necessary or appropriate. The address of the General Partner shall be TK House,
Bayside Executive Park, West Bay Street and ▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇-▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ of the Bahamas or such other place as the General Partner
may from time to time designate by notice to the Limited Partners.
|
Section
2.4
|
Purpose
and Business.
|
The
purpose and nature of the business to be conducted by the Partnership shall
be
to i)engage
directly in, or enter into or form any corporation, partnership, joint venture,
limited liability company or other arrangement to engage indirectly in, any
business activity that is approved by the General Partner and that lawfully
may
be conducted by a limited partnership organized pursuant to the ▇▇▇▇▇▇▇▇ Islands
Act and, in connection therewith, to exercise all of the rights and powers
conferred upon the Partnership pursuant to the agreements relating to such
business activity, and ii)
do
anything necessary or appropriate to the foregoing, including the making of
capital contributions or loans to a Group Member; provided,
however,
that
the General Partner shall not cause the Partnership to engage, directly or
indirectly, in any business activity that the General Partner determines would
cause the Partnership to be treated as an association taxable as a corporation
or otherwise taxable as an entity for United States federal income tax purposes.
The General Partner shall have no duty or obligation to propose or approve,
and
may decline to propose or approve, the conduct by the Partnership of any
business free of any fiduciary duty or obligation whatsoever to the Partnership,
any Limited Partner or Assignee and, in declining to so propose or approve,
shall not be required to act in good faith or pursuant to any other standard
imposed by this Agreement, any Group Member Agreement, any other agreement
contemplated hereby or under the ▇▇▇▇▇▇▇▇ Islands Act or any other law, rule
or
regulation.
|
Section
2.5
|
Powers.
|
The
Partnership shall be empowered to do any and all acts and things necessary
and
appropriate for the furtherance and accomplishment of the purposes and business
described in Section
2.4
and for
the protection and benefit of the Partnership.
|
Section
2.6
|
Power
of Attorney.
|
(a) Each
Limited Partner and each Assignee hereby constitutes and appoints the General
Partner and, if a Liquidator shall have been selected pursuant to Section
12.3,
the
Liquidator (and any successor to the Liquidator by merger, transfer, assignment,
election or
NYC:103990_15.DOC
23
otherwise)
and each of their authorized officers and attorneys-in-fact, as the case may
be,
with full power of substitution, as his true and lawful agent and
attorney-in-fact, with full power and authority in his name, place and ▇▇▇▇▇,
to:
(i) execute,
swear to, acknowledge, deliver, file and record in the appropriate public
offices (1)
all
certificates, documents and other instruments (including this Agreement and
the
Certificate of Limited Partnership and all amendments or restatements hereof
or
thereof) that the General Partner or the Liquidator determines to be necessary
or appropriate to form, qualify or continue the existence or qualification
of
the Partnership as a limited partnership (or a partnership in which the limited
partners have limited liability) in the ▇▇▇▇▇▇▇▇ Islands and in all other
jurisdictions in which the Partnership may conduct business or own property;
(2)
all
certificates, documents and other instruments that the General Partner or the
Liquidator determines to be necessary or appropriate to reflect, in accordance
with its terms, any amendment, change, modification or restatement of this
Agreement; (3)
all
certificates, documents and other instruments (including conveyances and a
certificate of cancellation) that the General Partner or the Liquidator
determines to be necessary or appropriate to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this Agreement;
(4)
all
certificates, documents and other instruments relating to the admission,
withdrawal, removal or substitution of any Partner pursuant to, or other events
described in, Articles IV,
X,
XI
or
XII;
(5)
all
certificates, documents and other instruments relating to the determination
of
the rights, preferences and privileges of any class or series of Partnership
Securities issued pursuant to Section
5.6;
and
(6)
all
certificates, documents and other instruments (including agreements and a
certificate of merger) relating to a merger, consolidation or conversion of
the
Partnership pursuant to Article
XIV;
and
(ii) execute,
swear to, acknowledge, deliver, file and record all ballots, consents,
approvals, waivers, certificates, documents and other instruments that the
General Partner or the Liquidator determines to be necessary or appropriate
to
(7)
make,
evidence, give, confirm or ratify any vote, consent, approval, agreement or
other action that is made or given by the Partners hereunder or is consistent
with the terms of this Agreement or (8)
effectuate the terms or intent of this Agreement; provided,
that
when required by Section
13.3
or any
other provision of this Agreement that establishes a percentage of the Limited
Partners or of the Limited Partners of any class or series required to take
any
action, the General Partner and the Liquidator may exercise the power of
attorney made in this Section
2.6(a)(ii)
only
after the necessary vote, consent or approval of the Limited Partners or of
the
Limited Partners of such class or series, as applicable.
Nothing
contained in this Section
2.6(a)
shall be
construed as authorizing the General Partner to amend this Agreement except
in
accordance with Article
XIII
or as
may be otherwise expressly provided for in this Agreement.
(b) The
foregoing power of attorney is hereby declared to be irrevocable and a power
coupled with an interest, and it shall survive and, to the maximum extent
permitted by law, not be affected by the subsequent death, incompetency,
disability, incapacity, dissolution, bankruptcy or termination of any Limited
Partner or Assignee and the transfer of all or any
NYC:103990_15.DOC
24
portion
of such Limited Partner’s or Assignee’s Partnership Interest and shall extend to
such Limited Partner’s or Assignee’s heirs, successors, assigns and personal
representatives. Each such Limited Partner or Assignee hereby agrees to be
bound
by any representation made by the General Partner or the Liquidator acting
in
good faith pursuant to such power of attorney; and each such Limited Partner
or
Assignee, to the maximum extent permitted by law, hereby waives any and all
defenses that may be available to contest, negate or disaffirm the action of
the
General Partner or the Liquidator taken in good faith under such power of
attorney. Each Limited Partner or Assignee shall execute and deliver to the
General Partner or the Liquidator, within 15 days after receipt of the request
therefor, such further designation, powers of attorney and other instruments
as
the General Partner or the Liquidator determines to be necessary or appropriate
to effectuate this Agreement and the purposes of the Partnership.
|
Section
2.7
|
Term.
|
The
term
of the Partnership commenced upon the filing of the Certificate of Limited
Partnership in accordance with the ▇▇▇▇▇▇▇▇ Islands Act and shall continue
in
existence until the dissolution of the Partnership in accordance with the
provisions of Article
XII.
The
existence of the Partnership as a separate legal entity shall continue until
the
cancellation of the Certificate of Limited Partnership as provided in the
▇▇▇▇▇▇▇▇ Islands Act.
|
Section
2.8
|
Title
to Partnership Assets.
|
Title
to
Partnership assets, whether real, personal or mixed and whether tangible or
intangible, shall be deemed to be owned by the Partnership as an entity, and
no
Partner or Assignee, individually or collectively, shall have any ownership
interest in such Partnership assets or any portion thereof. Title to any or
all
of the Partnership assets may be held in the name of the Partnership, the
General Partner, one or more of its Affiliates or one or more nominees, as
the
General Partner may determine. The General Partner hereby declares and warrants
that any Partnership assets for which record title is held in the name of the
General Partner or one or more of its Affiliates or one or more nominees shall
be held by the General Partner or such Affiliate or nominee for the use and
benefit of the Partnership in accordance with the provisions of this Agreement;
provided,
however,
that
the General Partner shall use reasonable efforts to cause record title to such
assets (other than those assets in respect of which the General Partner
determines that the expense and difficulty of conveyancing makes transfer of
record title to the Partnership impracticable) to be vested in the Partnership
as soon as reasonably practicable; provided,
further, that, prior to the withdrawal or removal of the General Partner or
as
soon thereafter as practicable, the General Partner shall use reasonable efforts
to effect the transfer of record title to the Partnership and, prior to any
such
transfer, will provide for the use of such assets in a manner satisfactory
to
the General Partner. All Partnership assets shall be recorded as the property
of
the Partnership in its books and records, irrespective of the name in which
record title to such Partnership assets is held.
NYC:103990_15.DOC
25
Article
III
RIGHTS
OF
LIMITED PARTNERS
|
Section
3.1
|
Limitation
of Liability.
|
The
Limited Partners and the Assignees shall have no liability under this Agreement
except as expressly provided in this Agreement or the ▇▇▇▇▇▇▇▇ Islands
Act.
|
Section
3.2
|
Management
of Business.
|
No
Limited Partner or Assignee, in its capacity as such, shall participate in
the
operation, management or control (within the meaning of the ▇▇▇▇▇▇▇▇ Islands
Act) of the Partnership’s business, transact any business in the Partnership’s
name or have the power to sign documents for or otherwise bind the Partnership.
Any action taken by any Affiliate of the General Partner or any officer,
director, employee, manager, member, general partner, agent or trustee of the
General Partner or any of its Affiliates, or any officer, director, employee,
member, general partner, agent or trustee of a Group Member, in its capacity
as
such, shall not be deemed to be participation in the control of the business
of
the Partnership by a limited partner of the Partnership (within the meaning
of
▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇) and shall not affect, impair or
eliminate the limitations on the liability of the Limited Partners or Assignees
under this Agreement.
|
Section
3.3
|
Outside
Activities of the Limited
Partners.
|
Subject
to the provisions of Section
7.5
and the
Omnibus Agreement, which shall continue to be applicable to the Persons referred
to therein, regardless of whether such Persons shall also be Limited Partners
or
Assignees, any Limited Partner or Assignee shall be entitled to and may have
business interests and engage in business activities in addition to those
relating to the Partnership, including business interests and activities in
direct competition with the Partnership Group. Neither the Partnership nor
any
of the other Partners or Assignees shall have any rights by virtue of this
Agreement in any business ventures of any Limited Partner or
Assignee.
|
Section
3.4
|
Rights
of Limited Partners.
|
(a) In
addition to other rights provided by this Agreement or by applicable law, and
except as limited by Section
3.4(b),
each
Limited Partner shall have the right, for a purpose reasonably related to such
Limited Partner’s interest as a Limited Partner in the Partnership, upon
reasonable written demand and at such Limited Partner’s own
expense:
(i) promptly
after becoming available, to obtain a copy of the Partnership’s foreign,
federal, state and local income tax returns for each year;
(ii) to
have
furnished to him a current list of the name and last known business, residence
or mailing address of each Partner;
NYC:103990_15.DOC
26
(iii) to
obtain
true and full information regarding the amount of cash and a description and
statement of the Net Agreed Value of any other Capital Contribution by each
Partner and which each Partner has agreed to contribute in the future, and
the
date on which each became a Partner;
(iv) to
have
furnished to him a copy of this Agreement and the Certificate of Limited
Partnership and all amendments thereto, together with a copy of the executed
copies of all powers of attorney pursuant to which this Agreement, the
Certificate of Limited Partnership and all amendments thereto have been
executed;
(v) to
obtain
true and full information regarding the status of the business and financial
condition of the Partnership Group; and
(vi) to
obtain
such other information regarding the affairs of the Partnership as is just
and
reasonable.
(b) The
General Partner may keep confidential from the Limited Partners and Assignees,
for such period of time as the General Partner deems reasonable, iii)
any
information that the General Partner reasonably believes to be in the nature
of
trade secrets or iv)
other
information the disclosure of which the General Partner in good faith believes
(a)
is not
in the best interests of the Partnership Group, (b)
could
damage the Partnership Group or (c)
that any
Group Member is required by law or by agreement with any third party to keep
confidential (other than agreements with Affiliates of the Partnership the
primary purpose of which is to circumvent the obligations set forth in this
Section
3.4).
ARTICLE
IV
CERTIFICATES;
RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION OF PARTNERSHIP
INTERESTS
|
Section
4.1
|
Certificates.
|
Upon
the
Partnership’s issuance of Common Units or Subordinated Units to any Person, the
Partnership shall issue, upon the request of such Person, one or more
Certificates in the name of such Person evidencing the number of such Units
being so issued. In addition, v)
upon the
General Partner’s request, the Partnership shall issue to it one or more
Certificates in the name of the General Partner evidencing its interests in
the
Partnership and vi)
upon the
request of any Person owning Incentive Distribution Rights or any other
Partnership Securities other than Common Units or Subordinated Units, the
Partnership shall issue to such Person one or more certificates evidencing
such
Incentive Distribution Rights or other Partnership Securities other than Common
Units or Subordinated Units. Certificates shall be executed on behalf of the
Partnership by the Chairman of the Board, President or any Executive Vice
President or Vice President and the Chief Financial Officer or the Secretary
or
any Assistant Secretary of the General Partner. No Common Unit Certificate
shall
be valid for any purpose until it has been countersigned by the Transfer Agent;
provided,
however,
that if
the General Partner elects to issue Common Units in global form, the Common
Unit
Certificates shall be valid upon receipt of a certificate from the Transfer
Agent certifying that the Common Units have been duly registered
NYC:103990_15.DOC
27
in
accordance with the directions of the Partnership. Subject to the requirements
of Section
6.7(b),
the
Partners holding Certificates evidencing Subordinated Units may exchange such
Certificates for Certificates evidencing Common Units on or after the date
on
which such Subordinated Units are converted into Common Units pursuant to the
terms of Section
5.8.
|
Section
4.2
|
Mutilated,
Destroyed, Lost or Stolen
Certificates.
|
(a) If
any
mutilated Certificate is surrendered to the Transfer Agent, the appropriate
officers of the General Partner on behalf of the Partnership shall execute,
and
the Transfer Agent shall countersign and deliver in exchange therefor, a new
Certificate evidencing the same number and type of Partnership Securities as
the
Certificate so surrendered.
(b) The
appropriate officers of the General Partner on behalf of the Partnership shall
execute and deliver, and the Transfer Agent shall countersign, a new Certificate
in place of any Certificate previously issued if the Record Holder of the
Certificate:
(i) makes
proof by affidavit, in form and substance satisfactory to the General Partner,
that a previously issued Certificate has been lost, destroyed or
stolen;
(ii) requests
the issuance of a new Certificate before the General Partner has notice that
the
Certificate has been acquired by a purchaser for value in good faith and without
notice of an adverse claim;
(iii) if
requested by the General Partner, delivers to the General Partner a bond, in
form and substance satisfactory to the General Partner, with surety or sureties
and with fixed or open penalty as the General Partner may direct to indemnify
the Partnership, the Partners, the General Partner and the Transfer Agent
against any claim that may be made on account of the alleged loss, destruction
or theft of the Certificate; and
(iv) satisfies
any other reasonable requirements imposed by the General Partner.
If
a
Limited Partner or Assignee fails to notify the General Partner within a
reasonable period of time after he has notice of the loss, destruction or theft
of a Certificate, and a transfer of the Limited Partner Interests represented
by
the Certificate is registered before the Partnership, the General Partner or
the
Transfer Agent receives such notification, the Limited Partner or Assignee
shall
be precluded from making any claim against the Partnership, the General Partner
or the Transfer Agent for such transfer or for a new Certificate.
(c) As
a
condition to the issuance of any new Certificate under this Section
4.2,
the
General Partner may require the payment of a sum sufficient to cover any tax
or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Transfer Agent) reasonably
connected therewith.
|
Section
4.3
|
Record
Holders.
|
The
Partnership shall be entitled to recognize the Record Holder as the Partner
or
Assignee with respect to any Partnership Interest and, accordingly, shall not
be
bound to
NYC:103990_15.DOC
28
recognize
any equitable or other claim to, or interest in, such Partnership Interest
on
the part of any other Person, regardless of whether the Partnership shall have
actual or other notice thereof, except as otherwise provided by law or any
applicable rule, regulation, guideline or requirement of any National Securities
Exchange on which such Partnership Interests are listed. Without limiting the
foregoing, when a Person (such as a broker, dealer, bank, trust company or
clearing corporation or an agent of any of the foregoing) is acting as nominee,
agent or in some other representative capacity for another Person in acquiring
and/or holding Partnership Interests, as between the Partnership on the one
hand, and such other Persons on the other, such representative Person
vii)
shall be
the Partner or Assignee (as the case may be) of record and beneficially,
viii)
must
execute and deliver a Transfer Application and ix)
shall be
bound by this Agreement and shall have the rights and obligations of a Partner
or Assignee (as the case may be) hereunder and as, and to the extent, provided
for herein.
|
Section
4.4
|
Transfer
Generally.
|
(a) The
term
“transfer,” when used in this Agreement with respect to a Partnership Interest,
shall be deemed to refer to a transaction x)
by which
the General Partner assigns its General Partner Interest to another Person
or by
which a holder of Incentive Distribution Rights assigns its Incentive
Distribution Rights to another Person, and includes a sale, assignment, gift,
pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition
by law or otherwise or xi)
by which
the holder of a Limited Partner Interest (other than an Incentive Distribution
Right) assigns such Limited Partner Interest to another Person who is or becomes
a Limited Partner or an Assignee, and includes a sale, assignment, gift,
exchange or any other disposition by law or otherwise, including any transfer
upon foreclosure of any pledge, encumbrance, hypothecation or
mortgage.
(b) No
Partnership Interest shall be transferred, in whole or in part, except in
accordance with the terms and conditions set forth in this Article
IV.
Any
transfer or purported transfer of a Partnership Interest not made in accordance
with this Article
IV
shall be
null and void.
(c) Nothing
contained in this Agreement shall be construed to prevent a disposition by
any
stockholder, member, partner or other owner of the General Partner of any or
all
of the shares of stock, membership interests, partnership interests or other
ownership interests in the General Partner.
|
Section
4.5
|
Registration
and Transfer of Limited Partner
Interests.
|
(a) The
General Partner shall keep or cause to be kept on behalf of the Partnership
a
register in which, subject to such reasonable regulations as it may prescribe
and subject to the provisions of Section
4.5(b),
the
Partnership will provide for the registration and transfer of Limited Partner
Interests. The Transfer Agent is hereby appointed registrar and transfer agent
for the purpose of registering Common Units and transfers of such Common Units
as herein provided. The Partnership shall not recognize transfers of
Certificates evidencing Limited Partner Interests unless such transfers are
effected in the manner described in this Section
4.5.
Upon
surrender of a Certificate for registration of transfer of any Limited Partner
Interests evidenced by a Certificate, and subject to the provisions of
Section
4.5(b),
the
appropriate
NYC:103990_15.DOC
29
officers
of the General Partner on behalf of the Partnership shall execute and deliver,
and in the case of Common Units, the Transfer Agent shall countersign and
deliver, in the name of the holder or the designated transferee or transferees,
as required pursuant to the holder’s instructions, one or more new Certificates
evidencing the same aggregate number and type of Limited Partner Interests
as
was evidenced by the Certificate so surrendered.
(b) The
General Partner shall not recognize any transfer of Limited Partner Interests
until the Certificates evidencing such Limited Partner Interests are surrendered
for registration of transfer and such Certificates are accompanied by a Transfer
Application duly executed by the transferee (or the transferee’s
attorney-in-fact duly authorized in writing). No charge shall be imposed by
the
General Partner for such transfer; provided,
that as
a condition to the issuance of any new Certificate under this Section
4.5,
the
General Partner may require the payment of a sum sufficient to cover any tax
or
other governmental charge that may be imposed with respect thereto.
(c) Limited
Partner Interests may be transferred only in the manner described in this
Section
4.5.
The
transfer of any Limited Partner Interests and the admission of any new Limited
Partner shall not constitute an amendment to this Agreement.
(d) Until
admitted as a Substituted Limited Partner pursuant to Section
10.2,
the
Record Holder of a Limited Partner Interest shall be an Assignee in respect
of
such Limited Partner Interest. Limited Partners may include custodians, nominees
or any other individual or entity in its own or any representative
capacity.
(e) A
transferee of a Limited Partner Interest who has completed and delivered a
Transfer Application shall be deemed to have xii)
requested admission as a Substituted Limited Partner, xiii)
agreed
to comply with and be bound by and to have executed this Agreement, xiv)
represented and warranted that such transferee has the right, power and
authority and, if an individual, the capacity to enter into this Agreement,
xv)
granted
the powers of attorney set forth in this Agreement and xvi)
given
the consents and approvals and made the waivers contained in this
Agreement.
(f) The
General Partner and its Affiliates shall have the right at any time to transfer
their Subordinated Units and Common Units (whether issued upon conversion of
the
Subordinated Units or otherwise) to one or more Persons.
|
Section
4.6
|
Transfer
of the General Partner’s General Partner
Interest.
|
(a) Subject
to Section
4.6(c)
below,
prior to March 31, 2015, the General Partner shall not transfer all or any
part
of its General Partner Interest to a Person unless such transfer xvii)
has been
approved by the prior written consent or vote of the holders of at least a
majority of the Outstanding Common Units (excluding Common Units held by the
General Partner and its Affiliates) or xviii)
is of
all, but not less than all, of its General Partner Interest to (a)
an
Affiliate of the General Partner (other than an individual) or (b)
another
Person (other than an individual) in connection with the transfer by the General
Partner of all or substantially all of its assets to such other
Person.
NYC:103990_15.DOC
30
(b) Subject
to Section
4.6(c)
below,
on or after March 31, 2015, the General Partner may transfer all or any of
its
General Partner Interest without Unitholder approval.
(c) Notwithstanding
anything herein to the contrary, no transfer by the General Partner of all
or
any part of its General Partner Interest to another Person shall be permitted
unless xix)
the
transferee agrees to assume the rights and duties of the General Partner under
this Agreement and to be bound by the provisions of this Agreement, xx)
the
Partnership receives an Opinion of Counsel that such transfer would not result
in the loss of limited liability of any Limited Partner or of any limited
partner or member of any other Group Member or cause the Partnership or any
other Group Member to be treated as an association taxable as a corporation
or
otherwise to be taxed as an entity for United States federal income tax purposes
(to the extent not already so treated or taxed) and xxi)
such
transferee also agrees to purchase all (or the appropriate portion thereof,
if
applicable) of the partnership or membership interest of the General Partner
as
the general partner or managing member, if any, of each other Group Member.
In
the case of a transfer pursuant to and in compliance with this Section
4.6,
the
transferee or successor (as the case may be) shall, subject to compliance with
the terms of Section
10.3,
be
admitted to the Partnership as the General Partner immediately prior to the
transfer of the General Partner Interest, and the business of the Partnership
shall continue without dissolution.
|
Section
4.7
|
Transfer
of Incentive Distribution
Rights.
|
Prior
to
March 31, 2015, a holder of Incentive Distribution Rights may transfer any
or
all of the Incentive Distribution Rights held by such holder without any consent
of the Unitholders to xxii)
an
Affiliate of such holder (other than an individual) or xxiii)
another
Person (other than an individual) in connection with (1)
the
merger or consolidation of such holder of Incentive Distribution Rights with
or
into such other Person or (2)
the
transfer by such holder of all or substantially all of its assets to such other
Person. Any other transfer of the Incentive Distribution Rights prior to March
31, 2015 shall require the prior approval of holders of at least a majority
of
the Outstanding Common Units (excluding Common Units held by the General Partner
and its Affiliates). On or after March 31, 2015, the General Partner or any
other holder of Incentive Distribution Rights may transfer any or all of its
Incentive Distribution Rights without Unitholder approval. Notwithstanding
anything herein to the contrary, no transfer of Incentive Distribution Rights
to
another Person shall be permitted unless the transferee agrees to be bound
by
the provisions of this Agreement.
|
Section
4.8
|
Restrictions
on Transfers.
|
(a) Except
as
provided in Section
4.8(d)
below,
but notwithstanding the other provisions of this Article
IV,
no
transfer of any Partnership Interests shall be made if such transfer would
xxiv)
violate
the then applicable federal or state securities laws or rules and regulations
of
the Commission, any state securities commission or any other governmental
authority with jurisdiction over such transfer, xxv)
terminate the existence or qualification of the Partnership or any Group Member
under the laws of the jurisdiction of its formation or xxvi) cause
the Partnership or any Group Member to be treated as an association taxable
as a
corporation or otherwise to be taxed as an entity for United States federal
income tax purposes (to the extent not already so treated or
taxed).
NYC:103990_15.DOC
31
(b) The
General Partner may impose restrictions on the transfer of Partnership Interests
if it receives an Opinion of Counsel that such restrictions are necessary to
avoid a significant risk of any Group Member becoming taxable as a corporation
or otherwise becoming taxable as an entity for United States federal income
tax
purposes. The General Partner may impose such restrictions by amending this
Agreement; provided,
however,
that
any amendment that would result in the delisting or suspension of trading of
any
class of Limited Partner Interests on the principal National Securities Exchange
on which such class of Limited Partner Interests is then listed must be
approved, prior to such amendment being effected, by the holders of at least
a
majority of the Outstanding Limited Partner Interests of such
class.
(c) The
transfer of a Subordinated Unit that has converted into a Common Unit shall
be
subject to the restrictions imposed by Section
6.7(b).
(d) Nothing
contained in this Article
IV,
or
elsewhere in this Agreement, shall preclude the settlement of any transactions
involving Partnership Interests entered into through the facilities of any
National Securities Exchange on which such Partnership Interests are listed
for
trading.
ARTICLE
V
CAPITAL
CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
|
Section
5.1
|
Organizational
Contributions.
|
(a) In
connection with the formation of the Partnership under the ▇▇▇▇▇▇▇▇ Islands
Act,
the General Partner made an initial Capital Contribution to the Partnership
in
the amount of $20.00, for a 2% General Partner Interest in the Partnership
and
has been admitted as the General Partner of the Partnership, and the
Organizational Limited Partner made an initial Capital Contribution to the
Partnership in the amount of $980 for a 98% Limited Partner Interest in the
Partnership and has been admitted as a Limited Partner of the Partnership.
Ninety-eight percent of any interest or other profit that may have resulted
from
the investment or other use of such initial Capital Contributions shall be
allocated and distributed to the Organizational Limited Partner, and the balance
thereof shall be allocated and distributed to the General Partner.
(b) Prior
to
the Closing Date (i) the General Partner contributed all of its ownership
interest in the Operating Company to the Partnership in exchange for (A) a
continuation of its 2% General Partner Interest and (B) the Incentive
Distribution Rights and (ii) Teekay Shipping Corporation contributed all of
its
ownership interest in the Operating Company, in exchange for a continuation
of
its 98% limited partner interest and a promissory note.
|
Section
5.2
|
Contributions
by the General Partner and its
Affiliates.
|
(a) On
the
Closing Date and pursuant to the Contribution Agreement, Teekay Shipping
Corporation’s 98% initial limited partner interest shall be converted into (A)
8,734,572 Common Units and (B) 14,734,572 Subordinated Units.
(b) Upon
the
issuance of any additional Limited Partner Interests by the Partnership (other
than the issuance of the Common Units issued in the Initial Offering and other
than the
NYC:103990_15.DOC
32
issuance
of the Common Units issued pursuant to the Over-Allotment Option), the General
Partner shall be required to make additional Capital Contributions equal to
(i)
2/98ths of any amount contributed to the Partnership by the Limited Partners
in
exchange for the additional Limited Partner Interests issued to such Limited
Partners less (ii) 2/98ths of any amount so contributed by such Limited Partners
that is used by the Partnership concurrently with such contribution to redeem
or
repurchase from any Person outstanding Limited Partner Interests of the same
class as the Limited Partner Interests issued to such Limited Partners at a
price per Limited Partner Interest equal to the net proceeds per Limited Partner
Interest, before expenses, that the Partnership receives from such issuances.
Except as set forth in the immediately preceding sentence and Article
XII,
the
General Partner shall not be obligated to make any additional Capital
Contributions to the Partnership.
|
Section
5.3
|
Contributions
by Initial Limited Partners and Distributions to the General Partner
and
its Affiliates.
|
(a) On
the
Closing Date and pursuant to the Underwriting Agreement, each Underwriter shall
contribute to the Partnership cash in an amount equal to the Issue Price per
Initial Common Unit, multiplied by the number of Common Units specified in
the
Underwriting Agreement to be purchased by such Underwriter at the Closing Date.
In exchange for such Capital Contributions by the Underwriters, the Partnership
shall issue Common Units to each Underwriter on whose behalf such Capital
Contribution is made in an amount equal to the quotient obtained by dividing
xxvii)
the cash
contribution to the Partnership by or on behalf of such Underwriter by
xxviii)
the
Issue Price per Initial Common Unit.
(b) Upon
the
exercise of the Over-Allotment Option, each Underwriter shall contribute to
the
Partnership cash in an amount equal to the Issue Price per Initial Common Unit,
multiplied by the number of Common Units to be purchased by such Underwriter
at
the Option Closing Date. In exchange for such Capital Contributions by the
Underwriters, the Partnership shall issue Common Units to each Underwriter
on
whose behalf such Capital Contribution is made in an amount equal to the
quotient obtained by dividing xxix)
the cash
contributions to the Partnership by or on behalf of such Underwriter by
xxx)
the
Issue Price per Initial Common Unit.
(c) No
Limited Partner Interests will be issued or issuable as of or at the Closing
Date other than xxxi)
the
Common Units issuable pursuant to subparagraph (a) hereof in aggregate number
equal to 6,000,000, xxxii)
the
“Option Units” as such term is used in the Underwriting Agreement in an
aggregate number up to 900,000 issuable upon exercise of the Over-Allotment
Option pursuant to subparagraph (c) hereof, xxxiii)
the
14,734,572 Subordinated Units issuable to pursuant to Section
5.2
hereof,
xxxiv)
the
8,734,572 Common Units issuable pursuant to Section
5.2
hereof,
and xxxv)
the
Incentive Distribution Rights and (vi) 1,000,000 Common Units issuable pursuant
to the Partnership’s 2005 Long-Term Incentive Plan.
|
Section
5.4
|
Interest
and Withdrawal.
|
No
interest shall be paid by the Partnership on Capital Contributions. No Partner
or Assignee shall be entitled to the withdrawal or return of its Capital
Contribution, except to the extent, if any, that distributions made pursuant
to
this Agreement or upon termination of the
NYC:103990_15.DOC
33
Partnership
may be considered and permitted as such by law and then only to the extent
provided for in this Agreement. Except to the extent expressly provided in
this
Agreement, no Partner or Assignee shall have priority over any other Partner
or
Assignee either as to the return of Capital Contributions or as to profits,
losses or distributions.
|
Section
5.5
|
Capital
Accounts.
|
(a) The
Partnership shall maintain for each Partner (or a beneficial owner of
Partnership Interests held by a nominee in any case in which the nominee has
furnished the identity of such owner to the Partnership in accordance with
Section 6031(c) of the Code or any other method acceptable to the General
Partner) owning a Partnership Interest a separate Capital Account with respect
to such Partnership Interest in accordance with the rules of Treasury Regulation
Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by
xxxvi)
the
amount of all Capital Contributions made to the Partnership with respect to
such
Partnership Interest and xxxvii)
all
items of Partnership income and gain (including, without limitation, income
and
gain exempt from tax) computed in accordance with Section
5.5(b)
and
allocated with respect to such Partnership Interest pursuant to Section
6.1,
and
decreased by (x) the amount of cash or Net Agreed Value of all actual and deemed
distributions of cash or property made with respect to such Partnership Interest
and (y) all items of Partnership deduction and loss computed in accordance
with
Section
5.5(b)
and
allocated with respect to such Partnership Interest pursuant to Section
6.1.
(b) For
purposes of computing the amount of any item of income, gain, loss or deduction
which is to be allocated pursuant to Article
VI
and is
to be reflected in the Partners’ Capital Accounts, the determination,
recognition and classification of any such item shall be the same as its
determination, recognition and classification for United States federal income
tax purposes (including, without limitation, any method of depreciation, cost
recovery or amortization used for that purpose), provided, that:
(i) Solely
for purposes of this Section
5.5,
the
Partnership shall be treated as owning directly its proportionate share (as
determined by the General Partner based upon the provisions of the applicable
Group Member Agreement) of all property owned any other Group Member that is
classified as a partnership for United States federal income tax
purposes.
(ii) All
fees
and other expenses incurred by the Partnership to promote the sale of (or to
sell) a Partnership Interest that can neither be deducted nor amortized under
Section 709 of the Code, if any, shall, for purposes of Capital Account
maintenance, be treated as an item of deduction at the time such fees and other
expenses are incurred and shall be allocated among the Partners pursuant to
Section
6.1.
(iii) Except
as
otherwise provided in Treasury Regulation Section 1.704-1(b)(2)(iv)(m), the
computation of all items of income, gain, loss and deduction shall be made
without regard to any election under Section 754 of the Code which may be made
by the Partnership and, as to those items described in Section 705(a)(1)(B)
or
705(a)(2)(B) of the Code, without regard to the fact that such items are not
includable in gross income or are neither currently deductible nor capitalized
for United States federal
NYC:103990_15.DOC
34
income
tax purposes. To the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Section 734(b) or 743(b) of the Code is required,
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into
account in determining Capital Accounts, the amount of such adjustment in the
Capital Accounts shall be treated as an item of gain or loss.
(iv) Any
income, gain or loss attributable to the taxable disposition of any Partnership
property shall be determined as if the adjusted basis of such property as of
such date of disposition were equal in amount to the Partnership’s Carrying
Value with respect to such property as of such date.
(v) In
accordance with the requirements of Section 704(b) of the Code, any deductions
for depreciation, cost recovery or amortization attributable to any Contributed
Property shall be determined as if the adjusted basis of such property on the
date it was acquired by the Partnership were equal to the Agreed Value of such
property. Upon an adjustment pursuant to Section
5.5(d)
to the
Carrying Value of any Partnership property subject to depreciation, cost
recovery or amortization, any further deductions for such depreciation, cost
recovery or amortization attributable to such property shall be determined
(A)
as if the adjusted basis of such property were equal to the Carrying Value
of
such property immediately following such adjustment and (B) using a rate of
depreciation, cost recovery or amortization derived from the same method and
useful life (or, if applicable, the remaining useful life) as is applied for
United States federal income tax purposes; provided,
however,
that,
if the asset has a zero adjusted basis for United States federal income tax
purposes, depreciation, cost recovery or amortization deductions shall be
determined using any method that the General Partner may adopt.
(c) (1)
A
transferee of a Partnership Interest shall succeed to a pro rata portion of
the
Capital Account of the transferor relating to the Partnership Interest so
transferred.
(ii) Immediately
prior to the transfer of a Subordinated Unit or of a Subordinated Unit that
has
converted into a Common Unit pursuant to Section
5.8
by a
holder thereof (other than a transfer to an Affiliate unless the General Partner
elects to have this subparagraph 5.5(c)(ii) apply), the Capital Account
maintained for such Person with respect to its Subordinated Units or converted
Subordinated Units will (A) first, be allocated to the Subordinated Units or
converted Subordinated Units to be transferred in an amount equal to the product
of (x) the number of such Subordinated Units or converted Subordinated Units
to
be transferred and (y) the Per Unit Capital Amount for a Common Unit, and (B)
second, any remaining balance in such Capital Account will be retained by the
transferor, regardless of whether it has retained any Subordinated Units or
converted Subordinated Units. Following any such allocation, the transferor’s
Capital Account, if any, maintained with respect to the retained Subordinated
Units or converted Subordinated Units, if any, will have a balance equal to
the
amount allocated under clause (B) hereinabove, and the transferee’s Capital
Account established with respect to the transferred Subordinated Units or
converted Subordinated Units will have a balance equal to the amount allocated
under clause (A) hereinabove.
NYC:103990_15.DOC
35
(d) (2) In
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an issuance
of additional Partnership Interests for cash or Contributed Property or the
conversion of the General Partner’s Combined Interest to Common Units pursuant
to Section
11.3(b),
the
Capital Account of all Partners and the Carrying Value of each Partnership
property immediately prior to such issuance shall be adjusted upward or downward
to reflect any Unrealized Gain or Unrealized Loss attributable to such
Partnership property, as if such Unrealized Gain or Unrealized Loss had been
recognized on an actual sale of each such property immediately prior to such
issuance and had been allocated to the Partners at such time pursuant to
Section
6.1
in the
same manner as any item of gain or loss actually recognized during such period
would have been allocated. In determining such Unrealized Gain or Unrealized
Loss, the aggregate cash amount and fair market value of all Partnership assets
(including, without limitation, cash or cash equivalents) immediately prior
to
the issuance of additional Partnership Interests shall be determined by the
General Partner using such method of valuation as it may adopt; provided,
however,
that
the General Partner, in arriving at such valuation, must take fully into account
the fair market value of the Partnership Interests of all Partners at such
time.
The General Partner shall allocate such aggregate value among the assets of
the
Partnership (in such manner as it determines) to arrive at a fair market value
for individual properties.
(ii) In
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), immediately
prior to any actual or deemed distribution to a Partner of any Partnership
property (other than a distribution of cash that is not in redemption or
retirement of a Partnership Interest), the Capital Accounts of all Partners
and
the Carrying Value of all Partnership property shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized Loss attributable to
such
Partnership property, as if such Unrealized Gain or Unrealized Loss had been
recognized in a sale of such property immediately prior to such distribution
for
an amount equal to its fair market value, and had been allocated to the
Partners, at such time, pursuant to Section
6.1
in the
same manner as any item of gain or loss actually recognized during such period
would have been allocated. In determining such Unrealized Gain or Unrealized
Loss the aggregate cash amount and fair market value of all Partnership assets
(including, without limitation, cash or cash equivalents) immediately prior
to a
distribution shall (A) in the case of an actual distribution that is not made
pursuant to Section
12.4
or in
the case of a deemed distribution, be determined and allocated in the same
manner as that provided in Section
5.5(d)(i)
or (B)
in the case of a liquidating distribution pursuant to Section
12.4,
be
determined and allocated by the Liquidator using such method of valuation as
it
may adopt.
|
Section
5.6
|
Issuances
of Additional Partnership
Securities.
|
(a) The
Partnership may issue additional Partnership Securities and options, rights,
warrants and appreciation rights relating to the Partnership Securities for
any
Partnership purpose at any time and from time to time to such Persons for such
consideration and on such terms and conditions as the General Partner shall
determine, all without the approval of any Limited Partners.
NYC:103990_15.DOC
36
(b) Each
additional Partnership Security authorized to be issued by the Partnership
pursuant to Section
5.6(a)
may be
issued in one or more classes, or one or more series of any such classes, with
such designations, preferences, rights, powers and duties (which may be senior
to existing classes and series of Partnership Securities), as shall be fixed
by
the General Partner, including (i) the right to share Partnership profits and
losses or items thereof; (ii) the right to share in Partnership distributions;
(iii) the rights upon dissolution and liquidation of the Partnership; (iv)
whether, and the terms and conditions upon which, the Partnership may redeem
the
Partnership Security; (v) whether such Partnership Security is issued with
the
privilege of conversion or exchange and, if so, the terms and conditions of
such
conversion or exchange; (vi) the terms and conditions upon which each
Partnership Security will be issued, evidenced by certificates and assigned
or
transferred; (vii) the method for determining the Percentage Interest as to
such
Partnership Security; and (viii) the right, if any, of each such Partnership
Security to vote on Partnership matters, including matters relating to the
relative rights, preferences and privileges of such Partnership
Security.
(c) The
General Partner shall take all actions that it determines to be necessary or
appropriate in connection with (i) each issuance of Partnership Securities
and
options, rights, warrants and appreciation rights relating to Partnership
Securities pursuant to this Section
5.6,
(ii)
the conversion of the General Partner Interest or any Incentive Distribution
Rights into Units pursuant to the terms of this Agreement, (iii) the admission
of Additional Limited Partners and (iv) all additional issuances of Partnership
Securities. The General Partner shall determine the relative rights, powers
and
duties of the holders of the Units or other Partnership Securities being so
issued. The General Partner shall do all things necessary to comply with the
▇▇▇▇▇▇▇▇ Islands Act and is authorized and directed to do all things that it
determines to be necessary or appropriate in connection with any future issuance
of Partnership Securities or in connection with the conversion of the General
Partner Interest or any Incentive Distribution Rights into Units pursuant to
the
terms of this Agreement, including compliance with any statute, rule, regulation
or guideline of any federal, state or other governmental agency or any National
Securities Exchange on which the Units or other Partnership Securities are
listed.
|
Section
5.7
|
Limitations
on Issuance of Additional Partnership
Securities.
|
The
Partnership may issue an unlimited number of Partnership Securities (or options,
warrants or appreciation rights related thereto) pursuant to Section
5.6
without
the approval of the Limited Partners; provided, however, that no fractional
units shall be issued by the Partnership.
|
Section
5.8
|
Conversion
of Subordinated Units.
|
(a) A
total
of 3,683,643 of the Outstanding Subordinated Units will convert into Common
Units on a one-for-one basis on the second Business Day following the
distribution of Available Cash to Partners pursuant to Section
6.3(a)
in
respect of any Quarter ending on or after March 31, 2008, in respect of
which:
(i) distributions
under Section
6.4
in
respect of all Outstanding Common Units and Subordinated Units and any other
Outstanding Units that are senior or equal in right of distribution to the
Subordinated Units with respect to each of the three consecutive,
non
NYC:103990_15.DOC
37
overlapping
four-Quarter periods immediately preceding such date equaled or exceeded the
sum
of the Minimum Quarterly Distribution on all of the Outstanding Common Units
and
Subordinated Units and any other Outstanding Units that are senior or equal
in
right of distribution to the Subordinated Units during such periods;
(ii) the
Adjusted Operating Surplus generated during each of the three consecutive,
non-overlapping four-Quarter periods immediately preceding such date equaled
or
exceeded the sum of the Minimum Quarterly Distribution on all of the Common
Units, Subordinated Units and any other Units that are senior or equal in right
of distribution to the Subordinated Units that were Outstanding during such
periods on a Fully Diluted Basis, plus the related distribution on the General
Partner Interest in the Partnership, during such periods; and
(iii) the
Cumulative Common Unit Arrearage on all of the Common Units is zero
(b) An
additional 3,683,643 of the Outstanding Subordinated Units will convert into
Common Units on a one-for-one basis on the second Business Day following the
distribution of Available Cash to Partners pursuant to Section
6.3(a)
in
respect of any Quarter ending on or after March 31, 2009, in respect of
which:
(i) distributions
under Section
6.4
in
respect of all Outstanding Common Units and Subordinated Units and any other
Outstanding Units that are senior or equal in right of distribution to the
Subordinated Units with respect to each of the three consecutive,
non-overlapping four-Quarter periods immediately preceding such date equaled
or
exceeded the sum of the Minimum Quarterly Distribution on all of the Outstanding
Common Units and Subordinated Units and any other Outstanding Units that are
senior or equal in right of distribution to the Subordinated Units during such
periods;
(ii) the
Adjusted Operating Surplus generated during each of the three consecutive,
non-overlapping four-Quarter periods immediately preceding such date equaled
or
exceeded the sum of the Minimum Quarterly Distribution on all of the Common
Units, Subordinated Units and any other Units that are senior or equal in right
of distribution to the Subordinated Units that were Outstanding during such
periods on a Fully Diluted Basis, plus the related distribution on the General
Partner Interest during such periods; and
(iii) the
Cumulative Common Unit Arrearage on all of the Common Units is zero;
provided,
however, that the conversion of Subordinated Units pursuant to this Section
5.8(b)
may not
occur until at least one year following the conversion of Subordinated Units
pursuant to Section
5.8(a).
(c) In
the
event that less than all of the Outstanding Subordinated Units shall convert
into Common Units pursuant to Sections 5.8(a)
or
5.8(b)
at a
time when there shall be more than one holder of Subordinated Units, then,
unless all of the holders of Subordinated Units shall agree to a different
allocation, the Subordinated Units that are to be converted into Common Units
shall be allocated among the holders of Subordinated Units pro rata based on
the
number of Subordinated Units held by each such holder.
NYC:103990_15.DOC
38
(d) Any
Subordinated Units that are not converted into Common Units pursuant to Sections
5.8(a)
or
5.8(b)
shall
convert into Common Units on a one-for-one basis on the second Business Day
following the distribution of Available Cash to Partners pursuant to
Section
6.3(a)
in
respect of the final Quarter of the Subordination Period.
(e) Notwithstanding
any other provision of this Agreement, all the then Outstanding Subordinated
Units will automatically convert into Common Units on a one-for-one basis as
set
forth in, and pursuant to the terms of, Section
11.4.
(f) A
Subordinated Unit that has converted into a Common Unit shall be subject to
the
provisions of Section
6.7(b).
|
Section
5.9
|
Limited
Preemptive Right.
|
Except
as
provided in this Section
5.9
and in
Section
5.2(b),
no
Person shall have any preemptive, preferential or other similar right with
respect to the issuance of any Partnership Security, whether unissued, held
in
the treasury or hereafter created. The General Partner shall have the right,
which it may from time to time assign in whole or in part to any of its
Affiliates, to purchase Partnership Securities from the Partnership whenever,
and on the same terms that, the Partnership issues Partnership Securities to
Persons other than the General Partner and its Affiliates, to the extent
necessary to maintain the Percentage Interests of the General Partner and its
Affiliates equal to that which existed immediately prior to the issuance of
such
Partnership Securities.
|
Section
5.10
|
Splits
and Combinations.
|
(a) Subject
to Sections 5.10(d),
6.6
and
6.9
(dealing
with adjustments of distribution levels), the Partnership may make a Pro Rata
distribution of Partnership Securities to all Record Holders or may effect
a
subdivision or combination of Partnership Securities so long as, after any
such
event, each Partner shall have the same Percentage Interest in the Partnership
as before such event, and any amounts calculated on a per Unit basis (including
any Common Unit Arrearage or Cumulative Common Unit Arrearage) or stated as
a
number of Units (including the number of Subordinated Units that may convert
prior to the end of the Subordination Period) are proportionately
adjusted.
(b) Whenever
such a distribution, subdivision or combination of Partnership Securities is
declared, the General Partner shall select a Record Date as of which the
distribution, subdivision or combination shall be effective and shall send
notice thereof at least 20 days prior to such Record Date to each Record Holder
as of a date not less than 10 days prior to the date of such notice. The General
Partner also may cause a firm of independent public accountants selected by
it
to calculate the number of Partnership Securities to be held by each Record
Holder after giving effect to such distribution, subdivision or combination.
The
General Partner shall be entitled to rely on any certificate provided by such
firm as conclusive evidence of the accuracy of such calculation.
(c) Promptly
following any such distribution, subdivision or combination, the Partnership
may
issue Certificates to the Record Holders of Partnership Securities as of the
applicable Record Date representing the new number of Partnership Securities
held by such
NYC:103990_15.DOC
39
Record
Holders, or the General Partner may adopt such other procedures that it
determines to be necessary or appropriate to reflect such changes. If any such
combination results in a smaller total number of Partnership Securities
Outstanding, the Partnership shall require, as a condition to the delivery
to a
Record Holder of such new Certificate, the surrender of any Certificate held
by
such Record Holder immediately prior to such Record Date.
(d) The
Partnership shall not issue fractional Units upon any distribution, subdivision
or combination of Units. If a distribution, subdivision or combination of Units
would result in the issuance of fractional Units but for the provisions of
this
Section
5.10(d),
each
fractional Unit shall be rounded to the nearest whole Unit (and a 0.5 Unit
shall
be rounded to the next higher Unit).
|
Section
5.11
|
Fully
Paid and Non-Assessable Nature of Limited Partner
Interests.
|
All
Limited Partner Interests issued pursuant to, and in accordance with the
requirements of, this Article
V
shall be
fully paid and non-assessable Limited Partner Interests in the Partnership,
except as such non-assessability may be affected by Section 51 of the ▇▇▇▇▇▇▇▇
Islands Act.
ARTICLE
VI
ALLOCATIONS
AND DISTRIBUTIONS
|
Section
6.1
|
Allocations
for Capital Account Purposes.
|
For
purposes of maintaining the Capital Accounts and in determining the rights
of
the Partners among themselves, the Partnership’s items of income, gain, loss and
deduction (computed in accordance with Section
5.5(b))
shall
be allocated among the Partners in each taxable year (or portion thereof) as
provided herein below.
(a) Net
Income.
After
giving effect to the special allocations set forth in Section
6.1(d),
Net
Income for each taxable year and all items of income, gain, loss and deduction
taken into account in computing Net Income for such taxable year shall be
allocated as follows:
(i) First,
100% to the General Partner, in an amount equal to the aggregate Net Losses
allocated to the General Partner pursuant to Section
6.1(b)(iii)
for all
previous taxable years until the aggregate Net Income allocated to the General
Partner pursuant to this Section
6.1(a)(i)
for the
current taxable year and all previous taxable years is equal to the aggregate
Net Losses allocated to the General Partner pursuant to Section
6.1(b)(iii)
for all
previous taxable years;
(ii) Second,
2% to the General Partner and 98% to the Unitholders, Pro Rata, until the
aggregate Net Income allocated pursuant to this Section
6.1(a)(ii)
for the
current taxable year and all previous taxable years is equal to the aggregate
Net Losses allocated pursuant to Section
6.1(b)(ii)
for all
previous taxable years; and
(iii) Third,
2%
to the General Partner, and 98% to the Unitholders, Pro Rata.
NYC:103990_15.DOC
40
(b) Net
Losses.
After
giving effect to the special allocations set forth in Section
6.1(d),
Net
Losses for each taxable period and all items of income, gain, loss and deduction
taken into account in computing Net Losses for such taxable period shall be
allocated as follows:
(i) First,
2%
to the General Partner, and 98% to the Unitholders, Pro Rata, until the
aggregate Net Losses allocated pursuant to this Section
6.1(b)(i)
for the
current taxable year and all previous taxable years is equal to the aggregate
Net Income allocated pursuant to Section
6.1(a)(iii)
for all
previous taxable years, provided that the Net Losses shall not be allocated
pursuant to this Section
6.1(b)(i)
to the
extent that such allocation would cause any Unitholder to have a deficit balance
in its Adjusted Capital Account at the end of such taxable year (or increase
any
existing deficit balance in its Adjusted Capital Account);
(ii) Second,
2% to the General Partner, and 98% to the Unitholders, Pro Rata; provided,
that
Net Losses shall not be allocated pursuant to this Section
6.1(b)(ii)
to the
extent that such allocation would cause any Unitholder to have a deficit balance
in its Adjusted Capital Account at the end of such taxable year (or increase
any
existing deficit balance in its Adjusted Capital Account);
(iii) Third,
the balance, if any, 100% to the General Partner.
(c) Net
Termination Gains and Losses.
After
giving effect to the special allocations set forth in Section
6.1(d),
all
items of income, gain, loss and deduction taken into account in computing Net
Termination Gain or Net Termination Loss for such taxable period shall be
allocated in the same manner as such Net Termination Gain or Net Termination
Loss is allocated hereunder. All allocations under this Section
6.1(c)
shall be
made after Capital Account balances have been adjusted by all other allocations
provided under this Section
6.1
and
after all distributions of Available Cash provided under Sections 6.4
and
6.5
have
been made; provided,
however,
that
solely for purposes of this Section
6.1(c),
Capital
Accounts shall not be adjusted for distributions made pursuant to Section
12.4.
(i) If
a Net
Termination Gain is recognized (or deemed recognized pursuant to Section
5.5(d)),
such
Net Termination Gain shall be allocated among the Partners in the following
manner (and the Capital Accounts of the Partners shall be increased by the
amount so allocated in each of the following subclauses, in the order listed,
before an allocation is made pursuant to the next succeeding
subclause):
(A) First,
to
each Partner having a deficit balance in its Capital Account, in the proportion
that such deficit balance bears to the total deficit balances in the Capital
Accounts of all Partners, until each such Partner has been allocated Net
Termination Gain equal to any such deficit balance in its Capital
Account;
(B) Second,
98% to all Unitholders holding Common Units, Pro Rata, and 2% to the General
Partner, until the Capital Account in respect of each Common Unit then
Outstanding is equal to the sum of (a)
its
Unrecovered Capital
NYC:103990_15.DOC
41
plus
(b)
the
Minimum Quarterly Distribution for the Quarter during which the Liquidation
Date
occurs, reduced by any distribution pursuant to Section
6.4(a)(i)
or
(b)(i) with respect to such Common Unit for such Quarter (the amount determined
pursuant to this clause (2) is hereinafter defined as the “Unpaid MQD”) plus
(c)
any then
existing Cumulative Common Unit Arrearage;
(C) Third,
if
such Net Termination Gain is recognized (or is deemed to be recognized) prior
to
the conversion of the last Outstanding Subordinated Unit, 98% to all Unitholders
holding Subordinated Units, Pro Rata, and 2% to the General Partner, until
the
Capital Account in respect of each Subordinated Unit then Outstanding equals
the
sum of (d)
its
Unrecovered Capital, determined for the taxable year (or portion thereof) to
which this allocation of gain relates, plus (e)
the
Minimum Quarterly Distribution for the Quarter during which the Liquidation
Date
occurs, reduced by any distribution pursuant to Section
6.4(a)(iii)
with
respect to such Subordinated Unit for such Quarter;
(D) Fourth,
98% to all Unitholders, Pro Rata, and 2% to the General Partner, until the
Capital Account in respect of each Common Unit then Outstanding is equal to
the
sum of (f)
its
Unrecovered Capital, plus (g)
the
Unpaid MQD, plus (h)
any then
existing Cumulative Common Unit Arrearage, plus (i)
the
excess of (aa) the First Target Distribution less the Minimum Quarterly
Distribution for each Quarter of the Partnership’s existence over (bb) the
cumulative per Unit amount of any distributions of Available Cash that is deemed
to be Operating Surplus made pursuant to Sections 6.4(a)(iv)
and
6.4(b)(ii)
(the sum
of (1) plus (2) plus (3) plus (4) is hereinafter defined as the “First
Liquidation Target Amount”);
(E) Fifth,
85% to all Unitholders, Pro Rata, 13% to the holders of the Incentive
Distribution Rights, Pro Rata, and 2% to the General Partner, until the Capital
Account in respect of each Common Unit then Outstanding is equal to the sum
of
(1) the First Liquidation Target Amount, plus (2) the excess of (aa) the Second
Target Distribution less the First Target Distribution for each Quarter of
the
Partnership’s existence over (bb) the cumulative per Unit amount of any
distributions of Available Cash that is deemed to be Operating Surplus made
pursuant to Sections 6.4(a)(v)
and
6.4(b)(iii)
(the sum
of (1) plus (2) is hereinafter defined as the “Second Liquidation Target
Amount”);
(F) Sixth,
75% to all Unitholders, Pro Rata, 23% to the holders of the Incentive
Distribution Rights, Pro Rata, and 2% to the General Partner, until the Capital
Account in respect of each Common Unit then Outstanding is equal to the sum
of
(j)
the
Second Liquidation Target Amount, plus (k)
the
excess of (aa) the Third Target Distribution less the Second Target Distribution
for each Quarter of the Partnership’s existence over (bb) the cumulative per
Unit amount of any distributions of Available Cash that is deemed to be
Operating Surplus made pursuant to Sections 6.4(a)(vi)and
6.4(b)(iv)
(the sum
of (1) plus (2) is hereinafter defined as the “Third Liquidation Target
Amount”); and
NYC:103990_15.DOC
42
(G) Finally,
any remaining amount 50% to all Unitholders, Pro Rata, 48% to the holders of
the
Incentive Distribution Rights, Pro Rata, and 2% to the General
Partner.
(ii) If
a Net
Termination Loss is recognized (or deemed recognized pursuant to Section
5.5(d)),
such
Net Termination Loss shall be allocated among the Partners in the following
manner:
(A) First,
if
such Net Termination Loss is recognized (or is deemed to be recognized) prior
to
the conversion of the last Outstanding Subordinated Unit, 98% to the Unitholders
holding Subordinated Units, Pro Rata, and 2% to the General Partner, until
the
Capital Account in respect of each Subordinated Unit then Outstanding has been
reduced to zero;
(B) Second,
98% to all Unitholders holding Common Units, Pro Rata, and 2% to the General
Partner, until the Capital Account in respect of each Common Unit then
Outstanding has been reduced to zero; and
(C) Third,
the balance, if any, 100% to the General Partner.
(d) Special
Allocations.
Notwithstanding any other provision of this Section
6.1,
the
following special allocations shall be made for such taxable
period:
(i) Partnership
Minimum Gain Chargeback.
Notwithstanding any other provision of this Section
6.1,
if
there is a net decrease in Partnership Minimum Gain during any Partnership
taxable period, each Partner shall be allocated items of Partnership income
and
gain for such period (and, if necessary, subsequent periods) in the manner
and
amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2)
and 1.704-2(j)(2)(i), or any successor provision. For purposes of this
Section
6.1(d),
each
Partner’s Adjusted Capital Account balance shall be determined, and the
allocation of income or gain required hereunder shall be effected, prior to
the
application of any other allocations pursuant to this Section
6.1(d)
with
respect to such taxable period (other than an allocation pursuant to Sections
6.1(d)(vi)
and
6.1(d)(vii)).
This
Section
6.1(d)(i)
is
intended to comply with the Partnership Minimum Gain chargeback requirement
in
Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently
therewith.
(ii) Chargeback
of Partner Nonrecourse Debt Minimum Gain.
Notwithstanding the other provisions of this Section
6.1
(other
than Section
6.1(d)(i)),
except
as provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net
decrease in Partner Nonrecourse Debt Minimum Gain during any Partnership taxable
period, any Partner with a share of Partner Nonrecourse Debt Minimum Gain at
the
beginning of such taxable period shall be allocated items of Partnership income
and gain for such period (and, if necessary, subsequent periods) in the manner
and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and
1.704-2(j)(2)(ii), or any successor provisions. For purposes of this
Section
6.1(d),
each
Partner’s Adjusted Capital Account balance shall be determined, and the
allocation of income or gain required hereunder
NYC:103990_15.DOC
43
shall
be
effected, prior to the application of any other allocations pursuant to this
Section
6.1(d),
other
than Section
6.1(d)(i)
and
other than an allocation pursuant to Sections 6.1(d)(vi)
and
6.1(d)(vii),
with
respect to such taxable period. This Section
6.1(d)(ii)
is
intended to comply with the chargeback of items of income and gain requirement
in Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted
consistently therewith.
(iii) Priority
Allocations.
(A) If
the
amount of cash or the Net Agreed Value of any property distributed (except
cash
or property distributed pursuant to Section
12.4)
to any
Unitholder with respect to its Units for a taxable year is greater (on a per
Unit basis) than the amount of cash or the Net Agreed Value of property
distributed to the other Unitholders with respect to their Units (on a per
Unit
basis), then (l)
each
Unitholder receiving such greater cash or property distribution shall be
allocated gross income in an amount equal to the product of (aa) the amount
by
which the distribution (on a per Unit basis) to such Unitholder exceeds the
distribution (on a per Unit basis) to the Unitholders receiving the smallest
distribution and (bb) the number of Units owned by the Unitholder receiving
the
greater distribution; and (m)
the
General Partner shall be allocated gross income in an aggregate amount equal
to
2/98ths of the sum of the amounts allocated in clause (1) above.
(B) After
the
application of Section
6.1(d)(iii)(A),
all or
any portion of the remaining items of Partnership gross income or gain for
the
taxable period, if any, shall be allocated (n)
to the
holders of Incentive Distribution Rights, Pro Rata, until the aggregate amount
of such items allocated to the holders of Incentive Distribution Rights pursuant
to this paragraph 6.1(d)(iii)(B)
for the
current taxable year and all previous taxable years is equal to the cumulative
amount of all Incentive Distributions made to the holders of Incentive
Distribution Rights from the Closing Date to a date 45 days after the end of
the
current taxable year and (o)
to the
General Partner in an amount equal to 2/98ths of the sum of the amounts
allocated in clause (1) above.
(iv) Qualified
Income Offset.
In the
event any Partner unexpectedly receives any adjustments, allocations or
distributions described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Partnership income
and gain shall be specially allocated to such Partner in an amount and manner
sufficient to eliminate, to the extent required by the Treasury Regulations
promulgated under Section 704(b) of the Code, the deficit balance, if any,
in
its Adjusted Capital Account created by such adjustments, allocations or
distributions as quickly as possible unless such deficit balance is otherwise
eliminated pursuant to Section
6.1(d)(i)
or
(ii).
(v) Gross
Income Allocations.
In the
event any Partner has a deficit balance in its Capital Account at the end of
any
Partnership taxable period in excess of the sum of (A) the amount such Partner
is required to restore pursuant to the provisions of this
NYC:103990_15.DOC
44
Agreement
and (B) the amount such Partner is deemed obligated to restore pursuant to
Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Partner shall
be
specially allocated items of Partnership gross income and gain in the amount
of
such excess as quickly as possible; provided,
that an
allocation pursuant to this Section
6.1(d)(v)
shall be
made only if and to the extent that such Partner would have a deficit balance
in
its Capital Account as adjusted after all other allocations provided for in
this
Section
6.1
have
been tentatively made as if this Section
6.1(d)(v)
were not
in this Agreement.
(vi) Nonrecourse
Deductions.
Nonrecourse Deductions for any taxable period shall be allocated to the Partners
in accordance with their respective Percentage Interests. If the General Partner
determines that the Partnership’s Nonrecourse Deductions should be allocated in
a different ratio to satisfy the safe harbor requirements of the Treasury
Regulations promulgated under Section 704(b) of the Code, the General Partner
is
authorized, upon notice to the other Partners, to revise the prescribed ratio
to
the numerically closest ratio that does satisfy such requirements.
(vii) Partner
Nonrecourse Deductions.
Partner
Nonrecourse Deductions for any taxable period shall be allocated 100% to the
Partner that bears the Economic Risk of Loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable
in accordance with Treasury Regulation Section 1.704-2(i). If more than one
Partner bears the Economic Risk of Loss with respect to a Partner Nonrecourse
Debt, such Partner Nonrecourse Deductions attributable thereto shall be
allocated between or among such Partners in accordance with the ratios in which
they share such Economic Risk of Loss.
(viii) Nonrecourse
Liabilities.
For
purposes of Treasury Regulation Section 1.752-3(a)(3), the Partners agree that
Nonrecourse Liabilities of the Partnership in excess of the sum of (A) the
amount of Partnership Minimum Gain and (B) the total amount of Nonrecourse
Built-in Gain shall be allocated among the Partners in accordance with their
respective Percentage Interests.
(ix) Code
Section 754 Adjustments.
To the
extent an adjustment to the adjusted tax basis of any Partnership asset pursuant
to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining
Capital Accounts, the amount of such adjustment to the Capital Accounts shall
be
treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases such basis), and such item of gain or
loss
shall be specially allocated to the Partners in a manner consistent with the
manner in which their Capital Accounts are required to be adjusted pursuant
to
such Section of the Treasury Regulations.
(x) Economic
Uniformity.
At the
election of the General Partner with respect to any taxable period ending upon,
or after, the termination of the Subordination Period with respect to any class
of Units, all or a portion of the remaining items of Partnership gross income
or
gain for such taxable period, after taking into account allocations pursuant
to
Section
6.1(d)(iii),
shall
be allocated 100% to each Partner holding
NYC:103990_15.DOC
45
Subordinated
Units of that class that are Outstanding as of the termination of such
Subordination Period (“Final Subordinated Units”) in the proportion of the
number of Final Subordinated Units held by such Partner to the total number
of
Final Subordinated Units then Outstanding, until each such Partner has been
allocated an amount of gross income or gain that increases the Capital Account
maintained with respect to such Final Subordinated Units to an amount equal
to
the product of (A) the number of Final Subordinated Units held by such Partner
and (B) the Per Unit Capital Amount for a Common Unit. The purpose of this
allocation is to establish uniformity between the Capital Accounts underlying
Final Subordinated Units and the Capital Accounts underlying Common Units held
by Persons other than the General Partner and its Affiliates immediately prior
to the conversion of such Final Subordinated Units into Common Units. This
allocation method for establishing such economic uniformity will be available
to
the General Partner only if the method for allocating the Capital Account
maintained with respect to the Subordinated Units between the transferred and
retained Subordinated Units pursuant to Section
5.5(c)(ii)
does not
otherwise provide such economic uniformity to the Final Subordinated
Units.
(xi) Curative
Allocation.
(A) Notwithstanding
any other provision of this Section
6.1,
other
than the Required Allocations, the Required Allocations shall be taken into
account in making the Agreed Allocations so that, to the extent possible, the
net amount of items of income, gain, loss and deduction allocated to each
Partner pursuant to the Required Allocations and the Agreed Allocations,
together, shall be equal to the net amount of such items that would have been
allocated to each such Partner under the Agreed Allocations had the Required
Allocations and the related Curative Allocation not otherwise been provided
in
this Section
6.1.
Notwithstanding the preceding sentence, Required Allocations relating to (1)
Nonrecourse Deductions shall not be taken into account except to the extent
that
there has been a decrease in Partnership Minimum Gain and (2) Partner
Nonrecourse Deductions shall not be taken into account except to the extent
that
there has been a decrease in Partner Nonrecourse Debt Minimum Gain. Allocations
pursuant to this Section
6.1(d)(xi)(A)
shall
only be made with respect to Required Allocations to the extent the General
Partner determines that such allocations will otherwise be inconsistent with
the
economic agreement among the Partners. Further, allocations pursuant to this
Section
6.1(d)(xi)(A)
shall be
deferred with respect to allocations pursuant to clauses (1) and (2) hereof
to
the extent the General Partner determines that such allocations are likely
to be
offset by subsequent Required Allocations.
(B) The
General Partner shall, with respect to each taxable period, (1) apply the
provisions of Section
6.1(d)(xi)(A)
in
whatever order is most likely to minimize the economic distortions that might
otherwise result from the Required Allocations, and (2) divide all allocations
pursuant to Section
6.1(d)(xi)(A)
among
the Partners in a manner that is likely to minimize such economic
distortions.
NYC:103990_15.DOC
46
(xii) Corrective
Allocations.
In the
event of any allocation of Additional Book Basis Derivative Items or any
Book-Down Event or any recognition of a Net Termination Loss, the following
rules shall apply:
(A) In
the
case of any allocation of Additional Book Basis Derivative Items (other than
an
allocation of Unrealized Gain or Unrealized Loss under Section
5.5(d)
hereof),
the General Partner shall allocate additional items of gross income and gain
away from the holders of Incentive Distribution Rights to the Unitholders and
the General Partner, or additional items of deduction and loss away from the
Unitholders and the General Partner to the holders of Incentive Distribution
Rights, to the extent that the Additional Book Basis Derivative Items allocated
to the Unitholders or the General Partner exceed their Share of Additional
Book
Basis Derivative Items. For this purpose, the Unitholders and the General
Partner shall be treated as being allocated Additional Book Basis Derivative
Items to the extent that such Additional Book Basis Derivative Items have
reduced the amount of income that would otherwise have been allocated to the
Unitholders or the General Partner under the Partnership Agreement (e.g.,
Additional Book Basis Derivative Items taken into account in computing cost
of
goods sold would reduce the amount of book income otherwise available for
allocation among the Partners). Any allocation made pursuant to this
Section
6.1(d)(xii)(A)
shall be
made after all of the other Agreed Allocations have been made as if this
Section
6.1(d)(xii)
were not
in this Agreement and, to the extent necessary, shall require the reallocation
of items that have been allocated pursuant to such other Agreed
Allocations.
(B) In
the
case of any negative adjustments to the Capital Accounts of the Partners
resulting from a Book-Down Event or from the recognition of a Net Termination
Loss, such negative adjustment (1) shall first be allocated, to the extent
of
the Aggregate Remaining Net Positive Adjustments, in such a manner, as
determined by the General Partner, that to the extent possible the aggregate
Capital Accounts of the Partners will equal the amount that would have been
the
Capital Account balance of the Partners if no prior Book-Up Events had occurred,
and (2) any negative adjustment in excess of the Aggregate Remaining Net
Positive Adjustments shall be allocated pursuant to Section
6.1(c)
hereof.
(C) In
making
the allocations required under this Section
6.1(d)(xii),
the
General Partner may apply whatever conventions or other methodology it
determines will satisfy the purpose of this Section
6.1(d)(xii).
|
Section
6.2
|
Allocations
for Tax Purposes.
|
(a) Except
as
otherwise provided herein, for United States federal income tax purposes, each
item of income, gain, loss and deduction shall be allocated among the Partners
in the same manner as its correlative item of “book” income, gain, loss or
deduction is allocated pursuant to Section
6.1.
NYC:103990_15.DOC
47
(b) In
an
attempt to eliminate Book-Tax Disparities attributable to a Contributed Property
or Adjusted Property, items of income, gain, loss, depreciation, amortization
and cost recovery deductions shall be allocated for United States federal income
tax purposes among the Partners as follows:
(i) (3)
In the
case of a Contributed Property, such items attributable thereto shall be
allocated among the Partners in the manner provided under Section 704(c) of
the
Code that takes into account the variation between the Agreed Value of such
property and its adjusted basis at the time of contribution; and (a)
any item
of Residual Gain or Residual Loss attributable to a Contributed Property shall
be allocated among the Partners in the same manner as its correlative item
of
“book” gain or loss is allocated pursuant to Section
6.1.
(ii) (4)
In the
case of an Adjusted Property, such items shall (5)
first,
be allocated among the Partners in a manner consistent with the principles
of
Section 704(c) of the Code to take into account the Unrealized Gain or
Unrealized Loss attributable to such property and the allocations thereof
pursuant to Section
5.5(d)(i)
or
5.5(d)(ii),
and
(6)
second,
in the event such property was originally a Contributed Property, be allocated
among the Partners in a manner consistent with Section
6.2(b)(i)(A);
and
(a)
any item
of Residual Gain or Residual Loss attributable to an Adjusted Property shall
be
allocated among the Partners in the same manner as its correlative item of
“book” gain or loss is allocated pursuant to Section
6.1.
(iii) The
General Partner shall apply the principles of Treasury Regulation Section
1.704-3(d) to eliminate Book-Tax Disparities.
(c) For
the
proper administration of the Partnership and for the preservation of uniformity
of the Limited Partner Interests (or any class or classes thereof), the General
Partner shall (i) adopt such conventions as it deems appropriate in determining
the amount of depreciation, amortization and cost recovery deductions; (ii)
make
special allocations for United States federal income tax purposes of income
(including, without limitation, gross income) or deductions; and (iii) amend
the
provisions of this Agreement as appropriate (x) to reflect the proposal or
promulgation of Treasury Regulations under Section 704(b) or Section 704(c)
of
the Code or (y) otherwise to preserve or achieve uniformity of the Limited
Partner Interests (or any class or classes thereof). The General Partner may
adopt such conventions, make such allocations and make such amendments to this
Agreement as provided in this Section
6.2(c)
only if
such conventions, allocations or amendments would not have a material adverse
effect on the Partners, the holders of any class or classes of Limited Partner
Interests issued and Outstanding or the Partnership, and if such allocations
are
consistent with the principles of Section 704 of the Code.
(d) The
General Partner may determine to depreciate or amortize the portion of an
adjustment under Section 743(b) of the Code attributable to unrealized
appreciation in any Adjusted Property (to the extent of the unamortized Book-Tax
Disparity) using a predetermined rate derived from the depreciation or
amortization method and useful life applied to the Partnership’s common basis of
such property, despite any inconsistency of such approach with Treasury
Regulation Section 1.167(c)-l(a)(6) or any successor regulations thereto. If
the
General
NYC:103990_15.DOC
48
Partner
determines that such reporting position cannot reasonably be taken, the General
Partner may adopt depreciation and amortization conventions under which all
purchasers acquiring Limited Partner Interests in the same month would receive
depreciation and amortization deductions, based upon the same applicable rate
as
if they had purchased a direct interest in the Partnership’s property. If the
General Partner chooses not to utilize such aggregate method, the General
Partner may use any other depreciation and amortization conventions to preserve
the uniformity of the intrinsic tax characteristics of any Limited Partner
Interests, so long as such conventions would not have a material adverse effect
on the Limited Partners or the Record Holders of any class or classes of Limited
Partner Interests.
(e) Any
gain
allocated to the Partners upon the sale or other taxable disposition of any
Partnership asset shall, to the extent possible, after taking into account
other
required allocations of gain pursuant to this Section
6.2,
be
characterized as Recapture Income in the same proportions and to the same extent
as such Partners (or their predecessors in interest) have been allocated any
deductions directly or indirectly giving rise to the treatment of such gains
as
Recapture Income.
(f) All
items
of income, gain, loss, deduction and credit recognized by the Partnership for
United States federal income tax purposes and allocated to the Partners in
accordance with the provisions hereof shall be determined without regard to
any
election under Section 754 of the Code that may be made by the Partnership;
provided,
however,
that
such allocations, once made, shall be adjusted (in the manner determined by
the
General Partner) to take into account those adjustments permitted or required
by
Sections 734 and 743 of the Code.
(g) Each
item
of Partnership income, gain, loss and deduction shall for United States federal
income tax purposes, be determined on an annual basis and prorated on a monthly
basis and shall be allocated to the Partners as of the opening of the New York
Stock Exchange on the first Business Day of each month; provided,
however,
such
items for the period beginning on the Closing Date and ending on the last day
of
the month in which the Option Closing Date or the expiration of the
Over-Allotment Option occurs shall be allocated to the Partners as of the
opening of the New York Stock Exchange on the first Business Day of the next
succeeding month; and provided, further, that gain or loss on a sale or other
disposition of any assets of the Partnership or any other extraordinary item
of
income or loss realized and recognized other than in the ordinary course of
business, as determined by the General Partner, shall be allocated to the
Partners as of the opening of the New York Stock Exchange on the first Business
Day of the month in which such gain or loss is recognized for United States
federal income tax purposes. The General Partner may revise, alter or otherwise
modify such methods of allocation to the extent permitted or required by Section
706 of the Code and the regulations or rulings promulgated
thereunder.
(h) Allocations
that would otherwise be made to a Limited Partner under the provisions of this
Article
VI
shall
instead be made to the beneficial owner of Limited Partner Interests held by
a
nominee in any case in which the nominee has furnished the identity of such
owner to the Partnership in accordance with Section 6031(c) of the Code or
any
other method determined by the General Partner.
NYC:103990_15.DOC
49
Section
6.3 Requirement
and Characterization of Distributions; Distributions to Record
Holders.
(a) Within
45
days following the end of each Quarter commencing with the Quarter ending on
June 30, 2005, an amount equal to 100% of Available Cash with respect to such
Quarter shall, subject to Section 51 of the ▇▇▇▇▇▇▇▇ Islands Act, be distributed
in accordance with this Article
VI
by the
Partnership to the Partners as of the Record Date selected by the General
Partner. All amounts of Available Cash distributed by the Partnership on any
date from any source shall be deemed to be Operating Surplus until the sum
of
all amounts of Available Cash theretofore distributed by the Partnership to
the
Partners pursuant to Section
6.4
equals
the Operating Surplus from the Closing Date through the close of the immediately
preceding Quarter. Any remaining amounts of Available Cash distributed by the
Partnership on such date shall, except as otherwise provided in Section
6.5,
be
deemed to be “Capital Surplus.” All distributions required to be made under this
Agreement shall be made subject to Section 51 of the ▇▇▇▇▇▇▇▇ Islands
Act.
(b) Notwithstanding
Section
6.3(a),
in the
event of the dissolution and liquidation of the Partnership, all receipts
received during or after the Quarter in which the Liquidation Date occurs,
other
than from borrowings described in (a)(ii) of the definition of Available Cash,
shall be applied and distributed solely in accordance with, and subject to
the
terms and conditions of, Section
12.4.
(c) The
General Partner may treat taxes paid by the Partnership on behalf of, or amounts
withheld with respect to, all or less than all of the Partners, as a
distribution of Available Cash to such Partners.
(d) Each
distribution in respect of a Partnership Interest shall be paid by the
Partnership, directly or through the Transfer Agent or through any other Person
or agent, only to the Record Holder of such Partnership Interest as of the
Record Date set for such distribution. Such payment shall constitute full
payment and satisfaction of the Partnership’s liability in respect of such
payment, regardless of any claim of any Person who may have an interest in
such
payment by reason of an assignment or otherwise.
|
Section
6.4
|
Distributions
of Available Cash from Operating
Surplus.
|
(a) During
Subordination Period. Available Cash with respect to any Quarter within the
Subordination Period that is deemed to be Operating Surplus pursuant to the
provisions of Sections 6.3
or
6.5
shall,
subject to Section 51 of the ▇▇▇▇▇▇▇▇ Islands Act, be distributed as follows,
except as otherwise required by Section
5.6(b)
in
respect of other Partnership Securities issued pursuant thereto:
(i) First,
98% to the Unitholders holding Common Units, Pro Rata, and 2% to the General
Partner, until there has been distributed in respect of each Common Unit then
Outstanding an amount equal to the Minimum Quarterly Distribution for such
Quarter;
(ii) Second,
98% to the Unitholders holding Common Units, Pro Rata, and 2% to the General
Partner, until there has been distributed in respect of each Common
Unit
NYC:103990_15.DOC
50
then
Outstanding an amount equal to the Cumulative Common Unit Arrearage existing
with respect to such Quarter;
(iii) Third,
98% to the Unitholders holding Subordinated Units, Pro Rata, and 2% to the
General Partner, until there has been distributed in respect of each
Subordinated Unit then Outstanding an amount equal to the Minimum Quarterly
Distribution for such Quarter;
(iv) Fourth,
98% to all Unitholders, Pro Rata, and 2% to the General Partner, until there
has
been distributed in respect of each Unit then Outstanding an amount equal to
the
excess of the First Target Distribution over the Minimum Quarterly Distribution
for such Quarter;
(v) Fifth,
85% to all Unitholders, Pro Rata, 13% to the holders of the Incentive
Distribution Rights and 2% to the General Partner, until there has been
distributed in respect of each Unit then Outstanding an amount equal to the
excess of the Second Target Distribution over the First Target Distribution
for
such Quarter;
(vi) Sixth,
75% to all Unitholders, Pro Rata, 23% to the holders of the Incentive
Distribution Rights, Pro Rata, and 2% to the General Partner, until there has
been distributed in respect of each Unit then Outstanding an amount equal to
the
excess of the Third Target Distribution over the Second Target Distribution
for
such Quarter; and
(vii) Thereafter,
50% to all Unitholders, Pro Rata, 48% to the holders of the Incentive
Distribution Rights, Pro Rata, and 2% to the General Partner;
provided,
however,
if the
Minimum Quarterly Distribution, the First Target Distribution, the Second Target
Distribution and the Third Target Distribution have been reduced to zero
pursuant to the second sentence of Section
6.6(a),
the
distribution of Available Cash that is deemed to be Operating Surplus with
respect to any Quarter will be made solely in accordance with Section
6.4(a)(vii).
(b) After
Subordination Period. Available Cash with respect to any Quarter after the
Subordination Period that is deemed to be Operating Surplus pursuant to the
provisions of Sections 6.3
or
6.5,
subject
to Section 51 of the ▇▇▇▇▇▇▇▇ Islands Act, shall be distributed as follows,
except as otherwise required by Section
5.6(b)
in
respect of additional Partnership Securities issued pursuant
thereto:
(i) First,
98% to all Unitholders, Pro Rata, and 2% to the General Partner, until there
has
been distributed in respect of each Unit then Outstanding an amount equal to
the
Minimum Quarterly Distribution for such Quarter;
(ii) Second,
98% to all Unitholders, Pro Rata, and 2% to the General Partner, until there
has
been distributed in respect of each Unit then Outstanding an amount equal to
the
excess of the First Target Distribution over the Minimum Quarterly Distribution
for such Quarter;
NYC:103990_15.DOC
51
(iii) Third,
85% to all Unitholders, Pro Rata, 13% to the holders of the Incentive
Distribution Rights, Pro Rata, and 2% to the General Partner, until there has
been distributed in respect of each Unit then Outstanding an amount equal to
the
excess of the Second Target Distribution over the First Target Distribution
for
such Quarter;
(iv) Fourth,
75% to all Unitholders, Pro Rata, 23% to the holders of the Incentive
Distribution Rights, Pro Rata, and 2% to the General Partner, until there has
been distributed in respect of each Unit then Outstanding an amount equal to
the
excess of the Third Target Distribution over the Second Target Distribution
for
such Quarter; and
(v) Thereafter,
50% to all Unitholders, Pro Rata, 48% to the holders of the Incentive
Distribution Rights, Pro Rata, and 2% to the General Partner;
provided,
however,
if the
Minimum Quarterly Distribution, the First Target Distribution, the Second Target
Distribution and the Third Target Distribution have been reduced to zero
pursuant to the second sentence of Section
6.6(a),
the
distribution of Available Cash that is deemed to be Operating Surplus with
respect to any Quarter will be made solely in accordance with Section
6.4(b)(v).
|
Section
6.5
|
Distributions
of Available Cash from Capital
Surplus.
|
Available
Cash that is deemed to be Capital Surplus pursuant to the provisions of
Section
6.3(a)
shall,
subject to Section 51 of the ▇▇▇▇▇▇▇▇ Islands Act, be distributed, unless the
provisions of Section
6.3
require
otherwise, 98% to all Unitholders, Pro Rata, and 2% to the General Partner,
until a hypothetical holder of a Common Unit acquired on the Closing Date has
received with respect to such Common Unit, during the period since the Closing
Date through such date, distributions of Available Cash that are deemed to
be
Capital Surplus in an aggregate amount equal to the Initial Unit Price.
Available Cash that is deemed to be Capital Surplus shall then be distributed
98% to all Unitholders holding Common Units, Pro Rata, and 2% to the General
Partner, until there has been distributed in respect of each Common Unit then
Outstanding an amount equal to the Cumulative Common Unit Arrearage. Thereafter,
all Available Cash shall be distributed as if it were Operating Surplus and
shall be distributed in accordance with Section
6.4.
|
Section
6.6
|
Adjustment
of Minimum Quarterly Distribution and Target Distribution
Levels.
|
(a) The
Minimum Quarterly Distribution, First Target Distribution, Second Target
Distribution, Third Target Distribution, Common Unit Arrearages and Cumulative
Common Unit Arrearages shall be proportionately adjusted in the event of any
distribution, combination or subdivision (whether effected by a distribution
payable in Units or otherwise) of Units or other Partnership Securities in
accordance with Section
5.10.
In the
event of a distribution of Available Cash that is deemed to be from Capital
Surplus, the then applicable Minimum Quarterly Distribution, First Target
Distribution, Second Target Distribution and Third Target Distribution, shall
be
adjusted proportionately downward to equal the product obtained by multiplying
the otherwise applicable Minimum Quarterly Distribution, First Target
Distribution,
NYC:103990_15.DOC
52
Second
Target Distribution and Third Target Distribution, as the case may be, by a
fraction of which the numerator is the Unrecovered Capital of the Common Units
immediately after giving effect to such distribution and of which the
denominator is the Unrecovered Capital of the Common Units immediately prior
to
giving effect to such distribution.
(b) The
Minimum Quarterly Distribution, First Target Distribution, Second Target
Distribution and Third Target Distribution, shall also be subject to adjustment
pursuant to Section
6.9.
|
Section
6.7
|
Special
Provisions Relating to the Holders of Subordinated
Units.
|
(a) Except
with respect to the right to vote on or approve matters requiring the vote
or
approval of a percentage of the holders of Outstanding Common Units and the
right to participate in allocations of income, gain, loss and deduction and
distributions made with respect to Common Units, the holder of a Subordinated
Unit shall have all of the rights and obligations of a Unitholder holding Common
Units hereunder; provided,
however,
that
immediately upon the conversion of Subordinated Units into Common Units pursuant
to Section
5.8,
the
Unitholder holding a Subordinated Unit shall possess all of the rights and
obligations of a Unitholder holding Common Units hereunder, including the right
to vote as a Common Unitholder and the right to participate in allocations
of
income, gain, loss and deduction and distributions made with respect to Common
Units; provided,
however,
that
such converted Subordinated Units shall remain subject to the provisions of
Sections 5.5(d)(ii),
6.1(d)(x)
and
6.7(b).
(b) The
Unitholder holding a Subordinated Unit that has converted into a Common Unit
pursuant to Section
5.8
shall
not be issued a Common Unit Certificate pursuant to Section
4.1,
and
shall not be permitted to transfer its converted Subordinated Units to a Person
that is not an Affiliate of the holder until such time as the General Partner
determines, based on advice of counsel, that a converted Subordinated Unit
should have, as a substantive matter, like intrinsic economic and federal income
tax characteristics, in all material respects, to the intrinsic economic and
federal income tax characteristics of an Initial Common Unit. In connection
with
the condition imposed by this Section
6.7(b),
the
General Partner may take whatever steps are required to provide economic
uniformity to the converted Subordinated Units in preparation for a transfer
of
such converted Subordinated Units, including the application of Sections
5.5(c)(ii)
and
6.1(d)(x);
provided,
however,
that no
such steps may be taken that would have a material adverse effect on the
Unitholders holding Common Units represented by Common Unit
Certificates.
|
Section
6.8
|
Special
Provisions Relating to the Holders of Incentive Distribution
Rights.
|
Notwithstanding
anything to the contrary set forth in this Agreement, the holders of the
Incentive Distribution Rights (a) shall (i) possess the rights and obligations
provided in this Agreement with respect to a Limited Partner pursuant to
Articles III
and
VII
and (ii)
have a Capital Account as a Partner pursuant to Section
5.5
and all
other provisions related thereto and (b) shall not (i) be entitled to vote
on
any matters requiring the approval or vote of the holders of Outstanding Units,
(ii) be entitled to any distributions other than as provided in
Sections
NYC:103990_15.DOC
53
6.4(a)(v),
(vi)
and
(vii),
6.4(b)(iii),
(iv)
and
(v),
and
12.4
or (iii)
be allocated items of income, gain, loss or deduction other than as specified
in
this Article
VI.
|
Section
6.9
|
Entity-Level
Taxation.
|
If
legislation is enacted or the interpretation of existing language is modified
by
a governmental taxing authority so that a Group Member is treated as an
association taxable as a corporation or is otherwise subject to an entity-level
tax for federal, state or local income tax purposes, then the General Partner
shall estimate for each Quarter the Partnership Group’s aggregate liability (the
“Estimated Incremental Quarterly Tax Amount”) for all such income taxes that are
payable by reason of any such new legislation or interpretation; provided that
any difference between such estimate and the actual tax liability for such
Quarter that is owed by reason of any such new legislation or interpretation
shall be taken into account in determining the Estimated Incremental Quarterly
Tax Amount with respect to each Quarter in which any such difference can be
determined. For each such Quarter, the Minimum Quarterly Distribution, First
Target Distribution, Second Target Distribution and Third Target Distribution,
shall be the product obtained by multiplying (a) the amounts therefor that
are
set out herein prior to the application of this Section
6.9
times
(b) the quotient obtained by dividing (i) Available Cash with respect to such
Quarter by (ii) the sum of Available Cash with respect to such Quarter and
the
Estimated Incremental Quarterly Tax Amount for such Quarter, as determined
by
the General Partner. For purposes of the foregoing, Available Cash with respect
to a Quarter will be deemed reduced by the Estimated Incremental Quarterly
Tax
Amount for that Quarter.
ARTICLE
VII
MANAGEMENT
AND OPERATION OF BUSINESS
|
Section
7.1
|
Management.
|
(a) The
General Partner shall conduct, direct and manage all activities of the
Partnership. Except as otherwise expressly provided in this Agreement, all
management powers over the business and affairs of the Partnership shall be
exclusively vested in the General Partner, and no Limited Partner or Assignee
shall have any management power over the business and affairs of the
Partnership. In addition to the powers now or hereafter granted a general
partner of a limited partnership under applicable law or that are granted to
the
General Partner under any other provision of this Agreement, the General
Partner, subject to Section
7.3,
shall
have full power and authority to do all things and on such terms as it
determines to be necessary or appropriate to conduct the business of the
Partnership, to exercise all powers set forth in Section
2.5
and to
effectuate the purposes set forth in Section
2.4,
including the following:
(i) the
making of any expenditures, the lending or borrowing of money, the assumption
or
guarantee of, or other contracting for, indebtedness and other liabilities,
the
issuance of evidences of indebtedness, including indebtedness that is
convertible into Partnership Securities, and the incurring of any other
obligations;
NYC:103990_15.DOC
54
(ii) the
making of tax, regulatory and other filings, or rendering of periodic or other
reports to governmental or other agencies having jurisdiction over the business
or assets of the Partnership;
(iii) the
acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or
exchange of any or all of the assets of the Partnership or the merger or other
combination of the Partnership with or into another Person (the matters
described in this clause (iii) being subject, however, to any prior approval
that may be required by Section
7.3
and
Article
XIV);
(iv) the
use
of the assets of the Partnership (including cash on hand) for any purpose
consistent with the terms of this Agreement, including the financing of the
conduct of the operations of the Partnership Group; subject to Section
7.6(a),
the
lending of funds to other Persons (including other Group Members); the repayment
or guarantee of obligations of the Partnership Group; and the making of capital
contributions to any member of the Partnership Group;
(v) the
negotiation, execution and performance of any contracts, conveyances or other
instruments (including instruments that limit the liability of the Partnership
under contractual arrangements to all or particular assets of the Partnership,
with the other party to the contract to have no recourse against the General
Partner or its assets other than its interest in the Partnership, even if same
results in the terms of the transaction being less favorable to the Partnership
than would otherwise be the case);
(vi) the
distribution of Partnership cash;
(vii) the
selection and dismissal of employees (including employees having titles such
as
“president,” “vice president,” “secretary” and “treasurer”) and agents, outside
attorneys, accountants, consultants and contractors and the determination of
their compensation and other terms of employment or hiring;
(viii) the
maintenance of insurance for the benefit of the Partnership Group, the Partners
and Indemnitees;
(ix) the
formation of, or acquisition of an interest in, and the contribution of property
and the making of loans to, any further limited or general partnerships, joint
ventures, corporations, limited liability companies or other relationships
(including the acquisition of interests in, and the contributions of property
to, any Group Member from time to time) subject to the restrictions set forth
in
Section
2.4;
(x) the
control of any matters affecting the rights and obligations of the Partnership,
including the bringing and defending of actions at law or in equity and
otherwise engaging in the conduct of litigation, arbitration or mediation and
the incurring of legal expense and the settlement of claims and
litigation;
(xi) the
indemnification of any Person against liabilities and contingencies to the
extent permitted by law;
NYC:103990_15.DOC
55
(xii) the
entering into of listing agreements with any National Securities Exchange and
the delisting of some or all of the Limited Partner Interests from, or
requesting that trading be suspended on, any such exchange (subject to any
prior
approval that may be required under Section
4.8);
(xiii) the
purchase, sale or other acquisition or disposition of Partnership Securities,
or
the issuance of options, rights, warrants and appreciation rights relating
to
Partnership Securities;
(xiv) the
undertaking of any action in connection with the Partnership’s participation in
any Group Member; and
(xv) the
entering into of agreements with any of its Affiliates to render services to
a
Group Member or to itself in the discharge of its duties as General Partner
of
the Partnership.
(b) Notwithstanding
any other provision of this Agreement, any Group Member Agreement, the ▇▇▇▇▇▇▇▇
Islands Act or any applicable law, rule or regulation, each of the Partners
and
the Assignees and each other Person who may acquire an interest in Partnership
Securities hereby (i) approves, ratifies and confirms the execution, delivery
and performance by the parties thereto of this Agreement, the Underwriting
Agreement, the Omnibus Agreement, the Contribution Agreement, any Group Member
Agreement of any other Group Member and the other agreements described in or
filed as exhibits to the Registration Statement that are related to the
transactions contemplated by the Registration Statement; (ii) agrees that the
General Partner (on its own or through any officer of the Partnership) is
authorized to execute, deliver and perform the agreements referred to in clause
(i) of this sentence and the other agreements, acts, transactions and matters
described in or contemplated by the Registration Statement on behalf of the
Partnership without any further act, approval or vote of the Partners or the
Assignees or the other Persons who may acquire an interest in Partnership
Securities; and (iii) agrees that the execution, delivery or performance by
the
General Partner, any Group Member or any Affiliate of any of them of this
Agreement or any agreement authorized or permitted under this Agreement
(including the exercise by the General Partner or any Affiliate of the General
Partner of the rights accorded pursuant to Article
XV)
shall
not constitute a breach by the General Partner of any duty that the General
Partner may owe the Partnership or the Limited Partners or any other Persons
under this Agreement (or any other agreements) or of any duty stated or implied
by law or equity.
|
Section
7.2
|
Certificate
of Limited Partnership.
|
The
General Partner has caused the Certificate of Limited Partnership to be filed
with the Registrar of Corporations of the ▇▇▇▇▇▇▇▇ Islands as required by the
▇▇▇▇▇▇▇▇ Islands Act. The General Partner shall use all reasonable efforts
to
cause to be filed such other certificates or documents that the General Partner
determines to be necessary or appropriate for the formation, continuation,
qualification and operation of a limited partnership (or a partnership in which
the limited partners have limited liability) in the ▇▇▇▇▇▇▇▇ Islands or any
other jurisdiction in which the Partnership may elect to do business or own
property. To the extent the General Partner determines such action to be
necessary or appropriate, the General Partner shall file amendments
NYC:103990_15.DOC
56
to
and
restatements of the Certificate of Limited Partnership and do all things to
maintain the Partnership as a limited partnership (or a partnership or other
entity in which the limited partners have limited liability) under the laws
of
the ▇▇▇▇▇▇▇▇ Islands or of any other jurisdiction in which the Partnership
may
elect to do business or own property. Subject to the terms of Section
3.4(a),
the
General Partner shall not be required, before or after filing, to deliver or
mail a copy of the Certificate of Limited Partnership, any qualification
document or any amendment thereto to any Limited Partner.
|
Section
7.3
|
Restrictions
on the General Partner’s
Authority.
|
(a) Except
as
otherwise provided in this Agreement, the General Partner may not, without
written approval of the specific act by holders of all of the Outstanding
Limited Partner Interests or by other written instrument executed and delivered
by holders of all of the Outstanding Limited Partner Interests subsequent to
the
date of this Agreement, take any action in contravention of this Agreement,
including, (i) committing any act that would make it impossible to carry on
the
ordinary business of the Partnership; (ii) possessing Partnership property,
or
assigning any rights in specific Partnership property, for other than a
Partnership purpose; (iii) admitting a Person as a Partner; (iv) amending this
Agreement in any manner; or (v) transferring its interest as a general partner
of the Partnership.
(b) Except
as
provided in Articles XII
and
XIV,
the
General Partner may not sell, exchange or otherwise dispose of all or
substantially all of the assets of the Partnership Group, taken as a whole,
in a
single transaction or a series of related transactions (including by way of
merger, consolidation, other combination or sale of ownership interests of
the
Partnership’s Subsidiaries) without the approval of holders of a Unit Majority;
provided,
however,
that
this provision shall not preclude or limit the General Partner’s ability to
mortgage, pledge, hypothecate or grant a security interest in all or
substantially all of the assets of the Partnership Group and shall not apply
to
any forced sale of any or all of the assets of the Partnership Group pursuant
to
the foreclosure of, or other realization upon, any such encumbrance. Without
the
approval of holders of a Unit Majority, the General Partner shall not, on behalf
of the Partnership, (i) consent to any amendment to the Operating Company
Agreement or, except as expressly permitted by Section
7.9(e),
take
any action permitted to be taken by a member of the Operating Company, in either
case, that would adversely affect the Limited Partners (including any particular
class of Partnership Interests as compared to any other class of Partnership
Interests) in any material respect or (ii) except as permitted under Sections
4.6,
11.1
and
11.2,
elect
or cause the Partnership to elect a successor general partner of the
Partnership.
|
Section
7.4
|
Reimbursement
of the General Partner.
|
(a) Except
as
provided in this Section
7.4
and
elsewhere in this Agreement, the General Partner shall not be compensated for
its services as a general partner or managing member of any Group
Member.
(b) The
General Partner shall be reimbursed on a monthly basis, or such other basis
as
the General Partner may determine, for (i) all direct and indirect expenses
it
incurs or payments it makes on behalf of the Partnership (including salary,
bonus, incentive compensation and other amounts paid to any Person including
Affiliates of the General Partner to perform
NYC:103990_15.DOC
57
services
for the Partnership or for the General Partner in the discharge of its duties
to
the Partnership), and (ii) all other expenses allocable to the Partnership
or
otherwise incurred by the General Partner in connection with operating the
Partnership’s business (including expenses allocated to the General Partner by
its Affiliates). The General Partner shall determine the expenses that are
allocable to the Partnership. Reimbursements pursuant to this Section
7.4
shall be
in addition to any reimbursement to the General Partner as a result of
indemnification pursuant to Section
7.7.
(c) The
General Partner, without the approval of the Limited Partners (who shall have
no
right to vote in respect thereof), may propose and adopt on behalf of the
Partnership employee benefit plans, employee programs and employee practices
(including plans, programs and practices involving the issuance of Partnership
Securities or options to purchase or rights, warrants or appreciation rights
relating to Partnership Securities), or cause the Partnership to issue
Partnership Securities in connection with, or pursuant to, any employee benefit
plan, employee program or employee practice maintained or sponsored by the
General Partner or any of its Affiliates, in each case for the benefit of
employees of the General Partner, any Group Member or any Affiliate, or any
of
them, in respect of services performed, directly or indirectly, for the benefit
of the Partnership Group. The Partnership agrees to issue and sell to the
General Partner or any of its Affiliates any Partnership Securities that the
General Partner or such Affiliates are obligated to provide to any employees
pursuant to any such employee benefit plans, employee programs or employee
practices. Expenses incurred by the General Partner in connection with any
such
plans, programs and practices (including the net cost to the General Partner
or
such Affiliates of Partnership Securities purchased by the General Partner
or
such Affiliates from the Partnership to fulfill options or awards under such
plans, programs and practices) shall be reimbursed in accordance with
Section
7.4(b).
Any and
all obligations of the General Partner under any employee benefit plans,
employee programs or employee practices adopted by the General Partner as
permitted by this Section
7.4(c)
shall
constitute obligations of the General Partner hereunder and shall be assumed
by
any successor General Partner approved pursuant to Section
11.1
or
11.2
or the
transferee of or successor to all of the General Partner’s General Partner
Interest pursuant to Section
4.6.
|
Section
7.5
|
Outside
Activities.
|
(a) After
the
Closing Date, the General Partner, for so long as it is the General Partner
of
the Partnership (i) agrees that its sole business will be to act as a general
partner or managing member, as the case may be, of the Partnership and any
other
partnership or limited liability company of which the Partnership or the
Operating Company is, directly or indirectly, a partner or member and to
undertake activities that are ancillary or related thereto (including being
a
limited partner in the Partnership), (ii) shall not engage in any business
or
activity or incur any debts or liabilities except in connection with or
incidental to (A) its performance as general partner or managing member, if
any,
of one or more Group Members or as described in or contemplated by the
Registration Statement or (B) the acquiring, owning or disposing of debt or
equity securities in any Group Member and (iii) except to the extent permitted
in the Omnibus Agreement, shall not, and shall cause its controlled Affiliates
not to, engage in any Teekay Restricted Businesses.
NYC:103990_15.DOC
58
(b) Teekay
Shipping Corporation and certain of its Affiliates have entered into the Omnibus
Agreement, which agreement sets forth certain restrictions on the ability of
Teekay Shipping Corporation and its Affiliates to engage in Teekay Restricted
Businesses.
(c) Except
as
specifically restricted by Section
7.5(a)
and the
Omnibus Agreement, each Indemnitee (other than the General Partner) shall have
the right to engage in businesses of every type and description and other
activities for profit and to engage in and possess an interest in other business
ventures of any and every type or description, whether in businesses engaged
in
or anticipated to be engaged in by any Group Member, independently or with
others, including business interests and activities in direct competition with
the business and activities of any Group Member, and none of the same shall
constitute a breach of this Agreement or any duty expressed or implied by law
to
any Group Member or any Partner or Assignee. None of any Group Member, any
Limited Partner or any other Person shall have any rights by virtue of this
Agreement, any Group Member Agreement, or the partnership relationship
established hereby in any business ventures of any Indemnitee.
(d) Subject
to the terms of Section
7.5(a),
Section
7.5(b),
Section
7.5(c)
and the
Omnibus Agreement, but otherwise notwithstanding anything to the contrary in
this Agreement, (i) the engaging in competitive activities by any Indemnitees
(other than the General Partner) in accordance with the provisions of this
Section
7.5
is
hereby approved by the Partnership and all Partners, (ii) it shall be deemed
not
to be a breach of any fiduciary duty or any other obligation of any type
whatsoever of the General Partner or of any Indemnitee for the Indemnitees
(other than the General Partner) to engage in such business interests and
activities in preference to or to the exclusion of the Partnership and (iii)
except as set forth in the Omnibus Agreement, the General Partner and the
Indemnitees shall have no obligation hereunder or as a result of any duty
expressed or implied by law to present business opportunities to the
Partnership.
(e) The
General Partner and each of its Affiliates may acquire Units or other
Partnership Securities in addition to those acquired on the Closing Date and,
except as otherwise provided in this Agreement, shall be entitled to exercise,
at their option, all rights relating to all Units or other Partnership
Securities acquired by them.
(f) The
term
“Affiliates” when used in Section
7.5(a)
and
Section
7.5(e)
with
respect to the General Partner shall not include any Group Member.
(g) Notwithstanding
anything to the contrary in this Agreement, to the extent that any provision
of
this Agreement purports or is interpreted to have the effect of restricting
the
fiduciary duties that might otherwise, as a result of ▇▇▇▇▇▇▇▇ Islands law
or
other applicable law, be owed by the General Partner to the Partnership and
its
Limited Partners, or to constitute a waiver or consent by the Limited Partners
to any such restriction, such provisions shall be inapplicable and have no
effect in determining whether the General Partner has complied with its
fiduciary duties in connection with determinations made by it under this
Section
7.5.
NYC:103990_15.DOC
59
|
Section
7.6
|
Loans
from the General Partner; Loans or Contributions from the Partnership
or
Group Members.
|
(a) The
General Partner or any of its Affiliates may lend to any Group Member, and
any
Group Member may borrow from the General Partner or any of its Affiliates,
funds
needed or desired by the Group Member for such periods of time and in such
amounts as the General Partner may determine; provided,
however,
that in
any such case the lending party may not charge the borrowing party interest
at a
rate greater than the rate that would be charged the borrowing party or impose
terms less favorable to the borrowing party than would be charged or imposed
on
the borrowing party by unrelated lenders on comparable loans made on an
arm’s-length basis (without reference to the lending party’s financial abilities
or guarantees), all as determined by the General Partner. The borrowing party
shall reimburse the lending party for any costs (other than any additional
interest costs) incurred by the lending party in connection with the borrowing
of such funds. For purposes of this Section
7.6(a)
and
Section
7.6(b),
the
term “Group Member” shall include any Affiliate of a Group Member that is
controlled by the Group Member.
(b) The
Partnership may lend or contribute to any Group Member, and any Group Member
may
borrow from the Partnership, funds on terms and conditions determined by the
General Partner. No Group Member may lend funds to the General Partner or any
of
its Affiliates (other than another Group Member).
(c) No
borrowing by any Group Member or the approval thereof by the General Partner
shall be deemed to constitute a breach of any duty, expressed or implied, of
the
General Partner or its Affiliates to the Partnership or the Limited Partners
by
reason of the fact that the purpose or effect of such borrowing is directly
or
indirectly to (i) enable distributions to the General Partner or its Affiliates
(including in their capacities as Limited Partners) to exceed the General
Partner’s Percentage Interest of the total amount distributed to all partners or
(ii) hasten the expiration of the Subordination Period or the conversion of
any
Subordinated Units into Common Units.
|
Section
7.7
|
Indemnification.
|
(a) To
the
fullest extent permitted by law but subject to the limitations expressly
provided in this Agreement, all Indemnitees shall be indemnified and held
harmless by the Partnership from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including legal fees and
expenses), judgments, fines, penalties, interest, settlements or other amounts
arising from any and all claims, demands, actions, suits or proceedings, whether
civil, criminal, administrative or investigative, in which any Indemnitee may
be
involved, or is threatened to be involved, as a party or otherwise, by reason
of
its status as an Indemnitee; provided,
that
the Indemnitee shall not be indemnified and held harmless if there has been
a
final and non-appealable judgment entered by a court of competent jurisdiction
determining that, in respect of the matter for which the Indemnitee is seeking
indemnification pursuant to this Section
7.7,
the
Indemnitee acted in bad faith or engaged in fraud, willful misconduct or gross
negligence or, in the case of a criminal matter, acted with knowledge that
the
Indemnitee’s conduct was unlawful; provided,
further, no indemnification pursuant to this Section
7.7
shall be
available to the General Partner or its Affiliates (other than a Group Member)
with respect to its or their
NYC:103990_15.DOC
60
obligations
incurred pursuant to the Underwriting Agreement, the Omnibus Agreement or the
Contribution Agreement (other than obligations incurred by the General Partner
on behalf of the Partnership). Any indemnification pursuant to this Section
7.7
shall be
made only out of the assets of the Partnership, it being agreed that the General
Partner shall not be personally liable for such indemnification and shall have
no obligation to contribute or loan any monies or property to the Partnership
to
enable it to effectuate such indemnification.
(b) To
the
fullest extent permitted by law, expenses (including legal fees and expenses)
incurred by an Indemnitee who is indemnified pursuant to Section
7.7(a)
in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Partnership prior to a determination that the
Indemnitee is not entitled to be indemnified upon receipt by the Partnership
of
any undertaking by or on behalf of the Indemnitee to repay such amount if it
shall be determined that the Indemnitee is not entitled to be indemnified as
authorized in this Section
7.7.
(c) The
indemnification provided by this Section
7.7
shall be
in addition to any other rights to which an Indemnitee may be entitled under
any
agreement, pursuant to any vote of the holders of Outstanding Limited Partner
Interests, as a matter of law or otherwise, both as to actions in the
Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity
(including any capacity under the Underwriting Agreement), and shall continue
as
to an Indemnitee who has ceased to serve in such capacity and shall inure to
the
benefit of the heirs, successors, assigns and administrators of the
Indemnitee.
(d) The
Partnership may purchase and maintain (or reimburse the General Partner or
its
Affiliates for the cost of) insurance, on behalf of the General Partner, its
Affiliates and such other Persons as the General Partner shall determine,
against any liability that may be asserted against, or expense that may be
incurred by, such Person in connection with the Partnership’s activities or such
Person’s activities on behalf of the Partnership, regardless of whether the
Partnership would have the power to indemnify such Person against such liability
under the provisions of this Agreement.
(e) For
purposes of this Section
7.7,
the
Partnership shall be deemed to have requested an Indemnitee to serve as
fiduciary of an employee benefit plan whenever the performance by it of its
duties to the Partnership also imposes duties on, or otherwise involves services
by, it to the plan or participants or beneficiaries of the plan; excise taxes
assessed on an Indemnitee with respect to an employee benefit plan pursuant
to
applicable law shall constitute “fines” within the meaning of Section
7.7(a);
and
action taken or omitted by it with respect to any employee benefit plan in
the
performance of its duties for a purpose reasonably believed by it to be in
the
best interest of the participants and beneficiaries of the plan shall be deemed
to be for a purpose that is in the best interests of the
Partnership.
(f) In
no
event may an Indemnitee subject the Limited Partners to personal liability
by
reason of the indemnification provisions set forth in this
Agreement.
(g) An
Indemnitee shall not be denied indemnification in whole or in part under this
Section
7.7
because
the Indemnitee had an interest in the transaction with respect to which
the
NYC:103990_15.DOC
61
indemnification
applies if the transaction was otherwise permitted by the terms of this
Agreement.
(h) The
provisions of this Section
7.7
are for
the benefit of the Indemnitees, their heirs, successors, assigns and
administrators and shall not be deemed to create any rights for the benefit
of
any other Persons.
(i) No
amendment, modification or repeal of this Section
7.7
or any
provision hereof shall in any manner terminate, reduce or impair the right
of
any past, present or future Indemnitee to be indemnified by the Partnership,
nor
the obligations of the Partnership to indemnify any such Indemnitee under and
in
accordance with the provisions of this Section
7.7
as in
effect immediately prior to such amendment, modification or repeal with respect
to claims arising from or relating to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of when such claims
may arise or be asserted.
|
Section
7.8
|
Liability
of Indemnitees.
|
(a) Notwithstanding
anything to the contrary set forth in this Agreement, no Indemnitee shall be
liable for monetary damages to the Partnership, the Limited Partners, the
Assignees or any other Persons who have acquired interests in the Partnership
Securities, for losses sustained or liabilities incurred as a result of any
act
or omission of an Indemnitee unless there has been a final and non-appealable
judgment entered by a court of competent jurisdiction determining that, in
respect of the matter in question, the Indemnitee acted in bad faith or engaged
in fraud, willful misconduct or gross negligence or, in the case of a criminal
matter, acted with knowledge that the Indemnitee’s conduct was
criminal.
(b) Subject
to its obligations and duties as General Partner set forth in Section
7.1(a),
the
General Partner may exercise any of the powers granted to it by this Agreement
and perform any of the duties imposed upon it hereunder either directly or
by or
through its agents, and the General Partner shall not be responsible for any
misconduct or negligence on the part of any such agent appointed by the General
Partner in good faith.
(c) To
the
extent that, at law or in equity, an Indemnitee has duties (including fiduciary
duties) and liabilities relating thereto to the Partnership or to the Partners,
the General Partner and any other Indemnitee acting in connection with the
Partnership’s business or affairs shall not be liable to the Partnership or to
any Partner for its good faith reliance on the provisions of this
Agreement.
(d) Any
amendment, modification or repeal of this Section
7.8
or any
provision hereof shall be prospective only and shall not in any way affect
the
limitations on the liability of the Indemnitees under this Section
7.8
as in
effect immediately prior to such amendment, modification or repeal with respect
to claims arising from or relating to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of when such claims
may arise or be asserted.
NYC:103990_15.DOC
62
|
Section
7.9
|
Resolution
of Conflicts of Interest; Standards of Conduct and Modification
of
Duties.
|
(a) Unless
otherwise expressly provided in this Agreement or any Group Member Agreement,
whenever a potential conflict of interest exists or arises between the General
Partner or any of its Affiliates, on the one hand, and the Partnership, any
Group Member, any Partner or any Assignee, on the other, any resolution or
course of action by the General Partner or its Affiliates in respect of such
conflict of interest shall be permitted and deemed approved by all Partners,
and
shall not constitute a breach of this Agreement, of any Group Member Agreement,
of any agreement contemplated herein or therein, or of any duty stated or
implied by law or equity, if the resolution or course of action in respect
of
such conflict of interest is xxxviii)
approved
by Special Approval, xxxix)
approved
by the vote of a majority of the Common Units (excluding Common Units owned
by
the General Partner and its Affiliates), xl) on
terms
no less favorable to the Partnership than those generally being provided to
or
available from unrelated third parties or xli)
fair and
reasonable to the Partnership, taking into account the totality of the
relationships between the parties involved (including other transactions that
may be particularly favorable or advantageous to the Partnership). The
General
Partner shall be authorized but not required in connection with its resolution
of such conflict of interest to seek Special Approval of such resolution,
and
the
General Partner may also adopt a resolution or course of action that has not
received Special Approval. If
Special Approval is not sought and the Board of Directors of the General Partner
determines that the resolution or course of action taken with respect to a
conflict of interest satisfies either of the standards set forth in clauses
(iii)
or
(iv)
above,
then it shall be presumed that, in making its decision, the Board of Directors
of the General Partner acted in good faith, and in any proceeding brought by
any
Limited Partner or Assignee or by or on behalf of such Limited Partner or
Assignee or any other Limited Partner or Assignee or the Partnership challenging
such approval, the Person bringing or prosecuting such proceeding shall have
the
burden of overcoming such presumption. Notwithstanding
anything to the contrary in this Agreement, the existence of the conflicts
of
interest described in the Registration Statement are hereby approved by all
Partners.
(b) Whenever
the General Partner makes a determination or takes or declines to take any
other
action, or any of its Affiliates causes it to do so, in its capacity as the
general partner of the Partnership as opposed to in its individual
capacity, whether under this Agreement, any Group Member Agreement or any other
agreement contemplated hereby or otherwise, then,
unless
another express standard is provided for in this Agreement, the General Partner,
or such Affiliates causing it to do so, shall make such determination or take
or
decline to take such other action in good faith and shall not be subject to
any
other or different standards imposed by this Agreement, any Group Member
Agreement, any other agreement contemplated hereby or under the ▇▇▇▇▇▇▇▇ Islands
Act or any other
law,
rule or regulation. In order for a determination or other action to be in “good
faith” for purposes of this Agreement, the Person or Persons making such
determination or taking or declining to take such other action must reasonably
believe that the determination or other action is in the best interests of
the
Partnership, unless the context otherwise requires.
(c) Whenever
the General Partner makes a determination or takes or declines to take any
other
action, or any of its Affiliates causes it to do so, in its individual capacity
as opposed to in its capacity as the general partner of the Partnership, whether
under this Agreement, any
NYC:103990_15.DOC
63
Group
Member Agreement or any other agreement contemplated hereby or otherwise, then
the General Partner, or such Affiliates causing it to do so, are entitled to
make such determination or to take or decline to take such other action free
of
any fiduciary duty or obligation whatsoever to the Partnership, any Limited
Partner or Assignee, and the General Partner, or such Affiliates causing it
to
do so, shall not be required to act in good faith or pursuant to any other
standard imposed by this Agreement, any Group Member Agreement, any other
agreement contemplated hereby or under the ▇▇▇▇▇▇▇▇ Islands Act or any other
law, rule or regulation. By
way of
illustration and not of limitation, whenever the phrase, “at the option of the
General Partner,” or some variation of that phrase, is used in this Agreement,
it indicates that the General Partner is acting
in
its individual capacity.
(d) Notwithstanding
anything to the contrary in this Agreement, the General Partner and its
Affiliates shall have no duty or obligation, express or implied, to (i) sell
or
otherwise dispose of any asset of the Partnership Group other than in the
ordinary course of business or (ii) permit any Group Member to use any
facilities or assets of the General Partner and its Affiliates, except as may
be
provided in contracts entered into from time to time specifically dealing with
such use. Any determination by the General Partner or any of its Affiliates
to
enter into such contracts shall be at its option.
(e) Except
as
expressly set forth in this Agreement, neither the General Partner nor any
other
Indemnitee shall have any duties or liabilities, including fiduciary duties,
to
the Partnership or any Limited Partner or Assignee and the provisions of this
Agreement, to the extent that they restrict or otherwise modify the duties
and
liabilities, including fiduciary duties, of the General Partner or any other
Indemnitee otherwise existing at law or in equity, are agreed by the Partners
to
replace such other duties and liabilities of the General Partner or such other
Indemnitee.
(f) The
Unitholders hereby authorize the General Partner, on behalf of the Partnership
as a partner or member of a Group Member, to approve of actions by the general
partner or managing member of such Group Member similar to those actions
permitted to be taken by the General Partner pursuant to this Section
7.9.
|
Section
7.10
|
Other
Matters Concerning the General
Partner.
|
(a) The
General Partner may rely and shall be protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties.
(b) The
General Partner may consult with legal counsel, accountants, appraisers,
management consultants, investment bankers and other consultants and advisers
selected by it, and any act taken or omitted to be taken in reliance upon the
opinion (including an Opinion of Counsel) of such Persons as to matters that
the
General Partner reasonably believes to be within such Person’s professional or
expert competence shall be conclusively presumed to have been done or omitted
in
good faith and in accordance with such opinion.
NYC:103990_15.DOC
64
(c) The
General Partner shall have the right, in respect of any of its powers or
obligations hereunder, to act through any of its duly authorized officers,
a
duly appointed attorney or attorneys-in-fact or the duly authorized officers
of
the Partnership.
|
Section
7.11
|
Purchase
or Sale of Partnership
Securities.
|
The
General Partner may cause the Partnership to purchase or otherwise acquire
Partnership Securities; provided
that the
General Partner may not cause any Group Member to purchase Subordinated Units
during the Subordination Period. As long as Partnership Securities are held
by
any Group Member, such Partnership Securities shall not be considered
Outstanding for any purpose, except as otherwise provided herein. The General
Partner or any Affiliate of the General Partner may also purchase or otherwise
acquire and sell or otherwise dispose of Partnership Securities for its own
account, subject to the provisions of Articles IV
and
X.
|
Section
7.12
|
Registration
Rights of the General Partner and its
Affiliates.
|
(a) If
xlii)
the
General Partner or any Affiliate of the General Partner (including for purposes
of this Section
7.12,
any
Person that is an Affiliate of the General Partner at the date hereof
notwithstanding that it may later cease to be an Affiliate of the General
Partner) or any of their assignees holds Partnership Securities that it desires
to sell and xliii)
Rule 144
of the Securities Act (or any successor rule or regulation to Rule 144) or
another exemption from registration is not available to enable such holder
of
Partnership Securities (the “Holder”) to dispose of the number of Partnership
Securities it desires to sell at the time it desires to do so without
registration under the Securities Act, then at the option and upon the request
of the Holder, the Partnership shall file with the Commission as promptly as
practicable after receiving such request, and use all reasonable efforts to
cause to become effective and remain effective for a period of not less than
six
months following its effective date or such shorter period as shall terminate
when all Partnership Securities covered by such registration statement have
been
sold, a registration statement under the Securities Act registering the offering
and sale of the number of Partnership Securities specified by the Holder;
provided,
however,
that
the Partnership shall not be required to effect more than three registrations
pursuant to this Section
7.12(a);
and
provided further, however, that if the Conflicts Committee determines that
a
postponement of the requested registration for up to six months would be in
the
best interests of the Partnership and its Partners due to a pending transaction,
investigation or other event, the filing of such registration statement or
the
effectiveness thereof may be deferred for up to six months, but not thereafter.
In connection with any registration pursuant to the immediately preceding
sentence, the Partnership shall (i) promptly prepare and file (a)
such
documents as may be necessary to register or qualify the securities subject
to
such registration under the securities laws of such states as the Holder shall
reasonably request; provided,
however,
that no
such qualification shall be required in any jurisdiction where, as a result
thereof, the Partnership would become subject to general service of process
or
to taxation or qualification to do business as a foreign corporation or
partnership doing business in such jurisdiction solely as a result of such
registration, and (b)
such
documents as may be necessary to apply for listing or to list the Partnership
Securities subject to such registration on such National Securities Exchange
as
the Holder shall reasonably request, and (ii) do any and all other acts and
things that may be necessary or appropriate to enable the Holder to consummate
a
public sale of such Partnership Securities in such states. Except as set forth
in Section
7.12(c),
all
costs and expenses of any such
NYC:103990_15.DOC
65
registration
and offering (other than the underwriting discounts and commissions) shall
be
paid by the Partnership, without reimbursement by the Holder.
(b) If
the
Partnership shall at any time propose to file a registration statement under
the
Securities Act for an offering of equity securities of the Partnership for
cash
(other than an offering relating solely to an employee benefit plan), the
Partnership shall use all reasonable efforts to include such number or amount
of
securities held by the Holder in such registration statement as the Holder
shall
request; provided, that the Partnership is not required to make any effort
or
take any action to so include the securities of the Holder once the registration
statement is declared effective by the Commission, including any registration
statement providing for the offering from time to time of securities pursuant
to
Rule 415 of the Securities Act. If the proposed offering pursuant to this
Section
7.12(b)
shall be
an underwritten offering, then, in the event that the managing underwriter
or
managing underwriters of such offering advise the Partnership and the Holder
in
writing that in their opinion the inclusion of all or some of the Holder’s
Partnership Securities would adversely and materially affect the success of
the
offering, the Partnership shall include in such offering only that number or
amount, if any, of securities held by the Holder that, in the opinion of the
managing underwriter or managing underwriters, will not so adversely and
materially affect the offering. Except as set forth in Section
7.12(c),
all
costs and expenses of any such registration and offering (other than the
underwriting discounts and commissions) shall be paid by the Partnership,
without reimbursement by the Holder.
(c) If
underwriters are engaged in connection with any registration referred to in
this
Section
7.12,
the
Partnership shall provide indemnification, representations, covenants, opinions
and other assurance to the underwriters in form and substance reasonably
satisfactory to such underwriters. Further, in addition to and not in limitation
of the Partnership’s obligation under Section
7.7,
the
Partnership shall, to the fullest extent permitted by law, indemnify and hold
harmless the Holder, its officers, directors and each Person who controls the
Holder (within the meaning of the Securities Act) and any agent thereof
(collectively, “Indemnified Persons”) against any losses, claims, demands,
actions, causes of action, assessments, damages, liabilities (joint or several),
costs and expenses (including interest, penalties and reasonable attorneys’ fees
and disbursements), resulting to, imposed upon, or incurred by the Indemnified
Persons, directly or indirectly, under the Securities Act or otherwise
(hereinafter referred to in this Section
7.12(c)
as a
“claim” and in the plural as “claims”) based upon, arising out of or resulting
from any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which any Partnership Securities
were registered under the Securities Act or any state securities or Blue Sky
laws, in any preliminary prospectus (if used prior to the effective date of
such
registration statement), or in any summary or final prospectus or in any
amendment or supplement thereto (if used during the period the Partnership
is
required to keep the registration statement current), or arising out of, based
upon or resulting from the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
made therein not misleading; provided,
however,
that
the Partnership shall not be liable to any Indemnified Person to the extent
that
any such claim arises out of, is based upon or results from an untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement, such preliminary, summary or final prospectus or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Partnership by or on behalf of such Indemnified
Person specifically for use in the preparation thereof.
NYC:103990_15.DOC
66
(d) The
provisions of Section
7.12(a)
and
Section
7.12(b)
shall
continue to be applicable with respect to the General Partner (and any of the
General Partner’s Affiliates and any of the General Partner’s or its Affiliates’
assignees) after it ceases to be a Partner of the Partnership, during a period
of two years subsequent to the effective date of such cessation and for so
long
thereafter as is required for the Holder to sell all of the Partnership
Securities with respect to which it has requested during such two-year period
inclusion in a registration statement otherwise filed or that a registration
statement be filed; provided,
however,
that
the Partnership shall not be required to file successive registration statements
covering the same Partnership Securities for which registration was demanded
during such two-year period. The provisions of Section
7.12(c)
shall
continue in effect thereafter.
(e) Any
request to register Partnership Securities pursuant to this Section
7.12
shall
xliv)
specify
the Partnership Securities intended to be offered and sold by the Person making
the request, xlv)
express
such Person’s present intent to offer such Partnership Securities for
distribution, xlvi)
describe
the nature or method of the proposed offer and sale of Partnership Securities,
and xlvii)
contain
the undertaking of such Person to provide all such information and materials
and
take all action as may be required in order to permit the Partnership to comply
with all applicable requirements in connection with the registration of such
Partnership Securities.
|
Section
7.13
|
Reliance
by Third Parties.
|
Notwithstanding
anything to the contrary in this Agreement, any Person dealing with the
Partnership shall be entitled to assume that the General Partner and any officer
of the General Partner authorized by the General Partner to act on behalf of
and
in the name of the Partnership has full power and authority to encumber, sell
or
otherwise use in any manner any and all assets of the Partnership and to enter
into any authorized contracts on behalf of the Partnership, and such Person
shall be entitled to deal with the General Partner or any such officer as if
it
were the Partnership’s sole party in interest, both legally and beneficially.
Each Limited Partner hereby waives any and all defenses or other remedies that
may be available against such Person to contest, negate or disaffirm any action
of the General Partner or any such officer in connection with any such dealing.
In no event shall any Person dealing with the General Partner or any such
officer or its representatives be obligated to ascertain that the terms of
this
Agreement have been complied with or to inquire into the necessity or expedience
of any act or action of the General Partner or any such officer or its
representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (a) at the time of the execution
and
delivery of such certificate, document or instrument, this Agreement was in
full
force and effect, (b) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on
behalf of the Partnership and (c) such certificate, document or instrument
was
duly executed and delivered in accordance with the terms and provisions of
this
Agreement and is binding upon the Partnership.
NYC:103990_15.DOC
67
Article
VIII
BOOKS,
RECORDS, ACCOUNTING AND REPORTS
|
Section
8.1
|
Records
and Accounting.
|
The
General Partner shall keep or cause to be kept at the principal office of the
Partnership appropriate books and records with respect to the Partnership’s
business, including all books and records necessary to provide to the Limited
Partners any information required to be provided pursuant to Section
3.4(a).
Any
books and records maintained by or on behalf of the Partnership in the regular
course of its business, including the record of the Record Holders and Assignees
of Units or other Partnership Securities, books of account and records of
Partnership proceedings, may be kept on, or be in the form of, computer disks,
hard drives, punch cards, magnetic tape, photographs, micrographics or any
other
information storage device; provided,
that
the books and records so maintained are convertible into clearly legible written
form within a reasonable period of time. The books of the Partnership shall
be
maintained, for financial reporting purposes, on an accrual basis in accordance
with U.S. GAAP.
|
Section
8.2
|
Fiscal
Year.
|
The
fiscal year of the Partnership shall be a fiscal year ending December
31.
|
Section
8.3
|
Reports.
|
(a) As
soon
as practicable, but in no event later than 120 days after the close of each
fiscal year of the Partnership, the General Partner shall cause to be mailed
or
made available to each Record Holder of a Unit as of a date selected by the
General Partner, an annual report containing financial statements of the
Partnership for such fiscal year of the Partnership, presented in accordance
with U.S. GAAP, including a balance sheet and statements of operations,
Partnership equity and cash flows, such statements to be audited by a firm
of
independent public accountants selected by the General Partner.
(b) As
soon
as practicable, but in no event later than 90 days after the close of each
Quarter except the last Quarter of each fiscal year, the General Partner shall
cause to be mailed or made available to each Record Holder of a Unit, as of
a
date selected by the General Partner, a report containing unaudited financial
statements of the Partnership and such other information as may be required
by
applicable law, regulation or rule of any National Securities Exchange on which
the Units are listed, or as the General Partner determines to be necessary
or
appropriate.
ARTICLE
IX
TAX
MATTERS
|
Section
9.1
|
Tax
Returns and Information.
|
The
Partnership shall timely file all returns of the Partnership that are required
for foreign, federal, state and local income tax purposes on the basis of the
accrual method and a taxable year ending on December 31. The tax information
reasonably required by Record
NYC:103990_15.DOC
68
Holders
for federal and state income tax reporting purposes with respect to a taxable
year shall be furnished to them within 90 days of the close of the calendar
year
in which the Partnership’s taxable year ends. The classification, realization
and recognition of income, gain, losses and deductions and other items shall
be
on the accrual method of accounting for United States federal income tax
purposes.
|
Section
9.2
|
Tax
Elections.
|
(a) The
Partnership shall make the election under Section 754 of the Code in accordance
with applicable regulations thereunder, subject to the reservation of the right
to seek to revoke any such election upon the General Partner’s determination
that such revocation is in the best interests of the Limited Partners.
Notwithstanding any other provision herein contained, for the purposes of
computing the adjustments under Section 743(b) of the Code, the General Partner
shall be authorized (but not required) to adopt a convention whereby the price
paid by a transferee of a Limited Partner Interest will be deemed to be the
lowest quoted closing price of the Limited Partner Interests on any National
Securities Exchange on which such Limited Partner Interests are listed during
the calendar month in which such transfer is deemed to occur pursuant to
Section
6.2(g)
without
regard to the actual price paid by such transferee.
(b) Except
as
otherwise provided herein, the General Partner shall determine whether the
Partnership should make any other elections permitted by the Code.
|
Section
9.3
|
Tax
Controversies.
|
Subject
to the provisions hereof, the General Partner is designated as the Tax Matters
Partner (as defined in the Code) and is authorized and required to represent
the
Partnership (at the Partnership’s expense) in connection with all examinations
of the Partnership’s affairs by tax authorities, including resulting
administrative and judicial proceedings, and to expend Partnership funds for
professional services and costs associated therewith. Each Partner agrees to
cooperate with the General Partner and to do or refrain from doing any or all
things reasonably required by the General Partner to conduct such
proceedings.
|
Section
9.4
|
Withholding.
|
Notwithstanding
any other provision of this Agreement, the General Partner is authorized to
take
any action that may be required to cause the Partnership and other Group Members
to comply with any withholding requirements established under the Code or any
other federal, state or local law including, without limitation, pursuant to
Sections 1441, 1442, 1445 and 1446 of the Code. To the extent that the
Partnership is required or elects to withhold and pay over to any taxing
authority any amount resulting from the allocation or distribution of income
to
any Partner or Assignee (including, without limitation, by reason of Section
1446 of the Code), the General Partner may treat the amount withheld as a
distribution of cash pursuant to Section
6.3
in the
amount of such withholding from such Partner.
Section
9.5 Conduct
of Operations.
The
General Partner shall use commercially reasonable efforts to conduct the
business of the Partnership and its Affiliates in a manner that does not require
a holder of Common Units to
NYC:103990_15.DOC
69
file
a
tax return in any jurisdiction with which the holder has no contact other than
through ownership of Common Units. For greater certainty, the General Partner
shall conduct the affairs and governance of the Partnership so that the General
Partner and the Partnership are not residents of Canada for purposes of Canada’s
tax legislation and neither the General Partner not the Partnership is carrying
on business in Canada for purposes of such legislation.
ARTICLE
X
ADMISSION
OF PARTNERS
|
Section
10.1
|
Admission
of Initial Limited Partners.
|
Upon
the
issuance by the Partnership of Common Units, Subordinated Units and Incentive
Distribution Rights to the General Partner, Teekay Shipping Corporation and
the
Underwriters as described in Sections 5.2
and
5.3
in
connection with the Initial Offering, the General Partner shall admit such
parties to the Partnership as Initial Limited Partners in respect of the Common
Units, Subordinated Units or Incentive Distribution Rights issued to
them.
|
Section
10.2
|
Admission
of Substituted Limited
Partners.
|
By
transfer of a Limited Partner Interest in accordance with Article
IV,
the
transferor shall be deemed to have given the transferee the right to seek
admission as a Substituted Limited Partner subject to the conditions of, and
in
the manner permitted under, this Agreement. A transferor of a Certificate
representing a Limited Partner Interest shall, however, only have the authority
to convey to a purchaser or other transferee who does not execute and deliver
a
Transfer Application (a) the right to negotiate such Certificate to a purchaser
or other transferee and (b) the right to transfer the right to request admission
as a Substituted Limited Partner to such purchaser or other transferee in
respect of the transferred Limited Partner Interests. Each transferee of a
Limited Partner Interest (including any nominee holder or an agent acquiring
such Limited Partner Interest for the account of another Person) who executes
and delivers a Transfer Application shall, by virtue of such execution and
delivery, be an Assignee. Such Assignee shall automatically be admitted to
the
Partnership as a Substituted Limited Partner with respect to the Limited Partner
Interests so transferred to such Person at such time as such transfer is
recorded on the books and records of the Partnership, and until so recorded,
such transferee shall be an Assignee. The General Partner shall periodically,
but no less frequently than on the first Business Day of each calendar quarter,
cause any unrecorded transfers of Limited Partner Interests with respect to
which a duly executed Transfer Application has been received to be recorded
in
the books and records of the Partnership. An Assignee shall have an interest
in
the Partnership equivalent to that of a Limited Partner with respect to
allocations and distributions, including liquidating distributions, of the
Partnership. With respect to voting rights attributable to Limited Partner
Interests that are held by Assignees, the General Partner shall be deemed to
be
the Limited Partner with respect thereto and shall, in exercising the voting
rights in respect of such Limited Partner Interests on any matter, vote such
Limited Partner Interests at the written direction of the Assignee who is the
Record Holder of such Limited Partner Interests. If no such written direction
is
received, such Limited Partner Interests will not be voted. An Assignee shall
have no other rights of a Limited Partner.
NYC:103990_15.DOC
70
|
Section
10.3
|
Admission
of Successor General Partner.
|
A
successor General Partner approved pursuant to Section
11.1
or
11.2
or the
transferee of or successor to all of the General Partner Interest pursuant
to
Section
4.6
who is
proposed to be admitted as a successor General Partner shall be admitted to
the
Partnership as the General Partner, effective immediately prior to the
withdrawal or removal of the predecessor or transferring General Partner,
pursuant to Section
11.1
or
11.2
or the
transfer of the General Partner Interest pursuant to Section
4.6,
provided,
however,
that no
such successor shall be admitted to the Partnership until compliance with the
terms of Section
4.6
has
occurred and such successor has executed and delivered such other documents
or
instruments as may be required to effect such admission. Any such successor
shall, subject to the terms hereof, carry on the business of the members of
the
Partnership Group without dissolution.
|
Section
10.4
|
Admission
of Additional Limited
Partners.
|
(a) A
Person
(other than the General Partner, an Initial Limited Partner or a Substituted
Limited Partner) who makes a Capital Contribution to the Partnership in
accordance with this Agreement shall be admitted to the Partnership as an
Additional Limited Partner only upon furnishing to the General
Partner:
(i) evidence
of acceptance in form satisfactory to the General Partner of all of the terms
and conditions of this Agreement, including the power of attorney granted in
Section
2.6,
and
(ii) such
other documents or instruments as may be required by the General Partner to
effect such Person’s admission as an Additional Limited Partner.
(b) Notwithstanding
anything to the contrary in this Section
10.4,
no
Person shall be admitted as an Additional Limited Partner without the consent
of
the General Partner. The admission of any Person as an Additional Limited
Partner shall become effective on the date upon which the name of such Person
is
recorded as such in the books and records of the Partnership, following the
consent of the General Partner to such admission.
|
Section
10.5
|
Amendment
of Agreement and Certificate of Limited
Partnership.
|
To
effect
the admission to the Partnership of any Partner, the General Partner shall
take
all steps necessary or appropriate under the ▇▇▇▇▇▇▇▇ Islands Act to amend
the
records of the Partnership to reflect such admission and, if necessary, to
prepare as soon as practicable an amendment to this Agreement and, if required
by law, the General Partner shall prepare and file an amendment to the
Certificate of Limited Partnership and the General Partner may for this purpose,
among others, exercise the power of attorney granted pursuant to Section
2.6.
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Article
XI
WITHDRAWAL
OR REMOVAL OF PARTNERS
|
Section
11.1
|
Withdrawal
of the General Partner.
|
(a) The
General Partner shall be deemed to have withdrawn from the Partnership upon
the
occurrence of any one of the following events (each such event herein referred
to as an “Event of Withdrawal”);
(i) The
General Partner voluntarily withdraws from the Partnership by giving written
notice to the other Partners;
(ii) The
General Partner transfers all of its rights as General Partner pursuant to
Section
4.6;
(iii) The
General Partner is removed pursuant to Section
11.2;
(iv) The
General Partner (1)
makes a
general assignment for the benefit of creditors; (2)
files a
voluntary petition in bankruptcy; (3)
files a
petition or answer seeking for itself a liquidation, dissolution or similar
relief (but not a reorganization) under any law; (4)
files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the General Partner in a proceeding
of
the type described in clauses (A)-(B) of this Section
11.1(a)(iv);
or
(5)
seeks,
consents to or acquiesces in the appointment of a trustee, receiver or
liquidator of the General Partner or of all or any substantial part of its
properties;
(v) The
General Partner is adjudged bankrupt or insolvent, or has entered against him
or
her an order for relief in any bankruptcy or insolvency proceeding;
(vi) (a)
in the
case of a general partner that is a corporation, the filing of a certificate
of
dissolution, or its equivalent, for the corporation or the revocation of its
charter and the expiration of ninety (90) days after the date of notice to
the
corporation of revocation without a reinstatement of its charter; (b)
in the
event the General Partner is a partnership or a limited liability company,
the
dissolution and commencement of winding up of the General Partner; (c)
in the
event the General Partner is acting in such capacity by virtue of being a
trustee of a trust, the termination of the trust; (d)
in the
event the General Partner is a natural person, his death or adjudication of
incompetency; and (e)
otherwise in the event of the termination of the General Partner.
If
an
Event of Withdrawal specified in Section
11.1(a)(iv),
or
Sections 11.1(a)(v)(A), (B), or (D) occurs, the withdrawing General Partner
shall give notice to the Limited Partners within 30 days after such occurrence.
The Partners hereby agree that only the Events of Withdrawal described in this
Section
11.1
shall
result in the withdrawal of the General Partner from the
Partnership.
(b) Withdrawal
of the General Partner from the Partnership upon the occurrence of an Event
of
Withdrawal shall not constitute a breach of this Agreement under the following
circumstances: xlviii)
at any
time during the period beginning on the Closing Date and ending at
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12:00
midnight, Eastern Standard Time, on March 31, 2015, the General Partner
voluntarily withdraws by giving at least 90 days’ advance notice of its
intention to withdraw to the Limited Partners; provided,
that
prior to the effective date of such withdrawal, the withdrawal is approved
by
Unitholders holding at least a majority of the Outstanding Common Units
(excluding Common Units held by the General Partner and its Affiliates) and
the
General Partner delivers to the Partnership an Opinion of Counsel (“Withdrawal
Opinion of Counsel”) that such withdrawal (following the selection of the
successor General Partner) would not result in the loss of the limited liability
of any Limited Partner or any Group Member or cause any Group Member to be
treated as an association taxable as a corporation or otherwise to be taxed
as
an entity for United States federal income tax purposes (to the extent not
already so treated or taxed); xlix)
at any
time after 12:00 midnight, Eastern Standard Time, on March 31, 2015, the General
Partner voluntarily withdraws by giving at least 90 days’ advance notice to the
Unitholders, such withdrawal to take effect on the date specified in such
notice; l)
at any
time that the General Partner ceases to be the General Partner pursuant to
Section
11.1(a)(ii)
or is
removed pursuant to Section
11.2;
or
li)
notwithstanding clause (i) of this sentence, at any time that the General
Partner voluntarily withdraws by giving at least 90 days’ advance notice of its
intention to withdraw to the Limited Partners, such withdrawal to take effect
on
the date specified in the notice, if at the time such notice is given one Person
and its Affiliates (other than the General Partner and its Affiliates) own
beneficially or of record or control at least 50% of the Outstanding Units.
The
withdrawal of the General Partner from the Partnership upon the occurrence
of an
Event of Withdrawal shall also constitute the withdrawal of the General Partner
as general partner or managing member, if any, to the extent applicable, of
the
other Group Members. If the General Partner gives a notice of withdrawal
pursuant to Section
11.1(a)(i),
the
holders of a Unit Majority, may, prior to the effective date of such withdrawal,
elect a successor General Partner. The Person so elected as successor General
Partner shall automatically become the successor general partner or managing
member, to the extent applicable, of the other Group Members of which the
General Partner is a general partner or a managing member. If, prior to the
effective date of the General Partner’s withdrawal, a successor is not selected
by the Unitholders as provided herein or the Partnership does not receive a
Withdrawal Opinion of Counsel, the Partnership shall be dissolved in accordance
with Section
12.1.
Any
successor General Partner elected in accordance with the terms of this
Section
11.1
shall be
subject to the provisions of Section
10.3.
|
Section
11.2
|
Removal
of the General Partner.
|
The
General Partner may be removed if such removal is approved by the Unitholders
holding at least 66 2/3% of the Outstanding Units (including Units held by
the
General Partner and its Affiliates voting as a single class). Any such action
by
such holders for removal of the General Partner must also provide for the
election of a successor General Partner by the Unitholders holding a majority
of
the outstanding Common Units voting as a class and a majority of the outstanding
Subordinated Units voting as a class (including Units held by the General
Partner and its Affiliates). Such removal shall be effective immediately
following the admission of a successor General Partner pursuant to Section
10.3.
The
removal of the General Partner shall also automatically constitute the removal
of the General Partner as general partner or managing member, to the extent
applicable, of the other Group Members of which the General Partner is a general
partner or a managing member. If a Person is elected as a successor General
Partner in accordance with the terms of this Section
11.2,
such
Person shall, upon admission
NYC:103990_15.DOC
73
pursuant
to Section
10.3,
automatically become a successor general partner or managing member, to the
extent applicable, of the other Group Members of which the General Partner
is a
general partner or a managing member. The right of the holders of Outstanding
Units to remove the General Partner shall not exist or be exercised unless
the
Partnership has received an opinion opining as to the matters covered by a
Withdrawal Opinion of Counsel. Any successor General Partner elected in
accordance with the terms of this Section
11.2
shall be
subject to the provisions of Section
10.3.
|
Section
11.3
|
Interest
of Departing Partner and Successor General
Partner.
|
(a) In
the
event of lii)
withdrawal of the General Partner under circumstances where such withdrawal
does
not violate this Agreement or liii)
removal
of the General Partner by the holders of Outstanding Units under circumstances
where Cause does not exist, if the successor General Partner is elected in
accordance with the terms of Section
11.1
or
11.2,
the
Departing Partner shall have the option, exercisable prior to the effective
date
of the departure of such Departing Partner, to require its successor to purchase
its General Partner Interest and its general partner interest (or equivalent
interest), if any, in the other Group Members and all of its Incentive
Distribution Rights (collectively, the “Combined Interest”) in exchange for an
amount in cash equal to the fair market value of such Combined Interest, such
amount to be determined and payable as of the effective date of its departure.
If the General Partner is removed by the Unitholders under circumstances where
Cause exists or if the General Partner withdraws under circumstances where
such
withdrawal violates this Agreement, and if a successor General Partner is
elected in accordance with the terms of Section
11.1
or
11.2
(or if
the business of the Partnership is continued pursuant to Section
12.2
and the
successor General Partner is not the former General Partner), such successor
shall have the option, exercisable prior to the effective date of the departure
of such Departing Partner (or, in the event the business of the Partnership
is
continued, prior to the date the business of the Partnership is continued),
to
purchase the Combined Interest for such fair market value of such Combined
Interest of the Departing Partner. In either event, the Departing Partner shall
be entitled to receive all reimbursements due such Departing Partner pursuant
to
Section
7.4,
including any employee-related liabilities (including severance liabilities),
incurred in connection with the termination of any employees employed by the
Departing Partner for the benefit of the Partnership or the other Group
Members.
For
purposes of this Section
11.3(a),
the
fair market value of the Departing Partner’s Combined Interest shall be
determined by agreement between the Departing Partner and its successor or,
failing agreement within 30 days after the effective date of such Departing
Partner’s departure, by an independent investment banking firm or other
independent expert selected by the Departing Partner and its successor, which,
in turn, may rely on other experts, and the determination of which shall be
conclusive as to such matter. If such parties cannot agree upon one independent
investment banking firm or other independent expert within 45 days after the
effective date of such departure, then the Departing Partner shall designate
an
independent investment banking firm or other independent expert, the Departing
Partner’s successor shall designate an independent investment banking firm or
other independent expert, and such firms or experts shall mutually select a
third independent investment banking firm or independent expert, which third
independent investment banking firm or other independent expert shall determine
the fair market value of the Combined Interest of the Departing Partner. In
making its determination,
NYC:103990_15.DOC
74
such
third independent investment banking firm or other independent expert may
consider the then current trading price of Units on any National Securities
Exchange on which Units are then listed, the value of the Partnership’s assets,
the rights and obligations of the Departing Partner and other factors it may
deem relevant.
(b) If
the
Combined Interest is not purchased in the manner set forth in Section
11.3(a),
the
Departing Partner (or its transferee) shall become a Limited Partner and its
Combined Interest shall be converted into Common Units pursuant to a valuation
made by an investment banking firm or other independent expert selected pursuant
to Section
11.3(a),
without
reduction in such Partnership Interest (but subject to proportionate dilution
by
reason of the admission of its successor). Any successor General Partner shall
indemnify the Departing Partner (or its transferee) as to all debts and
liabilities of the Partnership arising on or after the date on which the
Departing Partner (or its transferee) becomes a Limited Partner. For purposes
of
this Agreement, conversion of the Combined Interest of the Departing Partner
to
Common Units will be characterized as if the Departing Partner (or its
transferee) contributed its Combined Interest to the Partnership in exchange
for
the newly issued Common Units.
(c) If
a
successor General Partner is elected in accordance with the terms of
Section
11.1
or
11.2
(or if
the business of the Partnership is continued pursuant to Section
12.2
and the
successor General Partner is not the former General Partner) and the option
described in Section
11.3(a)
is not
exercised by the party entitled to do so, the successor General Partner shall,
at the effective date of its admission to the Partnership, contribute to the
Partnership cash in the amount equal to 2/98ths of the Net Agreed Value of
the
Partnership’s assets on such date. In such event, such successor General Partner
shall, subject to the following sentence, be entitled to 2% of all Partnership
allocations and distributions to which the Departing Partner was entitled.
In
addition, the successor General Partner shall cause this Agreement to be amended
to reflect that, from and after the date of such successor General Partner’s
admission, the successor General Partner’s interest in all Partnership
distributions and allocations shall be 2%.
|
Section
11.4
|
Termination
of Subordination Period, Conversion of Subordinated Units and
Extinguishment of Cumulative Common Unit
Arrearages.
|
Notwithstanding
any provision of this Agreement, if the General Partner is removed as general
partner of the Partnership under circumstances where Cause does not exist and
Units held by the General Partner and its Affiliates are not voted in favor
of
such removal, (i) the Subordination Period will end and all Outstanding
Subordinated Units will immediately and automatically convert into Common Units
on a one-for-one basis, (ii) all Cumulative Common Unit Arrearages on the Common
Units will be extinguished and (iii) the General Partner will have the right
to
convert its General Partner Interest and its Incentive Distribution Rights
into
Common Units or to receive cash in exchange therefor.
|
Section
11.5
|
Withdrawal
of Limited Partners.
|
No
Limited Partner shall have any right to withdraw from the Partnership;
provided,
however, that when a transferee of a Limited Partner’s Limited Partner Interest
becomes a Record Holder of the Limited Partner Interest so transferred, such
transferring Limited Partner shall cease to be a Limited Partner with respect
to
the Limited Partner Interest so transferred.
NYC:103990_15.DOC
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Article
XII
DISSOLUTION
AND LIQUIDATION
|
Section
12.1
|
Dissolution.
|
The
Partnership shall not be dissolved by the admission of Substituted Limited
Partners or Additional Limited Partners or by the admission of a successor
General Partner in accordance with the terms of this Agreement. Upon the removal
or withdrawal of the General Partner, if a successor General Partner is elected
pursuant to Sections 11.1
or
11.2,
the
Partnership shall not be dissolved and such successor General Partner shall
continue the business of the Partnership. The Partnership shall dissolve, and
(subject to Section
12.2)
its
affairs shall be wound up, upon:
(a) an
election to dissolve the Partnership by the General Partner that is approved
by
the holders of a Unit Majority;
(b) the
sale
of all or substantially all of the assets and properties of the Partnership
Group;
(c) the
entry
of a decree of judicial dissolution of the Partnership pursuant to the
provisions of the ▇▇▇▇▇▇▇▇ Islands Act; or
(d) an
Event
of Withdrawal of the General Partner as provided in Section
11.1(a)
(other
than Section
11.1(a)(ii)),
unless
a successor is elected and an Opinion of Counsel is received as provided in
Sections 11.1(b)
or
11.2
and such
successor is admitted to the Partnership pursuant to Section
10.3.
|
Section
12.2
|
Continuation
of the Business of the Partnership After
Dissolution.
|
Upon
(a)
dissolution of the Partnership following an Event of Withdrawal caused by the
withdrawal or removal of the General Partner as provided in Sections
11.1(a)(i)
or
11.1(a)(iii)
and the
failure of the Partners to select a successor to such Departing Partner pursuant
to Sections 11.1
or
11.2,
then
within 90 days thereafter, or (b) dissolution of the Partnership upon an event
constituting an Event of Withdrawal as defined in Sections 11.1(a)(iv)
or
11.1(a)(vi),
then,
to the maximum extent permitted by law, within 180 days thereafter, the holders
of a Unit Majority may elect to continue the business of the Partnership on
the
same terms and conditions set forth in this Agreement by appointing as a
successor General Partner a Person approved by the holders of a Unit Majority.
Unless such an election is made within the applicable time period as set forth
above, the Partnership shall conduct only activities necessary to wind up its
affairs. If such an election is so made, then:
(i) the
Partnership shall continue without dissolution unless earlier dissolved in
accordance with this Article
XII;
(ii) if
the
successor General Partner is not the former General Partner, then the interest
of the former General Partner shall be treated in the manner provided in
Section
11.3;
and
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(iii) the
successor General Partner shall be admitted to the Partnership as General
Partner, effective as of the Event of Withdrawal, by agreeing in writing to
be
bound by this Agreement; provided,
that
the right of the holders of a Unit Majority to approve a successor General
Partner and to reconstitute and to continue the business of the Partnership
shall not exist and may not be exercised unless the Partnership has received
an
Opinion of Counsel that (x) the exercise of the right would not result in the
loss of limited liability of any Limited Partner and (y) neither the
Partnership, the reconstituted limited partnership nor any Group Member would
be
treated as an association taxable as a corporation or otherwise be taxable
as an
entity for United States federal income tax purposes upon the exercise of such
right to continue (to the extent not already so treated or taxed).
|
Section
12.3
|
Liquidator.
|
Upon
dissolution of the Partnership, unless the business of the Partnership is
continued pursuant to Section
12.2,
the
General Partner shall select one or more Persons to act as Liquidator. The
Liquidator (if other than the General Partner) shall be entitled to receive
such
compensation for its services as may be approved by holders of at least a
majority of the Outstanding Common Units and Subordinated Units voting as a
single class. The Liquidator (if other than the General Partner) shall agree
not
to resign at any time without 15 days’ prior notice and may be removed at any
time, with or without cause, by notice of removal approved by holders of at
least a majority of the Outstanding Common Units and Subordinated Units voting
as a single class. Upon dissolution, removal or resignation of the Liquidator,
a
successor and substitute Liquidator (who shall have and succeed to all rights,
powers and duties of the original Liquidator) shall within 30 days thereafter
be
approved by holders of at least a majority of the Outstanding Common Units
and
Subordinated Units voting as a single class. The right to approve a successor
or
substitute Liquidator in the manner provided herein shall be deemed to refer
also to any such successor or substitute Liquidator approved in the manner
herein provided. Except as expressly provided in this Article
XII,
the
Liquidator approved in the manner provided herein shall have and may exercise,
without further authorization or consent of any of the parties hereto, all
of
the powers conferred upon the General Partner under the terms of this Agreement
(but subject to all of the applicable limitations, contractual and otherwise,
upon the exercise of such powers, other than the limitation on sale set forth
in
Section
7.3(b))
necessary or appropriate to carry out the duties and functions of the Liquidator
hereunder for and during the period of time required to complete the winding
up
and liquidation of the Partnership as provided for herein.
|
Section
12.4
|
Liquidation.
|
The
Liquidator shall proceed to dispose of the assets of the Partnership, discharge
its liabilities, and otherwise wind up its affairs in such manner and over
such
period as determined by the Liquidator, subject to Section 60 of the ▇▇▇▇▇▇▇▇
Islands Act and the following:
(a) The
assets may be disposed of by public or private sale or by distribution in kind
to one or more Partners on such terms as the Liquidator and such Partner or
Partners may agree. If any property is distributed in kind, the Partner
receiving the property shall be deemed for purposes of Section
12.4(c)
to have
received cash equal to its fair market value; and
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contemporaneously
therewith, appropriate cash distributions must be made to the other Partners.
The Liquidator may defer liquidation or distribution of the Partnership’s assets
for a reasonable time if it determines that an immediate sale or distribution
of
all or some of the Partnership’s assets would be impractical or would cause
undue loss to the Partners. The Liquidator may distribute the Partnership’s
assets, in whole or in part, in kind if it determines that a sale would be
impractical or would cause undue loss to the Partners.
(b) Liabilities
of the Partnership include amounts owed to the Liquidator as compensation for
serving in such capacity (subject to the terms of Section
12.3)
and
amounts to Partners otherwise than in respect of their distribution rights
under
Article
VI.
With
respect to any liability that is contingent, conditional or unmatured or is
otherwise not yet due and payable, the Liquidator shall either settle such
claim
for such amount as it thinks appropriate or establish a reserve of cash or
other
assets to provide for its payment. When paid, any unused portion of the reserve
shall be distributed as additional liquidation proceeds.
(c) All
property and all cash in excess of that required to discharge liabilities as
provided in Section
12.4(b)
shall be
distributed to the Partners in accordance with, and to the extent of, the
positive balances in their respective Capital Accounts, as determined after
taking into account all Capital Account adjustments (other than those made
by
reason of distributions pursuant to this Section
12.4(c))
for the
taxable year of the Partnership during which the liquidation of the Partnership
occurs (with such date of occurrence being determined pursuant to Treasury
Regulation Section 1.704-1(b)(2)(ii)(g)), and such distribution shall be made
by
the end of such taxable year (or, if later, within 90 days after said date
of
such occurrence).
|
Section
12.5
|
Cancellation
of Certificate of Limited
Partnership.
|
Upon
the
completion of the distribution of Partnership cash and property as provided
in
Section
12.4
in
connection with the liquidation of the Partnership, the Certificate of Limited
Partnership and all qualifications of the Partnership as a foreign limited
partnership in jurisdictions other than the ▇▇▇▇▇▇▇▇ Islands shall be canceled
and such other actions as may be necessary to terminate the Partnership shall
be
taken.
|
Section
12.6
|
Return
of Contributions.
|
The
General Partner shall not be personally liable for, and shall have no obligation
to contribute or loan any monies or property to the Partnership to enable it
to
effectuate, the return of the Capital Contributions of the Limited Partners
or
Unitholders, or any portion thereof, it being expressly understood that any
such
return shall be made solely from Partnership assets.
|
Section
12.7
|
Waiver
of Partition.
|
To
the
maximum extent permitted by law, each Partner hereby waives any right to
partition of the Partnership property.
|
Section
12.8
|
Capital
Account Restoration.
|
No
Limited Partner shall have any obligation to restore any negative balance in
its
Capital Account upon liquidation of the Partnership. The General Partner shall
be obligated to
NYC:103990_15.DOC
78
restore
any negative balance in its Capital Account upon liquidation of its interest
in
the Partnership by the end of the taxable year of the Partnership during which
such liquidation occurs, or, if later, within 90 days after the date of such
liquidation.
ARTICLE
XIII
AMENDMENT
OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
|
Section
13.1
|
Amendments
to be Adopted Solely by the General
Partner.
|
Each
Partner agrees that the General Partner, without the approval of any Partner
or
Assignee, may amend any provision of this Agreement and execute, swear to,
acknowledge, deliver, file and record whatever documents may be required in
connection therewith, to reflect:
(a) a
change
in the name of the Partnership, the location of the principal place of business
of the Partnership, the registered agent of the Partnership or the registered
office of the Partnership;
(b) admission,
substitution, withdrawal or removal of Partners in accordance with this
Agreement;
(c) a
change
that the General Partner determines to be necessary or appropriate to qualify
or
continue the qualification of the Partnership as a limited partnership or a
partnership in which the Limited Partners have limited liability under the
laws
of the ▇▇▇▇▇▇▇▇ Islands or to ensure that the Group Members will not be treated
as associations taxable as corporations or otherwise taxed as entities for
▇▇▇▇▇▇▇▇ Islands income tax purposes;
(d) a
change
that the General Partner determines, (i) does not adversely affect the Limited
Partners (including any particular class of Partnership Interests as compared
to
other classes of Partnership Interests) in any material respect, (ii) to be
necessary or appropriate to (A) satisfy any requirements, conditions or
guidelines contained in any opinion, directive, order, ruling or regulation
of
any ▇▇▇▇▇▇▇▇ Islands authority (including the ▇▇▇▇▇▇▇▇ Islands Act) or (B)
facilitate the trading of the Units (including the division of any class or
classes of Outstanding Units into different classes to facilitate uniformity
of
tax consequences within such classes of Units) or comply with any rule,
regulation, guideline or requirement of any National Securities Exchange on
which the Units are or will be listed, (iii) to be necessary or appropriate
in
connection with action taken by the General Partner pursuant to Section
5.10
or (iv)
is required to effect the intent expressed in the Registration Statement or
the
intent of the provisions of this Agreement or is otherwise contemplated by
this
Agreement;
(e) a
change
in the fiscal year or taxable year of the Partnership and any other changes
that
the General Partner determines to be necessary or appropriate as a result of
a
change in the fiscal year or taxable year of the Partnership including, if
the
General Partner shall so determine, a change in the definition of “Quarter” and
the dates on which distributions are to be made by the Partnership;
(f) an
amendment that is necessary, in the Opinion of Counsel, to prevent the
Partnership, or the General Partner or its directors, officers, trustees or
agents from in any
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manner
being subjected to the provisions of the Investment Company Act of 1940, as
amended, the Investment Advisers Act of 1940, as amended, or “plan asset”
regulations adopted under the Employee Retirement Income Security Act of 1974,
as amended, regardless of whether such are substantially similar to plan asset
regulations currently applied or proposed by the United States Department of
Labor;
(g) an
amendment that the General Partner determines to be necessary or appropriate
in
connection with the authorization of issuance of any class or series of
Partnership Securities pursuant to Section
5.6;
(h) any
amendment expressly permitted in this Agreement to be made by the General
Partner acting alone;
(i) an
amendment that the General Partner determines to be necessary or appropriate
to
reflect and account for the formation by the Partnership of, or investment
by
the Partnership in, any corporation, partnership, joint venture, limited
liability company or other entity, in connection with the conduct by the
Partnership of activities permitted by the terms of Section
2.4;
or
(j) any
other
amendments substantially similar to the foregoing.
|
Section
13.2
|
Amendment
Procedures.
|
Except
as
provided in Sections 13.1
and
13.3,
all
amendments to this Agreement shall be made in accordance with the following
requirements. Amendments to this Agreement may be proposed only by the General
Partner; provided,
however,
that
the
General Partner shall have no duty or obligation to propose any amendment to
this Agreement and may decline to do so free of any fiduciary duty or obligation
whatsoever to the Partnership, any Limited Partner or Assignee and, in declining
to propose an amendment, shall not be required to act in good faith or pursuant
to any other standard imposed by this Agreement, any Group Member Agreement,
any
other agreement contemplated hereby or under the ▇▇▇▇▇▇▇▇ Islands Act or any
other law, rule or regulation.
A
proposed amendment shall be effective upon its approval by the holders of a
Unit
Majority, unless a greater or different percentage is required under this
Agreement or by the ▇▇▇▇▇▇▇▇ Islands Act. Each proposed amendment that requires
the approval of the holders of a specified percentage of Outstanding Units
shall
be set forth in a writing that contains the text of the proposed amendment.
If
such an amendment is proposed, the General Partner shall seek the written
approval of the requisite percentage of Outstanding Units or call a meeting
of
the Unitholders to consider and vote on such proposed amendment. The General
Partner shall notify all Record Holders upon final adoption of any such proposed
amendments.
|
Section
13.3
|
Amendment
Requirements.
|
(a) Notwithstanding
the provisions of Sections 13.1
and
13.2,
no
provision of this Agreement that establishes a percentage of Outstanding Units
(including Units deemed owned by the General Partner) required to take any
action shall be amended, altered, changed, repealed or rescinded in any respect
that would have the effect of reducing such voting percentage unless such
amendment is approved by the written consent or the affirmative vote of holders
of
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Outstanding
Units whose aggregate Outstanding Units constitute not less than the voting
requirement sought to be reduced.
(b) Notwithstanding
the provisions of Sections 13.1
and
13.2,
no
amendment to this Agreement may liv)
enlarge
the obligations of any Limited Partner without its consent, unless such shall
be
deemed to have occurred as a result of an amendment approved pursuant to
Section
13.3(c),
lv)
enlarge
the obligations of, restrict in any way any action by or rights of, or reduce
in
any way the amounts distributable, reimbursable or otherwise payable to, the
General Partner or any of its Affiliates without its consent, which consent
may
be given or withheld at its option, lvi)
change
Section
12.1(a),
or
lvii)
change
the term of the Partnership or, except as set forth in Section
12.1(a),
give
any Person the right to dissolve the Partnership.
(c) Except
as
provided in Section
14.3,
and
without and without limitation of the General Partner’s authority to adopt
amendments to this Agreement without the approval of any Partners or Assignees
as contemplated in Section
13.1,
any
amendment that would have a material adverse effect on the rights or preferences
of any class of Partnership Interests in relation to other classes of
Partnership Interests must be approved by the holders of not less than a
majority of the Outstanding Partnership Interests of the class
affected.
(d) Notwithstanding
any other provision of this Agreement, except for amendments pursuant to
Section
13.1
and
except as otherwise provided in Section
14.3(b),
no
amendments shall become effective without the approval of the holders of at
least 90% of the Outstanding Units voting as a single class unless the
Partnership obtains an Opinion of Counsel to the effect that such amendment
will
not affect the limited liability of any Limited Partner under applicable
law.
(e) Except
as
provided in Section
13.1,
this
Section
13.3
shall
only be amended with the approval of the holders of at least 90% of the
Outstanding Units.
|
Section
13.4
|
Special
Meetings.
|
All
acts
of Limited Partners to be taken pursuant to this Agreement shall be taken in
the
manner provided in this Article
XIII.
Special
meetings of the Limited Partners may be called by the General Partner or by
Limited Partners owning 20% or more of the Outstanding Units of the class or
classes for which a meeting is proposed. Limited Partners shall call a special
meeting by delivering to the General Partner one or more requests in writing
stating that the signing Limited Partners wish to call a special meeting and
indicating the general or specific purposes for which the special meeting is
to
be called. Within 60 days after receipt of such a call from Limited Partners
or
within such greater time as may be reasonably necessary for the Partnership
to
comply with any statutes, rules, regulations, listing agreements or similar
requirements governing the holding of a meeting or the solicitation of proxies
for use at such a meeting, the General Partner shall send a notice of the
meeting to the Limited Partners either directly or indirectly through the
Transfer Agent. A meeting shall be held at a time and place determined by the
General Partner on a date not less than 10 days nor more than 60 days after
the
mailing of notice of the meeting. Limited Partners shall not vote on matters
that would cause the Limited Partners to be deemed to be taking part in the
management and control of the business and affairs
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81
of
the
Partnership so as to jeopardize the Limited Partners’ limited liability under
the ▇▇▇▇▇▇▇▇ Islands Act or the law of any other state in which the Partnership
is qualified to do business.
|
Section
13.5
|
Notice
of a Meeting.
|
Notice
of
a meeting called pursuant to Section
13.4
shall be
given to the Record Holders of the class or classes of Units for which a meeting
is proposed in writing by mail or other means of written communication in
accordance with Section 15.1. The notice shall be deemed to have been given
at
the time when deposited in the mail or sent by other means of written
communication.
|
Section
13.6
|
Record
Date.
|
For
purposes of determining the Limited Partners entitled to notice of or to vote
at
a meeting of the Limited Partners or to give approvals without a meeting as
provided in Section
13.11
the
General Partner may set a Record Date, which shall not be less than 10 nor
more
than 60 days before (a) the date of the meeting (unless such requirement
conflicts with any rule, regulation, guideline or requirement of any National
Securities Exchange on which the Units are listed for trading, in which case
the
rule, regulation, guideline or requirement of such exchange shall govern) or
(b)
in the event that approvals are sought without a meeting, the date by which
Limited Partners are requested in writing by the General Partner to give such
approvals.
|
Section
13.7
|
Adjournment.
|
When
a
meeting is adjourned to another time or place, notice need not be given of
the
adjourned meeting and a new Record Date need not be fixed, if the time and
place
thereof are announced at the meeting at which the adjournment is taken, unless
such adjournment shall be for more than 45 days. At the adjourned meeting,
the
Partnership may transact any business which might have been transacted at the
original meeting. If the adjournment is for more than 45 days or if a new Record
Date is fixed for the adjourned meeting, a notice of the adjourned meeting
shall
be given in accordance with this Article
XIII.
|
Section
13.8
|
Waiver
of Notice; Approval of Meeting; Approval of
Minutes.
|
The
transactions of any meeting of Limited Partners, however called and noticed,
and
whenever held, shall be as valid as if it had occurred at a meeting duly held
after regular call and notice, if a quorum is present either in person or by
proxy, and if, either before or after the meeting, Limited Partners representing
such quorum who were present in person or by proxy and entitled to vote, sign
a
written waiver of notice or an approval of the holding of the meeting or an
approval of the minutes thereof. All waivers and approvals shall be filed with
the Partnership records or made a part of the minutes of the meeting. Attendance
of a Limited Partner at a meeting shall constitute a waiver of notice of the
meeting, except when the Limited Partner attends the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of
any
business because the meeting is not lawfully called or convened; and except
that
attendance at a meeting is not a waiver of any right to disapprove the
consideration of matters required to be included in the notice of the meeting,
but not so included, if the disapproval is expressly made at the
meeting.
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|
Section
13.9
|
Quorum
and Voting.
|
The
holders of a majority of the Outstanding Units of the class or classes for
which
a meeting has been called (including Outstanding Units deemed owned by the
General Partner) represented in person or by proxy shall constitute a quorum
at
a meeting of Limited Partners of such class or classes unless any such action
by
the Limited Partners requires approval by holders of a greater percentage of
such Units, in which case the quorum shall be such greater percentage. At any
meeting of the Limited Partners duly called and held in accordance with this
Agreement at which a quorum is present, the act of Limited Partners holding
Outstanding Units that in the aggregate represent a majority of the Outstanding
Units entitled to vote and be present in person or by proxy at such meeting
shall be deemed to constitute the act of all Limited Partners, unless a greater
or different percentage is required with respect to such action under the
provisions of this Agreement, in which case the act of the Limited Partners
holding Outstanding Units that in the aggregate represent at least such greater
or different percentage shall be required. The Limited Partners present at
a
duly called or held meeting at which a quorum is present may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
Limited Partners to leave less than a quorum, if any action taken (other than
adjournment) is approved by the required percentage of Outstanding Units
specified in this Agreement (including Outstanding Units deemed owned by the
General Partner). In the absence of a quorum any meeting of Limited Partners
may
be adjourned from time to time by the affirmative vote of holders of at least
a
majority of the Outstanding Units entitled to vote at such meeting (including
Outstanding Units deemed owned by the General Partner) represented either in
person or by proxy, but no other business may be transacted, except as provided
in Section
13.7.
|
Section
13.10
|
Conduct
of a Meeting.
|
The
General Partner shall have full power and authority concerning the manner of
conducting any meeting of the Limited Partners or solicitation of approvals
in
writing, including the determination of Persons entitled to vote, the existence
of a quorum, the satisfaction of the requirements of Section
13.4,
the
conduct of voting, the validity and effect of any proxies and the determination
of any controversies, votes or challenges arising in connection with or during
the meeting or voting. The General Partner shall designate a Person to serve
as
chairman of any meeting and shall further designate a Person to take the minutes
of any meeting. All minutes shall be kept with the records of the Partnership
maintained by the General Partner. The General Partner may make such other
regulations consistent with applicable law and this Agreement as it may deem
advisable concerning the conduct of any meeting of the Limited Partners or
solicitation of approvals in writing, including regulations in regard to the
appointment of proxies, the appointment and duties of inspectors of votes and
approvals, the submission and examination of proxies and other evidence of
the
right to vote, and the revocation of approvals in writing.
|
Section
13.11
|
Action
Without a Meeting.
|
If
authorized by the General Partner, any action that may be taken at a meeting
of
the Limited Partners may be taken without a meeting if an approval in writing
setting forth the action so taken is signed by Limited Partners owning not
less
than the minimum percentage of the Outstanding Units (including Units deemed
owned by the General Partner) that would be necessary to authorize or take
such
action at a meeting at which all the Limited Partners were
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present
and voted (unless such provision conflicts with any rule, regulation, guideline
or requirement of any National Securities Exchange on which the Units are
listed, in which case the rule, regulation, guideline or requirement of such
exchange shall govern). Prompt notice of the taking of action without a meeting
shall be given to the Limited Partners who have not approved in writing. The
General Partner may specify that any written ballot submitted to Limited
Partners for the purpose of taking any action without a meeting shall be
returned to the Partnership within the time period, which shall be not less
than
20 days, specified by the General Partner. If a ballot returned to the
Partnership does not vote all of the Units held by the Limited Partners, the
Partnership shall be deemed to have failed to receive a ballot for the Units
that were not voted. If approval of the taking of any action by the Limited
Partners is solicited by any Person other than by or on behalf of the General
Partner, the written approvals shall have no force and effect unless and until
(a) they are deposited with the Partnership in care of the General Partner,
(b)
approvals sufficient to take the action proposed are dated as of a date not
more
than 90 days prior to the date sufficient approvals are deposited with the
Partnership and (c) an Opinion of Counsel is delivered to the General Partner
to
the effect that the exercise of such right and the action proposed to be taken
with respect to any particular matter (i) will not cause the Limited Partners
to
be deemed to be taking part in the management and control of the business and
affairs of the Partnership so as to jeopardize the Limited Partners’ limited
liability, and (ii) is otherwise permissible under the state statutes then
governing the rights, duties and liabilities of the Partnership and the
Partners.
|
Section
13.12
|
Right
to Vote and Related Matters.
|
(a) Only
those Record Holders of the Units on the Record Date set pursuant to
Section
13.6
(and
also subject to the limitations contained in the definition of “Outstanding”)
shall be entitled to notice of, and to vote at, a meeting of Limited Partners
or
to act with respect to matters as to which the holders of the Outstanding Units
have the right to vote or to act. All references in this Agreement to votes
of,
or other acts that may be taken by, the Outstanding Units shall be deemed to
be
references to the votes or acts of the Record Holders of such Outstanding
Units.
(b) With
respect to Units that are held for a Person’s account by another Person (such as
a broker, dealer, bank, trust company or clearing corporation, or an agent
of
any of the foregoing), in whose name such Units are registered, such other
Person shall, in exercising the voting rights in respect of such Units on any
matter, and unless the arrangement between such Persons provides otherwise,
vote
such Units in favor of, and at the direction of, the Person who is the
beneficial owner, and the Partnership shall be entitled to assume it is so
acting without further inquiry. The provisions of this Section
13.12(b)
(as well
as all other provisions of this Agreement) are subject to
the
provisions of Section
4.3.
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Article
XIV
Merger
|
Section
14.1
|
Authority.
|
The
Partnership may merge or consolidate with or into one or more corporations,
limited liability companies, statutory trusts or associations, real estate
investment trusts, common law trusts or unincorporated businesses, including
a
partnership (whether general or limited (including a limited liability
partnership)), formed under the laws of the ▇▇▇▇▇▇▇▇ Islands, pursuant to a
written agreement of merger or consolidation (“Merger Agreement”) in accordance
with this Article
XIV.
|
Section
14.2
|
Procedure
for Merger or Consolidation.
|
Merger
or
consolidation of the Partnership pursuant to this Article
XIV
requires
the prior consent of the General Partner, provided, however, that, to the
fullest extent permitted by law, the General Partner shall have no duty or
obligation to consent to any merger or consolidation of the Partnership and
may
decline to do so free of any fiduciary duty or obligation whatsoever to the
Partnership, any Limited Partner and, in declining to consent to a merger or
consolidation, shall not be required to act in good faith or pursuant to any
other standard imposed by this Agreement, any Group Member Agreement, any other
agreement contemplated hereby or under the ▇▇▇▇▇▇▇▇ Islands Act or any other
law, rule or regulation or at equity. If the General Partner shall determine
to
consent to the merger or consolidation, the General Partner shall approve the
Merger Agreement, which shall set forth:
(a) the
names
and jurisdictions of formation or organization of each of the business entities
proposing to merge or consolidate;
(b) the
name
and jurisdiction of formation or organization of the business entity that is
to
survive the proposed merger or consolidation (the “Surviving Business
Entity”);
(c) the
terms
and conditions of the proposed merger or consolidation;
(d) the
manner and basis of exchanging or converting the equity securities of each
constituent business entity for, or into, cash, property or interests, rights,
securities or obligations of the Surviving Business Entity; and (1)
if any
general or limited partner interests, securities or rights of any constituent
business entity are not to be exchanged or converted solely for, or into, cash,
property or interests, rights, securities or obligations of the Surviving
Business Entity, the cash, property or general or limited partner interests,
rights, securities or obligations of any general or limited partnership,
corporation, trust, limited liability company, unincorporated business or other
entity (other than the Surviving Business Entity) which the holders of such
interests, securities or rights are to receive in exchange for, or upon
conversion of their interests, securities or rights, and (2)
in the
case of securities represented by certificates, upon the surrender of such
certificates, which cash, property or interests, rights, securities or
obligations of the Surviving Business Entity or any general or limited
partnership, corporation, trust, limited liability company, unincorporated
business or other entity (other than the Surviving Business Entity), or
evidences thereof, are to be delivered;
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85
(e) a
statement of any changes in the constituent documents or the adoption of new
constituent documents (the articles or certificate of incorporation, articles
of
trust, declaration of trust, certificate or agreement of limited partnership
or
other similar charter or governing document) of the Surviving Business Entity
to
be effected by such merger or consolidation;
(f) the
effective time of the merger, which may be the date of the filing of the
certificate of merger pursuant to Section 14.4 or a later date specified in
or
determinable in accordance with the Merger Agreement (provided, that if the
effective time of the merger is to be later than the date of the filing of
such
certificate of merger, the effective time shall be fixed at a date or time
certain at or prior to the time of the filing of such certificate of merger
and
stated therein); and
(g) such
other provisions with respect to the proposed merger or consolidation that
the
General Partner determines to be necessary or appropriate.
|
Section
14.3
|
Approval
by Limited Partners of Merger or
Consolidation.
|
(a) Except
as
provided in Sections 14.3(d)
and
14.3(e),
the
General Partner, upon its approval of the Merger Agreement, shall direct that
the Merger Agreement be submitted to a vote of Limited Partners, whether at
a
special meeting or by written consent, in either case in accordance with the
requirements of Article
XIII.
A copy
or a summary of the Merger Agreement shall be included in or enclosed with
the
notice of a special meeting or the written consent.
(b) Except
as
provided in Sections 14.3(d)
and
14.3(e),
the
Merger Agreement shall be approved upon receiving the affirmative vote or
consent of the holders of a Unit Majority.
(c) Except
as
provided in Sections 14.3(d)
and
14.3(e),
after
such approval by vote or consent of the Limited Partners, and at any time prior
to the filing of the certificate of merger pursuant to Section
14.4,
the
merger or consolidation may be abandoned pursuant to provisions therefor, if
any, set forth in the Merger Agreement.
(d) Notwithstanding
anything else contained in this Article
XIV
or in
this Agreement, the General Partner is permitted, without Limited Partner
approval, to convert the Partnership or any Group Member into a new limited
liability entity, to merge the Partnership or any Group Member into, or convey
all of the Partnership’s assets to, another limited liability entity which shall
be newly formed and shall have no assets, liabilities or operations at the
time
of such conversion, merger or conveyance other than those it receives from
the
Partnership or other Group Member if (3)
the
General Partner has received an Opinion of Counsel that the conversion, merger
or conveyance, as the case may be, would not result in the loss of the limited
liability of any Limited Partner or cause the Partnership to be treated as
an
association taxable as a corporation or otherwise to be taxed as an entity
for
federal income tax purposes (to the extent not previously treated as such),
(4)
the sole
purpose of such conversion, merger or conveyance is to effect a mere change
in
the legal form of the Partnership into another limited liability entity and
(5)
the
governing instruments of the new entity provide the Limited Partners and the
General Partner with the same rights and obligations as are herein
contained.
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(e) Additionally,
notwithstanding anything else contained in this Article
XIV
or in
this Agreement, the General Partner is permitted, without Limited Partner
approval, to merge or consolidate the Partnership with or into another entity
if
(6)
the
General Partner has received an Opinion of Counsel that the merger or
consolidation, as the case may be, would not result in the loss of the limited
liability of any Limited Partner or cause the Partnership to be treated as
an
association taxable as a corporation or otherwise to be taxed as an entity
for
federal income tax purposes (to the extent not previously treated as such),
(7)
the
merger or consolidation would not result in an amendment to the Partnership
Agreement, other than any amendments that could be adopted pursuant to
Section
13.1,
(8)
the
Partnership is the Surviving Business Entity in such merger or consolidation,
(9)
each
Unit outstanding immediately prior to the effective date of the merger or
consolidation is to be an identical Unit of the Partnership after the effective
date of the merger or consolidation, and (10)
the
number of Partnership Securities to be issued by the Partnership in such merger
or consolidation do not exceed 20% of the Partnership Securities Outstanding
immediately prior to the effective date of such merger or
consolidation.
|
Section
14.4
|
Certificate
of Merger.
|
Upon
the
required approval by the General Partner and the Unitholders of a Merger
Agreement, a certificate of merger shall be executed and filed in conformity
with the requirements of the ▇▇▇▇▇▇▇▇ Islands Act.
|
Section
14.5
|
Amendment
of Partnership Agreement.
|
Pursuant
to Section 20(2) of the ▇▇▇▇▇▇▇▇ Islands Act, an agreement of merger or
consolidation approved in accordance with Section 20(2) of the ▇▇▇▇▇▇▇▇ Islands
Act may (a) effect any amendment to this Agreement or (b) effect the adoption
of
a new partnership agreement for a limited partnership if it is the Surviving
Business Entity. Any such amendment or adoption made pursuant to this
Section
14.5
shall be
effective at the effective time or date of the merger or
consolidation.
|
Section
14.6
|
Effect
of Merger.
|
(a) At
the
effective time of the certificate of merger:
(i) all
of
the rights, privileges and powers of each of the business entities that has
merged or consolidated, and all property, real, personal and mixed, and all
debts due to any of those business entities and all other things and causes
of
action belonging to each of those business entities, shall be vested in the
Surviving Business Entity and after the merger or consolidation shall be the
property of the Surviving Business Entity to the extent they were of each
constituent business entity;
(ii) the
title
to any real property vested by deed or otherwise in any of those constituent
business entities shall not revert and is not in any way impaired because of
the
merger or consolidation;
(iii) all
rights of creditors and all liens on or security interests in property of any
of
those constituent business entities shall be preserved unimpaired;
and
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87
(iv) all
debts, liabilities and duties of those constituent business entities shall
attach to the Surviving Business Entity and may be enforced against it to the
same extent as if the debts, liabilities and duties had been incurred or
contracted by it.
(b) A
merger
or consolidation effected pursuant to this Article shall not be deemed to result
in a transfer or assignment of assets or liabilities from one entity to
another.
ARTICLE
XV
RIGHT
TO
ACQUIRE LIMITED PARTNER INTERESTS
|
Section
15.1
|
Right
to Acquire Limited Partner
Interests.
|
(a) Notwithstanding
any other provision of this Agreement, if at any time the General Partner and
its Affiliates hold more than 80% of the total Limited Partner Interests of
any
class then Outstanding, the General Partner shall then have the right, which
right it may assign and transfer in whole or in part to the Partnership or
any
Affiliate of the General Partner, exercisable at its option, to purchase all,
but not less than all, of such Limited Partner Interests of such class then
Outstanding held by Persons other than the General Partner and its Affiliates,
at the greater of (x) the Current Market Price as of the date three days prior
to the date that the notice described in Section
15.1(b)
is
mailed and (y) the highest price paid by the General Partner or any of its
Affiliates for any such Limited Partner Interest of such class purchased during
the 90-day period preceding the date that the notice described in Section
15.1(b)
is
mailed. As used in this Agreement, (i) “Current Market Price” as of any date of
any class of Limited Partner Interests means the average of the daily Closing
Prices (as hereinafter defined) per Limited Partner Interest of such class
for
the 20 consecutive Trading Days (as hereinafter defined) immediately prior
to
such date; (ii) “Closing Price” for any day means the last sale price on such
day, regular way, or in case no such sale takes place on such day, the average
of the closing bid and asked prices on such day, regular way, as reported in
the
principal consolidated transaction reporting system with respect to securities
listed on the principal National Securities Exchange (other than the Nasdaq
Stock Market) on which such Limited Partner Interests are listed or, if such
Limited Partner Interests of such class are not listed on any National
Securities Exchange (other than the Nasdaq Stock Market), the last quoted price
on such day or, if not so quoted, the average of the high bid and low asked
prices on such day in the over-the-counter market, as reported by the Nasdaq
Stock Market or such other system then in use, or, if on any such day such
Limited Partner Interests of such class are not quoted by any such organization,
the average of the closing bid and asked prices on such day as furnished by
a
professional market maker making a market in such Limited Partner Interests
of
such class selected by the General Partner, or if on any such day no market
maker is making a market in such Limited Partner Interests of such class, the
fair value of such Limited Partner Interests on such day as determined by the
General Partner; and (iii) “Trading Day” means a day on which the principal
National Securities Exchange on which such Limited Partner Interests of any
class are listed is open for the transaction of business or, if Limited Partner
Interests of a class are not listed on any National Securities Exchange, a
day
on which banking institutions in New York City generally are open.
(b) If
the
General Partner, any Affiliate of the General Partner or the Partnership elects
to exercise the right to purchase Limited Partner Interests granted pursuant
to
Section
NYC:103990_15.DOC
88
15.1(a),
the
General Partner shall deliver to the Transfer Agent notice of such election
to
purchase (the “Notice of Election to Purchase”) and shall cause the Transfer
Agent to mail a copy of such Notice of Election to Purchase to the Record
Holders of Limited Partner Interests of such class (as of a Record Date selected
by the General Partner) at least 10, but not more than 60, days prior to the
Purchase Date. Such Notice of Election to Purchase shall also be published
for a
period of at least three consecutive days in at least two daily newspapers
of
general circulation printed in the English language and published in the Borough
of Manhattan, New York. The Notice of Election to Purchase shall specify the
Purchase Date and the price (determined in accordance with Section
15.1(a))
at
which Limited Partner Interests will be purchased and state that the General
Partner, its Affiliate or the Partnership, as the case may be, elects to
purchase such Limited Partner Interests, upon surrender of Certificates
representing such Limited Partner Interests in exchange for payment, at such
office or offices of the Transfer Agent as the Transfer Agent may specify,
or as
may be required by any National Securities Exchange on which such Limited
Partner Interests are listed. Any such Notice of Election to Purchase mailed
to
a Record Holder of Limited Partner Interests at his address as reflected in
the
records of the Transfer Agent shall be conclusively presumed to have been given
regardless of whether the owner receives such notice. On or prior to the
Purchase Date, the General Partner, its Affiliate or the Partnership, as the
case may be, shall deposit with the Transfer Agent cash in an amount sufficient
to pay the aggregate purchase price of all of such Limited Partner Interests
to
be purchased in accordance with this Section
15.1.
If the
Notice of Election to Purchase shall have been duly given as aforesaid at least
10 days prior to the Purchase Date, and if on or prior to the Purchase Date
the
deposit described in the preceding sentence has been made for the benefit of
the
holders of Limited Partner Interests subject to purchase as provided herein,
then from and after the Purchase Date, notwithstanding that any Certificate
shall not have been surrendered for purchase, all rights of the holders of
such
Limited Partner Interests (including any rights pursuant to Articles
IV,
V,
VI,
and
XII)
shall
thereupon cease, except the right to receive the purchase price (determined
in
accordance with Section
15.1(a))
for
Limited Partner Interests therefor, without interest, upon surrender to the
Transfer Agent of the Certificates representing such Limited Partner Interests,
and such Limited Partner Interests shall thereupon be deemed to be transferred
to the General Partner, its Affiliate or the Partnership, as the case may be,
on
the record books of the Transfer Agent and the Partnership, and the General
Partner or any Affiliate of the General Partner, or the Partnership, as the
case
may be, shall be deemed to be the owner of all such Limited Partner Interests
from and after the Purchase Date and shall have all rights as the owner of
such
Limited Partner Interests (including all rights as owner of such Limited Partner
Interests pursuant to Articles IV,
V,
VI,
and
XII).
(c) At
any
time from and after the Purchase Date, a holder of an Outstanding Limited
Partner Interest subject to purchase as provided in this Section
15.1
may
surrender his Certificate evidencing such Limited Partner Interest to the
Transfer Agent in exchange for payment of the amount described in Section
15.1(a),
therefor, without interest thereon.
NYC:103990_15.DOC
89
Article
XVI
GENERAL
PROVISIONS
|
Section
16.1
|
Addresses
and Notices.
|
Any
notice, demand, request, report or proxy materials required or permitted to
be
given or made to a Partner or Assignee under this Agreement shall be in writing
and shall be deemed given or made when delivered in person or when sent by
first
class United States mail or by other means of written communication to the
Partner or Assignee at the address described below. Any notice, payment or
report to be given or made to a Partner or Assignee hereunder shall be deemed
conclusively to have been given or made, and the obligation to give such notice
or report or to make such payment shall be deemed conclusively to have been
fully satisfied, upon sending of such notice, payment or report to the Record
Holder of such Partnership Securities at his address as shown on the records
of
the Transfer Agent or as otherwise shown on the records of the Partnership,
regardless of any claim of any Person who may have an interest in such
Partnership Securities by reason of any assignment or otherwise. An affidavit
or
certificate of making of any notice, payment or report in accordance with the
provisions of this Section
16.1
executed
by the General Partner, the Transfer Agent or the mailing organization shall
be
prima facie evidence of the giving or making of such notice, payment or report.
If any notice, payment or report addressed to a Record Holder at the address
of
such Record Holder appearing on the books and records of the Transfer Agent
or
the Partnership is returned by the United States Postal Service marked to
indicate that the United States Postal Service is unable to deliver it, such
notice, payment or report and any subsequent notices, payments and reports
shall
be deemed to have been duly given or made without further mailing (until such
time as such Record Holder or another Person notifies the Transfer Agent or
the
Partnership of a change in his address) if they are available for the Partner
or
Assignee at the principal office of the Partnership for a period of one year
from the date of the giving or making of such notice, payment or report to
the
other Partners and Assignees. Any notice to the Partnership shall be deemed
given if received by the General Partner at the principal office of the
Partnership designated pursuant to Section
2.3.
The
General Partner may rely and shall be protected in relying on any notice or
other document from a Partner, Assignee or other Person if believed by it to
be
genuine.
|
Section
16.2
|
Further
Action.
|
The
parties shall execute and deliver all documents, provide all information and
take or refrain from taking action as may be necessary or appropriate to achieve
the purposes of this Agreement.
|
Section
16.3
|
Binding
Effect.
|
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their heirs, executors, administrators, successors, legal representatives
and permitted assigns.
NYC:103990_15.DOC
90
|
Section
16.4
|
Integration.
|
This
Agreement constitutes the entire agreement among the parties hereto pertaining
to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.
|
Section
16.5
|
Creditors.
|
None
of
the provisions of this Agreement shall be for the benefit of, or shall be
enforceable by, any creditor of the Partnership.
|
Section
16.6
|
Waiver.
|
No
failure by any party to insist upon the strict performance of any covenant,
duty, agreement or condition of this Agreement or to exercise any right or
remedy consequent upon a breach thereof shall constitute waiver of any such
breach of any other covenant, duty, agreement or condition.
|
Section
16.7
|
Counterparts.
|
This
Agreement may be executed in counterparts, all of which together shall
constitute an agreement binding on all the parties hereto, notwithstanding
that
all such parties are not signatories to the original or the same counterpart.
Each party shall become bound by this Agreement immediately upon affixing its
signature hereto or, in the case of a Person acquiring a Unit, upon accepting
the certificate evidencing such Unit or executing and delivering a Transfer
Application as herein described, independently of the signature of any other
party.
|
Section
16.8
|
Applicable
Law.
|
This
Agreement shall be construed in accordance with and governed by the laws of
the
▇▇▇▇▇▇▇▇ Islands, without regard to the principles of conflicts of
law.
|
Section
16.9
|
Invalidity
of Provisions.
|
If
any
provision of this Agreement is or becomes invalid, illegal or unenforceable
in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected thereby.
|
Section
16.10
|
Consent
of Partners.
|
Each
Partner hereby expressly consents and agrees that, whenever in this Agreement
it
is specified that an action may be taken upon the affirmative vote or consent
of
less than all of the Partners, such action may be so taken upon the concurrence
of less than all of the Partners and each Partner shall be bound by the results
of such action.
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK.]
NYC:103990_15.DOC
91
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement as a Deed as of the date first
written above.
| GENERAL PARTNER: | |
|
Teekay
GP L.L.C.
|
|
|
By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇
|
|
|
Title:
Chief Executive Officer and Chief Financial
Officer
|
| ORGANIZATIONAL LIMITED PARTNER: | |
|
Teekay
Shipping Corporation
|
|
|
By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇
|
|
|
Title:
Executive Vice President and Chief Financial
Officer
|
NYC:103990_15.DOC
92
|
LIMITED
PARTNERS:
All
Limited Partners now and hereafter admitted as Limited Partners of
the
Partnership, pursuant to powers of attorney now and hereafter executed
in
favor of, and granted and delivered to the General
Partner.
|
|
|
.
|
Teekay
GP L.L.C
|
|
By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
|
|
|
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇
|
|
|
Title:
Chief Executive Officer and Chief Financial
Officer
|
NYC:103990_15.DOC
93
EXHIBIT
A
to
the First Amended and Restated
Agreement
of Limited Partnership of
Certificate
Evidencing Common Units
Representing
Limited Partner Interests in
|
No.
__________
|
__________
Common Units
|
In
accordance with Section
4.1
of the
First Amended and Restated Agreement of Limited Partnership of Teekay LNG
Partners L.P., as amended, supplemented or restated from time to time (the
“Partnership
Agreement”),
Teekay LNG Partners L.P., a ▇▇▇▇▇▇▇▇ Islands limited partnership (the
“Partnership”),
hereby certifies that ___________________ (the “Holder”)
is the
registered owner of Common Units representing limited partner interests in
the
Partnership (the “Common
Units”)
transferable on the books of the Partnership, in person or by duly authorized
attorney, upon surrender of this Certificate properly endorsed and accompanied
by a properly executed application for transfer of the Common Units represented
by this Certificate. The rights, preferences and limitations of the Common
Units
are set forth in, and this Certificate and the Common Units represented hereby
are issued and shall in all respects be subject to the terms and provisions
of,
the Partnership Agreement. Copies of the Partnership Agreement are on file
at,
and will be furnished without charge on delivery of written request to the
Partnership at, the principal office of the Partnership located at TK House,
Bayside Executive Park, West Bay Street and ▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, Commonwealth of the Bahamas. Capitalized terms used herein but not
defined shall have the meanings given them in the Partnership
Agreement.
The
Holder, by accepting this Certificate, is deemed to have (i) requested
admission as, and agreed to become, a Limited Partner and to have agreed to
comply with and be bound by and to have executed the Partnership Agreement,
(ii) represented and warranted that the Holder has all right, power and
authority and, if an individual, the capacity necessary to enter into the
Partnership Agreement, (iii) granted the powers of attorney provided for in
the Partnership Agreement and (iv) made the waivers and given the consents
and approvals contained in the Partnership Agreement.
This
Certificate shall not be valid for any purpose unless it has been countersigned
and registered by the Transfer Agent and Registrar.
|
Dated:_______________
|
Teekay
LNG Partners L.P.
|
|
|
Countersigned
and Registered by:
|
By:
Teekay GP L.L.C.,
its
General Partner
|
|
|
By:
|
||
|
as
Transfer Agent and Registrar
|
Name:
|
|
|
By:
|
By:
|
NYC:103990_15.DOC
Authorized
Signature Secretary
[Reverse
of Certificate]
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as follows according to applicable laws or
regulations:
|
TEN
COM -
|
as
tenants in common
|
UNIF
GIFT/TRANSFERS MIN ACT
|
|
TEN
ENT -
|
as
tenants by the entireties
|
__________
Custodian _________
|
|
(Cust) (Minor)
|
||
|
JT
TEN -
|
as
joint tenants with right of
|
under
Uniform Gifts/Transfers to CD
|
|
survivorship
and not as
|
Minors
Act (State)
|
|
|
tenants
in common
|
Additional
abbreviations, though not in the above list, may also be used.
ASSIGNMENT
OF COMMON UNITS
in
TEEKAY
LNG PARTNERS L.P.
FOR
VALUE
RECEIVED, __________ hereby assigns, conveys, sells and transfers
unto
_______________________
__________________________
(Please
print or typewrite name (Please
insert Social Security or other
and
address of Assignee) identifying
number of Assignee)
__________
Common Units representing limited partner interests evidenced by this
Certificate, subject to the Partnership Agreement, and does hereby irrevocably
constitute and appoint __________ as its attorney-in-fact with full power of
substitution to transfer the same on the books of Teekay LNG Partners
L.P.
|
Date:______________________________
|
NOTE:
|
The
signature to any endorsement hereon must correspond with the name
as
written upon the face of this Certificate in every particular, without
alteration, enlargement or change.
|
|
THE
SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS
WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT
TO S.E.C. RULE 17d-15
_____________________________
|
____________________
(Signature)
____________________
(Signature)
|
No
transfer of the Common Units evidenced hereby will be registered on the books
of
the Partnership, unless the Certificate evidencing the Common Units to be
transferred is surrendered for registration or transfer and an Application
for
Transfer of Common Units has been executed by a transferee either (a) on the
form set forth below or (b) on a separate application that the Partnership
will
furnish on request without charge. A transferor of the Common Units shall have
no duty to the transferee with respect to execution of the transfer application
in order for such transferee to obtain registration of the transfer of the
Common Units.
NYC:103990_15.DOC
APPLICATION
FOR TRANSFER OF COMMON UNITS
The
undersigned (“Assignee”)
hereby
applies for transfer registration to the name of the Assignee of the Common
Units evidenced hereby.
The
Assignee (a) requests admission as a Substituted Limited Partner and agrees
to
comply with and be bound by, and hereby executes, the First Amended and Restated
Agreement of Limited Partnership of Teekay LNG Partners L.P. (the “Partnership”),
as
amended, supplemented or restated to the date hereof (the “Partnership
Agreement”),
and
from time to time (b) represents and warrants that the Assignee has all
right, power and authority and, if an individual, the capacity necessary to
enter into the Partnership Agreement, (c) appoints the General Partner of the
Partnership and, if a Liquidator shall be appointed, the Liquidator of the
Partnership as the Assignee’s attorney-in-fact to execute, swear to, acknowledge
and file any document, including, without limitation, the Partnership Agreement
and any amendment thereto and the Certificate of Registration of the Partnership
and any amendment thereto, necessary or appropriate for the Assignee’s admission
as a Substituted Limited Partner and as a party to the Partnership Agreement,
(d) gives the powers of attorney provided for in the Partnership Agreement,
and
(e) makes the waivers and gives the consents and approvals contained in the
Partnership Agreement. Capitalized terms not defined herein have the meanings
assigned to such terms in the Partnership Agreement.
Date:_____________________
| ____________________________ | ________________________ |
|
Social
Security or other identifying number
|
Signature
of Assignee
|
| ____________________________ | ________________________ |
|
Purchase
Price including commissions, if any
|
Name
and Address of Assignee
|
Type
of
Entity (check one):
¨ Individual ¨ Partnership ¨ Corporation
¨ Trust
¨ Other
(specify)
Nationality
(for taxation purposes) (check one):
¨ U.S.
Citizen, Resident or Domestic Entity
¨ Foreign
Corporation ¨ Non-resident
Alien
If
the
U.S. Citizen, Resident or Domestic Entity box is checked, Certification B-1
must
be completed.
Under
Section 1445(e) of the Internal Revenue Code of 1986, as amended (the
“Code”),
the
Partnership must withhold tax with respect to certain transfers of property
if a
holder of an interest in the Partnership is a foreign person. To inform the
Partnership that no withholding is required with respect to the undersigned
interestholder’s interest in it, the undersigned hereby certifies as set forth
in B-1 (or, if applicable, certifies the following on behalf of the
interestholder).
The
interestholder understands that this certificate may be disclosed to the
Internal Revenue Service by the Partnership and that any false statement
contained herein could be punishable by fine, imprisonment or both.
Under
penalties of perjury, I declare that I have examined this certification and
to
the best of my knowledge and belief it is true, correct and complete and, if
applicable, I further declare that I have authority to sign this document on
behalf of:
Name
of
Interestholder
Signature
and Date
Title
(if
applicable)
Note:
If
the Assignee is a broker, dealer, bank, trust company, clearing corporation,
other nominee holder or an agent of any of the foregoing, and is holding for
the
account of any other person, this application should be completed by an officer
thereof or, in the case of a broker or dealer, by a registered representative
who is a member of a registered national securities exchange or a member of
the
National Association of Securities Dealers, Inc., or, in the case of any other
nominee holder, a person performing a similar function. If the Assignee is
a
broker, dealer, bank, trust company, clearing corporation, other nominee owner
or an agent of any of the foregoing, the above certification as to any person
for whom the Assignee will hold the Common Units shall be made to the best
of
the Assignee’s knowledge.