Second Amendment to
Agreement and Certificate of Limited Partnership of
Geodyne Energy Income Limited Partnership II-H
This Second Amendment to Agreement and Certificate of Limited Partnership
of Geodyne Energy Income Limited Partnership II-H (the "Partnership") is entered
into by and between Geodyne Properties, Inc. ("Properties"), a Delaware
corporation, as General Partner, Geodyne Depositary Company ("Depositary"), a
Delaware corporation, as the Limited Partner, and all Substituted Limited
Partners admitted to the Partnership.
WHEREAS, on May 17, 1989, Properties and Depositary executed and entered
into that certain Agreement and Certificate of Limited Partnership of the
Partnership (the "Agreement"); and
WHEREAS, on February 25, 1993, Properties executed and entered into that
First Amendment to the Agreement whereby it changed (i) the name of the
Partnership from "PaineWebber/Geodyne Energy Income Partnership II-H" to
"Geodyne Energy Income Limited Partnership II-H", (ii) the address of the
Partnership's principal place of business, and (iii) the address for the
Partnership's agent for service of process; and
WHEREAS, Section 11.1 of the Agreement provides that the General Partner
may, without prior notice or consent of any Unit Holder, amend any provision of
this Agreement if, in its opinion, such amendment does not have a material
adverse effect upon the Unit Holders; and
WHEREAS, Properties as General Partner desires to amend the Agreement in
order to (i) reflect the name change and address changes described above, (ii)
expedite the method of accepting transfers of Unit Holders' Units in the
Partnership and (iii) provide for an optional right of repurchase/redemption
which may be exercised by the Unit Holders.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements herein contained, the parties hereto hereby agree as follows:
I. The third sentence contained in Section 7.3 of the Agreement is hereby
amended and restated as follows:
Unit Holders becoming Substituted Limited Partners will be admitted
to the Partnership monthly.
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II. The second sentence contained in Section 7.3 of the Agreement, which
sentence required the payment by Unit Holders of a fee (not to exceed
$100) for legal and administrative costs associated with the transfer of
a Partnership Unit, is hereby deleted.
III. Section 8.2B(3) of the Agreement, which section required the payment by
Unit Holders of a fee (not to exceed $50) for expenses associated with
the General Partner's acceptance of a Substituted Limited Partner is
hereby deleted.
IV. The reference in the last sentence of Section 8.3A of the Agreement to
a transfer fee is hereby deleted.
V. The Agreement is hereby amended to provide for a new Article Fifteen.
Said Article Fifteen is hereby stated as follows:
Article Fifteen
Optional Repurchase/Redemption Provisions
Section 15.1. Optional Repurchase Right.
Any Unit Holder or Substituted Limited Partner shall have the right,
at his option, to present his Units to the General Partner or its
designated Affiliate for repurchase on the basis set forth in this Article
Fifteen.
Section 15.2. Procedure for Repurchase.
A. As of December 31, 1992 and annually thereafter (the "Appraisal
Date") the General Partner shall appraise the Proved Reserves and other
assets of the Partnership pursuant to the provisions set forth herein and
shall assign a repurchase price (the "Repurchase Price") to the Unit
Holders' Units in the Partnership in accordance with the provisions set
forth herein.
B. In arriving at the Repurchase Price, the General Partner
shall consider those factors deemed relevant by it including, without
limitation, the following:
(i) the present value of the estimated future
net revenues of the Production
Partnership's Proved Reserves, calculated
as described below; and
(ii) the book value of all other Partnership
assets and liabilities.
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Section 15.3. Calculation of Present Value of the
Partnership's Estimated Future Net Revenues.
In calculating the present value of the Partnership's Estimated
Future Net Revenues the General Partner shall use the petroleum
engineering reports and other petroleum reserve information required to be
furnished to the Unit Holders pursuant to Section 10.4C of the Agreement.
Future gross revenues expected to be derived from the production and
sale of the Proved Reserves attributable to the Production Partnership's
Producing Properties shall be estimated using either (i) escalations of
future sales prices of Hydrocarbons supplied by the General Partner (the
"Escalated Case") or (ii) sales prices of Hydrocarbons provided by
Regulation S-X adopted by the Securities and Exchange Commission (the "SEC
Case"), as the General Partner may determine in its sole discretion.
Future net revenues shall be calculated by deducting anticipated
expenses (using either (i) escalations of future costs supplied by the
General Partner if the General Partner adopted the Escalated Case with
respect to future sales prices of Hydrocarbons or (ii) constant future
costs if the General Partner adopted the SEC Case with respect to future
sales prices of Hydrocarbons) from estimated future gross revenues.
The present value of the future net revenues shall be calculated by
discounting the estimated future net revenues at either 10% (if the
General Partner employed future pricing criteria in accordance with the
SEC Case) or that rate per annum which is one percentage point higher than
the prime rate of interest of The Chase Manhattan Bank, N.A. or any
successor bank, as of the Appraisal Date (if the General Partner employed
pricing criteria in accordance with the Escalated Case, provided, however,
that such discount rate will not exceed 18% per annum and will be no less
than 10% per annum).
Section 15.4. Risk Reduction.
In determining the Repurchase Price for Unit Holders pursuant to
this Article Fifteen, the present value of the Partnership's Proved
Developed Producing Reserves shall be reduced by 25% for risk and the
present value of all other categories of Proved Reserves shall be reduced
by 35% for risk. The risk reductions shall be subject to upward or
downward adjustment by the General Partner if, during the period between
the Appraisal Date and the Effective Date (as defined in Section 15.5),
there has been a material increase or decrease in the current price of oil
or gas or in the estimated amount of the Partnership's Proved Reserves.
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Section 15.5. Tender Procedure.
Upon completion of the appraisal of the Partnership's assets as of
the Appraisal Date, the General Partner shall notify each Unit Holder of
the Repurchase Price and his proportionate share thereof and either the
General Partner or one of its Affiliates will offer to purchase such Unit
Holder's Units in exchange for such Unit Holder's proportionate share of
the Repurchase Price (a "Repurchase Offer"). Any Unit Holder desiring to
do so may accept such Repurchase Offer by notifying the General Partner of
his election. Unit Holders so notifying the General Partner shall be
referred to herein as "Electing Unit Holders". The General Partner or its
designated Affiliate shall thereupon promptly pay to each Electing Unit
Holder, his proper share of the Repurchase Price, calculated as herein set
forth, within 30 days from the date which a properly drawn assignment of
such Electing Unit Holder's interest, free and clear of all liens and
encumbrances, is tendered to and accepted by the General Partner or its
designated Affiliate (the "Effective Date"). Upon the acquisition of an
Electing Unit Holder's Units, the General Partner or its designated
Affiliate shall, as of the Effective Date of such acquisition, succeed to
all the rights and obligations attributable to such interest.
Section 15.6. Monthly Adjustment to Repurchase
Price.
The Repurchase Price shall be recalculated monthly with the
Repurchase Price being reduced by the amount of any cash distributions to
Unit Holders during the period from the Appraisal Date to the date of the
payment of the Repurchase Price and shall otherwise be adjusted to reflect
the effect of material operations during such period. In the event the
Repurchase Price is adjusted for any reason other than to reflect the
payment of cash distributions, the General Partner shall provide written
notification of such adjustment to the Unit Holders.
Section 15.7. Limitation on Units Repurchased.
A. At the sole discretion of the General Partner, the General
Partner or its designated Affiliate may either (i) limit the time period
in which it will accept tendered Units for repurchase or (ii) limit the
amount of Units to be accepted for repurchase; provided, however, that in
any event the annual repurchase offer will (i) remain open for at least
thirty (30) days and (ii) the General Partner or its designated Affiliate
will offer to repurchase at least 10% of the outstanding Units of the
Partnership. In such an event, the General Partner will either (i) specify
such limitation(s) in the annual Repurchase Offer mailed to the Unit
Holders or (ii) provide all Unit Holders with written notification of such
limitation(s) at least thirty (30) days prior to the effective date of any
such limitation(s).
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B. In the event the General Partner imposes a limitation upon the
number of Units to be repurchased in the Partnership, and the amount of
Units tendered, but not repurchased, exceeds such limitation, such
tendered Units will be accepted for repurchase by lot.
C. In addition, in order to avoid certain possible adverse tax
consequences, the General Partner may, in order to comply with the
regulations or procedures under Section 469(k) of the Internal Revenue
Code of 1986, as amended, relating to "publicly traded partnerships," (i)
delay or defer the Effective Date of any repurchase and (ii) limit the
total number of Units of any Partnership to be repurchased in any 12-month
period to the maximum number provided in such regulations and procedures.
In the event of such delay or deferral, the General Partner shall notify
the Electing Unit Holder of the reasons therefor and shall provide the
Electing Unit Holder with the option to withdraw his tender of Units for
repurchase.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as
of the 4th day of August, 1993.
Geodyne Properties, Inc.
as General Partner
By: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇▇
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C. ▇▇▇▇▇▇ ▇▇▇▇▇▇
President
Geodyne Depositary Company, as the
Limited Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President
Geodyne Properties, Inc., as
Attorney-in-Fact for all Substituted
Limited Partners
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President - Controller
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