EXHIBIT 3.2
CONFORMED
AGREEMENT OF LIMITED PARTNERSHIP
OF
MARKET HUB PARTNERS FINANCE, L.P.
Dated as of December 31, 1997
INDEX
PAGE
ARTICLE I.
DEFINITIONS AND TERMS..................................................1
1.1 Definitions................................................1
1.2 Terms Generally............................................2
ARTICLE II.
THE PARTNERSHIP........................................................2
2.1 Continuation...............................................2
2.2 Name.......................................................2
2.3 Principal Office, Registered Office and Agent
for Service of Process.....................................2
2.4 Purpose....................................................3
2.5 Term.......................................................3
2.6 Partners...................................................3
ARTICLE III.
CONTRIBUTIONS..........................................................3
3.1 Contributions..............................................3
3.2 No Return..................................................3
ARTICLE IV.
DISTRIBUTIONS..........................................................4
ARTICLE V.
CONTROL OF THE PARTNERSHIP.............................................4
5.1 Power and Authority........................................4
5.2 Inquiries..................................................4
5.3 Compensation...............................................5
ARTICLE VI.
BOOKS AND RECORDS AND ACCOUNTING.......................................5
6.1 Financial Information......................................5
6.2 Fiscal Year................................................6
6.3 Access to Books and Records................................6
ARTICLE VII.
RESPONSIBILITIES OF PARTNERS...........................................6
7.1 Liability to Partners......................................6
7.2 Indemnification............................................6
7.3 Time Devoted to Affairs; Other Ventures....................9
7.4 Good Faith Reliance on Agreement...........................9
7.5 Certain Standards..........................................9
PAGE
ARTICLE VIII.
DISSOLUTION AND TERMINATION...........................................10
8.1 Dissolution...............................................10
8.2 Winding Up................................................10
8.3 Waiver of Partition.......................................10
ARTICLE IX.
TAX MATTERS...........................................................10
9.1 Allocations of Tax Items..................................10
9.2 Tax Elections.............................................11
9.3 Preparation of Tax Returns................................11
9.4 Tax Matters Partner.......................................11
ARTICLE X.
MISCELLANEOUS.........................................................12
10.1 Notices...................................................12
10.2 Captions..................................................12
10.3 Further Assurances........................................12
10.4 Successors and Assigns....................................12
10.5 Governing Law.............................................13
10.6 Integration...............................................13
10.7 Amendments................................................13
10.8 No Third-Party Rights.....................................13
10.9 Relationship of the Partners..............................13
10.10 Counterparts..............................................14
10.11 Waiver....................................................14
AGREEMENT OF LIMITED PARTNERSHIP
OF
MARKET HUB PARTNERS FINANCE, L.P.
This Agreement of Limited Partnership dated as of December 31, 1997
of Market Hub Partners Finance, L.P., a Delaware limited partnership, is entered
into by and between Market Hub Partners Finance, L.L.C., a Delaware limited
liability company ("Finance GP"), and Market Hub Partners, L.P., a Delaware
limited partnership ("MHP").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and upon the terms and conditions hereinafter set forth, the parties
hereto intending to be legally bound, agree as follows:
ARTICLE I.
DEFINITIONS AND TERMS
1.1 DEFINITIONS. Unless the context otherwise requires, the
following terms shall have the following meanings for purposes of this
Agreement:
AGREEMENT: This Agreement, as the same may be amended from time to
time in accordance with the provisions hereof.
FACILITIES: The ▇▇▇▇ Bluff and the ▇▇▇▇ market hub and high
deliverability gas storage facilities which are located in Liberty and ▇▇▇▇▇▇▇▇
Counties, Texas and in Acadia Parish, Louisiana, respectively, or the right to
own and develop such facilities, together with real-time nomination, allocation
and title tracking systems and gas trading platforms.
GENERAL PARTNER: The general partner of the Partnership.
LIMITED PARTNER: The limited partner of the Partnership.
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OWNERSHIP PERCENTAGE: With respect to Finance GP, .01%, and with
respect to MHP, 99.99%.
PARTNERS: The General Partner and the Limited Partner.
PARTNERSHIP: The limited partnership formed pursuant to this
Agreement.
1.2 TERMS GENERALLY. The definitions in this Agreement shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include," "includes" and
"including" shall be deemed to be followed by the phrase "without limitation."
ARTICLE II.
THE PARTNERSHIP
2.1 CONTINUATION. Subject to the provisions of this Agreement, the
parties hereto continue this Partnership pursuant to the Delaware Revised
Uniform Limited Partnership Act ("DRULPA"). The general partner of the
Partnership has heretofore caused to be filed the certificate of limited
partnership of the Partnership which is required by the DRULPA and shall cause
to be filed such other certificates or filings as may be required for the
formation and operation of the Partnership in the State of Delaware or any other
state in which the Partnership elects to do business.
2.2 NAME. The name of the Partnership shall be "Market Hub Partners
Finance, L.P." The Partnership may change its name or adopt such trade or
fictitious names as it may determine.
2.3 PRINCIPAL OFFICE, REGISTERED OFFICE AND AGENT FOR SERVICE OF
PROCESS. The principal office of the Partnership shall be ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or such other place as shall be determined by
the General Partner. The General Partner shall give
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the Partners prompt written notice of any change in the principal place of
business of the Partnership. The name of the registered agent for service of
process on the Partnership in Delaware is The Corporation Trust Company. The
address of the registered agent and the address of the registered office of the
Partnership in Delaware is Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
2.4 PURPOSE. The principal purpose of the Partnership shall be to
develop, construct, own and operate the Facilities and to engage in such other
business and activities as shall be incidental to or related to the foregoing or
as may be determined by the General Partner from time to time and permitted by
law. Such activities may be undertaken directly by the Partnership or through
its subsidiaries.
2.5 TERM. The Partnership shall continue in effect under the terms
of this Agreement from the date hereof until dissolved and liquidated in the
manner provided herein.
2.6 PARTNERS.
(a) GENERAL PARTNER. The general partner of the Partnership is
Finance GP.
(b) LIMITED PARTNER. MHP is the limited partner of the
Partnership.
ARTICLE III.
CONTRIBUTIONS
3.1 CONTRIBUTIONS. Each Partner (or its predecessor in interest) has
heretofore made contributions to the Partnership.
3.2 NO RETURN. Except as otherwise expressly provided in this
Agreement, no Partner shall be entitled to a return of, or interest on, its
contributions or on any undistributed funds held by the Partnership.
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ARTICLE IV.
DISTRIBUTIONS
From time to time, the General Partner may determine the amount
which is to be distributed by the Partnership, and any such amount so
distributed shall be divided among the Partners in proportion to their Ownership
Percentages.
ARTICLE V.
CONTROL OF THE PARTNERSHIP
5.1 POWER AND AUTHORITY. Except as otherwise expressly provided by
this Agreement or by nonwaivable provisions of applicable law, (i) the
management and control of the business and affairs of the Partnership shall be
vested in the General Partner, which may act on behalf of the Partnership
without the consent of the individual Partners, (ii) all decisions respecting
any matter set forth herein or otherwise affecting or arising out of the conduct
of the business of the Partnership shall be made by the General Partner, (iii)
the General Partner shall have the exclusive right and full authority to manage,
conduct and control the Partnership's business and to effect the purposes and
provisions of this Agreement and (iv) the General Partner shall have full
authority to do all things in the conduct of the business of the Partnership
deemed necessary or desirable by the General Partner.
5.2 INQUIRIES. In no event shall any person, other than a Partner,
dealing with the General Partner with respect to any business or property of the
Partnership be obligated to ascertain that the provisions of this Agreement have
been complied with or be obligated to inquire into the necessity or expedience
of any act or action of the General Partner; and every contract, agreement,
deed, mortgage, security agreement, promissory note or other instrument or
document executed by the General Partner with respect to any business or
property of the Partnership shall be conclusive
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evidence in favor of any person relying on or claiming thereunder (in the
absence of such person's actual knowledge to the contrary) that (i) at the time
of the execution and delivery thereof, this Agreement was in full force and
effect, (ii) such instrument or document was duly executed in accordance with
the terms and provisions of this Agreement and is binding upon the Partnership,
and (iii) the General Partner was duly authorized and empowered to execute and
deliver any instrument or document for and on behalf of the Partnership. Any act
of the General Partner that purports to be on behalf of the Partnership shall be
binding on the Partnership as against all third parties who act in reliance
thereon and who do not have actual knowledge of such General Partner's lack or
abuse of authority.
5.3 COMPENSATION. The General Partner is not entitled to
compensation for its services as General Partner, but is entitled to be
reimbursed on a monthly basis for its reasonable operating, administrative and
office expenses related to the conduct of the Partnership's business including,
without limitation (i) costs of personnel employed by, or on loan to, the
General Partner to conduct the Partnership's business, (ii) expenditures for
office space and (iii) costs attributable to using existing office equipment or
purchasing new office equipment authorized in an approved budget, expenditures
for office supplies, expenses for communications, and other reasonable
out-of-pocket costs.
ARTICLE VI.
BOOKS AND RECORDS AND ACCOUNTING
6.1 FINANCIAL INFORMATION. The Partnership shall maintain adequate
books and records of account which shall be kept in accordance with the method
of accounting determined by the General Partner.
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6.2 FISCAL YEAR. The fiscal year for the Partnership shall be the
calendar year or such other fiscal year as may be determined by the General
Partner.
6.3 ACCESS TO BOOKS AND RECORDS. The General Partner shall permit,
after reasonable notice, access to all books, records and facilities of the
Partnership at any reasonable time to any Partner or its representative.
ARTICLE VII.
RESPONSIBILITIES OF PARTNERS
7.1 LIABILITY TO PARTNERS. No Partner of the Partnership or
director, officer, partner, or employee of a Partner shall be liable to the
Partnership or to any Partner for any losses sustained or liabilities incurred
as a result of any act or omission if (i) such person acted in good faith and in
a manner it reasonably believed to be in, or not opposed to, the best interests
of the Partnership, and (ii) its conduct did not constitute gross negligence or
willful or wanton misconduct.
7.2 INDEMNIFICATION.
(a) To the fullest extent permitted by law, each Partner
(individually, an "Indemnitee") shall be indemnified and held harmless by
the Partnership from and against any and all losses, claims, damages,
liabilities, joint and several, expenses (including legal fees and
expenses), judgments, fines, settlements and other amounts arising from
any and all claims, demands, actions, suits or proceedings, civil,
criminal, administrative or investigative (other than an action by or in
the right of the Partnership), in which the Indemnitee may be involved, or
threatened to be involved, as a party or otherwise by reason of its status
as a Partner, regardless of whether the Indemnitee continues to be a
Partner of the Partnership at the time any such liability or expense is
paid or incurred, if (i) the Indemnitee acted in good faith and in a
manner it reasonably believed to be in, or not opposed to, the best
interests of
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the Partnership, and, with respect to any criminal proceeding, had no
reasonable cause to believe its conduct was unlawful, and (ii) the
Indemnitee's conduct did not constitute gross negligence or willful or
wanton misconduct. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere,
or its equivalent, shall not, of itself, create a presumption that the
Indemnitee acted in a manner contrary to that specified in (i) or (ii)
above.
(b) To the fullest extent permitted by law, each Indemnitee shall be
indemnified and held harmless by the Partnership against any and all
expenses (including legal fees and expenses) arising from any and all
claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, brought by or in the right of the
Partnership, in which the Indemnitee may be involved, or threatened to be
involved, as a party or otherwise by reason of its status as a Partner
regardless of whether the Indemnitee continues to be a Partner at the time
any such expense is paid or incurred, if the Indemnitee acted in good
faith and in a manner it reasonably believed to be in, or not opposed to,
the best interests of the Partnership, and, with respect to any criminal
proceeding, had no reasonable cause to believe its conduct was unlawful,
except that no indemnification may be made with respect to any claim,
demand, action, suit or proceeding as to which such person shall have been
adjudged to be liable for gross negligence or willful or wanton misconduct
unless and only to the extent that the court in which such claim, demand,
action, suit or proceeding was brought shall determine upon application
that, despite the adjudication of liability but in view of all of the
circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses that such court shall deem proper.
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(c) To the fullest extent permitted by law, expenses incurred by an
Indemnitee in defending any claim, demand, action, suit or proceeding
subject to this Section shall, from time to time, be advanced by the
Partnership prior to the final disposition of such claim, demand, action,
suit or proceeding upon receipt by the Partnership of any undertaking by
or on behalf of the Indemnitee to repay such amount unless it shall be
determined that such person is entitled to be indemnified as authorized in
this Section.
(d) The indemnification provided by this Section shall be in
addition to any other rights to which those indemnified may be entitled
under any agreement, vote of the Partners, as a matter of law or
otherwise, both as to action in the Indemnitee's capacity as a Partner and
to action in another capacity, 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.
(e) In no event may an Indemnitee subject any General Partner or
Limited Partner of the Partnership to personal liability by reason of
these indemnification provisions.
(f) An Indemnitee shall not be denied indemnification, in whole or
in part, under this Section because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of this Agreement.
(g) Any indemnification under this Section 8.2, unless ordered by a
court, shall be made by the Partnership only as authorized in the specific
case and only upon a determination that indemnification of the Indemnitee
is proper in the circumstances because the Indemnitee has met the
applicable standard of conduct set forth in the pertinent subsection, such
determination to be made (i) by the General Partner, if the General
Partner
8
is not a named defendant or respondent in the proceeding, (ii) by a
majority of the Limited Partners or (iii) in a written opinion of
independent legal counsel.
7.3 TIME DEVOTED TO AFFAIRS; OTHER VENTURES. No Partner shall be
required to devote its full time and effort to Partnership affairs, but only
such time and effort as each in such person's judgment deems to be reasonably
necessary and appropriate in pursuit of the affairs of the Partnership. Any
Partner may engage in any other business venture of every nature, independently
or with others, and no other Partner shall have any rights by virtue of this
Agreement in and to such ventures or to the revenues or profits derived
therefrom.
7.4 GOOD FAITH RELIANCE ON AGREEMENT. To the extent that, at law or
in equity, the Partners have duties (including fiduciary duties) and liabilities
relating thereto to the Partnership or to another Partner, the Partners acting
under this Agreement shall not be liable to the Partnership or to any such other
Partner for their good faith reliance on the provisions of this Agreement. The
provisions of this Agreement, to the extent that they expand or restrict the
duties and liabilities of the Partners otherwise existing at law or in equity,
are agreed by the Partners to replace such other duties and liabilities of the
Partners.
7.5 CERTAIN STANDARDS. Whenever in this Agreement any Partner is
permitted or required to make a decision (i) in its "sole discretion" or
"discretion," or under a similar grant of authority or latitude, such Partner
shall be entitled to consider only such interests and factors as it desires and
may consider its own interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the Partnership or the
other Partners, or (ii) in "good faith" or under another express standard, such
Partner shall be entitled to act under such express standard and shall not be
subject to any other or different standards imposed by this Agreement or by law
or any other agreement contemplated herein.
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ARTICLE VIII.
DISSOLUTION AND TERMINATION
8.1 DISSOLUTION. The Partnership shall be dissolved upon the first
to occur of December 31, 2028, or as provided by law, if earlier. After the
dissolution of the Partnership, the Partnership shall not terminate until its
affairs have been wound up and its assets distributed as provided in this
Article.
8.2 WINDING UP. After dissolution of the Partnership, the General
Partner shall wind up the affairs of the Partnership in accordance with
applicable law, and incident thereto, unless satisfactory arrangements are
otherwise made, shall sell sufficient Partnership assets to pay all Partnership
liabilities and shall sell or otherwise dispose of all other Partnership assets.
As soon as the actions contemplated by this Section have been
completed, the Partnership's assets shall be distributed by the General Partner
in accordance with Article IV hereof.
8.3 WAIVER OF PARTITION. Each Partner hereby waives any and all
rights that such Partner may have to maintain an action for partition of the
Partnership's assets.
ARTICLE IX.
TAX MATTERS
The parties hereto acknowledge that the Partnership is expected to
be disregarded for federal income tax purposes and so long as that is the case
the portion of this Article which relates to federal income tax matters will be
of no substantive effect.
9.1 ALLOCATIONS OF TAX ITEMS. Each item of income and deduction
recognized by the Partnership for federal, state or local income tax purposes
shall be allocated among the
10
Partners in accordance with their Ownership Percentages except to the extent
that the General Partner determines that another allocation is required by law.
9.2 TAX ELECTIONS. The General Partner shall determine whether the
Partnership shall make any election (including any election which may be
permitted with respect to the Partnership's method of accounting and any
election for which provision is made in Section 168 and Section 754 of the
Internal Revenue Code or corresponding provisions of future law) which is
available to the Partnership for federal, state or local tax purposes.
Notwithstanding the foregoing, upon the transfer of an interest in MHP, the
Partnership shall, if requested by MHP, elect to adjust the basis of the
Partnership property as allowed by Sections 743(b) and 754 of the Internal
Revenue Code, or comparable provisions then in effect, and if any such election
is made, the Partnership shall make any tax accounting adjustments resulting
from such election in the information supplied to the Partners, and the
Partnership shall have the right to charge MHP for the Partnership's reasonable
expenses in making such adjustments.
9.3 PREPARATION OF TAX RETURNS. The General Partner shall use its
reasonable efforts to cause the Partnership to prepare and timely file, at the
expense of the Partnership, all tax returns of the Partnership and shall furnish
to the Partners the tax information reasonably required thereby for federal,
state and local tax reporting purposes.
9.4 TAX MATTERS PARTNER. The General Partner is hereby designated as
the tax matters partner, within the meaning of Section 6231(a)(7) of the
Internal Revenue Code, and is authorized to represent the Partnership at the
Partnership's expense (including the costs of professional services) in
connection with any examination of the Partnership's affairs by any tax
authority and is authorized so to represent the Partnership at the Partnership's
expense in any administrative or judicial proceedings in connection therewith.
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Prompt notice shall be given to the Partners upon receipt of advice
that the Internal Revenue Service or other taxing authority intends to examine
any income tax return or records or books of the Partnership. Any Partner may
participate at such Partner's expense in any such administrative or judicial
proceeding to the extent provided by applicable law.
ARTICLE X.
MISCELLANEOUS
10.1 NOTICES. All notices, offers or other communications required
or permitted to be given pursuant to this Agreement shall be in writing and
shall be considered as properly given or made if mailed from within the United
States by first class United States mail, postage prepaid, or by prepaid
telegram or telex, and addressed, as the case may be, to the Partnership at
▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or to a Partner at its
address as set forth on the signature page of this Agreement. The Partnership
may change its address by giving a notice thereof stating its new address to the
Partners. Any Partner may change its address by giving a notice thereof stating
its new address to the Partnership.
10.2 CAPTIONS. Captions contained in this Agreement are inserted
only as a matter of convenience and in no way define, limit, extend or describe
the scope of this Agreement or the intent of any provision hereof.
10.3 FURTHER ASSURANCES. The Partners will execute and deliver such
further instruments and take or refrain from taking any action as may be
necessary or appropriate to carry out the intent and purpose of this Agreement.
10.4 SUCCESSORS AND ASSIGNS. Except as otherwise provided in this
Agreement, all provisions of this Agreement shall be binding upon, inure to the
benefit of, and be enforceable
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by and against the respective heirs, executors, administrators, legal
representatives, successors and assigns of each of the Partners.
10.5 GOVERNING LAW. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT
MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT
ALL OF THE TERMS AND PROVISIONS HEREOF SHALL BE CONSTRUED UNDER THE SUBSTANTIVE
LAWS OF THE STATE OF DELAWARE AS NOW ADOPTED OR AS MAY HEREAFTER BE AMENDED.
10.6 INTEGRATION. This Agreement constitutes the entire agreement
among the parties pertaining to the subject matter hereof and supersedes all
prior and contemporaneous agreements and understandings of the parties in
connection therewith.
10.7 AMENDMENTS. This Agreement, including the Appendices hereto,
may not be modified or amended unless a consent in writing setting forth the
amendment or modification shall be signed by a majority of the Partners.
10.8 NO THIRD-PARTY RIGHTS. Nothing in this Agreement shall be
deemed to create any right in any person not a party hereto (other than the
successors and assigns of a party hereto) and this instrument shall not be
construed in any respect to be a contract in whole or in part for the benefit of
any third party.
10.9 RELATIONSHIP OF THE PARTNERS. The relationship between each of
the Partners shall be limited to the performance of the transactions
contemplated by this Agreement. The relationship set forth in this Agreement
shall be construed and deemed to be a partnership created for the sole purpose
of carrying out the transactions contemplated hereby.
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10.10 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be an original of this Agreement, but all of
which, taken together, shall constitute one and the same Agreement.
10.11 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 a waiver of any such breach or any other covenant, duty, agreement or
condition.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
GENERAL PARTNER:
MARKET HUB PARTNERS
FINANCE, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, Chief Financial
Officer and Secretary
LIMITED PARTNER:
MARKET HUB PARTNERS, L.P.
By: MARKET HUB PARTNERS, INC.,
a general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Chief Financial
Officer
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