EXHIBIT 3.1(a)
SECOND AMENDED AND RESTATED AGREEMENT
OF
LIMITED PARTNERSHIP
OF
AMERIGAS PROPANE, L.P.
DATED AS OF DECEMBER 1, 2004
TABLE OF CONTENTS
PAGE
ARTICLE I ORGANIZATIONAL MATTERS.................................................................... 1
1.1 Formation..................................................................................... 1
1.2 Name.......................................................................................... 1
1.3 Registered Office; Principal Office........................................................... 1
1.4 Power of Attorney............................................................................. 2
1.5 Term.......................................................................................... 3
1.6 Possible Restrictions on Transfer............................................................. 3
ARTICLE II DEFINITIONS............................................................................... 3
ARTICLE III PURPOSE................................................................................... 8
3.1 Purpose and Business.......................................................................... 8
3.2 Powers........................................................................................ 8
ARTICLE IV CONTRIBUTIONS............................................................................. 8
4.1 Initial Contributions......................................................................... 8
4.2 Contributions by AmeriGas and the MLP......................................................... 8
4.3 Additional Contributions...................................................................... 9
4.4 No Preemptive Rights.......................................................................... 9
4.5 Interest and Withdrawal....................................................................... 9
ARTICLE V DISTRIBUTIONS............................................................................. 9
5.1 Timing and Amount of Regular Distributions.................................................... 9
5.2 Special Distribution.......................................................................... 10
5.3 Distribution Ratio............................................................................ 10
5.4 Payments Other Than Distributions............................................................. 10
5.5 Entity-Level Tax Payments..................................................................... 10
ARTICLE VI MANAGEMENT AND OPERATION OF BUSINESS...................................................... 10
6.1 Management.................................................................................... 10
6.2 Certificate of Limited Partnership............................................................ 12
6.3 Restrictions on General Partner's Authority................................................... 12
6.4 Reimbursement of the General Partner.......................................................... 13
6.5 Outside Activities............................................................................ 13
6.6 Loans to and from the General Partner; Contracts with Affiliates.............................. 15
6.7 Indemnification............................................................................... 16
6.8 Liability of Indemnitees...................................................................... 18
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TABLE OF CONTENTS
(continued)
PAGE
6.9 Resolution of Conflicts of Interest........................................................... 18
6.10 Other Matters Concerning the General Partner.................................................. 20
6.11 Title to Partnership Assets................................................................... 20
6.12 Reliance by Third Parties..................................................................... 21
ARTICLE VII RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNER............................................. 21
7.1 Limitation of Liability....................................................................... 21
7.2 Management of Business........................................................................ 21
7.3 Outside Activities............................................................................ 22
7.4 Return of Capital............................................................................. 22
7.5 Right of the Limited Partner Relating to the Partnership...................................... 22
ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS.................................................... 23
8.1 Records and Accounting........................................................................ 23
8.2 Fiscal Year................................................................................... 23
ARTICLE IX TAX MATTERS............................................................................... 23
9.1 Tax Allocations............................................................................... 23
9.2 Preparation of Tax Returns.................................................................... 24
9.3 Tax Elections................................................................................. 24
9.4 Tax Controversies............................................................................. 24
ARTICLE X TRANSFER OF INTERESTS..................................................................... 24
10.1 Transfer...................................................................................... 24
10.2 Transfer of the General Partner's Partnership Interest........................................ 25
10.3 Transfer of the Limited Partner's Partnership Interest........................................ 25
ARTICLE XI ADMISSION OF PARTNERS..................................................................... 25
11.1 Admission of AmeriGas as a Limited Partner.................................................... 25
11.2 Admission of Substituted Limited Partners..................................................... 25
11.3 Admission of Successor General Partner........................................................ 26
11.4 Amendment of Agreement and Certificate of Limited Partnership................................. 26
11.5 Admission of Additional Limited Partners...................................................... 26
ARTICLE XII WITHDRAWAL OR REMOVAL OF PARTNERS......................................................... 26
12.1 Withdrawal of the General Partner............................................................. 27
12.2 Removal of the General Partner................................................................ 28
12.3 Interest of Departing Partner and Successor General Partner................................... 28
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TABLE OF CONTENTS
(continued)
PAGE
12.4 Reimbursement of Departing Partner............................................................ 28
12.5 Withdrawal of the Limited Partner............................................................. 28
ARTICLE XIII DISSOLUTION AND LIQUIDATION............................................................... 28
13.1 Dissolution................................................................................... 28
13.2 Continuation of the Business of the Partnership After Dissolution............................. 29
13.3 Liquidator.................................................................................... 30
13.4 Liquidation................................................................................... 30
13.5 Cancellation of Certificate of Limited Partnership............................................ 31
13.6 Return of Contributions....................................................................... 31
13.7 Waiver of Partition........................................................................... 31
ARTICLE XIV AMENDMENT OF PARTNERSHIP AGREEMENT........................................................ 31
14.1 Amendment to be Adopted Solely by General Partner............................................. 31
14.2 Amendment Procedures.......................................................................... 32
ARTICLE XV MERGER.................................................................................... 32
15.1 Authority..................................................................................... 32
15.2 Procedure for Merger or Consolidation......................................................... 33
15.3 Approval by Limited Partner of Merger or Consolidation........................................ 34
15.4 Certificate of Merger......................................................................... 34
15.5 Effect of Merger.............................................................................. 34
ARTICLE XVI GENERAL PROVISIONS........................................................................ 34
16.1 Addresses and Notices......................................................................... 34
16.2 References.................................................................................... 35
16.3 Pronouns and Plurals.......................................................................... 35
16.4 Further Action................................................................................ 35
16.5 Binding Effect................................................................................ 35
16.6 Integration................................................................................... 35
16.7 Creditors..................................................................................... 35
16.8 Waiver........................................................................................ 35
16.9 Counterparts.................................................................................. 35
16.10 Applicable Law................................................................................ 35
16.11 Invalidity of Provisions...................................................................... 35
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SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
AMERIGAS PROPANE, L.P.
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
AMERIGAS PROPANE, L. P., dated as of December 1, 2004, is entered into by and
among AmeriGas Propane, Inc., a Pennsylvania corporation, as the General
Partner, and AmeriGas Partners, L.P., a Delaware limited partnership, as the
initial Limited Partner, together with any other Persons who become Partners in
the Partnership as provided herein. In consideration of the covenants,
conditions and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
ORGANIZATIONAL MATTERS
1.1 FORMATION. The General Partner and the MLP have previously formed the
Partnership as a limited partnership pursuant to the provisions of the Delaware
Act. The General Partner hereby amends and restates the Amended and Restated
Agreement of Limited Partnership of AmeriGas Propane, L.P., dated as of April
12, 1995, in its entirety. Except as expressly provided to the contrary in this
Agreement, the rights and obligations of the Partners and the administration,
dissolution and termination of the Partnership shall be governed by the Delaware
Act. All Partnership Interests shall constitute personal property of the owner
thereof for all purposes.
1.2 NAME. The name of the Partnership shall be "AmeriGas Propane, L.P."
The Partnership's business may be conducted under any other name or names deemed
necessary or appropriate by the General Partner, including the name of the
General Partner. The words "Limited Partnership," "L.P.," "Ltd." or similar
words or letters shall be included in the Partnership's name where necessary for
the purposes of complying with the laws of any jurisdiction that so requires.
The General Partner in its sole discretion may change the name of the
Partnership at any time and from time to time and shall notify the Limited
Partner of such change in the next regular communication to the Limited Partner.
1.3 REGISTERED OFFICE; PRINCIPAL OFFICE. Unless and until changed by the
General Partner, the registered office of the Partnership in the State of
Delaware shall be located at 32 Loockerman Square, Suite L-100, Dover, Delaware
19904, and the registered agent for service of process on the Partnership in the
State of Delaware at such registered office shall be The Prentice-Hall
Corporation System, Inc. The principal office of the Partnership shall be
located at, and the address of the General Partner shall be, 460 North Gulph
Road, King of Prussia, Pennsylvania 19406, or such other place as the General
Partner may from time to time designate by notice to the Limited Partner. The
Partnership may maintain offices at such other place or places within or outside
the State of Delaware as the General Partner deems necessary or appropriate.
1.4 POWER OF ATTORNEY. (a) The Limited Partner hereby constitutes and
appoints each of the General Partner and, if a Liquidator shall have been
selected pursuant to Section 13.3, the Liquidator severally (and any successor
to either thereof by merger, transfer, assignment, election or otherwise) and
each of their authorized officers and attorneys-in-fact, with full power of
substitution, as its true and lawful agent and attorney-in-fact, with full power
and authority in its name, place and stead, to:
(i) execute, swear to, acknowledge, deliver, file and record
in the appropriate public offices (A) all certificates, documents and other
instruments (including this Agreement and the Certificate of Limited Partnership
and all amendments or restatements thereof) that the General Partner or the
Liquidator deems 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 State
of Delaware and in all other jurisdictions in which the Partnership may conduct
business or own property; (B) all certificates, documents and other instruments
that the General Partner or the Liquidator deems necessary or appropriate to
reflect, in accordance with its terms, any amendment, charge, modification or
restatement of this Agreement; (C) all certificates, documents and other
instruments (including conveyances and a certificate of cancellation) that the
General Partner or the Liquidator deems necessary or appropriate to reflect the
dissolution and liquidation of the Partnership pursuant to the terms of this
Agreement; (D) all certificates, documents and other instruments relating to the
admission, withdrawal, removal or substitution of any Partner pursuant to, or
other events described in, Article X, XI, XII or XIII; (E) all certificates,
documents and other instruments relating to the determination of the rights,
preferences and privileges of any class or series of Partnership Interests; and
(F) all certificates, documents and other instruments (including agreements and
a certificate of merger) relating to a merger or consolidation of the
Partnership pursuant to Article XV; and
(ii) execute, swear to, acknowledge, deliver, file and record
all ballots, consents, approvals, waivers, certificates, documents and other
instruments necessary or appropriate, in the sole discretion of the General
Partner or the Liquidator, to 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 is
necessary or appropriate, in the sole discretion of the General Partner or the
Liquidator, to effectuate the terms or intent of this Agreement; provided, that
when the approval of the Limited Partner is required by any provision of this
Agreement, the General Partner or the Liquidator may exercise the power of
attorney made in this Section 1.4(a)(ii) only after the necessary approval of
the Limited Partner is obtained.
Nothing contained in this Section 1.4(a) shall be construed as authorizing the
General Partner to amend this Agreement except in accordance with Article XIV 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 not
be affected by the subsequent death, incompetency, disability, incapacity,
dissolution, bankruptcy or termination of the Limited Partner and the transfer
of all or any portion of the Limited Partner's Partnership Interest and shall
extend to the Limited Partner's heirs, successors, assigns and personal
representatives. The
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Limited Partner 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 the Limited Partner 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. The Limited
Partner shall execute and deliver to the General Partner or the Liquidator,
within 15 days after receipt of the General Partner's or the Liquidator's
request therefor, such further designation, powers of attorney and other
instruments as the General Partner or the Liquidator deems necessary to
effectuate this Agreement and the purposes of the Partnership.
1.5 TERM. The Partnership commenced upon the filing of the Certificate of
Limited Partnership in accordance with the Delaware Act and shall continue in
existence until the close of Partnership business on December 31, 2093, or until
the earlier termination of the Partnership in accordance with the provisions of
Article XIII.
1.6 POSSIBLE RESTRICTIONS ON TRANSFER. The General Partner may impose
restrictions on the transfer of Partnership Interests if a subsequent Opinion of
Counsel determines that such restrictions are necessary to avoid a substantial
risk of the Partnership's becoming taxable as a corporation or otherwise as an
entity for federal income tax purposes. The restrictions may be imposed by
making such amendments to this Agreement as the General Partner in its sole
discretion may determine to be necessary or appropriate to impose such
restrictions.
ARTICLE II
DEFINITIONS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"ADDITIONAL LIMITED PARTNER" means a Person admitted to the Partnership as
a Limited Partner pursuant to Section 11.5 and who is shown as such on the books
and records of the Partnership.
"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.
"AGREEMENT" means this Second Amended and Restated Agreement of Limited
Partnership of AmeriGas Propane, L.P., as it may be amended, supplemented or
restated from time to time.
"AMERIGAS" means AmeriGas Propane, Inc, a Pennsylvania corporation and a
wholly owned subsidiary of AmeriGas, Inc., a Pennsylvania corporation.
"AUDIT COMMITTEE" means a committee of the Board of Directors of the
General Partner composed entirely of two or more directors who are neither
officers nor employees of the General Partner or any of its Affiliates.
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"AVAILABLE CASH" as to any Quarter ending before the Liquidation Date,
means:
(a) the sum of (i) all cash of the Partnership Group on hand at the
end of such Quarter and (ii) all additional cash of the Partnership Group on
hand on the date of determination of Available Cash with respect to such Quarter
resulting from borrowings subsequent to the end of such Quarter, less
(b) the amount of cash reserves that is necessary or appropriate in
the reasonable discretion of the General Partner to (i) provide for the proper
conduct of the business of the Partnership Group (including reserves for future
capital expenditures) subsequent to such Quarter, (ii) provide funds for
distributions under Sections 5.3(a), (b) and (c) or 5.4(a) of the MLP Agreement
in respect of any one or more of the next four Quarters, or (iii) comply with
applicable law or any debt instrument or other agreement or obligation to which
any member of the Partnership Group is a party or its assets are subject.
"BUSINESS DAY" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States or the
states of New York or Pennsylvania shall not be regarded as a Business Day.
"CERTIFICATE OF LIMITED PARTNERSHIP" means the Certificate of Limited
Partnership filed with the Secretary of State of the State of Delaware as
referenced in Section 6.2, as such Certificate of Limited Partnership may be
amended, supplemented or restated from time to time.
"CLOSING DATE" means the first date on which Common Units are sold by the
MLP to the Underwriters pursuant to the provisions of the Underwriting
Agreement.
"CODE" means the 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
future law.
"COMMON 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 Common Units in the MLP
Agreement.
"CONTRIBUTION" means any cash, cash equivalents or the Net Agreed Value of
any property or asset that a Partner contributes to the Partnership pursuant to
the Conveyance and Contribution Agreement, the Merger and Contribution
Agreement, Article IV or Article XIII.
"CONVEYANCE AND CONTRIBUTION AGREEMENT" means that certain Conveyance and
Contribution Agreement, dated as of the Closing Date, between Petrolane, the
MLP, the Partnership and certain other parties, together with the additional
conveyance documents and instruments contemplated or referenced thereunder.
"DELAWARE ACT" means the Delaware Revised Uniform Limited Partnership Act,
6 Del C Section 11-101, et seq., as amended, supplemented or restated from time
to time, and any successor to such statute.
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"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 12.1 or Section 12.2.
"EVENT OF WITHDRAWAL" has the meaning assigned to such term in Section
12.1(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
supplemented or restated from time to time, and any successor to such statute.
"GENERAL PARTNER" means AmeriGas and its successors as general partner of
the Partnership.
"GROUP MEMBER" means a member of the Partnership Group.
"INCLUDES" means includes, without limitation, and "including" means
including, without limitation.
"INDEMNITEE" means (a) the General Partner, any Departing Partner, any
Person who is or was an Affiliate of the General Partner or any Departing
Partner, (b) any Person who is or was an officer, director, employee, partner,
agent or trustee of the General Partner or any Departing Partner or any such
Affiliate, or (c) any Person who is or was serving at the request of the General
Partner or any Departing Partner or any such Affiliate as a director, officer,
employee, partner, agent, fiduciary or trustee of another Person; provided, that
a Person shall not be an Indemnitee pursuant to this clause (c) by reason of
providing, on a fee-for-services basis, trustee, fiduciary or custodial
services.
"INITIAL OFFERING" means the initial offering and sale of Common Units to
the public, as described in the Registration Statement.
"LIMITED PARTNER" means the MLP, AmeriGas and Petrolane pursuant to
Section 4.2, each Substituted Limited Partner, if any, each Additional Limited
Partner and any Departing Partner upon the change of its status from General
Partner to Limited Partner pursuant to Section 12.3, but excluding any such
Person from and after the time it withdraws from the Partnership.
"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 13.2, the date on which the applicable time period
during which the Partners have the right to elect to reconstitute the
Partnership and continue its business 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 the General Partner or other Person approved pursuant
to Section 13.3 who performs the functions described therein.
"MERGER AGREEMENT" has the meaning assigned to such term in Section 15.1.
"MERGER AND CONTRIBUTION AGREEMENT" means that certain Merger and
Contribution Agreement, dated as of the Closing Date, between AmeriGas, the MLP,
the Partnership and
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certain other parties, together with the additional conveyance documents and
instruments contemplated or referenced thereunder.
"MLP" means AmeriGas Partners, L.P., a Delaware limited partnership.
"MLP AGREEMENT" means the Agreement of Limited Partnership of AmeriGas
Partners, L.P., as it may be amended, supplemented or restated from time to
time.
"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 the fair market value any asset or property
contributed to the Partnership reduced by any liabilities either assumed by the
Partnership upon such contribution or to which the asset or to which the asset
or property is subject when contributed, in each case as determined by the
General Partner using such reasonable method of valuation as it may adopt.
"1989 CUSTOMER LIST" means a customer list established in 1989 on the
books of Petrolane Gas Services LP, a partnership which was merged into
Petrolane on July 15, 1993.
"OPINION OF COUNSEL" means a written opinion of counsel (who may be
regular counsel to AmeriGas, any Affiliate of AmeriGas, the Partnership or the
General Partner) acceptable to the General Partner in its reasonable discretion.
"PARTNERS" means the General Partner and the Limited Partner.
"PARTNERSHIP" means AmeriGas Propane, L.P., a Delaware limited
partnership, and any successor thereto.
"PARTNERSHIP GROUP" means the Partnership and its partnership
Subsidiaries, treated as a single consolidated partnership.
"PARTNERSHIP INTEREST" means the interest of a Partner in the Partnership.
"PERCENTAGE INTEREST" means (a) as to the General Partner, in its capacity
as such, 1.0101% and (b) as to the Limited Partner, 98.9899%.
"PERSON" means an individual or a corporation, partnership, trust,
unincorporated organization, association or other entity.
"PETROLANE" means Petrolane Incorporated, a California corporation.
"QUARTER" means, unless the context requires otherwise, a three-month
period of time ending on March 31, June 30, September 30, or December 31.
"REGISTRATION STATEMENT" means the Registration Statement on Form S-1
(Registration No. 33-86028), as it has been or as it may be amended or
supplemented from time to time, filed
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by the MLP with the Securities and Exchange Commission under the Securities Act
to register the offering and sale of the Common Units in the Initial Offering.
"RESTRICTED ACTIVITIES" means the retail sales of propane to end users in
the continental United States in the manner engaged in by AmeriGas and Petrolane
immediately prior to the Closing Date.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
supplemented or restated from time to time and any successor to such statute.
"SPECIAL APPROVAL" means approval by the Audit Committee.
"SPECIAL PROPANE CORPORATION" means any corporation that is engaged in
Restricted Activities, is not an S Corporation within the meaning of Section
1361 of the Code, and whose tax basis in its assets is in the aggregate
substantially less than the fair market value of such assets.
"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, by such
Person, by one or more Subsidiaries of such Person or a combination thereof, (b)
a partnership (whether general or limited) in which such Person or a Subsidiary
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 or controlled, directly or indirectly, by such Person,
by one or more Subsidiaries of such Person, or a combination thereof, or (c) any
other Person (other than a corporation or a partnership) in which such Person,
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.
"SUBSTITUTED LIMITED PARTNER" means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 11.3 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.
"SURVIVING BUSINESS ENTITY" has the meaning assigned to such term in
Section 15.2(b).
"UNDERWRITER" means each Person named as an underwriter in Schedule 1 to
the Underwriting Agreement who purchases Common Units pursuant thereto.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated April 12,
1995, among the Underwriters, the MLP and other parties providing for the
purchase of Common Units by such Underwriters.
"WITHDRAWAL OPINION OF COUNSEL" has the meaning assigned to such term in
Section 12.1(b).
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ARTICLE III
PURPOSE
3.1 PURPOSE AND BUSINESS. The purpose and nature of the business to be
conducted by the Partnership shall be to (a) acquire, manage and operate the
assets transferred to the Partnership pursuant to the Merger and Contribution
Agreement and the Conveyance and Contribution Agreement, and any similar assets
or properties, and to engage directly in, or to enter into or form any
corporation, partnership, joint venture, limited liability company or other
arrangement to engage indirectly in, any type of business or activity engaged in
by AmeriGas or Petrolane or their Affiliates immediately prior to the Closing
Date 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, (b) 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 which may lawfully be conducted by a limited partnership
organized pursuant to the Delaware 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 (c) do anything necessary or
appropriate to the foregoing, including the making of capital contributions or
loans to the MLP or any Subsidiary of the Partnership or the MLP. The General
Partner has no obligation or duty to the Partnership or the Limited Partner to
propose or approve, and in its sole discretion may decline to propose or
approve, the conduct by the Partnership of any business.
3.2 POWERS. The Partnership shall be empowered to do any and all acts and
things necessary, appropriate, proper, advisable, incidental to or convenient
for the furtherance and accomplishment of the purposes and business described in
Section 3.1 and for the protection and benefit of the Partnership.
ARTICLE IV
CONTRIBUTIONS
4.1 INITIAL CONTRIBUTIONS. In connection with the formation of the
Partnership under the Delaware Act, the General Partner made an initial
Contribution to the Partnership in the amount of $10.10 for an interest in the
Partnership and has been admitted as the general partner of the Partnership, and
the MLP made an initial Contribution to the Partnership in the amount of $989.90
for an interest in the Partnership and has been admitted as a limited partner of
the Partnership.
4.2 CONTRIBUTIONS BY AMERIGAS AND THE MLP. (a) On the Closing Date and
pursuant to the Merger and Contribution Agreement, various Subsidiaries of
AmeriGas shall merge with and into the Partnership. Pursuant to the Merger and
Contribution Agreement, AmeriGas shall receive merger consideration consisting
of, among other items, (i) the continuation of its general partner interest in
the Partnership consisting of a Partnership Interest representing a 1.0101%
Percentage Interest and (ii) a limited partner interest in the Partnership,
which shall thereupon be contributed to the MLP as set forth in the Merger and
Contribution Agreement.
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(b) On the Closing Date and pursuant to the Conveyance and
Contribution Agreement, Petrolane, or Petrolane and one of its Subsidiaries,
will convey substantially all of its or their assets to the Partnership in
exchange for, among other items, a limited partner interest or interests in the
Partnership, which shall thereupon be contributed to the MLP as set forth in the
Conveyance and Contribution Agreement.
(c) On the Closing Date, the MLP shall contribute in respect of its
Partnership Interest the net proceeds to the MLP from the issuance of the Common
Units pursuant to the Initial Offering.
(d) The Partnership Interests contributed to the Partnership
pursuant to the provisions of Sections 4.2(a) and (b), together with the
Partnership Interest previously held by the MLP, will represent a 98.9899%
Percentage Interest in the Partnership.
4.3 ADDITIONAL CONTRIBUTIONS. With the consent of the General Partner, the
Limited Partner may, but shall not be obligated to, make additional
Contributions to the Partnership. Contemporaneously with the making of any such
additional Contributions by the Limited Partner, the General Partner shall be
obligated to make an additional Contribution to the Partnership in an amount
equal to 1.0101 / 98.9899% of the Net Agreed Value of the additional
Contribution then made by the Limited Partner. Except as set forth in the
immediately preceding sentence and Article XIII, the General Partner shall not
be obligated to make any additional Contributions to the Partnership.
4.4 NO PREEMPTIVE RIGHTS. No Person shall have any preemptive,
preferential or other similar right with respect to issuance or sale of any
class or series of Partnership Interests, any option, right, warrant or
appreciation rights relating thereto, or any other type of equity interest that
the Partnership may lawfully issue, or any unsecured or secured debt obligation
of the Partnership that is convertible into any class or series of equity
interests of the Partnership.
4.5 INTEREST AND WITHDRAWAL. No interest shall be paid by the Partnership
on Contributions, no Partner shall be entitled to withdraw any part of its
Contributions or to receive any distribution from the Partnership, except as
provided in Articles V, VII, XII and XIII.
ARTICLE V
DISTRIBUTIONS
5.1 TIMING AND AMOUNT OF REGULAR DISTRIBUTIONS. (a) Subject to Section
5.1(b), cash shall be distributed to the Partners at such times and in such
amount as the General Partner shall from time to time determine.
(b) The General Partner shall determine the amount of Available Cash
with respect to each Quarter ending before the Liquidation Date within 45 days
following the end of such Quarter. Such determination shall be made by reference
to the books and records of the Partnership Group and, if made in good faith,
shall be conclusive. Promptly following such determination, an amount equal to
Available Cash with respect to such prior Quarter shall be distributed to the
Partners.
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5.2 SPECIAL DISTRIBUTION. Immediately following the issuance and sale by
the Partnership of its $110,000,000 of Series C First Mortgage Notes, and in
anticipation of the contributions to be made to the Partnership pursuant to
Section 4.2, the net proceeds to the Partnership from the issuance of such notes
shall be distributed to the General Partner.
5.3 DISTRIBUTION RATIO. Except as provided in Sections 5.2 and 13.4(c),
all distributions shall be made to the Partners in the ratio of their respective
Percentage Interests.
5.4 PAYMENTS OTHER THAN DISTRIBUTIONS. Amounts payable as compensation or
reimbursement to the General Partner, or amounts payable to any person other
than in his capacity as a Partner, such as for goods or services, shall not be
treated as distributions.
5.5 ENTITY-LEVEL TAX PAYMENTS. The General Partner is authorized to take
any action it determines in its sole discretion to be necessary or appropriate
to cause the Partnership to comply with any withholding requirements established
under the Code or any other law. Whether or not pursuant to any withholding
requirement, if the Partnership is required or elects to pay any tax on behalf
of the General Partner or the Limited Partner that is attributable to the
Partnership, the General Partner is authorized to pay such taxes from
Partnership funds. To the extent feasible, each such payment shall be treated as
a distribution pursuant to Article V in respect of the Person on whose behalf
the payment was made. If the payment is made on behalf of a Person whose
identity cannot be determined, the General Partner is authorized to treat the
payment as a distribution to the Limited Partner. Alternatively, the General
Partner may elect to treat an amount paid on behalf of the General Partner and
the Limited Partner as an expenditure of the Partnership if the amount paid on
behalf of the General Partner is not substantially greater per Percentage
Interest than that paid on behalf of the Limited Partner.
ARTICLE VI
MANAGEMENT AND OPERATION OF BUSINESS
6.1 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 the Limited
Partner shall have no right of control or 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 which are
granted to the General Partner under any other provision of this Agreement, the
General Partner, subject to Section 6.3, shall have full power and authority to
do all things and on such terms as it, in its sole discretion, may deem
necessary or appropriate to conduct the business of the Partnership, to exercise
all powers set forth in Section 3.2 and to effectuate the purposes set forth in
Section 3.1, 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 and the
incurring of any other obligations;
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(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;
(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, the lending
of funds to other Persons (including the MLP, the General Partner and its
Affiliates), the repayment of obligations of the Partnership and the making of
capital contributions to a Subsidiary;
(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 such insurance for the benefit of
the Partnership Group and the Partners (including the assets of the Partnership)
as it deems necessary or appropriate;
(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;
(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 and the
incurring of legal expense and the settlement of claims and litigation; and
(xi) the indemnification of any Person against liabilities and
contingencies to the extent permitted by law.
(b) Notwithstanding any other provision of this Agreement, the MLP
Agreement, the Delaware Act or any applicable law, rule or regulation, each of
the Partners hereby (i) approves, ratifies and confirms the execution, delivery
and performance by the parties thereto of the Underwriting Agreement, the
Conveyance and Contribution Agreement, the
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Merger and Contribution Agreement, the agreements and other documents filed as
exhibits to the Registration Statement, and the other agreements described in or
filed as a part of 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 Statements on behalf of the Partnership
without any further act, approval or vote of the Partners; and (iii) agrees that
the execution, delivery or performance by the General Partner, the MLP, any
Group Member or any Affiliate of any of them, of this Agreement or any agreement
authorized or permitted under this Agreement, shall not constitute a breach by
the General Partner of any duty that the General Partner may owe the Partnership
or the Limited Partner or any other Persons under this Agreement (or any other
agreements) or of any duty stated or implied by law or equity.
6.2 CERTIFICATE OF LIMITED PARTNERSHIP. The General Partner has caused the
Certificate of Limited Partnership to be filed with the Secretary of State of
the State of Delaware as required by the Delaware Act and shall use all
reasonable efforts to cause to be filed such other certificates or documents as
may be determined by the General Partner in its sole discretion to be reasonable
and necessary or appropriate for the formation, continuation, qualification and
operation of a limited partnership (or a partnership in which the Limited
Partner has limited liability) in the State of Delaware or any other state in
which the Partnership may elect to do business or own property. To the extent
that such action is determined by the General Partner in its sole discretion to
be reasonable and necessary or appropriate, the General Partner shall file
amendments to and restatements of the Certificate of Limited Partnership and do
all things to maintain the Partnership as a limited partnership (or a
partnership in which the Limited Partner has limited liability) under the laws
of the State of Delaware or of any other state in which the Partnership may
elect to do business or own property. Subject to the terms of Section 7.4(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 the Limited Partner.
6.3 RESTRICTIONS ON GENERAL PARTNER'S AUTHORITY. (a) The General Partner
may not, without written approval of the specific act by the Limited Partner or
by other written instrument executed and delivered by the Limited Partner
subsequent to the date of this Agreement, take any action in contravention of
this Agreement, including, except as otherwise provided in this Agreement, (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 general partner of the
Partnership.
(b) Except as provided in Articles XIII and XV, the General Partner
may not sell, exchange or otherwise dispose of all or substantially all of the
Partnership's assets in a single transaction or a series of related transactions
without the approval of the Limited Partner; 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 Partnership's assets and shall not apply to any forced sale of any or all of
the Partnership's assets pursuant to the foreclosure of, or other realization
upon, any such encumbrance.
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(c) At all times while serving as the general partner of the
Partnership, the General Partner shall not make any dividend or distribution on,
or repurchase any shares of, its stock or take any other action within its
control if the effect of such action would be to reduce its net worth,
independent of its interest in the Partnership Group and the MLP, to be less
than $10 million.
6.4 REIMBURSEMENT OF THE GENERAL PARTNER. (a) Except as provided in this
Section 6.4 and elsewhere in this Agreement or in the MLP Agreement, the General
Partner shall not be compensated for its services as general partner 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 in its sole discretion,
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 to perform services for the Partnership or for
the General Partner in the discharge of its duties to the Partnership) and (ii)
all other necessary or appropriate expenses allocable to the Partnership or
otherwise reasonably 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 fees
and expenses that are allocable to the Partnership in any reasonable manner
determined by the General Partner in its sole discretion. Reimbursements
pursuant to this Section 6.4 shall be in addition to any reimbursement to the
General Partner as a result of indemnification pursuant to Section 6.7.
(c) The General Partner, in its sole discretion and without the
approval of the Limited Partner (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 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. Expenses incurred by the General Partner in connection with
any such plans, programs and practices shall be reimbursed in accordance with
Section 6.4(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 6.4(c) shall constitute obligations
of the General Partner hereunder and shall be assumed by any successor General
Partner approved pursuant to Section 12.1 or 12.2 or the transferee of or
successor to all of the General Partner's Partnership Interest as a general
partner in the Partnership pursuant to Section 11.3.
6.5 OUTSIDE ACTIVITIES. (a) After the Closing Date, the General Partner,
for so long as it is the general partner of the Partnership, shall not engage in
any business or activity or incur any debts or liabilities except in connection
with or incidental to (i) its performance as general partner of the MLP or one
or more Group Members or as described in or contemplated by the Registration
Statement, (ii) the acquiring, owning or disposing of debt or equity securities
in the MLP or any Group Member, (iii) engaging in an activity permitted by
Section 6.5(b), and (iv) permitting its employees to perform services for its
Affiliates, including Affiliates engaging in an activity permitted by Section
6.5(b).
(b) The General Partner or any of its Affiliates may engage in an
activity that is a Restricted Activity only if
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(i) the General partner determines, prior to commencing such
activity, that it is inadvisable for the Partnership to engage in such activity
either because (A) of the financial commitments associated with such activity or
(B) such activity is not consistent with the Partnership's business strategy or
cannot otherwise be integrated with the Partnership's operations on a beneficial
basis, and such determination is approved by Special Approval;
(ii) such activity arises as a result of an acquisition
utilizing primarily equity securities of a corporate Affiliate of the
Partnership, and the aggregate consideration paid in connection with such
acquisition and all other acquisitions of then-owned entities made pursuant to
the exception provided by this Section 6.5(b)(ii) does not exceed $50 million;
or
(iii) such activity arises as a result of an acquisition of
stock of one or more Special Propane Corporations, and the aggregate total
assets of all then-owned Special Propane Corporations acquired pursuant to the
exception provided by this Section 6.5(b)(iii) and owned for more than 24 months
does not exceed 10% of the total assets of the Partnership (in each case as such
assets shall be determined in accordance with generally accepted accounting
principles).
Subject to the restrictions of Section 6.5(c), the General Partner or its
Affiliates may engage in the activity described in Section 6.5(b), either
through the direct ownership of the assets of a business or indirectly through
the ownership of equity interests in a business, may sell or otherwise transfer
such assets or equity interests to any Group Member or any third person, and may
retain all the profits derived from any of the foregoing.
(c) During the period the activity being undertaken pursuant to
Section 6.5(b) is being carried on directly or indirectly by the General Partner
or an Affiliate, the personnel engaged in such activity shall not (A) attempt to
sell propane to persons to whom any Group Member is selling propane or (B) seek
new customers in geographical areas in which any Group Member is engaged in the
retail propane business and in which the business was not engaged at the time it
was acquired by the General Partner or an Affiliate.
(d) Except as restricted by Sections 6.5(a), (b) or (c), each
Indemnitee 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 to any Group Member or any Partner or Assignee. Neither any Group Member,
any Limited Partner nor any other Person shall have any rights by virtue of this
Agreement, the Operating Partnership Agreement or the partnership established
hereby or thereby in any business ventures of any Indemnitee.
(e) Notwithstanding anything to the contrary in this Agreement, (i)
the engaging in competitive activities by any Indemnitees in accordance with the
provisions of this Section 6.5 is hereby approved by the Partnership and all
Partners and (ii) it shall be deemed not to be a breach of the General Partner's
fiduciary duty or any other obligation of any type
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whatsoever of the General Partner for the Indemnitees to engage in such business
interests and activities in preference to or to the exclusion of the
Partnership.
(f) The term "Affiliates" when used in this Section 6.5(b) or (c)
with respect to the General Partner shall not include any Group Member, the MLP
or any Subsidiary of any Group Member or the MLP.
6.6 LOANS TO AND FROM THE GENERAL PARTNER; CONTRACTS WITH AFFILIATES. (a)
The General Partner, the Limited Partner or any Affiliate thereof may lend to
any Group Member, and any Group Member may borrow, funds needed or desired by
the Group Member for such periods of time as the General Partner may determine,
and the General Partner, the Limited Partner or any Affiliate thereof may borrow
from any Group Member, and any Group Member may lend to such Persons, excess
funds of the Group Member for such periods of time and in such amounts as the
General Partner may determine; provided, however, that in either 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 (without reference to the
lending party's financial abilities or guarantees) by unrelated lenders on
comparable loans. 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
6.6(a) and Section 6.6(b), the term "Group Member" shall include any Affiliate
of the 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, funds on terms and conditions established in the
sole discretion of the General Partner; provided, however, that the Partnership
may not charge the Group Member interest at a rate greater than the rate that
would be charged to the Group Member (without reference to the General Partner's
financial abilities or guarantees), by unrelated lenders on comparable loans.
The foregoing authority shall be exercised by the General Partner in its sole
discretion and shall not create any right or benefit in favor of any Group
Member or any other Person.
(c) The General Partner may itself, or may enter into an agreement
with any of its Affiliates to, render services to the Partnership or to the
General Partner in the discharge of its duties as general partner of the
Partnership. Any service rendered to the Partnership by the General Partner or
any of its Affiliates shall be on terms that are fair and reasonable to the
Partnership; provided, however, that the requirements of this Section 6.6(c)
shall be deemed satisfied as to (i) any transaction approved by Special
Approval, (ii) any transaction, the terms of which are no less favorable to the
Partnership than those generally being provided to or available from unrelated
third parties or (iii) any transaction that, 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), is
equitable to the Partnership. The provisions of Section 6.4 shall apply to the
rendering of services described in this Section 6.6(c).
(d) The Partnership may transfer assets to joint ventures, other
partnerships, corporations, limited liability companies or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions as are consistent with this Agreement and applicable
law.
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(e) Neither the General Partner nor any of its Affiliates shall
sell, transfer or convey any property to, or purchase any property from, the
Partnership, directly or indirectly, except pursuant to transactions that are
fair and reasonable to the Partnership; provided, however, that the requirements
of this Section 6.6(e) shall be deemed to be satisfied as to (i) the
transactions effected pursuant to Section 4.2, the Conveyance and Contribution
Agreement, the Merger and Contribution Agreement and any other transactions
described in or contemplated by the Registration Statements, (ii) any
transaction approved by Special Approval, (iii) any transaction, the terms of
which are no less favorable to the Partnership than those generally being
provided to or available from unrelated third parties, or (iv) any transaction
that, 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), is equitable to the Partnership.
(f) The General Partner and its Affiliates will have no obligation
to permit any Group Member or the MLP 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 and except as
set forth in the Registration Statement with respect to the "FAST" propane
purchase optimization and fuel accounting system, nor shall there be any
obligation on the part of the General Partner or its Affiliates to enter into
such contracts.
(g) Notwithstanding Section 6.6(f), the General Partner shall make
available to the Partnership the "STARS I" and "STARS II" proprietary computer
systems to the same extent and on the same terms and conditions that the General
Partner is obligated to make available the FAST proprietary computer system
pursuant to Sections 6.6(f) and 13.3(d) of the MLP Agreement.
(h) Without limitation of Sections 6.6(a) through 6.6(g), and
notwithstanding anything to the contrary in this Agreement, the existence of the
conflicts of interest described in the Registration Statements are hereby
approved by all Partners.
6.7 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 and 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 in
each case the Indemnitee acted in good faith and in a manner that such
Indemnitee 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; provided, further, no
indemnification pursuant to this Section 6.7 shall be available to the General
Partner with respect to its obligations incurred pursuant to the Underwriting
Agreement or the Merger and Contribution Agreement (other than obligations
incurred by the General Partner on behalf of the Partnership or the MLP), or to
Petrolane with respect to its obligations incurred pursuant to the Conveyance
and Contribution Agreement. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon
16
a plea of nolo contendere, or its equivalent, shall not create a presumption
that the Indemnitee acted in a manner contrary to that specified above. Any
indemnification pursuant to this Section 6.7 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 6.7(a) in defending any claim, demand, action, suit or proceeding
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 an 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 6.7.
(c) The indemnification provided by this Section 6.7 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, both as to actions in the Indemnitee's capacity as and 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 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,
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 6.7, 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 6.7(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 interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is in, or not opposed to, the best interests of the Partnership.
(f) In no event may an Indemnitee subject the Limited Partner 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 6.7 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.
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(h) The provisions of this Section 6.7 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 6.7 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 6.7 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.
6.8 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 Partner, or any other Persons who have acquired
interests in the Partnership, for losses sustained or liabilities incurred as a
result of any act or omission if such Indemnitee acted in good faith.
(b) Subject to its obligations and duties as General Partner set
forth in Section 6.1(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) Any amendment, modification or repeal of this Section 6.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the liability to the Partnership and the Limited Partner of the
General Partner, its directors, officers and employees and any other Indemnitees
under this Section 6.8 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.
6.9 RESOLUTION OF CONFLICTS OF INTEREST. (a) Unless otherwise expressly
provided in this Agreement or the MLP 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, the MLP or the Limited
Partner, on the other hand, any resolution or course of action in respect of
such conflict of interest shall be permitted and deemed approved by the Limited
Partner, and shall not constitute a breach of this Agreement, of the MLP
Agreement or 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 is, or
by operation of this Agreement is deemed to be, fair and reasonable 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 a resolution of such conflict or course of action. Any conflict of
interest and any resolution of such conflict of interest shall be conclusively
deemed fair and reasonable to the Partnership if such conflict of interest or
resolution is (i) approved by Special Approval, (ii) on terms no less favorable
to the Partnership than those generally being provided to or available from
unrelated third parties or (iii) fair to the Partnership, taking into account
the totality of the relationships between the parties involved
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(including other transactions that may be particularly favorable or advantageous
to the Partnership). The General Partner may also adopt a resolution or course
of action that has not received Special Approval. The General Partner (including
the Audit Committee in connection with Special Approval) shall be authorized in
connection with its determination of what is "fair and reasonable" to the
Partnership and in connection with its resolution of any conflict of interest to
consider (A) the relative interests of any party to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such interest;
(B) any customary or accepted industry practices and any customary or historical
dealings with a particular Person; (C) any applicable generally accepted
accounting or engineering practices or principles; and (D) such additional
factors as the General Partner (including the Audit Committee) determines in its
sole discretion to be relevant, reasonable or appropriate under the
circumstances. Nothing contained in this Agreement, however, is intended to nor
shall it be construed to require the General Partner (including the Audit
Committee) to consider the interests of any Person other than the Partnership.
In the absence of bad faith by the General Partner, the resolution, action or
terms so made, taken or provided by the General Partner with respect to such
matter shall not constitute a breach of this Agreement, the MLP Agreement or any
other agreement contemplated herein or therein or a breach of any standard of
care or duty imposed herein or therein or, to the extent permitted by law, under
the Delaware Act or any other law, rule or regulation.
(b) Whenever this Agreement or any other agreement contemplated
hereby provides that the General Partner or any of its Affiliates is permitted
or required to make a decision (i) in its "sole discretion" or "discretion,"
that it deems "necessary or appropriate" or "necessary or advisable" or under a
grant of similar authority or latitude, the General Partner or such Affiliate
shall be entitled to consider only such interests and factors as it desires and
shall have no duty or obligation to give any consideration to any interest of,
or factors affecting, the Partnership, the Limited Partner or any limited
partner of the Limited Partner, (ii) it may make such decision in its sole
discretion (regardless of whether there is a reference to "sole discretion" or
"discretion") unless another express standard is provided for, or (iii) in "good
faith" or under another express standard, the General Partner or such Affiliate
shall act under such express standard and shall not be subject to any other or
different standards imposed by this Agreement, the MLP Agreement, any other
agreement contemplated hereby or under the Delaware Act or any other law, rule
or regulation. In addition, any actions taken by the General Partner or such
Affiliate consistent with the standards of "reasonable discretion" set forth in
the definition of Available Cash shall not constitute a breach of any duty of
the General Partner to the Partnership, the Limited Partner or any limited
partner of the Limited Partner. The General Partner shall have no duty, express
or implied, to sell or otherwise dispose of any asset of the Partnership Group,
other than in the ordinary course of business. No borrowing by any Group Member
or the approval thereof by the General Partner shall be deemed to constitute a
breach of any duty of the General Partner to the Partnership, the Limited
Partner or any limited partner of the Limited Partner by reason of the fact that
the purpose or effect of such borrowing is directly or indirectly to (A) enable
distributions in respect of the general partner interest under the MLP Agreement
to exceed 1% of the total amount distributed by the MLP, or (B) hasten the
expiration of the "Subordination Period" under the MLP Agreement or the
conversion of any "Subordinated Units" in the MLP into Common Units.
(c) Whenever a particular transaction, arrangement or resolution of
a conflict of interest is required under this Agreement to be "fair and
reasonable" to any Person, the fair
19
and reasonable nature of such transaction, arrangement or resolution shall be
considered in the context of all similar or related transactions.
(d) The Limited Partner hereby authorizes the General Partner, on
behalf of the Partnership as a partner of a Group Member, to approve of actions
by the general partner of such Group Member similar to those actions permitted
to be taken by the General Partner pursuant to this Section 6.9.
6.10 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.
(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 and a duly appointed attorney or attorneys-in-fact or the duly
authorized officers of the Partnership.
(d) Any standard of care and duty imposed by this Agreement or under
the Delaware Act or any applicable law, rule or regulation shall be modified,
waived or limited as required to permit the General Partner to act under this
Agreement or any other agreement contemplated by this Agreement and to make any
decision pursuant to the authority prescribed in this Agreement, so long as such
action is not reasonably believed by the General Partner to be in, or not
inconsistent with, the best interests of the Partnership.
6.11 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, 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 its 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 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
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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 Partnership. 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. The General Partner covenants and agrees that at the
Closing Date, the Partnership Group shall have all licenses, permits,
certificates, franchises, or other governmental authorizations or permits
necessary for the ownership of their properties or for the conduct of their
businesses, except for such licenses, permits, certificates, franchises, or
other governmental authorizations or permits, failure to have obtained which
will not, individually or in the aggregate, have a material adverse effect on
the Partnership Group.
6.12 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 Partnership 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 contracts on behalf of
the Partnership, and such Person shall be entitled to deal with the General
Partner as if it were the Partnership's sole party in interest, both legally and
beneficially. The 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 and 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 and such
officer or its representatives. Each and every certificate, document or other
instrument executed on behalf of the Partnership by the General Partner or any
such officer 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.
ARTICLE VII
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNER
7.1 LIMITATION OF LIABILITY. The Limited Partner shall have no liability
under this Agreement except as expressly provided in this Agreement or the
Delaware Act.
7.2 MANAGEMENT OF BUSINESS. The Limited Partner, in its capacity as such,
shall not participate in the operation, management or control (within the
meaning of the Delaware 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. The transaction of any such business by the
General Partner, any of its Affiliates or any officer, director, employee,
partner, agent or trustee of the General Partner or any of its Affiliates, in
its capacity as such, shall not affect, impair or eliminate the limitations on
the liability of the Limited Partner under this Agreement.
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7.3 OUTSIDE ACTIVITIES. Subject to the provisions of Section 6.5, which
shall continue to be applicable to the Persons referred to therein, regardless
of whether such Person shall also be a Limited Partner, any Limited Partner
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 not any of the other Partners shall have any rights by
virtue of this Agreement in any business ventures of any Limited Partner.
7.4 RETURN OF CAPITAL. The Limited Partner shall not be entitled to the
withdrawal or return of its Contribution, except to the extent, if any, that
distributions made pursuant to this Agreement or upon termination of the
Partnership may be considered as such by law and then only to the extent
provided for in this Agreement.
7.5 RIGHT OF THE LIMITED PARTNER RELATING TO THE PARTNERSHIP. (a) In
addition to other rights provided by this Agreement or by applicable law, and
except as limited by Section 7.4(b), the Limited Partner shall have the right,
for a purpose reasonably related to the Limited Partner's interest as a limited
partner in the Partnership, upon reasonable demand and at the Limited Partner's
own expense:
(i) to obtain true and full information regarding the status
of the business and financial condition of the Partnership;
(ii) promptly after becoming available, to obtain a copy of
the Partnership's federal, state and local tax returns for each year;
(iii) to have furnished to it, upon notification to the
General Partner, a current list of the name and last known business, residence
or mailing address of each Partner;
(iv) to have furnished to it, upon notification to the General
Partner, 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 amount
of cash and a description and statement of the Net Agreed Value of any other
Contribution by each Partner and which each Partner has agreed to contribute in
the future, and the date on which each became a Partner; 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
Partner for such period of time as the General Partner deems reasonable, (i) any
information that the General Partner reasonably believes to be in the nature of
trade secrets or (ii) 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 the
Partnership Group is required by law or by agreements with third parties to keep
confidential (other than
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agreements with Affiliates the primary purpose of which is to circumvent the
obligations set forth in this Section 7.4).
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
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 Partner any information required to be
provided pursuant to Section 7.4(a). Any books and records maintained by or on
behalf of the Partnership in the regular course of its business, including 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 generally accepted accounting principles.
8.2 FISCAL YEAR. The fiscal year of the Partnership for financial
accounting purposes shall be October 1 to September 30.
ARTICLE IX
TAX MATTERS
9.1 TAX ALLOCATIONS. The Partnership shall allocate all taxable items of
income, deduction, and credit of the Partnership among the Partners in
accordance with their Partnership Interests, subject to the following:
(a) SECTION 754 ELECTION. Income and deductions of the Partnership
that are attributable to the Section 754 Election ("754 allocations") shall be
allocated to the Partners entitled thereto.
(b) CONTRIBUTED PROPERTY. Income and deductions attributable to each
property contributed to the Partnership shall be shared among the Partners so as
to take into account the variation between the tax basis of such property to the
Partnership at the time of contribution and its fair market value at such time
("704(c) allocations"). In addition, the General Partner will make curative
allocations permitted by the Code with respect to the assets contributed to the
Partnership on the Closing Date to the extent that the General Partner
determines, as of the Closing Date and in light of the General Partner's
estimates of its other income and deductions and its expected distributions and
in light of Section 9.1(g) and Article V of the MLP Agreement, are necessary to
cause the cumulative taxable income allocated in respect of the Common Units
during the first four taxable years of the Partnership not to exceed 30% of the
cumulative distributions in respect of the Common Units during such period.
(c) GENERAL PARTNER AUTHORITY. The General Partner may change any of
the above allocations if and to the extent it determines that such change is
required by the Code.
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Moreover, if, as to one or more classes of tax items, the General Partner
determines that more than one method is permitted or that the correct method is
uncertain, the General Partner may adopt such method for reporting purposes that
it thinks is in the best interest of the Partnership, taking into account ease
of administration, the desire to match taxable income and deductions with
economic income and deductions, the economic interests of the Partners in the
Partnership, and the risk of proposed adjustments by the Internal Revenue
Service and the consequences thereof.
(d) SPECIAL INTANGIBLES ALLOCATION. There shall be allocated to the
General Partner all deductions attributable to the ownership of, and any gain or
loss on the distribution or other disposition of, the 1989 Customer List and the
rights of the Partnership Group to use without cost the "FAST" propane purchase
optimization and fuel accounting system, the "STARS I" and "STARS II"
proprietary software system, and the trademark, tradename, or similar intangible
rights of Petrolane, the General Partner or its other Affiliates.
9.2 PREPARATION OF TAX RETURNS. The General Partner shall timely file all
returns of the Partnership required for federal and state income tax purposes
and shall furnish to Record Holders within 90 days of the close of the calendar
year the tax information reasonably required by them for federal and state
income tax reporting purposes. The classification, realization, and recognition
of income, deductions, credit, and other items shall be on the accrual method of
accounting for federal income tax purposes. The taxable year of the Partnership
shall end on December 31.
9.3 TAX ELECTIONS. (a) The Partnership shall make the Section 754 Election
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.
(b) The Partnership shall elect to deduct expenses incurred in
organizing the Partnership ratably over a sixty-month period as provided in
Section 709 of the Code.
(c) Except as otherwise provided herein, the General Partner shall
determine whether the Partnership should make any other elections permitted by
the Code.
9.4 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.
ARTICLE X
TRANSFER OF INTERESTS
10.1 TRANSFER. (a) The term "transfer," when used in this Article X with
respect to a Partnership Interest, shall be deemed to refer to a transaction by
which a Partner assigns its
24
Partnership Interest to another Person and includes a sale, assignment, gift,
pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition
by law or otherwise.
(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 X. Any transfer or purported transfer of a Partnership Interest not made
in accordance with this Article X shall be null and void.
(c) Nothing contained in this Article X shall be construed to
prevent a disposition by the parent entity of the General Partner of any or all
of the issued and outstanding capital stock of the General Partner.
10.2 TRANSFER OF THE GENERAL PARTNER'S PARTNERSHIP INTEREST. If the
general partner of the MLP transfers its partnership interest as the general
partner therein to any Person in accordance with the provisions of the MLP
Agreement, the General Partner shall contemporaneously therewith transfer its
Partnership Interest as the general partner of the Partnership to such Person,
and the Limited Partner hereby expressly consents to such transfer. Except as
set forth in the immediately preceding sentence, the General Partner may not
transfer all or any part of its Partnership Interest as the general partner in
the Partnership.
10.3 TRANSFER OF THE LIMITED PARTNER'S PARTNERSHIP INTEREST. If the
Limited Partner merges or consolidates with or into any other Person or
transfers all or substantially all of its assets to another Person, such Person
may become a Substituted Limited Partner pursuant to Article XI. Except as set
forth in the immediately preceding sentence and except for the transfers
contemplated by Sections 4.2 and 11.1, the Limited Partner may not transfer all
or any part of its Partnership Interest or withdraw from the Partnership.
ARTICLE XI
ADMISSION OF PARTNERS
11.1 ADMISSION OF AMERIGAS AS A LIMITED PARTNER. Upon the making by
AmeriGas and Petrolane of the Contributions described in Section 4.2, AmeriGas
and Petrolane shall be admitted to the Partnership as Limited Partners. Upon the
transfer by AmeriGas and Petrolane of their respective Partnership Interests as
Limited Partners to the MLP as provided in the Conveyance and Contribution
Agreement and the Merger and Contribution Agreement, AmeriGas and Petrolane
shall each withdraw and cease to be a Limited Partner of the Partnership.
11.2 ADMISSION OF SUBSTITUTED LIMITED PARTNERS. Any person that is the
successor in interest to a Limited Partner as described in Section 10.3 shall be
admitted to the Partnership as a limited partner upon (a) furnishing to the
General Partner (i) acceptance in form satisfactory to the General Partner of
all of the terms and conditions of this Agreement and (ii) such other documents
or instruments as may be required to effect its admission as a limited partner
in the Partnership and (b) obtaining the consent of the General Partner, which
consent may be given or withheld in the General Partner's sole discretion. Such
Person shall be admitted to the
25
Partnership as a limited partner immediately prior to the transfer of the
Partnership Interest, and the business of the Partnership shall continue without
dissolution.
11.3 ADMISSION OF SUCCESSOR GENERAL PARTNER. A successor General Partner
approved pursuant to Section 12.1 or 12.2 or the transferee of or successor to
all of the General Partner's Partnership Interest as the general partner in the
Partnership pursuant to Section 10.2 who is proposed to be admitted as a
successor General Partner shall, subject to compliance with the terms of Section
12.3, if applicable, be admitted to the Partnership as the successor General
Partner, effective immediately prior to the withdrawal or removal of the General
Partner pursuant to Section 12.1 or 12.2 or the transfer of the General
Partner's Partnership Interest as the general partner of the Partnership
pursuant to Section 10.2. Any such successor shall, subject to the terms hereof,
carry on the business of the Partnership without dissolution. In each case, the
admission of such successor General Partner to the Partnership shall, subject to
the terms hereof, be subject to the successor General Partner executing and
delivering to the Partnership an acceptance of all of the terms and conditions
of this Agreement and such other documents or instruments as may be required to
effect such admission.
11.4 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 and appropriate under the Delaware Act to amend
the records of the Partnership to reflect such admission and, if necessary, to
prepare as soon as practical an amendment of this Agreement and, if required by
law, to 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 1.4.
11.5 ADMISSION OF ADDITIONAL LIMITED PARTNERS. (a) Person (other than the
General Partner, the MLP or a Substituted Limited Partner) who makes a
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 granting of the power of attorney granted in Section
1.4, and (ii) such other documents or instruments as may be required in the
discretion of the General Partner to effect such Person's admission as an
Additional Limited Partner.
(b) Notwithstanding anything to the contrary in this Section 11.5,
no Person shall be admitted as an Additional Limited Partner (i) without the
consent of the General Partner, which consent may be given or withheld in the
General Partner's sole discretion, and (ii) unless such admission is
contemporaneous with a transfer by such Limited Partner of its Partnership
Interest to the MLP and consequent withdrawal as a Limited Partner, during the
Subordination Period. 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.
ARTICLE XII
WITHDRAWAL OR REMOVAL OF PARTNERS
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12.1 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 Limited Partner;
(ii) the General Partner transfers all of its rights as
General Partner pursuant to Section 10.2;
(iii) the General Partner is removed pursuant to Section 12.2;
or
(iv) the general partner of the MLP (A) withdraws from, or (B)
is removed as the general partner of, the MLP.
If an Event of Withdrawal specified in Section 12.1(a)(iv) (A) occurs, the
withdrawing General Partner shall give notice to the Limited Partner within 30
days after such occurrence. The Partners hereby agree that only the Events of
Withdrawal described in this Section 12.1 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: (i) at any time during the period
beginning on the Closing Date and ending at 12:00 midnight, Eastern Standard
Time, on December 31, 2004, the General Partner voluntarily withdraws by giving
at least 90 days' advance notice of its intention to withdraw to the Limited
Partner, provided that prior to the effective date of such withdrawal, the
Limited Partner approves such withdrawal 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 the Limited Partner, any limited
partner of the Limited Partner, or any limited partner of any Group Member, or
cause the Limited Partner or any Group Member to be treated as an association
taxable as a corporation or otherwise to be taxed as an entity for federal
income tax purposes; (ii) at any time on or after 12:00 midnight, Eastern
Standard Time, on December 31, 2004, the General Partner voluntarily withdraws
by giving at least 90 days' advance notice to the Limited Partner, such
withdrawal to take effect on the date specified in such notice; (iii) at any
time that the General Partner ceases to be the General Partner pursuant to
Section 12.1(a)(ii), (iii) or (iv)(B); or (iv) at any time that the General
Partner ceases to be the General Partner pursuant to Section 12.1(a)(iv)(A), and
such withdrawal does not constitute a breach of the MLP Agreement. If the
General Partner gives a notice of withdrawal pursuant to Section 12.1(a)(i) or
Section 13.1(a)(i) of the MLP Agreement, the Limited Partner may, prior to the
effective date of such withdrawal or removal, elect a successor General Partner,
provided that such successor shall be the same Person, if any, that is elected
by the limited partners of the MLP pursuant to Section 13.1 of the MLP Agreement
as the successor to the General Partner in its capacity as general partner of
the MLP. If, prior to the effective date of the General Partner's withdrawal, a
successor is not selected by the Limited Partner as provided herein or the
Partnership does not receive a Withdrawal Opinion of Counsel, the Partnership
shall be dissolved in accordance with Section
27
13.1. Any successor General Partner elected in accordance with the terms of this
Section 12.1 shall be subject to the provisions of Section 11.3.
12.2 REMOVAL OF THE GENERAL PARTNER. The General Partner shall be removed
if such General Partner is removed as a general partner of the MLP pursuant to
Section 13.2 of the MLP Agreement. Such removal shall be effective concurrently
with the effectiveness of the removal of such General Partner as the general
partner of the MLP pursuant to the terms of the MLP Agreement. If a successor
General Partner is elected in connection with the removal of such General
Partner as a general partner of the MLP, such successor General Partner shall,
upon admission pursuant to Article XI, automatically become a successor General
Partner of the Partnership. The admission of any such successor General Partner
to the Partnership shall be subject to the provisions of Section 11.3.
12.3 INTEREST OF DEPARTING PARTNER AND SUCCESSOR GENERAL PARTNER. The
Partnership Interest of a Departing Partner departing as a result of withdrawal
or removal pursuant to Section 12.1 or 12.2 shall (unless it is otherwise
required to be converted into Common Units pursuant to Section 13.3(b) of the
MLP Agreement) be purchased by the successor to the Departing Partner for cash
in the manner specified in the MLP Agreement. Such purchase (or conversion into
Common Units, as applicable) shall be a condition to the admission to the
Partnership of the successor as the General Partner. Any successor General
Partner shall indemnify the Departing General Partner as to all debts and
liabilities of the Partnership arising on or after the effective date of the
withdrawal or removal of the Departing Partner.
12.4 REIMBURSEMENT OF DEPARTING PARTNER. The Departing Partner shall be
entitled to receive all reimbursements due such Departing Partner pursuant to
Section 6.4, including any employee-related liabilities (including severance
liabilities), incurred in connection with the termination of any employees
employed by such Departing Partner for the benefit of the Partnership.
12.5 WITHDRAWAL OF THE LIMITED PARTNER. Without the prior consent of the
General Partner, which may be granted or withheld in its sole discretion, and
except as provided in Section 11.1, the Limited Partner shall not have the right
to withdraw from the Partnership.
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
13.1 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, any successor
General Partner shall continue the business of the Partnership. The Partnership
shall dissolve and, subject to Section 13.2, its affairs should be wound up,
upon:
(a) the expiration of its term as provided in Section 1.5;
28
(b) an Event of Withdrawal of the General Partner as provided in
Section 12.1(a) (other than Section 12.1(a)(ii)), unless a successor is elected
and an Opinion of Counsel is received as provided in Section 12.1(b) or 12.2 and
such successor is admitted to the Partnership pursuant to Section 11.3;
(c) an election to dissolve the Partnership by the General Partner
that is approved by the Limited Partner;
(d) entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Delaware Act;
(e) the sale of all or substantially all of the assets and
properties of the Partnership Group; or
(f) the dissolution of the MLP.
13.2 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 Section
12.1(a)(i) or (iii) and following a failure of the Limited Partner to appoint a
successor General Partner as provided in Section 12.1 or 12.2, then within 90
days thereafter, or (b) dissolution of the Partnership upon an event
constituting an Event of Withdrawal as defined in Section 13.1(a)(iv), (v) or
(vi) of the MLP Agreement, then within 180 days thereafter, the Limited Partner
may elect to reconstitute the Partnership and continue its business on the same
terms and conditions set forth in this Agreement by forming a new limited
partnership on terms identical to those set forth in this Agreement and having
as a general partner a Person approved by the Limited Partner. In addition, upon
dissolution of the Partnership pursuant to Section 13.1(f), if the MLP is
reconstituted pursuant to Section 14.2 of the MLP Agreement, the reconstituted
MLP may, within 180 days after such event of dissolution, as the Limited
Partner, elect to reconstitute the Partnership in accordance with the
immediately preceding sentence. Upon any such election by the Limited Partner,
all Partners shall be bound thereby and shall be deemed to have approved same.
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 reconstituted Partnership shall continue until the end
of the term set forth in Section 1.5 unless earlier dissolved in accordance with
this Article XIII;
(ii) if the successor General Partner is not the former
General Partner, then the interest of the former General Partner shall be
purchased by the successor General Partner or converted into Common Units of the
MLP as provided in Section 13.3 of the MLP Agreement; and
(iii) all necessary steps shall be taken to cancel this
Agreement and the Certificate of Limited Partnership and to enter into and, as
necessary, to file a new partnership agreement and certificate of limited
partnership, and the successor General Partner may for this purpose exercise the
powers of attorney granted the General Partner pursuant to Section 1.4;
provided, that the right 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
29
Partnership has received an Opinion of Counsel that (x) the exercise of the
right would not result in the loss of limited liability of the Limited Partner
or any limited partner of the 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
federal income tax purposes upon the exercise of such right to continue.
13.3 LIQUIDATOR. Upon dissolution of the Partnership, unless the
Partnership is continued under an election to reconstitute and continue the
Partnership pursuant to Section 13.2, the General Partner, or in the event the
dissolution is the result of an Event of Withdrawal, a liquidator or liquidating
committee approved by the Limited Partner, shall be the Liquidator. The
Liquidator (if other than the General Partner) shall be entitled to receive such
compensation for its services as may be approved by the Limited Partner. The
Liquidator shall agree not to resign at any time without 15 days' prior notice
and (if other than the General Partner) may be removed at any time, with or
without cause, by notice of removal approved by the Limited Partner. 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 the Limited Partner. 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 XIII, 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 6.3(b)) to the extent necessary or desirable in the good faith judgment
of the Liquidator to carry out the duties and functions of the Liquidator
hereunder for and during such period of time as shall be reasonably required in
the good faith judgment of the Liquidator to complete the winding-up and
liquidation of the Partnership as provided for herein.
13.4 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 the Liquidator determines to be in the best
interest of the Partners, subject to the following:
(a) DISPOSITION OF ASSETS. 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 the receiving Partner may agree. If any property is
distributed in kind, the Partner receiving the property shall be deemed for
purposes of Section 13.4(c) to have received cash equal to its fair market
value; and contemporaneously therewith, appropriate cash distributions must be
made to the other Partners.
(b) DISCHARGE OF LIABILITIES. Liabilities of the Partnership include
amounts owed to Partners otherwise in respect of their distribution rights under
Article V. With respect to any liability that is contingent 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.
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(c) LIQUIDATION DISTRIBUTIONS. The Liquidator shall reassign the
1989 Customer List and other assets described in Section 9.1(d) to the General
Partner. Subject to Section 13.4(a), all other property and all cash in excess
of that required to discharge liabilities as provided in Section 13.4(b) shall
be distributed to the Partners in the ratio of their respective Percentage
Interests.
13.5 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP. Upon the
completion of the distribution of Partnership cash and property as provided in
Sections 13.3 and 13.4 in connection with the liquidation of the Partnership,
the Partnership shall be terminated and the Certificate of Limited Partnership
and all qualifications of the Partnership as a foreign limited partnership in
jurisdictions other than the State of Delaware shall be cancelled and such other
actions as may be necessary to terminate the Partnership shall be taken.
13.6 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
Contributions of the Limited Partner, or any portion thereof, it being expressly
understood that any such return shall be made solely from Partnership assets.
13.7 WAIVER OF PARTITION. Each Partner hereby waives any right to
partition of the Partnership property.
ARTICLE XIV
AMENDMENT OF PARTNERSHIP AGREEMENT
14.1 AMENDMENT TO BE ADOPTED SOLELY BY GENERAL PARTNER. The Limited
Partner agrees that the General Partner (pursuant to its powers of attorney from
the Limited Partner), without the approval of the Limited Partner, 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, in the sole discretion of the General Partner, is
necessary or advisable 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 any state or to ensure that
neither the Partnership nor the MLP will be treated as an association taxable as
a corporation or otherwise be taxable as an entity for federal income tax
purposes;
(d) a change that, in the sole discretion of the General Partner,
(i) does not adversely affect the Limited Partner in any material respect, (ii)
is necessary or advisable to satisfy any requirements, conditions or guidelines
contained in any opinion, directive, order,
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ruling or regulation of any federal or state agency or judicial authority or
contained in any federal or state statute (including the Delaware Act),
compliance with any of which the General Partner determines in its sole
discretion to be in the best interests of the Partnership and the Limited
Partner, (iii) is required to effect the intent of the provisions of this
Agreement or is otherwise contemplated by this Agreement or (iv) is required to
conform the provisions of this Agreement with the provisions of the MLP
Agreement as the provisions of the MLP Agreement may be amended, supplemented or
restated from time to time;
(e) a change in the fiscal year and taxable year of the Partnership
and any changes that, in the sole discretion of the General Partner, are
necessary or advisable as a result of a change in the fiscal year and 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 or officers from
in any 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) any amendment expressly permitted in this Agreement to be made
by the General Partner acting alone;
(h) an amendment effected, necessitated or contemplated by a Merger
Agreement approved in accordance with Section 15.3;
(i) an amendment that, in the sole discretion of the General
Partner, is necessary or advisable to reflect, account for and deal with
appropriately 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 3.1; or
(j) any other amendments substantially similar to the foregoing.
14.2 AMENDMENT PROCEDURES. Except with respect to amendments of the type
described in Section 14.1, all amendments to this Agreement shall be made in
accordance with the following requirements. Amendments to this Agreement may be
proposed only by or with the consent of the General Partner. Each such proposal
shall contain the text of the proposed amendment. A proposed amendment shall be
effective upon its approval by the Limited Partner.
ARTICLE XV
MERGER
15.1 AUTHORITY. The Partnership may merge or consolidate with one or more
corporations, business trusts or associations, real estate investment trusts,
common law trusts or
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unincorporated businesses, including a general partnership or limited
partnership, formed under the laws of the State of Delaware or any other state
of the United States of America, pursuant to a written agreement of merger or
consolidation ("Merger Agreement") in accordance with this Article XV.
15.2 PROCEDURE FOR MERGER OR CONSOLIDATION. Merger or consolidation of the
Partnership pursuant to this Article XV requires the prior approval of the
General Partner. If the General Partner shall determine, in the exercise of its
sole discretion, 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 jurisdictions 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
general or limited partnership interests, rights, securities or obligations of
the Surviving Business Entity; and (i) 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 general or limited
partner 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 limited partnership, corporation, trust or
other entity (other than the Surviving Business Entity) which the holders of
such general or limited partner interests, securities or rights are to receive
in exchange for, or upon conversion of, their general or limited partner
interests, securities or rights, and (ii) in the case of securities represented
by certificates, upon the surrender of such certificates, which cash, property
or general or limited partner interests, rights, securities or obligations of
the Surviving Business Entity or any general or limited partnership,
corporation, trust or other entity (other than the Surviving Business Entity),
or evidences thereof, are to be delivered;
(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 15.4 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 the certificate of merger, the effective time shall be fixed no later
than the time of the filing of the certificate of merger and stated therein);
and
(g) Such other provisions with respect to the proposed merger or
consolidation as are deemed necessary or appropriate by the General Partner.
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15.3 APPROVAL BY LIMITED PARTNER OF MERGER OR CONSOLIDATION. (a) The
General Partner, upon its approval of the Merger Agreement, shall direct that a
copy or a summary of the Merger Agreement be submitted to the Limited Partner
for its approval.
(b) The Merger Agreement shall be approved upon receiving the
approval of the Limited Partner. After such approval by the Limited Partner, and
at any time prior to the filing of the certificate of merger pursuant to Section
15.4, the merger or consolidation may be abandoned pursuant to provisions
therefor, if any, set forth in the Merger Agreement.
15.4 CERTIFICATE OF MERGER. Upon the required approval by the General
Partner and the Limited Partner of a Merger Agreement, a certificate of merger
shall be executed and filed with the Secretary of State of the State of Delaware
in conformity with the requirements of the Delaware Act.
15.5 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
interest in property of any of those constituent business entities shall be
preserved unimpaired; and
(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 having occurred.
ARTICLE XVI
GENERAL PROVISIONS
16.1 ADDRESSES AND NOTICES. Any notice, demand, request or report required
or permitted to be given or made to a Partner under this Agreement shall be in
writing and shall be deemed given or made when received by it at the principal
office of the Partnership referred to in Section 1.3.
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16.2 REFERENCES. Except as specifically provided otherwise, references to
"Articles" and "Sections" are to Articles and Sections of this Agreement.
16.3 PRONOUNS AND PLURALS. Whenever the context may require, 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.
16.4 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.
16.5 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.
16.6 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.
16.7 CREDITORS. None of the provisions of this Agreement shall be for the
benefit of, or shall be enforceable by, any creditor of the Partnership.
16.8 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 or any other covenant, duty, agreement or condition.
16.9 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, independently of the signature of any other
party.
16.10 APPLICABLE LAW. This Agreement shall be construed in accordance with
and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of law.
16.11 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
GENERAL PARTNER:
AMERIGAS PROPANE, INC.
By: /s/ Robert H. Knauss
--------------------------------------
Vice President and General Counsel
LIMITED PARTNER:
AMERIGAS PARTNERS, L.P.
By: AmeriGas Propane, Inc.,
as general partner
By: /s/ Robert H. Knauss
----------------------------------
Vice President and General Counsel
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