Exhibit 4.1
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Star Gas Partners, L.P.
and
American Stock Transfer & Trust Company
As Rights Agent
----------------------
Unit Purchase Rights Agreement
Dated as of April 17, 2001
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TABLE OF CONTENTS
Page
SECTION 1. CERTAIN DEFINITIONS.............................. 1
SECTION 2. APPOINTMENT OF RIGHTS AGENT...................... 1
SECTION 3. ISSUANCE OF RIGHTS CERTIFICATES.................. 1
SECTION 4. FORM OF RIGHTS CERTIFICATES...................... 1
SECTION 5. SECTION 5. COUNTERSIGNATURE AND REGISTRATION..... 1
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE
OF RIGHTS CERTIFICATES; MUTILATED, DESTROYED,
LOST OR STOLEN RIGHTS CERTIFICATES............... 1
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION
DATE OF RIGHTS................................... 1
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS
CERTIFICATES..................................... 1
SECTION 9. RESERVATION AND AVAILABILITY OF CLASS A
COMMON UNITS..................................... 1
SECTION 10. CLASS A COMMON UNITS RECORD DATE................. 1
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF
CLASS A COMMON UNITS OR NUMBER OF RIGHTS......... 1
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF COMMON UNITS.................................. 1
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER........................ 1
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL COMMON UNITS.... 1
SECTION 15. RIGHTS OF ACTION................................. 1
SECTION 16. AGREEMENT OF RIGHTS HOLDERS...................... 1
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A UNITHOLDER 1
SECTION 18. CONCERNING THE RIGHTS AGENT...................... 1
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME
OF RIGHTS AGENT.................................. 1
SECTION 20. DUTIES OF RIGHTS AGENT........................... 1
SECTION 21. CHANGE OF RIGHTS AGENT........................... 1
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.............. 1
SECTION 23. REDEMPTION....................................... 1
SECTION 24. EXCHANGE......................................... 1
SECTION 25. NOTICE OF CERTAIN EVENTS......................... 1
SECTION 26. NOTICES.......................................... 1
SECTION 27. SUPPLEMENTS AND AMENDMENTS....................... 1
SECTION 28. SUCCESSORS....................................... 1
SECTION 29. DETERMINATIONS AND ACTIONS BY THE GENERAL
PARTNER, ETC..................................... 1
SECTION 30. BENEFITS OF THIS AGREEMENT....................... 1
SECTION 31. SEVERABILITY..................................... 1
SECTION 32. GOVERNING LAW.................................... 1
SECTION 33. COUNTERPARTS..................................... 1
SECTION 34. DESCRIPTIVE HEADINGS............................. 1
SECTION 35. AMENDMENT TO PARTNERSHIP AGREEMENT............... 1
EXHIBITS
Exhibit A Form of Rights Certificate
Exhibit B Summary of Rights
Exhibit C Fee Schedule
UNIT PURCHASE RIGHTS AGREEMENT
This Unit Purchase Rights Agreement (the "Agreement"), is dated
as of April 17, 2001, between STAR GAS PARTNERS, L.P., a Delaware limited
partnership (the "Partnership"), and AMERICAN STOCK TRANSFER & TRUST
COMPANY, as rights agent (the "Rights Agent").
On April 16, 2001 (the "Rights Distribution Declaration Date"),
the General Partner (as hereinafter defined) of the Partnership authorized
and declared a distribution of one unit purchase right (a "Right") for each
Unit (as hereinafter defined) of the Partnership outstanding as of the
Close of Business (as hereinafter defined) on April 27, 2001 (the "Record
Date"), each Right representing the right to purchase one Class A Common
Unit (as such number may be adjusted pursuant to the provisions of this
Agreement), having the rights, preferences and privileges set forth in the
Partnership Agreement, upon the terms and subject to the conditions herein
set forth, and further authorized and directed the issuance of one Right
(as such number may be adjusted pursuant to the provisions of this
Agreement) with respect to each Unit that shall become outstanding between
the Record Date and the earlier of the Distribution Date and the Expiration
Date (as such terms are hereinafter defined), and in certain circumstances
after the Distribution Date. Capitalized terms used but not defined shall
have the meanings assigned to such terms in Section 1.
NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of (i) the Common Units or (ii) the
Subordinated Units then outstanding but shall not include an Exempt Person
(as hereinafter defined). Notwithstanding the foregoing, no Person shall be
deemed to be an Acquiring Person either (i) as the result of an acquisition
of either Common Units or Subordinated Units by the Partnership which, by
reducing the number of Units outstanding, increases the proportionate
number of Common Units or Subordinated Units beneficially owned by such
Person, together with all Affiliates or Associates of such Person, to 15%
or more of either the Common Units or the Subordinated Units then
outstanding; provided, however, that if a Person, together with all
Affiliates or Associates of such Person, shall become the Beneficial Owner
of 15% or more of either the Common Units or the Subordinated Units then
outstanding by reason of Unit purchases by the Partnership and shall, after
such Unit purchases by the Partnership, become the Beneficial Owner of any
additional Common Units or Subordinated Units, then such Person shall be
deemed to be an Acquiring Person unless upon the consummation of the
acquisition of such additional Common Units or Subordinated Units such
Person, together with all Affiliates or Associates of such Person, does not
own 15% or more of either the Common Units or the Subordinated Units then
outstanding. Notwithstanding the foregoing, if the General Partner
determines in good faith that a Person who would otherwise be an "Acquiring
Person", as defined pursuant to the foregoing provisions of this paragraph
(a), has become such inadvertently, and such Person divested or divests as
promptly as practicable a
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sufficient number of Common Units or Subordinated Units so that such Person
would no longer be an "Acquiring Person", as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be
deemed to be or to have become an "Acquiring Person" for any purposes of
this Agreement. Notwithstanding anything to the contrary contained herein,
for the purpose of the definition of a "Triggering Event" a Person that
becomes an Acquiring Person prior to the end of the Subordination Period
will continue to be deemed to be an Acquiring Person following the date of
the termination of the Subordination Period whether or not such Person owns
15% or more of the Common Units at such time.
(b) "Affiliate" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as
in effect on the date of this Agreement.
(c) "Assignee" shall have the meanings ascribed to it in the
Partnership Agreement.
(d) "Associate" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as
in effect on the date of this Agreement.
(e) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for purposes of
Section 13(d) of the Exchange Act and Rule 13d-3 thereunder (or any
comparable or successor law or regulation);
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a bona fide
public offering of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed pursuant to
this Section 1(e)(ii)(A) the Beneficial Owner of, or to beneficially own,
(1) securities tendered pursuant to a tender or exchange offer made by or
on behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange, or
(2) securities which a Person or any of such Person's Affiliates or
Associates may be deemed to have the right to acquire pursuant to any
merger or other acquisition agreement between the Partnership and such
Person (or one or more of its Affiliates or Associates) if such agreement
has been approved by the General Partner prior to such Person becoming an
Acquiring Person; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any security under
this Section 1(e)(ii)(B) if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the
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applicable rules and regulations of the Exchange Act and (2) is not also
then reportable on Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which such
Person or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding, whether or not in writing (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by
the proviso to Section 1(e)(ii)(B)) or disposing of any securities of the
Partnership; provided, however, that in no case shall an officer or
director of the General Partner be deemed to be (x) the Beneficial Owner of
any securities beneficially owned by another officer or director of the
General Partner solely by reason of actions undertaken by such persons in
their capacity as officers or directors of the General Partner or (y) the
Beneficial Owner of securities held of record by the trustee of any
employee benefit plan of the General Partner or any Subsidiary of the
Partnership for the benefit of any employee of the Partnership or any
Subsidiary of the Partnership, other than the officer or director, by
reason of any influence that such officer or director may have over the
voting of the securities held in the plan.
(f) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in New York are authorized or
obligated by law or executive order to close.
(g) "Class A Common Unit" shall mean 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
Class A Common Units in the Partnership Agreement; no Class A Common Units
shall be outstanding until the expiration of the Subordination Period, at
which time all Common Units Outstanding immediately prior to the expiration
of the Subordination Period shall be redesignated as Class A Common Units.
(h) "Class B Common Unit" shall mean 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
Class B Common Units in the Partnership Agreement; no Class B Common Units
shall be outstanding until the expiration of the Subordination Period, at
which time each Outstanding Senior Subordinated Unit and Junior
Subordinated Unit shall convert into one Class B Common Unit.
(i) "Close of Business" on any given date shall mean 5:00 P.M.,
New York time, on such date; provided, however, that if such date is not a
Business Day, it shall mean 5:00 P.M., New York time, on the next
succeeding Business Day.
(j) "Common Unit" shall mean 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 Partnership Agreement. All references herein to Common Units after the
expiration of the Subordination Period shall be
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deemed to be references to both Class A Common Units and Class B Common
Units, unless otherwise indicated.
(k) "Distribution Date" shall mean the earlier of (i) the Close
of Business on the tenth calendar day (or such later date as may be
determined by action of the General Partner but not later than the date on
which a Triggering Event occurs) after the Unit Acquisition Date (or, if
the tenth day after the Unit Acquisition Date occurs before the Record
Date, the Close of Business on the Record Date) or (ii) the Close of
Business on the tenth calendar day (or such later date as may be determined
by action of the General Partner prior to such time as any Person becomes
an Acquiring Person) after the date that any Person (other than an Exempt
Person) has first published, sent or given the means to tender or exchange
Units to Unitholders, within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, if, assuming the successful
consummation thereof, such Person would be the Beneficial Owner of 15% or
more of either the Common Units or the Subordinated Units then outstanding.
(l) "Equivalent Units " shall mean Common Units and any other
class or series of Partnership Securities which is entitled to participate
in distributions, including distributions upon the liquidation, dissolution
or winding up of the Partnership, on a proportional basis with the Class A
Common Units. In calculating the number of any class or series of
Equivalent Units for purposes of Section 11 of this Rights Agreement, the
number of Equivalent Units, or fractions of an Equivalent Unit, of such
class or series of Equivalent Units that is entitled to the same
distribution as a whole Class A Common Unit shall be deemed to be one unit.
(m) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(n) "Exchange Ratio" shall have the meaning set forth in
Section 11(a)(i) hereof.
(o) "Exempt Person" shall mean the Partnership, the General
Partner, any Subsidiary of the Partnership, any Subsidiary or Affiliate of
the General Partner, or any employee benefit plan or employee unit purchase
plan of the Partnership or the General Partner or of any Subsidiary of the
Partnership or of any Subsidiary or Affiliate of the General Partner, or
any trust or other entity organized, appointed, established or holding
Units for or pursuant to the terms of any such plan.
(p) "Expiration Date" shall mean the earliest of (i) the Close
of Business on the Final Expiration Date, (ii) the Redemption Date, (iii)
the time at which all exercisable Rights are exchanged as provided in
Section 24 hereof or (iv) the consummation of a transaction contemplated by
Section 13(d) hereof.
(q) "Final Expiration Date" shall mean April 16, 2011.
(r) "General Partner" shall mean Star Gas LLC, a Delaware
limited liability company, and its successor as general partner of the
Partnership.
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(s) "General Partner Interest" shall mean the ownership interest
of the general partner in the Partnership (in its capacity as a general
partner without reference to any Limited Partner Interest held by it) which
is evidenced by General Partner Units and includes any and all benefits to
which the general partner is entitled as provided in the Partnership
Agreement, together with all obligations of the general partner to comply
with the terms and provisions of the Partnership Agreement.
(t) "General Partner Unit" shall mean a Unit representing a
fractional part of the General Partner Interest and having the rights and
obligations specified with respect to the General Partner Interest in the
Partnership Agreement.
(u) "Junior Subordinated Unit" shall mean 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
Junior Subordinated Units in the Partnership Agreement.
(v) "Limited Partner shall have the meaning ascribed to it in
the Partnership Agreement.
(w) "Limited Partner Interest" shall mean the ownership interest
of a Limited Partner in the Partnership which is evidenced by Common Units,
Senior Subordinated Units and Junior Subordinated Units or other
Partnership Securities and includes any and all benefits to which a Limited
Partner is entitled as provided in this Agreement, together with all
obligations of a Limited partner to comply with the terms and provisions of
this Agreement.
(x) "Nasdaq" shall mean the National Association of Securities
Dealers, Inc. Automated Quotation System.
(y) "Partnership Agreement" shall mean the Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of March 26,
1999, as the same may be amended or supplemented from time to time
hereafter, including, without limitation, pursuant to Section 35 hereof.
(z) "Partnership Interest" shall mean an interest in the
Partnership which shall include General Partner Interests and Limited
Partner Interests.
(aa) "Partnership Security" shall mean any class or series of
Units, any option, right, warrant or appreciation rights relating thereto,
or any other type of equity interest that the Partnership may lawfully
issue pursuant to the Partnership Agreement, or any unsecured or secured
debt obligation of the Partnership that is convertible into any class or
series of equity interests of the Partnership.
(bb) "Permitted Offer" shall mean a tender offer for all
outstanding Units made in the manner prescribed by Section 14(d) of the
Exchange Act and the rules and regulations promulgated thereunder;
provided, however, that such tender offer occurs at a time when General
Partner has determined that the offer is both adequate and otherwise in the
best
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interests of the Partnership and its partners (taking into account all
factors that the General Partner deems relevant).
(cc) "Person" shall mean any individual, firm, corporation
limited liability company, partnership, limited partnership or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
(dd) "Purchase Price" shall have the meaning set forth in
Section 7(b) hereof.
(ee) "Record Date" shall have the meaning set forth in the
recitals at the beginning of this Agreement.
(ff) "Redemption Date" shall mean the time at which the General
Partner orders redemption of the Rights as provided in Section 23 hereof.
(gg) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(hh) "Rights Certificate" shall have the meaning set forth in
Section 3(c) hereof.
(ii) "Rights Distribution Declaration Date" shall have the
meaning set forth in the recitals at the beginning of this Agreement.
(jj) "Section 13 Event" shall mean any event described in clause
(i), (ii) or (iii) of Section 13(a) hereof.
(kk) "Securities Act" shall have the meaning set forth in
Section 9(c) hereof.
(ll) "Senior Subordinated Unit" shall mean 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
Senior Subordinated Units in the Partnership Agreement.
(mm) "Subordinated Units" shall mean the Senior Subordinated
Units and the Junior Subordinated Units."
(nn) "Subordination Period" shall have the meaning ascribed to
it in the Partnership Agreement.
(oo) "Subsidiary" of any Person shall mean any corporation or
other entity of which an amount of voting securities sufficient to elect a
majority of the directors or Persons having similar authority of such
corporation or other entity is beneficially owned, directly or indirectly,
by such Person, or any corporation or other entity otherwise controlled by
such Person.
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(pp) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(qq) "Total Exercise Price" shall have the meaning set forth in
Section 4(a) hereof.
(rr) "Trading Day" shall have the meaning set forth in Section
11(d) hereof.
(ss) A "Triggering Event" shall be deemed to have occurred upon
either:
(A) the date on which any Person (other than an Exempt
Person) becomes an Acquiring Person if on or prior to such
date the Subordination Period shall have terminated, or, if
the Subordination Period shall not have terminated on the
date that a Person becomes an Acquiring Person, the date on
which the Subordinated Period subsequently terminates
(provided that if a Person became an Acquiring Person prior
to the date on which the Subordination Period terminates
there continues to be an Acquiring Person on such date), or
(B) the date of the occurrence of a Section 13 Event.
(tt) "Unit" shall mean a Partnership Interest of a Partner or
Assignee in the Partnership representing a fractional part of the
Partnership Interests of all Partners and Assignees and shall include
Common Units (Class A Common Units and Class B Common Units after the
expiration of the Subordination Period), Senior Subordinated Units, Junior
Subordinated Units and General Partner Units; provided that each Unit at
any time Outstanding shall represent the same fractional part of the
Partnership Interests of all Partners and Assignees holding Units as each
other Unit.
(uu) "Unit Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the
Exchange Act) by the Partnership or an Acquiring Person that an Acquiring
Person has become such; provided that, if such person is determined not to
have become an Acquiring Person pursuant to Section 1(a) hereof, then no
Unit Acquisition Date shall be deemed to have occurred.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Partnership hereby appoints
the Rights Agent to act as agent for the Partnership and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Units) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Partnership may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable.
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SECTION 3. ISSUANCE OF RIGHTS CERTIFICATES.
(a) Until the Distribution Date, (i) the Rights will be
evidenced (subject to the provisions of Sections 3(b) and 3(c) hereof) by
the certificates for Units registered in the names of the holders thereof
(which certificates shall also be deemed to be Rights Certificates) and not
by separate Rights Certificates and (ii) the right to receive Rights
Certificates will be transferable only in connection with the transfer of
Units. Until the earlier of the Distribution Date, or the Expiration Date,
the surrender for transfer of such Unit certificates shall also constitute
the surrender for transfer of the Rights associated with the Units
represented thereby. As soon as practicable after the Distribution Date,
the Partnership will prepare and execute, the Rights Agent will
countersign, and the Partnership will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, postage-prepaid
mail, to each record holder of Units as of the close of business on the
Distribution Date, at the address of such holder shown on the records of
the Partnership, a Rights Certificate, in substantially the form of Exhibit
A hereto (a "Rights Certificate"), evidencing one Right for each Unit so
held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per Unit has been made pursuant to
Section 11(a)(i) or Section 11(i) hereof, then at the time of distribution
of the Rights Certificates, the Partnership shall make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of the
Distribution Date, the Rights will be evidenced solely by such Rights
Certificates and may be transferred solely by the transfer of the Rights
Certificates as permitted hereby, separately and apart from any transfer of
one or more Units, and the holders of such Rights Certificates as listed in
the records of the Partnership or any transfer agent or registrar for the
Rights shall be the record holders there of.
(b) As soon as practicable after the Record Date, the
Partnership will send a copy of a Summary of Rights in substantially the
form of Exhibit B hereto (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each holder of Units that requests same, at the
address of such holder shown on the records of the Partnership.
(c) Unless the General Partner by resolution adopted at or
before the time of the issuance (including pursuant to the exercise of
options under the Partnership's benefit plans) of any Units specifies to
the contrary, Rights shall be issued in respect of all Units that are
issued after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date or, in certain circumstances provided in
Section 22 hereof, after the Distribution Date. Certificates representing
such Units shall also be deemed to be certificates for Rights, and shall
bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Star Gas
Partners, L.P. and American Stock Transfer & Trust Company as the
Rights Agent, dated as of April 17, 2001 (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of Star Gas
Partners, L.P. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate.
Star Gas Partners, L.P. will mail to the
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holder of this certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration Date, the
Rights associated with the Units represented by such certificates shall be
evidenced by such certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights associated with the
Units represented thereby. In the event that the Partnership purchases or
acquires any Units after the Record Date but prior to the Distribution Date, any
Rights associated with such Units shall be deemed canceled and retired so that
the Partnership shall not be entitled to exercise any Rights associated with the
Units which are no longer outstanding.
SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to
purchase Class A Common Units and of assignment to be printed on the
reverse thereof) shall be substantially in the form of Exhibit A hereto and
may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Partnership may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange or quotation system on which the Rights may from time
to time be listed, or to conform to usage. Subject to the provisions of
Section 11 and Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date (or in the case of Rights
issued with respect to Units issued by the Partnership after the Record
Date, as of the date of issuance of such Units) and on their face shall
entitle the holders thereof to purchase such number of Class A Common Units
as shall be set forth therein at the Purchase Price set forth therein (the
aggregate Purchase Price of all Class A Common Units issuable upon exercise
of one Right shall hereinafter be referred to as the "Total Exercise
Price"), but the number and type of securities purchasable upon the
exercise of each Right and the Purchase Price shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii)
a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such (a "Post-
Transferee"), (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the General Partner has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect
avoidance of Section 7(e) hereof (a "Prior Transferee"), or (iv) any
subsequent transferee
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receiving transferred Rights from a Post Transferee or a Prior Transferee
either directly or through one or more intermediate transferees, and any
Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of the Rights Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the
Partnership by the Chairman of the Board, Chief Executive Officer,
President or any Vice President of the General Partner, either manually or
by facsimile signature, and by the Secretary or an Assistant Secretary of
the General Partner, either manually or by facsimile signature. The Rights
Certificates shall be countersigned by the Rights Agent, either manually or
by facsimile signature, and shall not be valid for any purpose unless
countersigned. In case any officer of the General Partner who shall have
signed any of the Rights Certificates shall cease to be such officer of the
General Partner before countersignature by the Rights Agent and issuance
and delivery by the Partnership, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the
Partnership with the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such officer of the General
Partner, and any Rights Certificate may be signed on behalf of the
Partnership by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the General Partner to
sign such Rights Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its office designated for such purposes, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by each of
the Rights Certificates and the date of each of the Rights Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Sections 7(e), 14 and 24
hereof, at any time after the Close of Business on the Distribution Date,
and at or prior to the Close of Business on the Expiration Date, any Rights
Certificate or Rights Certificates may be transferred, split up, combined
or exchanged for another Rights Certificate or Rights Certificates,
entitling the registered holder to purchase a like number of Class A Common
Units (or, following a Triggering Event, other securities, cash or other
assets, as the case may be) as the Rights
10
Certificate or Rights Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate or Rights Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Rights Certificates to be transferred, split up,
combined or exchanged at the office of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Partnership shall be obligated to
take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on
the reverse side of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Partnership
shall reasonably request. Thereupon the Rights Agent shall, subject to
Sections 7(e), 14 and 24 hereof, countersign and deliver to the person
entitled thereto a Rights Certificate or Rights Certificates, as the case
may be, as so requested. The Partnership may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates.
(b) Subject to the provisions of Sections 7(c), 14 and 24
hereof, at any time after the Close of Business on the Distribution Date,
and at or prior to the Close of Business on the Expiration Date, upon
receipt by the Partnership and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a
Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the
Partnership's request, reimbursement to the Partnership and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to
the Rights Agent and cancellation of the Rights Certificate if mutilated,
the Partnership will make and deliver a new Rights Certificate of like
tenor to the Rights Agent for delivery to the registered holder in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.
(a) Subject to Sections 7(e), 7(f), 23(b) and 24(b) hereof, the
registered holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein), in whole or in
part, at any time after the Distribution Date, upon surrender of the Rights
Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights
Agent designated for such purpose, together with payment of the Purchase
Price for each Class A Common Unit as to which the Rights are exercised, at
or prior to the Expiration Date. Notwithstanding the foregoing, no Right
may be exercised prior to the end of the Subordination Period.
(b) The purchase price (the "Purchase Price") for each Class A
Common Unit issuable pursuant to the exercise of a Right shall initially be
Eighty Dollars ($80.00), shall be subject to adjustment from time to time
as provided in Sections 11 and 13 hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c)
below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the
11
Purchase Price for the number of Class A Common Units (or other securities
or property, as the case may be) to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Rights
Certificate in accordance with Section 9 hereof in cash, or by certified
check or cashier's check payable to the order of the Partnership, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)
requisition from any transfer agent of the Class A Common Units (or make
available, if the Rights Agent is the transfer agent for the Class A Common
Units) a certificate or certificates for the number of Class A Common Units
to be purchased and the Partnership hereby irrevocably authorizes its
transfer agent to comply with all such requests, (ii) when appropriate,
requisition from the Partnership the amount of cash to be paid in lieu of
issuance of fractional Class A Common Units in accordance with Section 14
hereof, (iii) after receipt of such certificates, cause the same to be
delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt thereof, deliver such cash
to or upon the order of the registered holder of such Rights Certificate.
The payment of the Purchase Price (as such amount may be reduced (including
to zero) pursuant to Section 11(a)(iv) hereof) may be made in cash or by
certified bank check or bank draft payable to the order of the Partnership.
In the event that the Partnership is obligated to issue other securities of
the Partnership, pay cash and/or distribute other property pursuant to
Section 11(a) hereof, the Partnership will make all arrangements necessary
so that such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Rights Certificate or to his or her duly authorized assigns, subject
to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate
of an Acquiring Person, (ii) a Post Transferee, (iii) a Prior Transferee or
(iv) any subsequent transferee receiving transferred Rights from a Post
Transferee or a Prior Transferee, either directly or through one or more
intermediate transferees, shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Partnership shall use all reasonable efforts to insure that
the provisions of this Section 7(e) and Section 4(b) hereof are complied
with, but shall have no liability to any holder of Rights Certificates or
to any other Person as a result of its failure to make any determinations
with respect to an Acquiring Person or any of such Acquiring Person's
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Partnership shall be obligated to
undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7 unless
such registered holder shall have (i) completed and signed the certificate
contained in the form of election to purchase set forth on the reverse side
of the Rights Certificate surrendered for such exercise and (ii) provided
such additional evidence of the
12
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Partnership shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Partnership
or to any of its agents, be delivered to the Rights Agent for cancellation
or in canceled form, or, if surrendered to the Rights Agent, shall be
canceled by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Agreement.
The Partnership shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other
Rights Certificate purchased or acquired by the Partnership otherwise than
upon the exercise thereof. The Rights Agent shall deliver all canceled
Rights Certificates to the Partnership, or shall, at the written request of
the Partnership, destroy such canceled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Partnership.
SECTION 9. RESERVATION AND AVAILABILITY OF CLASS A COMMON
UNITS.
(a) Subject to Article IV of the Partnership Agreement, the
Partnership covenants and agrees that it will use its best efforts to cause
to be reserved and kept available out of and to the extent of its
authorized and unissued Class A Common Units the number of Class A Common
Units that will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) If the Partnership shall hereafter list any of its Class A
Common Units on a national securities exchange or quotation system, then so
long as the Class A Common Units issuable and deliverable upon exercise of
the Rights may be listed on such exchange or quotation system, the
Partnership shall use its best efforts to cause, from and after such time
as the Rights become exercisable (but only to the extent that it is
reasonably likely that the Rights will be exercised), all Class A Common
Units reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Partnership shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence
of a Triggering Event in which the consideration to be delivered by the
Partnership upon exercise of the Rights has been determined in accordance
with Section 11(a)(iv) hereof, or as soon as is required by law following
the Distribution Date, as the case may be, a registration statement under
the Securities Act, with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing and
(iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Final Expiration Date. After
the date set forth in clause (i) of the first sentence of this Section
9(c), the Partnership may temporarily suspend, for a period not to exceed
ninety (90) days, the exercisability of the Rights in order to prepare and
file such registration statement and permit it to become effective. Upon
any such suspension, the Partnership shall issue a public announcement
stating, and notify the Rights Agent, that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement and
notification to the Rights Agent at such time as the suspension is no
13
longer in effect. The Partnership will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue
sky" laws of the various states in connection with the exercisability of
the Rights. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction, unless
the requisite qualification in such jurisdiction shall have been obtained,
or an exemption therefrom shall be available, and until a registration
statement (if requested) has been declared effective.
(d) The Partnership covenants and agrees that it will take all
such action as may be necessary to ensure that all Class A Common Units
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such Class A Common Units (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable Class A Common Units.
(e) The Partnership further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the original issuance or
delivery of the Rights Certificates or of any Class A Common Units upon the
exercise of Rights. The Partnership shall not, however, be required to pay
any transfer tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a person other than, or the issuance or
delivery of certificates for the Class A Common Units in a name other than
that of, the registered holder of the Rights Certificate evidencing Rights
surrendered for exercise or to issue or to deliver any certificates for
Class A Common Units upon the exercise of any Rights until any such tax
shall have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been
established to the Partnership's reasonable satisfaction that no such tax
is due.
SECTION 10. CLASS A COMMON UNITS RECORD DATE. Each person in
whose name any certificate for a Class A Common Unit is issued upon the
exercise of Rights shall for all purposes be deemed to have become the
holder of record of Class A Common Units represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase
Price multiplied by the number of Class A Common Units with respect to
which the Rights have been exercised (and any applicable transfer taxes)
was made; provided, however, that if the date of such surrender and payment
is a date upon which the Class A Common Units transfer books of the
Partnership are closed, such person shall be deemed to have become the
record holder of such Class A Common Units on, and such certificate shall
be dated, the next succeeding Business Day on which the Class A Common
Units transfer books of the Partnership are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Rights Certificate shall not
be entitled to any rights of a holder of Class A Common Units for which the
Rights shall be exercisable, including, without limitation, the right to
vote, to receive distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the
Partnership, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF CLASS A
COMMON UNITS OR NUMBER OF RIGHTS. The Purchase Price, the number and kind
of Class A Common Units or other securities or property covered by each
Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
14
(a) (i) In the event the Partnership shall at any time after the
date of this Agreement (A) declare a distribution on the Common Units
payable in Common Units, (B) subdivide the outstanding Common Units, (C)
combine the outstanding Common Units (by reverse unit split or otherwise)
into a smaller number of Common Units, or (D) issue any Partnership
Securities in a reclassification of the Common Units (including any such
reclassification in connection with a consolidation or merger in which the
Partnership is the continuing or surviving entity), then, in each such
event, except as otherwise provided in this Section 11(a) and Section 7(e)
hereof: (1) each of the Rights outstanding at the time of the record date
for such distribution or the effective date of such subdivision,
combination or reclassification shall be proportionately adjusted to that
number of Rights (calculated to the nearest one ten-thousandth (1/10,000)
of a Right) equal to a fraction (the "Exchange Ratio"), the numerator of
which shall be the total number of Common Units or Partnership Securities
issued in such distribution, subdivision, combination or reclassification
of the Common Units outstanding immediately following such time and the
denominator of which shall be the total number of Common Units outstanding
immediately prior to such time; (2) the number of Rights that shall
thereafter be issued with respect to each Unit or other Partnership
Securities that shall become outstanding thereafter but prior to the
Distribution Date shall be equal to the total number of outstanding Rights
immediately after such event (as adjusted pursuant to this clause (1))
divided by the total number of outstanding Units or such other Partnership
Securities immediately after such event (subject to further adjustment
pursuant to the provisions of this Agreement); (3) the Purchase Price in
effect at the time of the record date for such distribution or of the
effective date of such subdivision, combination or reclassification shall
be adjusted so that the Purchase Price thereafter shall equal the result
obtained by dividing the Purchase Price in effect immediately prior to such
time by the Exchange Ratio; and (4) the number of Class A Common Units or
such other Partnership Securities issuable upon the exercise of each Right
shall remain unchanged immediately after such event, but, in the event of a
reclassification, the kind of Partnership Securities issuable upon the
exercise of each Right immediately after such reclassification shall be
appropriately adjusted. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof,
the adjustment provided for in this Section 11(a)(i) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii) hereof. Notwithstanding anything to the contrary contained
herein, references to "Common Units" in this Agreement shall be deemed to
be references to "Class A Common Units" following the expiration of the
Subordination Period.
(ii) Subject to Sections 9, 23, and 24 of this Agreement, in the
event a Triggering Event shall have occurred, then from and after the date
of such Triggering Event, each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to receive for each
Right, upon exercise thereof in accordance with the terms of this Agreement
and payment of the then-current Total Exercise Price, the greater of (A)
such number of Class A Common Units for which such Right was exercisable
immediately prior to such event or (B) such number of Class A Common Units
as shall equal the result obtained by multiplying the then-current Purchase
Price by the then number of Class A Common Units for which a Right was
exercisable (or would have
15
been exercisable if the Distribution Date had occurred) immediately prior
to the first occurrence of a Triggering Event, and dividing that product by
50% of the current per unit market price (determined pursuant to Section
11(d) hereof) for Common Units on the date of occurrence of the Triggering
Event (such number of Class A Common Units being hereinafter referred to as
the "Adjustment Units").
(iii) The right to buy Class A Common Units pursuant to Section
11(a)(ii) hereof shall not arise as a result of any Person becoming an
Acquiring Person through an acquisition of Units pursuant to a Permitted
Offer.
(iv) In lieu of issuing Class A Common Units in accordance with
Section 11(a)(ii) hereof, the Partnership may, if the General Partner
determines that such action is necessary or appropriate and not contrary to
the interest of holders of Rights (and, in the event that the number of
Class A Common Units which are authorized by the Partnership Agreement but
not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in full of
the Rights, or if any necessary regulatory approval for such issuance has
not been obtained by the Partnership, the Partnership shall: (A) determine
the excess of (1) the value of the Class A Common Units issuable upon the
exercise of a Right (the "Current Value") over (2) the then current
Purchase Price (such excess, the "Spread") and (B) with respect to each
Right (other than the Rights which have become null and void pursuant to
Section 7(e)), make adequate provision to substitute for such Class A
Common Units, upon exercise of the Rights, (1) cash, (2) a reduction in the
Purchase Price, (3) other equity securities of the Partnership (including,
without limitation, Partnership Securities which the General Partner has
deemed to have the same value as Class A Common Units (such Partnership
Securities are herein called "Unit Equivalents")), except to the extent
that the Partnership has not obtained any necessary unitholder or
regulatory approval for such issuance, (4) debt securities of the
Partnership, except to the extent that the Partnership has not obtained any
necessary unitholder or regulatory approval for such issuance, (5) other
assets or (6) any combination of the foregoing, having an aggregate value
equal to the [Current Value], where such aggregate value has been
determined by the General Partner based upon the advice of a nationally
recognized investment banking firm selected by the General Partner;
provided, however, if the Partnership shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30)
days following the later of (x) the first occurrence of a Triggering Event
and (y) the date on which the Partnership's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being referred to herein as
the "Section 11(a)(ii) Trigger Date"), then the Partnership shall be
obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, Class A Common Units (to
the extent available), except to the extent that the Partnership has not
obtained any necessary Unitholder or regulatory approval for such issuance,
and then, if necessary, cash, which Class A Common Units and/or cash have
an aggregate value equal to the Spread. If the General Partner of the
Partnership shall determine in good faith that it is likely that sufficient
additional Class A Common Units could be authorized for issuance upon
exercise in full of the Rights or that any necessary regulatory approval
for such issuance will be obtained, the thirty (30)-day period set forth
above may be extended to the extent necessary, but not more than ninety
(90) days after the Section 11(a)(ii) Trigger Date, in
16
order that the Partnership may seek Unitholder approval for the
authorization of such additional Class A Common Units or take action to
obtain such regulatory approval (such period, as it may be extended, the
"Substitution Period"). To the extent that the Partnership determines that
some action need be taken pursuant to the first and/or second sentences of
this Section 11(a)(iv), the Partnership (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional units, to take any action to obtain any
required regulatory approval and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine
the value thereof. In the event of any such suspension, the Partnership
shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iv), the value of the Class A Common Units shall be the
current per unit market price (as determined pursuant to Section 11(d)
hereof) of the Common Units on the Section 11(a)(ii) Trigger Date and the
value of any "Unit Equivalent" shall be deemed to have the same value as
the Common Units on such date.
(b) In case the Partnership shall, at any time after the date
of this Agreement, fix a record date for the issuance of rights, options or
warrants to all holders of Common Units or of any class or series of
Equivalent Units entitling such holders (for a period expiring within
forty-five (45) calendar days after such record date) to subscribe for or
purchase Common Units or Equivalent Units or securities convertible into
Common Units or Equivalent Units at a price per Unit (or having a
conversion price per unit, if a security convertible into Common Units or
Equivalent Units) less than the then current per unit market price (as
defined in Section 11(d) of the Common Units or Equivalent Units on such
record date, then, in each such case, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Common Units and Equivalent Units
(if any) outstanding on such record date, plus the number of Common Units
or Equivalent Units, as the case may be, which the aggregate offering price
of the total number of Common Units or Equivalent Units, as the case may
be, so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current per
unit market price, and the denominator of which shall be the number of
Common Units and Equivalent Units (if any) outstanding on such record date,
plus the number of additional Common Units or Equivalent Units, as the case
may be, to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case
such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by the General Partner, whose determination
shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights. Common Units and
Equivalent Units owned by or held for the account of the Partnership shall
not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed,
and in the event that such rights, options or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
17
(c) In case the Partnership shall, at any time after the date
of this Agreement, fix a record date for the making of a distribution to
all holders of Common Units or of any class or series of Equivalent Units
(including any such distribution made in connection with a consolidation or
merger in which the Partnership is the continuing or surviving entity) of
evidences of indebtedness or assets (other than a regular quarterly cash
distribution, if any, or a distribution payable in Common Units) or
subscription rights, options or warrants (excluding those referred to in
Section 11(b)), then, in each such case, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current per unit market price (as
determined pursuant to Section 11(d) hereof) of a Common Unit or an
Equivalent Unit on such record date, less the fair market value (as
determined in good faith by the General Partner of the Partnership, whose
determination shall be described in a statement filed with the Rights
Agent) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such subscription rights or warrants applicable to
a Common Unit or Equivalent Unit, as the case may be, and the denominator
of which shall be such current market price (as determined pursuant to
Section 11(d) hereof) of a Common Unit or Equivalent Unit on such record
date. Such adjustments shall be made successively whenever such a record
date is fixed, and in the event that such distribution is not so made, the
Purchase Price shall be adjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iv) hereof, the "current per
unit market price" of any security (a "Security" for the purpose of this
Section 11(d) on any date shall be deemed to be the average of the daily
closing prices per unit of such Security for the thirty (30) consecutive
Trading Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iv) hereof, the "current per
unit market price" of any Security on any date shall be deemed to be the
average of the daily closing prices per unit of such Security for the ten
(10) consecutive Trading Days immediately prior to such date; provided,
however, that in the event that the current per unit market price of the
Security is determined during a period following the announcement by the
issuer of such Security of (i) a distribution on such Security payable in
units of such Security or securities convertible into such units or (ii)
any subdivision, combination or reclassification of such Security, and
prior to the expiration of the requisite thirty (30) Trading Day or ten
(10) Trading Day period, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per unit market
price shall be appropriately adjusted to reflect the current market price
per unit equivalent of such Security. The closing price for each day shall
be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
the Security is listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities exchange, the last
sale price or, if such last sale price is not reported, the average of the
high bid and low asked prices in the over-the-counter market, as reported
by Nasdaq or such other system then in use, or, if on any such date the
Security is not quoted by any
18
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Security
selected by the General Partner. If on any such date no market maker is
making a market in the Security, the fair value of such Security on such
date as determined in good faith by the General Partner shall be used. The
term "Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to trading
is open for the transaction of business or, if the Security is not listed
or admitted to trading on any national securities exchange, a Business Day.
If the Security is not publicly held or so listed or traded, "current per
unit market price" shall mean the fair value per Security as determined in
good faith by the General Partner, whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price;
provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest ten-thousandth of a
Security. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the
earlier of (i) three (3) years from the date of the transaction which
requires such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a) or 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any Partnership Securities other than Class A
Common Units, thereafter the number of such other Partnership Securities so
receivable upon exercise of any Right and if required, the Purchase Price
thereof, shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect
to the Class A Common Units contained in Sections 11(a), (b), (c), (e),
(h), (i), (j), (k), (l) and (m), and the provisions of Sections 7, 9, 10,
13 and 14 with respect to the Class A Common Units shall apply on like
terms to any such other Partnership Securities.
(g) All Rights originally issued by the Partnership subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of Class A
Common Units purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Partnership shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and 11(c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of Class A Common Units (calculated to the nearest one ten-
thousandth of a Class A Common Unit) obtained by (i) multiplying (x) the
number of Class A Common Units covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained
by the Purchase Price in effect immediately after such adjustment of the
Purchase Price.
19
(i) The Partnership may elect on or after the date of any
adjustment of the Purchase Price as a result of the calculations made in
Section 11(b) and 11(c) to adjust the number of Rights, in substitution for
any adjustment in the number of Class A Common Units purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment
of the number of Rights shall be exercisable for the number of Class A
Common Units for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Partnership shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Rights Certificates have been issued, shall be
at least ten (10) days later than the date of the public announcement. If
Rights Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Partnership shall, as promptly
as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Partnership, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof, if
required by the Partnership, new Rights Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment.
Rights Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the
option of the Partnership, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Class A Common Units issuable upon the exercise of
the Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one Common Unit and the number
of Class A Common Units which were expressed in the initial Rights
Certificates issued hereunder.
(k) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Partnership may elect to defer until the occurrence
of such event the issuing to the holder of any Right exercised after such
record date of the number of Class A Common Units and other Partnership
Securities, if any, issuable upon such exercise over and above the number
of Class A Common Units and other Partnership Securities, if any, issuable
upon such exercise on the basis of the Purchase Price in effect prior to
such adjustment; provided, however, that the Partnership shall deliver to
such holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional units (fractional or otherwise)
upon the occurrence of the event requiring such adjustment.
(l) Anything in this Section 11 to the contrary
notwithstanding, prior to the Distribution Date, the General Partner shall
be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to
20
the extent that it in its sole discretion shall determine to be advisable
in order that any (i) consolidation or subdivision of the Common Units,
(ii) issuance wholly for cash of any Common Units at less than the current
market price, (iii) issuance wholly for cash of Common Units or securities
which by their terms are convertible into or exchangeable for Common Units,
(iv) distributions or (v) issuance of rights, options or warrants referred
to in this Section 11, hereafter made by the Partnership to holders of its
Units shall not be taxable to such Unitholders.
(m) The Partnership covenants and agrees that it shall not, at
any time after the Distribution Date, effect or permit to occur any
Triggering Event or Section 13 Event, if (i) at the time or immediately
after such Triggering Event or Section 13 Event there are any rights,
warrants or other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or (ii) prior to,
simultaneously with or immediately after such Section 13 Event, the
securityholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(b) hereof shall have received
a distribution of Rights previously owned by such Person or any of its
Affiliates and Associates.
(n) The Partnership covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Sections 23, 24 or
27 hereof, take (or permit to be taken) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded
by the Rights.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
COMMON UNITS. Whenever an adjustment is made as provided in Sections 11 and
13 hereof, the Partnership shall promptly (a) prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for
such adjustment, (b) file with the Rights Agent and with each transfer
agent for the Common Units a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Rights Certificate in accordance with
Section 26 hereof. Notwithstanding the foregoing sentence, the failure of
the Partnership to make such certification or give such notice shall not
affect the validity of such adjustment or the force or effect of the
requirement for such adjustment. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment contained therein
and shall not be deemed to have knowledge of such adjustment unless and
until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that at any time after a Person has become
Acquiring Person:
(i) the Partnership shall consolidate with, or merge with and
into, any other Person (other than a Subsidiary of the Partnership in a
transaction the principal purpose of which is to change the state of
organization of the Partnership or which complies with Section 11(n)
hereof);
(ii) any Person (other than a Subsidiary of the Partnership in a
transaction that complies with Section 11(n) hereof) shall consolidate with
the
21
Partnership, or merge with and into the Partnership and the Partnership
shall be the continuing or surviving entity of such consolidation or
merger; or
(iii) the Partnership shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Partnership and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Partnership or one or
more of its wholly owned Subsidiaries in one or more transactions, each of
which complies with Section 11(n) hereof), then, and in each such case,
proper provision shall be made so that
(A) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the exercise
thereof in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid and nonassessable common units or
equivalent securities of the Principal Party (as hereinafter defined), free
of any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the
then current Purchase Price by the number of Class A Common Units for which
a Right was exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Triggering Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of Class A Common
Units for which a Right was exercisable immediately prior to the first
occurrence of a Triggering Event by the Purchase Price in effect
immediately prior to such first occurrence of a Triggering Event) and (2)
dividing that product (which, following the first occurrence of a Section
13 Event, shall be referred to as the "Total Exercise Price" for each Right
and for all purposes of this Agreement) by 50% of the current per unit or
per share market price (determined pursuant to Section 11(d) hereof) of the
common units or equivalent securities of such Principal Party on the date
of consummation of such Section 13 Event;
(B) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such Section 13 Event, all the obligations
and duties of the Partnership pursuant to this Agreement;
(C) the term "Partnership" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event;
(D) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of
its common units or equivalent securities) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its common units or equivalent securities thereafter
deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean, in the case of any
transaction described in clause (i), (ii) or (iii) of Section 13(a), the
Person referred to therein (or
22
such Person's or Acquiring Person's successor, including, if applicable,
the Partnership, if it is the surviving entity), provided, however, that in
any such case, (i) if such Person is a direct or indirect Subsidiary of
another Person, "Principal Party" shall refer to such other Person and (ii)
in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, "Principal Party" shall refer to whichever of such Persons is
the issuer of the common units or equivalent securities having the greatest
aggregate value, and provided, further, that for purposes of transactions
described in clause (iii) hereof, "Principal Party" shall refer to that
Person receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions.
(c) If, for any reason, the Rights cannot be exercised
for common units or equivalent securities of such Principal Party as
provided in Section 13(a), or, if within 60 days following the completion
of any such transaction such common units or equivalent securities have not
been issued, then each holder of Rights shall have the right to exchange
its Rights for cash from such Principal Party in an amount equal to the
number of common units or equivalent securities that it would otherwise be
entitled to purchase times 50% of the current per share market price, as
determined pursuant to Section 11(d) hereof, of such common units or
equivalent securities of such Principal Party. If, for any reason, the
foregoing formulation cannot be applied to determine the cash amount into
which the Rights are exchangeable, then the General Partner, based upon the
advice of one or more nationally recognized investment banking firms, and
based upon the total value of the Partnership, shall determine such amount
reasonably and with good faith to the holders of Rights. Any such
determination shall be final and binding on the Rights Agent.
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
clauses (i) and (ii) of Section 13(a) if: (i) such transaction is
consummated with a Person or Persons who acquired Units pursuant to a
Permitted Offer (or a wholly-owned Subsidiary of any such Person or
Persons); (ii) the price per Unit offered in such transaction is not less
than the price per unit of Unit paid to all holders of Units whose Units
were purchased pursuant to such Permitted Offer; and (iii) the form of
consideration being offered to the remaining holders of Units pursuant to
such transaction is the same form as the form of consideration paid
pursuant to such Permitted Offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
(e) The Partnership shall not consummate any Section 13
Event unless the Principal Party shall have a sufficient number of
authorized common units or equivalent securities that have not been issued
or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Partnership
and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement confirming that such Principal Party shall, upon
consummation of such Section 13 Event, assume this Agreement in accordance
with Sections 13(a) and (b) hereof, that all rights of first refusal or
preemptive rights in respect of the issuance of common units or equivalent
securities of such Principal Party upon exercise of outstanding Rights have
been waived, that there are no rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially diminish
the benefits intended to be afforded by the Rights and that such
transaction shall not result in a default by
23
such Principal Party under this Agreement, and further providing that, as
soon as practicable after the date of such Section 13 Event, such Principal
Party will:
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, use its best efforts to
cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration Date,
and similarly comply with applicable state securities laws;
(ii) use its best efforts to list (or continue the listing
of) the Rights and the securities purchasable upon exercise of the Rights
on a national securities exchange or to meet the eligibility requirements
for quotation on Nasdaq; and
(iii) deliver to holders of the Rights historical
financial statements for such Principal Party which comply in all respects
with the requirements for registration on Form 10 (or any successor form)
under the Exchange Act.
In the event that at any time after the occurrence of a Triggering
Event some or all of the Rights shall not have been exercised at the time
of a transaction described in this Section 13, the Rights which have not
theretofore been exercised shall thereafter be exercisable in the manner
described in Section 13(a) (without taking into account any prior
adjustment required by Section 11(a)(ii)).
(f) The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or other transfers.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL COMMON UNITS.
(a) The Partnership shall not be required to issue
fractions of Rights or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there shall be paid
to the registered holders of the Rights Certificates with regard to which
such fractional Rights would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a whole Right
shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise
issuable, as determined pursuant to the second sentence of Section 11(d)
hereof.
(b) The Partnership shall not be required to issue
fractions of Class A Common Units upon exercise of the Rights or to
distribute certificates which evidence fractional Class A Common Units. In
lieu of fractional Class A Common Units, the Partnership shall pay to the
registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction
of the current market value of a Class A Common Unit. For purposes of this
Section 14(b), the current market value of a Class A Common Unit shall be
the closing price of a Class A Common Unit (as determined pursuant to
24
the second sentence of Section 11(d) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his or her right to receive any fractional Rights or any
fractional Class A Common Units upon exercise of a Right.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Units); and any registered holder of any Rights Certificate
(or, prior to the Distribution Date, of the Units), without the consent of
the Rights Agent or of the holder of any other Rights Certificate (or,
prior to the Distribution Date, of the Units), may, in his or her own
behalf and for his or her own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Partnership to enforce,
or otherwise act in respect of, his or her right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy
at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual
or threatened violations of, the obligations of any Person subject to this
Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Partnership and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Units;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer
and with the appropriate forms and certificates fully executed; and
(c) the Partnership and the Rights Agent may deem and treat the
person in whose name the Rights Certificate (or, prior to the Distribution
Date, the associated Units certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Rights Certificates or the associated Units
certificate made by anyone other than the Partnership or the Rights Agent)
for all purposes whatsoever, and neither the Partnership nor the Rights
Agent shall be affected by any notice to the contrary.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A UNITHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote,
receive distributions or be deemed for any purpose the holder of the Class
A Common Units or any other Partnership Securities which may at any time be
issuable on the exercise of the Rights
25
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a unitholder of the Partnership
or any right to vote upon any matter submitted to unitholders at any
meeting thereof, or to give or withhold consent to any action, or to
receive notice of meetings or other actions affecting unitholders (except
as provided in Section 25 hereof), or to receive distributions or
subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Partnership agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Partnership also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability or expense, incurred
without negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of
liability in the premises. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including
but not limited to lost profits), even if the Rights Agent has been advised
of the likelihood of such loss or damage and regardless of the form of the
action.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it
in connection with, its administration of this Agreement in reliance upon
any Rights Certificate or certificate for the Class A Common Units or for
other Partnership Securities, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice
of counsel as set forth in Section 20 hereof.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided, however,
that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the time
such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
26
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and
in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Partnership and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Partnership), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of "current per unit market price")
be proved or established by the Partnership prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman
of the Board, the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Secretary or any Assistant
Secretary of the Partnership and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate .
(c) The Rights Agent shall be liable hereunder to the
Partnership and any other Person only for its own negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in
the Rights Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Partnership only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Rights Certificate
27
(except its countersignature thereof); nor shall it be responsible for any
breach by the Partnership of any covenant or condition contained in this
Agreement or in any Rights Certificate; nor shall it be responsible for any
change in the exercisability of the Rights or any adjustment in the terms
of the Rights (including the manner, method or amount thereof) provided for
in Sections 3, 11, 13, 23 or 24, or the ascertaining of the existence of
facts that would require any such change or adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after receipt by
the Rights Agent of a certificate furnished pursuant to Section 12
describing such change or adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any Class A Common Units to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any Class A Common
Units will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Partnership agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Financial Officer, the Secretary
or any Assistant Secretary of the General Partner, and to apply to such
officers for advice or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. Any application by the Rights Agent
for written instructions from the Partnership may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent under this Rights Agreement and the date on
and/or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in any
such application on or after the date specified in such application (which
date shall not be less than five (5) Business Days after the date any
officer of the Partnership actually receives such application, unless any
such officer shall have consented in writing to an earlier date) unless,
prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in
response to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any unitholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Partnership or become pecuniarily interested in any
transaction in which the Partnership may be interested, or contract with or
lend money to the Partnership or otherwise act as fully and freely as
though it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the
Partnership or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Partnership
28
resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued employment
thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting
with the Partnership.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days' notice in writing mailed to the
Partnership and to each transfer agent of the Units by registered or
certified mail, and to the holders of the Rights Certificates by first-
class mail. The Partnership may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Units by registered or certified mail, and to the holders of
the Rights Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the
Partnership shall appoint a successor to the Rights Agent. If the
Partnership shall fail to make such appointment within a period of thirty
(30) days after giving notice of such removal or after it has been notified
in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who
shall, with such notice, submit his or her Rights Certificate for
inspection by the Partnership), then the registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Partnership or by such a court, shall be a corporation
organized and doing business under the laws of the United States or of any
state of the United States, in good standing, which is authorized under
such laws to exercise corporate trust or unitholder services powers and is
subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital
and surplus of at least $50 million. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any
such appointment, the Partnership shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the Units, and mail
a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
29
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary,
the Partnership may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its General Partner to
reflect any adjustment or change in the Purchase Price and the number or
kind or class of Units or other securities or property purchasable under
the Rights Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of Units
following the Distribution Date and prior to the earlier of the Redemption
Date and the Final Expiration Date, the Partnership (a) shall, with respect
to Units so issued or sold pursuant to the exercise, conversion or exchange
of securities hereinafter issued by the Partnership and (b) may, in any
other case, if deemed necessary or appropriate by the General Partner,
issue Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no such
Rights Certificate shall be issued and this sentence shall be null and void
ab initio if, and to the extent that, such issuance or this sentence would
create a significant risk of or result in material adverse tax consequences
to the Partnership or the Person to whom such Rights Certificate would be
issued and (ii) no such Rights Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.
SECTION 23. REDEMPTION.
(a) The Partnership may, at its option and with the approval of
the General Partner, at any time prior to the Close of Business on the
earlier of (i) the tenth calendar day following the Unit Acquisition Date
or such later date as may be determined by action of the General Partner
and publicly announced by the Partnership but not later than the
Distribution Date or (ii) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of $0.01
per Right, appropriately adjusted to reflect any unit split, unit
distribution or similar transaction occurring after the date hereof (such
redemption price being herein referred to as the "Redemption Price") and
the Partnership may, at its option, pay the Redemption Price either in
Common Units (based on the current per unit market price thereof (as
determined pursuant to Section 11(d) hereof) at the time of redemption) or
cash. Such redemption of the Rights by the Partnership may be made
effective at such time, on such basis and with such conditions as the
General Partner in its sole discretion may establish.
(b) Immediately upon the action of the General Partner ordering
the redemption of the Rights pursuant to paragraph (a) of this Section 23,
evidence of which shall have been filed with the Rights Agent, and without
any further action and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders of Rights shall
be to receive the Redemption Price. The Partnership shall promptly give
public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not effect the validity of
such redemption. Within ten (10) days after the action of the General
Partner ordering the redemption of the Rights, the Partnership shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent
for the Units. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Partnership nor any of its
30
Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24 hereof, and other than in connection with
the purchase of Units prior to the Distribution Date.
SECTION 24. EXCHANGE.
(a) Subject to applicable laws, rules and regulations, and
subject to subsection (c) below, the General Partner may, at its option, at
any time after the Distribution Date but prior to the occurrence of a
Triggering Event, authorize the exchange of all or part of the then
outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for
Class A Common Units at an exchange ratio of one Class A Common Unit per
Right, appropriately adjusted to reflect any unit split, unit distribution
or similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Ratio of Exchange"). The exchange
shall become effective on the date (the "Exchange Date") of a Triggering
Event. [Notwithstanding the foregoing, the General Partner shall not be
empowered to effect such exchange at any time after any Person (other than
the Partnership, any Subsidiary of the Partnership, any employee benefit
plan of the Partnership or any such Subsidiary, or any entity holding Units
for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of
50% or more of the Units then outstanding].
(b) Immediately upon the action of the General Partner
ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of Class A Common
Units equal to the number of such Rights held by such holder multiplied by
the Ratio of Exchange. The Partnership shall give public notice of any such
exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Partnership
shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of exchange will state the method by which the exchange of the
Class A Common Units for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Class A
Common Units issued but not outstanding or authorized but unissued on the
Exchange Date to permit any exchange of Rights as contemplated in
accordance with Section 24(a), the Partnership shall either take such
action as may be necessary to authorize additional Class A Common Units for
issuance upon exchange of the Rights or alternatively, at the option of the
General Partner, with respect to each Right (i) pay cash in an amount equal
to the Current Value (as hereinafter defined), in lieu of issuing Class A
Common Units in exchange therefor, or (ii) issue debt or equity securities
or a combination thereof, having a value equal to the Current Value, in
lieu of issuing Class A Common Units in exchange for each such Right, where
the value of such securities shall be determined by a nationally recognized
investment banking firm selected by the
31
General Partner, or (iii) deliver any combination of cash, property, Class
A Common Units and/or other securities having a value equal to the Current
Value in exchange for each Right. For purposes of this Section 24(c) only,
the Current Value shall mean the product of the current per Unit market
price of Common Units (determined pursuant to Section 11(d) on the date of
the occurrence of the event described above in subparagraph (a)) multiplied
by the number of Class A Common Units for which the Right otherwise would
be exchangeable if there were sufficient units available. To the extent
that the Partnership determines that some action need be taken pursuant to
clauses (i), (ii) or (iii) of this Section 24(c), the General Partner may
temporarily suspend the exercisability of the Rights for a period of up to
sixty (60) days following the date on which the event described in Section
24(a) shall have occurred, in order to seek any authorization of additional
Class A Common Units and/or to decide the appropriate form of distribution
to be made pursuant to the above provision and to determine the value
thereof. In the event of any such suspension, the Partnership shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended.
(d) The Partnership shall not be required to issue fractions of
Class A Common Units or to distribute certificates which evidence
fractional Class A Common Units. In lieu of such fractional Class A Common
Units, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Class A Common Units
would otherwise be issuable, an amount in cash equal to the same fraction
of the current per unit market value of a whole Common Unit (as determined
pursuant to the second sentence of Section 11(d) hereof).
(e) The General Partner may, at its option, at any time before
any Person has become an Acquiring Person, exchange all or part of the then
outstanding Rights for rights of substantially equivalent value, as
determined reasonably and with good faith by the General Partner, based
upon the advice of one or more nationally recognized investment banking
firms.
(f) Immediately upon the action of the General Partner ordering
the exchange of any Rights pursuant to subsection (e) of this Section 24
and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of rights in exchange
therefor as has been determined by the General Partner in accordance with
subsection (e) above. The Partnership shall give public notice of any such
exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Partnership
shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of
the transfer agent for the Units of the Partnership. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Rights will be effected.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Partnership shall propose to effect or permit
to occur any of the transactions referred to in Section 11(a)(i) or a
Section 13 Event, the Partnership shall give notice thereof to each holder
of Rights in accordance with Section 26 hereof at least twenty (20) days
prior to occurrence of such Triggering Event or such Section 13 Event.
32
(b) In case any Triggering Event or Section 13 Event shall
occur, then, in any such case, the Partnership shall as soon as practicable
thereafter give to each holder of a Rights Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights
under Sections 11(a)(ii) and 13 hereof.
SECTION 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Partnership shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
STAR GAS PARTNERS, L.P.
2187 Atlantic Street
Stamford, CT 06902
Attn: Richard F. Ambury, Vice President - Finance
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Partnership
or by the holder of any Rights Certificate to or on the Rights Agent shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Partnership)
as follows:
AMERICAN STOCK TRANSFER & TRUST COMPANY
59 Maiden Lane
New York, New York 10038
Attn: Reorganization Department
Notices or demands authorized by this Agreement to be given or
made by the Partnership or the Rights Agent to the holder of any Rights
Certificate shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Partnership.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date, the Partnership may supplement or amend this Agreement in any respect
without the approval of any holders of Rights and the Rights Agent shall,
if the Partnership so directs, execute such supplement or amendment. From
and after the Distribution Date, the Partnership and the Rights Agent may
from time to time supplement or amend this Agreement without the approval
of any holders of Rights in order to (i) cure any ambiguity, (ii) correct
or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) shorten or lengthen
any time period hereunder (which lengthening or shortening, shall be
effective only if it is effected prior to the occurrence of a Triggering
Event or (iv) to change or supplement the provisions hereunder in any
manner that the Partnership may deem necessary or desirable and that shall
not adversely affect the interests of the holders of Rights (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period relating to
when the Rights may be redeemed at such time as the Rights are not then
redeemable or (B) any other time period unless such lengthening is for the
33
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a certificate from
an appropriate officer of the Partnership that states that the proposed
supplement or amendment is in compliance with the terms of this Section 27,
the Rights Agent shall execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Units.
SECTION 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Partnership or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE GENERAL PARTNER,
ETC. For all purposes of this Agreement, any calculation of the number of
Units outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Units of which
any Person is the Beneficial Owner, shall be made in accordance with the
last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The General shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and
powers specifically granted to the General Partner, or the Partnership or
as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including
a determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the General
Partner in good faith, shall (x) be final, conclusive and binding on the
Partnership, the Rights Agent, the holders of the Rights Certificates and
all other parties and (y) not subject General Partner to any liability to
the holders of the Rights.
SECTION 30. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the
Partnership, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the Units) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Partnership, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to
the Distribution Date, the Units).
SECTION 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the General Partner determines in its good faith judgment
that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth day following the date of such
determination by the General Partner.
34
SECTION 32. GOVERNING LAW. This Agreement and each Right and
each Rights Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such
State.
SECTION 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 35. AMENDMENT TO PARTNERSHIP AGREEMENT. Upon the
Distribution Date, the Partnership Agreement shall be amended automatically
as follows:
a. To incorporate by this reference into the Partnership
Agreement all of the terms and provisions of the Rights Agreement.
b. To amend Article V to add the following new Section
5.9:
"Section 5.9 Special Provisions Relating to Adjustment of Minimum
Quarterly Distribution and Target Level Distributions
in Connection with Rights.
(a) Upon the date of a Triggering Event (the "Trigger
Date"), the Minimum Quarterly Distribution, First
Target Distribution, Second Target Distribution and
Third Target Distribution (collectively, the
"Distribution Levels") shall each automatically be
adjusted so that the Distribution Levels thereafter
shall equal the result obtained by multiplying the
Distribution Levels in effect immediately prior to the
date of a Triggering Event by the Distribution Ratio
(defined below).
(b) The distribution ratio (the "Distribution Ratio") shall
equal a fraction the numerator of which shall be the
number of Units outstanding on the Trigger Date, plus
the number of Class A Common Units or other Partnership
Securities, as the case may be, that the aggregate
exercise price of the Rights would purchase at the
current per unit market price for the Common Units on
the Trigger Date and the denominator of which shall be
the number of Units outstanding on the Trigger Date,
plus the number of Class A Common Units or other
Partnership Securities, as the case may be, that would
be issuable upon the exercise in full of the Rights;
provided, however, that if the General
35
Partner shall have exercised the option pursuant to
Section 24 of the Rights Agreement to exchange all or a
part of the then outstanding and exercisable Rights for
Class A Common Units or other Partnership Securities,
as the case may be, then the Distribution Ratio shall
be adjusted accordingly to reflect the number of Class
A Common Units or other Partnership Securities, as the
case may be, that would be issuable in connection
within such exchange."
c. To amend Section 15.3 of the Partnership Agreement to
add the following new paragraph (f):
"(f) Notwithstanding anything to the contrary contained
herein, following the Distribution Date the Partnership
shall not supplement or amend the terms of the
Partnership Agreement in any manner that may materially
adversely affect the interests of the holders of Rights
(other than an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person)."
[Remainder of This Page Intentionally Left Blank]
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
STAR GAS PARTNERS, L.P.
By: Star Gas, LLC
(General Partner)
By:______________________________
Name:
Title:
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By:______________________________
Name:
Title:
37
EXHIBIT A
FORM OF RIGHTS CERTIFICATE
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER April 16, 2011 OR EARLIER IF TERMINATED BY THE
PARTNERSHIP OR IF THE PARTNERSHIP EXCHANGES THE RIGHTS PURSUANT TO THE
RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE PARTNERSHIP, AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY,
THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL
AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(E) OF SUCH RIGHTS
AGREEMENT.]
______________________________
* The portion of the legend in bracket shall be inserted only if applicable and
shall replace the preceding sentence.
A-1
RIGHTS CERTIFICATE
STAR GAS PARTNERS, L.P.
This certifies that ______________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of April 17, 2001 (the "Rights Agreement"),
between Star Gas Partner, L.P., a Delaware corporation (the "Partnership"), and
American Stock Transfer & Trust Company, as rights agent (the "Rights Agent"),
to purchase from the Partnership at any time after the Distribution Date (as
such term is defined in the Rights Agreement) and prior to 5:00 P.M., New York
time, on April 16, 2011 at the office of the Rights Agent designated for such
purpose, or at ____________________________, the office of its successor as
Rights Agent, one fully paid non-assessable Class A common unit of limited
partner interest (the "Class A Common Units"), of the Partnership, at a purchase
price of $80.00 per unit (the "Purchase Price"), upon presentation and surrender
of this Rights Certificate with the Form of Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of Class A Common Units which may be purchased upon
exercise hereof) set forth above are the number and Purchase Price as of
__________, 2001, based on the Class A Common Units as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number and kind
of Class A Common Units or other securities which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Partnership and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal executive offices of
the Partnership and the above-mentioned office of the Rights Agent.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Rights Certificate (i) may be redeemed by the Partnership, at
its option, at a redemption price of $0.01 per Right or (ii) may be exchanged by
the Partnership in whole or in part for Class A Common Units, substantially
equivalent rights or other consideration as determined by the Partnership.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate amount of securities as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such holder to purchase.
If this Rights Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
A-2
No fractional portion of less than one Class A Common Unit will be
issued upon the exercise of any Right or Rights evidenced hereby but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement. No
holder of this Rights Certificate, as such, shall be entitled to vote or receive
distributions or be deemed for any purpose the holder of the Common Units or of
any other securities of the Partnership which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
unitholder of the Partnership or any right to vote upon any matter submitted to
Unitholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
Unitholders (except as provided in the Rights Agreement), or to receive
distributions or subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Partnership. Dated as of ___________ __, 2001.
ATTEST: STAR GAS PARTNERS, L.P.
By: Star Gas, LLC
(General Partner)
By:
Name:
Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
____________________
as Rights Agent
By:__________________________
Authorized Signature
A-3
FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Rights Certificate)
FOR VALUE RECEIVED __________________ hereby sells, assigns and
transfers unto
(Please print name and address of transferee)
_________________________________________________________________________ this
Rights Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint __________________________
Attorney, to transfer the within Rights Certificate on the books of the within-
named Partnership, with full power of substitution.
Dated: _______________, 20__
___________________________________
Signature
IMPORTANT: The signature(s) of the assignor(s)
must be guaranteed by an eligible guarantor
institution (bank, stock broker, savings and loan
association or credit union) with membership in an
approved signature guarantee medallion program
pursuant to Securities and Exchange Commission
Rule 17Ad-15.
____________________________________________
____________________________________________
(person(s) executing this power sign(s) here)
____________________________________________
Signature Medallion Guaranteed
A-4
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(i) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person,
or an Affiliate or Associate of any such Person (as such terms are defined in
the Rights Agreement);
(ii) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of any such Person.
Dated: _______________, 20__
____________________________________
Signature
IMPORTANT: The signature(s) of the assignor(s)
must be guaranteed by an eligible guarantor
institution (bank, stock broker, savings and loan
association or credit union) with membership in an
approved signature guarantee medallion program
pursuant to Securities and Exchange Commission
Rule 17Ad-15.
___________________________________________
___________________________________________
(person(s) executing this power sign(s) here)
___________________________________________
Signature Medallion Guaranteed
A-5
FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Rights Certificate)
To: __________________________________
The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Rights Certificate to purchase the number of Class A
Common Units issuable upon the exercise of such Rights and requests that
certificates for such number of Class A Common Units issued in the name of:
Please insert social security or other identifying number:
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security or other identifying number:
(Please print name and address)
________________________________________________________________________________
Dated: ___________________, 20__
_________________________________
Signature
IMPORTANT: The signature(s) of the holder(s) must be guaranteed by an eligible
guarantor institution (bank, stock broker, savings and loan association or
credit union) with membership in an approved signature guarantee medallion
program pursuant to Securities and Exchange Commission Rule 17Ad-15.
____________________________________________
____________________________________________
(person(s) executing this power sign(s) here)
____________________________________________
Signature Medallion Guaranteed
A-6
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ]did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of any such Person.
Dated: __________ 20__
________________________________
Signature
IMPORTANT: The signature(s) of the holder(s) must
be guaranteed by an eligible guarantor institution
(bank, stock broker, savings and loan association
or credit union) with membership in an approved
signature guarantee medallion program pursuant to
Securities and Exchange Commission Rule 17Ad-15.
____________________________________________
____________________________________________
(person(s) executing this power sign(s) here)
____________________________________________
Signature Medallion Guaranteed
A-7
FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
A-8
EXHIBIT B
STAR GAS PARTNERS, L.P.
UNITHOLDER RIGHTS PLAN
Summary of Rights
Distribution Transfer of Rights:
The General Partner has declared a Rights Certificate distribution of
one Right for each limited partner unit and general partner unit of Star Gas
Partners, L.P. outstanding. Prior to the Distribution Date referred to below,
the Rights will be evidenced by, and trade with, the certificates for the Units.
After the Distribution Date, Star Gas Partners, L.P. (the "Partnership") will
mail Rights certificates to the Partnership's unitholders and the Rights will
become transferable apart from the Units.
Distribution Date:
Rights will separate from the Units and become exercisable (following
the end of the Subordination Period) on the tenth day (or such later date as may
be determined by the General Partner) after a person or group (a) acquires
beneficial ownership of 15% or more of either the Common Units or the
Subordinated Units or (b) announces a tender or exchange offer, the consummation
of which would result in ownership by a person or group of 15% or more of the
Common Units or the Subordinated Units.
Common Units Purchasable Upon Exercise of Rights:
After the Distribution Date, each Right will entitle the holder to
purchase, for $80.00, a Class A Common Unit following the end of the
Subordination Period.
Flip-In:
If a person or group (an "Acquiring Person") obtains 15% or more of
either the Common Units or the Subordinated Units (other than pursuant to a
tender offer deemed adequate and in the best interests of the Partnership and
its Unitholders by the General Partner (a "Permitted Offer")), and the
Subordination Period ends then each Right (other than Rights owned by an
Acquiring Person or its affiliates) will entitle the holder thereof to purchase,
for the exercise price, a number of Class A Common Units having a then current
market value of twice the exercise price.
B-1
Flip-Over:
If, after the Distribution Date, (a) the Partnership merges into
another entity, (b) an acquiring entity merges into the Partnership or (c) the
Partnership sells more than 50% of the Partnership's assets or earning power,
then each Right (other than Rights owned by an Acquiring Person or its
affiliates) will entitle the holder thereof to purchase, for the exercise price,
a number of common units or equivalent securities of the person engaging in the
transaction having a then current market value of twice the exercise price
(unless the transaction satisfies certain conditions and is consummated with a
person who acquired units pursuant to a Permitted Offer, in which case the
Rights will expire).
Exchange Provision:
At any time after an event triggering the flip-in or flip-over rights
and prior to the acquisition by the Acquiring Person of 50% or more of the
outstanding Units , the General Partner may exchange the Rights (other than
Rights owned by the Acquiring Person or its affiliates), in whole or in part, at
an exchange ratio of one Class A Common Unit per Right (subject to adjustment).
Redemption of the Rights:
Rights will be redeemable at the Partnership's option for $0.01 per
Right at any time on or prior to the Distribution Date.
Expiration of the Rights:
The Rights expire on the earliest of (a) April 16, 2011, (b) exchange
or redemption of the Rights as described above, or (c) consummation of a merger
or consolidation resulting in expiration of the Rights as described above.
Amendment of Terms of Rights:
The terms of the Rights and the Rights Agreement may be amended in any
respect without the consent of the Rights holders on or prior to the
Distribution Date; thereafter, the terms of the Rights and the Rights Agreement
may be amended without the consent of the Rights holders in order to cure any
ambiguities or to make changes which do not adversely affect the interests of
Rights holders (other than the Acquiring Person).
Voting Rights:
Rights will not have any voting rights.
Anti-Dilution Provisions:
Rights will have the benefit of certain customary anti-dilution
provisions.
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Taxes:
The Rights distribution should not be taxable for federal income tax
purposes. However, following an event which renders the Rights exercisable or
upon redemption of the Rights, Unitholders may recognize taxable income.
The foregoing is a summary of certain principal terms of the
Unitholder Rights Plan only and is qualified in its entirety by reference to the
detailed terms of the Rights Agreement dated as of April 17, 2001, between the
Partnership and the Rights Agent.
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EXHIBIT C
FEE SCHEDULE
$2,500.00 Flat Fee per annum for services, plus reasonable out of pocket
expenses, in connection with the Unit Purchase Rights Agreement dated April 17,
2001 by and between Star Gas Partners, L.P., a Delaware limited partnership, and
American Stock Transfer & Trust Company, as Rights Agent.
Billable to Star Gas Partners, L.P.
C-1