FOURTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
GENESIS ENERGY, L.P.
TABLE OF CONTENTS
ARTICLE I DEFINITIONS........................................................5
1.1 DEFINITIONS......................................................5
1.2 CONSTRUCTION....................................................17
ARTICLE II ORGANIZATION.....................................................18
2.1 CONTINUATION OF EXISTENCE.......................................18
2.2 NAME............................................................18
2.3 REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE;
OTHER OFFICES... ..............................18
2.4 PURPOSE AND BUSINESS............................................18
2.5 POWERS..........................................................19
2.6 POWER OF ATTORNEY...............................................19
2.7 TERM............................................................20
2.8 TITLE TO PARTNERSHIP ASSETS.....................................20
ARTICLE III RIGHTS OF LIMITED PARTNERS......................................20
3.1 LIMITATION OF LIABILITY.........................................20
3.2 MANAGEMENT OF BUSINESS..........................................20
3.3 OUTSIDE ACTIVITIES OF THE LIMITED PARTNERS......................21
3.4 RIGHTS OF LIMITED PARTNERS......................................21
ARTICLE IV CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;
REDEMPTION OF PARTNERSHIP INTERESTS ..21
4.1 CERTIFICATES....................................................21
4.2 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES..... .........22
4.3 RECORD HOLDERS..................................................22
4.4 TRANSFER GENERALLY..............................................23
4.5 REGISTRATION AND TRANSFER OF LIMITED PARTNER INTERESTS..........23
4.6 TRANSFER OF A GENERAL PARTNER'S GENERAL PARTNER INTEREST........24
4.7 RESTRICTIONS ON TRANSFERS.......................................24
4.8 CITIZENSHIP CERTIFICATES; NON-CITIZEN ASSIGNEES.......... ......24
4.9 REDEMPTION OF PARTNERSHIP INTERESTS OF NON-CITIZEN ASSIGNEES....25
ARTICLE V CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS.......26
5.1 PREVIOUS CAPITAL CONTRIBUTIONS..................................26
5.2 ADDITIONAL CONTRIBUTIONS BY GENERAL PARTNER......... ...........26
5.3 INTEREST AND WITHDRAWAL.........................................26
5.4 CAPITAL ACCOUNTS................................................26
5.5 ISSUANCES OF ADDITIONAL PARTNERSHIP SECURITIES..................28
5.6 LIMITED PREEMPTIVE RIGHT........................................29
5.7 SPLITS AND COMBINATIONS.........................................29
5.8 FULLY PAID AND NON-ASSESSABLE NATURE OF LIMITED PARTNER
INTERESTS... .................................30
ARTICLE VI ALLOCATIONS AND DISTRIBUTIONS....................................30
6.1 ALLOCATIONS FOR CAPITAL ACCOUNT PURPOSES........................30
6.2 ALLOCATIONS FOR TAX PURPOSES....................................35
6.3 REQUIREMENT AND CHARACTERIZATION OF DISTRIBUTIONS;
DISTRIBUTIONS TO RECORD HOLDERS... ................36
6.4 DISTRIBUTIONS OF AVAILABLE CASH FROM OPERATING SURPLUS..........37
6.5 DISTRIBUTIONS OF AVAILABLE CASH FROM CAPITAL SURPLUS... ........37
6.6 ADJUSTMENT OF MINIMUM QUARTERLY DISTRIBUTION AND TARGET
DISTRIBUTION LEVELS ..........................38
6.7 SPECIAL PROVISIONS RELATING TO THE HOLDERS OF INCENTIVE
DISTRIBUTION RIGHTS ..........................38
6.8 ENTITY-LEVEL TAXATION...........................................38
ARTICLE VII MANAGEMENT AND OPERATION OF BUSINESS............................38
7.2 MANAGEMENT......................................................38
7.3 CERTIFICATE OF LIMITED PARTNERSHIP..............................40
7.4 RESTRICTIONS ON GENERAL PARTNER'S AUTHORITY.....................40
7.5 REIMBURSEMENT OF THE GENERAL PARTNER............................41
7.6 OUTSIDE ACTIVITIES..............................................42
7.7 LOANS FROM THE GENERAL PARTNER; LOANS OR CONTRIBUTIONS FROM
THE PARTNERSHIP; CONTRACTS WITH AFFILIATES; CERTAIN
RESTRICTIONS ON THE GENERAL PARTNER.............................42
7.8 INDEMNIFICATION.................................................43
7.9 LIABILITY OF INDEMNITEES........................................45
7.10 RESOLUTION OF CONFLICTS OF INTEREST.............................45
7.11 OTHER MATTERS CONCERNING THE GENERAL PARTNER....................46
7.12 PURCHASE OR SALE OF PARTNERSHIP SECURITIES......................47
7.13 REGISTRATION RIGHTS OF THE GENERAL PARTNER AND ITS AFFILIATES...47
7.14 RELIANCE BY THIRD PARTIES.......................................48
ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS.........................49
8.2 RECORDS AND ACCOUNTING..........................................49
8.3 FISCAL YEAR.....................................................49
8.4 REPORTS.........................................................49
ARTICLE IX TAX MATTERS......................................................49
9.2 TAX RETURNS AND INFORMATION...... ..............................49
9.3 TAX ELECTIONS...................................................50
9.4 TAX CONTROVERSIES...............................................50
9.5 WITHHOLDING.....................................................50
ARTICLE X ADMISSION OF PARTNERS.............................................50
10.1 ADMISSION OF SUBSTITUTED LIMITED PARTNER........................50
10.2 ADMISSION OF SUCCESSOR GENERAL PARTNER..........................51
10.3 ADMISSION OF ADDITIONAL LIMITED PARTNERS........................51
10.4 AMENDMENT OF AGREEMENT AND CERTIFICATE OF LIMITED PARTNERSHIP...51
ARTICLE XI WITHDRAWAL OR REMOVAL OF PARTNERS................................51
11.1 WITHDRAWAL OF THE GENERAL PARTNER...............................51
11.2 REMOVAL OF THE GENERAL PARTNER..................................53
11.3 INTEREST OF DEPARTING PARTNER AND SUCCESSOR GENERAL PARTNER.....53
11.4 WITHDRAWAL OF LIMITED PARTNERS..................................54
ARTICLE XII DISSOLUTION AND LIQUIDATION.....................................54
12.1 DISSOLUTION.....................................................54
12.2 CONTINUATION OF THE BUSINESS OF THE PARTNERSHIP AFTER
DISSOLUTION ....................................55
12.3 LIQUIDATOR......................................................55
12.4 LIQUIDATION.....................................................56
12.5 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP.. ...........56
12.6 RETURN OF CONTRIBUTIONS.........................................56
12.7 WAIVER OF PARTITION.............................................57
12.8 CAPITAL ACCOUNT RESTORATION.....................................57
ARTICLE XIII AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE.....57
13.1 AMENDMENT TO BE ADOPTED SOLELY BY THE GENERAL PARTNER...........57
13.2 AMENDMENT PROCEDURES............................................58
13.3 AMENDMENT REQUIREMENTS..........................................58
13.4 SPECIAL MEETINGS................................................59
13.5 NOTICE OF A MEETING.............................................59
13.6 RECORD DATE.....................................................59
13.7 ADJOURNMENT.....................................................59
13.8 WAIVER OF NOTICE; APPROVAL OF MEETING; APPROVAL OF MINUTES......60
13.9 QUORUM..................................................... ....60
13.10 CONDUCT OF A MEETING............................................60
13.11 ACTION WITHOUT A MEETING.................................... ...61
13.12 VOTING AND OTHER RIGHTS.........................................61
ARTICLE XIV MERGER..........................................................61
14.1 AUTHORITY.......................................................61
14.2 PROCEDURE FOR MERGER OR CONSOLIDATION...........................62
14.3 APPROVAL BY LIMITED PARTNERS OF MERGER OR CONSOLIDATION.........62
14.4 CERTIFICATE OF MERGER...........................................63
14.5 EFFECT OF MERGER................................................63
ARTICLE XV RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS.......................63
15.1 RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS......................63
ARTICLE XVI GENERAL PROVISIONS..............................................65
16.1 ADDRESSES AND NOTICES...........................................65
16.2 FURTHER ACTION..................................................65
16.3 BINDING EFFECT..................................................65
16.4 INTEGRATION................................................. ...65
16.5 CREDITORS.......................................................66
16.6 WAIVER..........................................................66
16.7 COUNTERPARTS....................................................66
16.8 APPLICABLE LAW..................................................66
16.9 INVALIDITY OF PROVISIONS........................................66
16.10 CONSENT OF PARTNERS.............................................66
4
FOURTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
GENESIS ENERGY, L.P.
THIS FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of
Genesis Energy, L.P. dated as of June 9, 2005, is entered into by and among
Genesis Energy, Inc., a Delaware corporation, as the General Partner, together
with any other Persons who are or who become Partners in the Partnership or
parties hereto as provided herein. In consideration of the covenants, conditions
and agreements contained herein, the parties hereto hereby agree as follows:
WHEREAS, the General Partner and certain other parties organized the
Partnership as a Delaware limited partnership pursuant to an Amended and
Restated Agreement of Limited Partnership dated as of December 3, 1996 (the
"First Amended Agreement");
WHEREAS, on December 7, 2000, the partners of the Partnership and
Genesis OLP approved by requisite vote a restructuring (the "Restructuring") of
the Partnership and Genesis OLP pursuant to which (a) all outstanding
Subordinated LP Units and APIs (each as defined in the First Amended OLP
Agreement) were eliminated, (b) the First Amended Agreement and the First
Amended OLP Agreement were amended to, among other things, reduce the Minimum
Quarterly Distribution, the First Target Distribution, the Second Target
Distribution and the Third Target Distribution (each as defined in the First
Amended OLP Agreement) and provide that the Common Units would not accrue
arrearages if the Minimum Quarterly Distribution were not paid in full in any
Quarter, (c) Salomon contributed to Genesis OLP the remaining $3,802,000 of its
distribution support obligation under the Distribution Support Agreement (the
"Remaining Distribution Support"), (d) Genesis OLP made a special distribution
of the Remaining Distribution Support less the cost associated with the
restructuring to the Partnership and the Partnership made a special distribution
of such amount to the holders of Common Units, (e) the Distribution Support
Agreement was terminated, (f) the Partnership withdrew as a general partner of
Genesis OLP and the Partnership's 80.01% general partner interest in Genesis OLP
represented by 8,801,020 Subordinated GP Units were converted into a 99.99%
limited partner interest, (g) the General Partner's 0.40% general partner
interest in Genesis OLP represented by 43,980 Subordinated GP Units were
converted into a 0.01% general partner interest and (h) Salomon's $300 million
credit support obligation under the Master Credit Support Agreement was extended
until December 31, 2001 on the existing terms and conditions;
WHEREAS, on December 7, 2000, the General Partner and certain other
parties amended and restated the First Amended Agreement to enter into the
Second Amended and Restated Agreement of Limited Partnership of Genesis Energy,
L.P. ("Second Amended Agreement'") to reflect the Restructuring and certain
other changes that, in the discretion of the General Partner, did not adversely
affect the Limited Partners in any material respect;
WHEREAS, on May 14, 2002, Genesis Energy, L.L.C., the sole general
partner, was converted from a Delaware limited liability company to a Delaware
corporation pursuant to Delaware law and such corporation is incorporated in the
state of Delaware as Genesis Energy, Inc.;
WHEREAS, on July 3, 2002, the General Partner proposed to the Audit
Committee of the Board of Directors of the General Partner that it desired to
amend Section 11.2 in order to broaden the rights of limited partners to remove
the General Partner;
WHEREAS, on July 31, 2002, the Audit Committee, after obtaining the
advice of counsel and an investment banking firm, unanimously provided Special
Approval of proposed amendments to Section 11.2;
WHEREAS, on July 31, 2002, the General Partner amended and restated the
Second Amended Agreement (the "Third Amended Agreement") to amend Section 11.2
in order to broaden the rights of limited partners to remove the General
Partner, to reflect the change in the General Partner's name, the conversion of
the General Partner to a Delaware corporation and certain other changes that, in
the discretion of the General Partner did not adversely affect the Limited
Partners in any material respect; and
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WHEREAS, the General Partner hereby amends and restates the Third
Amended Agreement as provided herein to reflect the consummation of the
transactions contemplated by the Conversion and Contribution Agreement,
including (a) the creation of Incentive Distribution Rights in the Partnership
in lieu of any incentive distribution rights in Genesis OLP that resulted from
the conversion pursuant to Section 7.13 of the Third Amended OLP Agreement, of
the incentive Compensation Payments set out in Section 7.12 of the Third Amended
OLP Agreement into incentive distribution rights in Genesis OLP and (b) certain
other conforming changes related to the foregoing, each of which constitute
changes that, in the discretion of the General Partner, do not adversely affect
the Limited Partners in any material respect.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby amend and restate the Third Amended
Agreement in its entirety:
ARTICLE I
DEFINITIONS
1.1 Definitions.
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"Acquisition" means any transaction in which any Group Member acquires
(through an asset acquisition, merger, stock acquisition or other form of
investment) control over all or a portion of the assets, properties or business
of another Person for the purpose of increasing the operating capacity or
revenues of the Partnership Group from the operating capacity or revenues of the
Partnership Group existing immediately prior to such transaction.
"Additional Book Basis" means the portion of any remaining Carrying
Value of an Adjusted Property that is attributable to positive adjustments made
to such Carrying Value as a result of Book-Up Events. For purposes of
determining the extent that Carrying Value constitutes Additional Book Basis:
(i) Any negative adjustment made to the Carrying Value of an
Adjusted Property as a result of either a Book-Down Event or a Book-Up
Event shall first be deemed to offset or decrease that portion of the
Carrying Value of such Adjusted Property that is attributable to any
prior positive adjustments made thereto pursuant to a Book-Up Event or
Book-Down Event.
(ii) If Carrying Value that constitutes Additional Book Basis
is reduced as a result of a Book-Down Event and the Carrying Value of
other property is increased as a result of such Book-Down Event, an
allocable portion of any such increase in Carrying Value shall be
treated as Additional Book Basis; provided that the amount treated as
Additional Book Basis pursuant hereto as a result of such Book-Down
Event shall not exceed the amount by which the Aggregate Remaining Net
Positive Adjustments after such Book-Down Event exceeds the remaining
Additional Book Basis attributable to all of the Partnership's Adjusted
Property after such Book-Down Event (determined without regard to the
application of this clause (ii) to such Book-Down Event).
"Additional Book Basis Derivative Items" means any Book Basis
Derivative Items that are computed with reference to Additional Book Basis. To
the extent that the Additional Book Basis attributable to all of the
Partnership's Adjusted Property as of the beginning of any taxable period
exceeds the Aggregate Remaining Net Positive Adjustments as of the beginning of
such period (the "Excess Additional Book Basis"), the Additional Book Basis
Derivative Items for such period shall be reduced by the amount that bears the
same ratio to the amount of Additional Book Basis Derivative Items determined
without regard to this sentence as the Excess Additional Book Basis bears to the
Additional Book Basis as of the beginning of such period.
"Additional Limited Partner" means a Person admitted to the Partnership
as a Limited Partner pursuant to Section 10.4 and who is shown as such on the
books and records of the Partnership.
6
"Adjusted Capital Account" means the Capital Account maintained for
each Partner as of the end of each fiscal year of the Partnership, (a) increased
by any amounts that such Partner is obligated to restore under the standards set
by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to
restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b)
decreased by (i) the amount of all losses and deductions that, as of the end of
such fiscal year, are reasonably expected to be allocated to such Partner in
subsequent years under Sections 704(e)(2) and 706(d) of the Code and Treasury
Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions
that, as of the end of such fiscal year, are reasonably expected to be made to
such Partner in subsequent years in accordance with the terms of this Agreement
or otherwise to the extent they exceed offsetting increases to such Partner's
Capital Account that are reasonably expected to occur during (or prior to) the
year in which such distributions are reasonably expected to be made (other than
increases as a result of a minimum gain chargeback pursuant to Section 6.1(d)(i)
or 6.1(d)(ii)). The foregoing definition of Adjusted Capital Account is intended
to comply with the provisions of Treasury Regulation Section 1.704-
1(b)(2)(ii)(d) and shall be interpreted consistently therewith. The "Adjusted
Capital Account" of a Partner in respect of a General Partner Interest, a Common
Unit, or an Incentive Distribution Right or any other Partnership Interest shall
be the amount that such Adjusted Capital Account would be if such General
Partner Interest, Common Unit, Incentive Distribution Right or other Partnership
Interest were the only interest in the Partnership held by such Partner from and
after the date on which such General Partner Interest, Common Unit, Incentive
Distribution Right or other Partnership Interest was first issued.
"Adjusted Property" means any property the Carrying Value of which has
been adjusted pursuant to Section 5.4(d)(i) or 5.4(d)(ii).
"Affiliate" means, with respect to any Person, any other Person that
(i) directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question or (ii)
owns, beneficially, directly or indirectly, 20% or more of the outstanding
capital stock, shares or other equity interests of the Person in question. As
used herein, the term "control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.
"Agreed Allocation" means any allocation, other than a Required
Allocation, of an item of income, gain, loss or deduction pursuant to the
provisions of Section 6.1, including a Curative Allocation (if appropriate to
the context in which the term "Agreed Allocation" is used).
"Agreed Value" of any Contributed Property means the fair market value
of such property or other consideration at the time of contribution as
determined by the General Partner using such reasonable method of valuation as
it may adopt. The General Partner shall, in its discretion, use such method as
it deems reasonable and appropriate to allocate the aggregate Agreed Value of
Contributed Properties contributed to the Partnership in a single or integrated
transaction among each separate property on a basis proportional to the fair
market value of each Contributed Property.
"Agreement" means this Fourth Amended and Restated Agreement of Limited
Partnership of Genesis Energy, L.P., as it may be amended, supplemented or
restated from time to time.
"API" has the meaning assigned to such term in the Fourth Amended OLP
Agreement.
"Assignee" means a Non-citizen Assignee or a Person to whom one or more
Limited Partner Interests have been transferred in a manner permitted under this
Agreement and who has executed and delivered a Transfer Application as required
by this Agreement, but who has not been admitted as a Substituted Limited
Partner.
"Associate" means, when used to indicate a relationship with any
Person, (a) any corporation or organization of which such Person is a director,
officer or partner or is, directly or indirectly, the owner of 20% or more of
any class of voting stock or other voting interest; (b) any trust or other
estate in which such Person has at least a 20% beneficial interest or as to
which such Person serves as trustee or in a similar fiduciary capacity; and (c)
any relative or spouse of such Person, or any relative of such spouse, who has
the same principal residence as such Person.
7
"Audit Committee" means a committee of the Board of Directors of the
General Partner composed entirely of two or more directors who are neither
officers nor employees of the General Partner or officers, directors or
employees of any Affiliate of the General Partner.
"Available Cash" means, with respect to any Quarter ending prior to the
Liquidation Date,
(a) the sum of (i) all cash and cash equivalents of the
Partnership on hand at the end of such Quarter and (ii) all additional cash and
cash equivalents of the Partnership on hand on the date of determination of
Available Cash with respect to such Quarter resulting from borrowings for
working capital purposes, less
(b) the amount of any cash reserves that is necessary or
appropriate in the reasonable discretion of the General Partner to (i) provide
for the proper conduct of the business of the Partnership Group (including
reserves for future capital expenditures and for anticipated future credit needs
of the business of the Partnership Group) subsequent to such Quarter, (ii)
comply with applicable law or any loan agreement (including the Master Credit
Support Agreement), security agreement (including the Security Agreement),
mortgage, debt instrument or other agreement or obligation to which any Group
Member is a party or by which it is bound or its assets are subject; or (iii)
provide funds for distributions under Section 6.4 or 6.5 in respect of any one
or more of the next four Quarters; provided, however, that disbursements made by
any Group Member or cash reserves established, increased or reduced after the
end of such Quarter but on or before the date of determination of Available Cash
with respect to such Quarter shall be deemed to have been made, established,
increased or reduced, for purposes of determining Available Cash, within such
Quarter if the General Partner so determines.
Notwithstanding the foregoing, "Available Cash" with respect to the
Quarter in which the Liquidation Date occurs and any subsequent Quarter shall
equal zero.
"Book Basis Derivative Items" means any item of income, deduction, gain
or loss included in the determination of Net Income or Net Loss that is computed
with reference to the Carrying Value of an Adjusted Property (e.g.,
depreciation, depletion, or gain or loss with respect to an Adjusted Property).
"Book-Down Event" means an event that triggers a negative adjustment to
the Capital Accounts of the Partners pursuant to Section 5.4(d).
"Book-Tax Disparity" means, with respect to any item of Contributed
Property or Adjusted Property, as of the date of any determination, the
difference between the Carrying Value of such Contributed Property or Adjusted
Property and the adjusted basis thereof for federal income tax purposes as of
such date. A Partner's share of the Partnership's Book-Tax Disparities in all of
its Contributed Property and Adjusted Property will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Section 5.4 and the hypothetical balance of such Partner's Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.
"Book-Up Event" means an event that triggers a positive adjustment to
the Capital Accounts of the Partners pursuant to Section 5.4(d).
"Business Day" means Monday through Friday of each week, except that a
legal holiday recognized as such by the government of the United States of
America or the states of New York or Texas shall not be regarded as a Business
Day.
"Capital Account" means the capital account maintained for a Partner
pursuant to Section 5.4. The "Capital Account" of a Partner in respect of a
General Partner Interest, a Common Unit, an Incentive Distribution Right or any
Partnership Interest shall be the amount that such Capital Account would be if
such General Partner Interest, Common Unit, Incentive Distribution Right or
other Partnership Interest were the only interest in the Partnership held by
such Partner from and after the date on which such General Partner Interest,
Common Unit, Incentive Distribution Right or other Partnership Interest was
first issued.
8
"Capital Contribution" means any cash, cash equivalents or the Net
Agreed Value of Contributed Property that a Partner contributes to the
Partnership.
"Capital Improvement" means any (a) addition or improvement to the
capital assets owned by any Group Member or (b) acquisition of existing or the
construction of new capital assets (including pipeline systems, storage
facilities and related assets), made to increase the operating capacity or
revenues of the Partnership Group from the operating capacity or revenues of the
Partnership Group existing immediately prior to such addition, improvement,
acquisition or construction.
"Capital Surplus" has the meaning assigned to such term in Section
6.3(a).
"Carrying Value" means (a) with respect to a Contributed Property, the
Agreed Value of such property reduced (but not below zero) by all depreciation,
amortization and cost recovery deductions charged to the Partners' and
Assignees' Capital Accounts in respect of such Contributed Property, and (b)
with respect to any other Partnership property, the adjusted basis of such
property for federal income tax purposes, all as of the time of determination.
The Carrying Value of any property shall be adjusted from time to time in
accordance with Sections 5.4(d)(i) and 5.4(d)(ii) and to reflect changes,
additions or other adjustments to the Carrying Value for dispositions and
acquisitions of Partnership properties, as deemed appropriate by the General
Partner.
"Cause" means a court of competent jurisdiction has entered a final,
non- appealable judgment finding the General Partner liable for actual fraud,
gross negligence or willful or wanton misconduct in its capacity as general
partner of the Partnership.
"Certificate" means a certificate, (i) issued in global form in
accordance with the rules of the Depositary or (ii) in such other form as may be
adopted by the General Partner in its discretion, issued by the Partnership
evidencing ownership of one or more Common Units or a certificate, in such form
as may be adopted by the General Partner in its discretion, issued by the
Partnership evidencing ownership of one or more other Partnership Securities.
"Certificate of Limited Partnership" means the Amended and Restated
Certificate of Limited Partnership of the Partnership filed with the Secretary
of State of the State of Delaware as referenced in Section 7.2, as such
Certificate of Limited Partnership may be amended, supplemented or restated from
time to time.
"Citizenship Certification" means a properly completed certificate in
such form as may be specified by the General Partner by which an Assignee or a
Limited Partner certifies that he (and if he is a nominee holding for the
account of another Person, that to the best of his knowledge such other Person)
is an Eligible Citizen.
"claim" has the meaning assigned to such term in Section 7.12(c).
"Closing Price" has the meaning assigned to such term in Section
15.1(a).
"Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time. Any reference herein to a specific section or sections
of the Code shall be deemed to include a reference to any corresponding
provision of future law.
"Combined Interest" has the meaning assigned to such term in Section
11.3(a).
"Commission" means the United States Securities and Exchange
Commission.
"Common Unit" means a Partnership Security representing a fractional
part of the Partnership Interests of all Limited Partners and Assignees and
having the rights and obligations specified with respect to a Common Unit in
this Agreement.
"Contributed Property" means each property or other asset, in such form
as may be permitted by the Delaware Act, but excluding cash, contributed to the
Partnership. Once the Carrying Value of a Contributed Property is adjusted
9
pursuant to Section 5.4(d), such property shall no longer constitute a
Contributed Property, but shall be deemed an Adjusted Property.
"Conversion and Contribution Agreement" means the Conversion and
Contribution Agreement, dated May 26, 2005, among the Partnership, the General
Partner and Genesis OLP.
"Conveyance Agreement" means that certain Purchase & Sale and
Contribution & Conveyance Agreement, dated as of November 26, 1996, among the
Partnership, Genesis OLP, Genesis Energy, L.L.C., Howell and a Subsidiary of
Salomon, together with the additional conveyance documents and instruments
contemplated or referenced thereunder.
"Curative Allocation" means any allocation of an item of income, gain,
deduction, loss or credit pursuant to the provisions of Section 6.1(d)(x).
"Current Market Price" has the meaning assigned to such term in Section
15.1(a).
"Delaware Act" means the Delaware Revised Uniform Limited Partnership
Act, 6 Del C. Section 17-101, et seq., as amended, supplemented or restated from
time to time, and any successor to such statute.
"Departing Partner" means a former General Partner from and after the
effective date of any withdrawal or removal of such former General Partner
pursuant to Section 11.1 or 11.2.
"Depositary" means, with respect to any Units issued in global form,
The Depository Trust Company and its successors and permitted assigns.
"Distribution Support Agreement" means the Distribution Support
Agreement, dated as of December 3, 1996, between the Genesis OLP and Salomon,
which sets forth the agreement of the Partnership and Salomon relating to the
purchase of APIs.
"Economic Risk of Loss" has the meaning set forth in Treasury
Regulation Section 1.752-2(a).
"Eligible Citizen" means a Person qualified to own interests in real
property in jurisdictions in which any Group Member does business or proposes to
do business from time to time, and whose status as a Limited Partner or Assignee
does not or would not subject such Group Member to a significant risk of
cancellation or forfeiture of any of its properties or any interest therein.
"Event of Withdrawal" has the meaning assigned to such term in Section
11.1(a).
"First Amended Agreement" has the meaning assigned to such term in the
recitals to this Agreement.
"First Amended OLP Agreement" means the Amended and Restated Agreement
of Limited Partnership of Genesis Crude Oil, L.P., dated as of December 3, 1996.
"First Liquidation Target Amount" has the meaning assigned to such term
in Section 6.1(c)(i)(C).
"First Target Distribution" means $0.25 per Unit per Quarter, subject
to adjustment in accordance with Sections 6.6 and 6.8.
"Fourth Amended OLP Agreement" means the Fourth Amended and Restated
Agreement of Limited Partnership of Genesis Crude Oil, L.P., dated as of the
date of this Agreement, as it may be amended, supplemented or restated from time
to time.
"General Partner" means Genesis Energy, Inc. and its successors and
permitted assigns as general partner of the Partnership.
10
"General Partner Interest" means the ownership interest of the General
Partner in the Partnership (in its capacity as a general partner without
reference to any Limited Partner Interest held by it), which may be evidenced by
Partnership Securities or a combination thereof or interest therein, and
includes any and all benefits to which the General Partner is entitled as
provided in this Agreement, together with all obligations of the General Partner
to comply with the terms and provisions of this Agreement.
"Genesis OLP" means Genesis Crude Oil, L.P., a Delaware limited
partnership, and its successors.
"GP Unit" means a Partnership Security representing a fractional part
of the Partnership Interest of the General Partner and having the rights and
obligations specified with respect to GP Units in the Third Amended Agreement.
"Group" means a Person that with or through any of its Affiliates or
Associates has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting (except voting pursuant to a revocable proxy or
consent given to such Person in response to a proxy or consent solicitation made
to 10 or more Persons) or disposing of any Partnership Securities with any other
Person that beneficially owns, or whose Affiliates or Associates beneficially
own, directly or indirectly, Partnership Securities.
"Group Member" means a member of the Partnership Group.
"Holder" as used in Section 7.12, has the meaning assigned to such term
in Section 7.12(a).
"Howell" means Howell Corporation and its Subsidiaries.
"Incentive Compensation Payment" has the meaning assigned to such term
in the Third Amended OLP Agreement.
"Incentive Distribution Right" means a non-voting Limited Partner
Interest issued to the General Partner in connection with the conversion and
contribution of all of its Incentive Compensation Payments in Genesis OLP to the
Partnership pursuant to the Conversion and Contribution Agreement, which Limited
Partner Interest will confer upon the holder thereof only the rights and
obligations specifically provided in this Agreement with respect to Incentive
Distribution Rights (and no other rights otherwise available to or other
obligations of a holder of a Limited Partner Interest). Notwithstanding anything
in this Agreement to the contrary, the holder of an Incentive Distribution Right
shall not be entitled to vote such Incentive Distribution Right on any
Partnership matter except as may otherwise be required by law.
"Incentive Distributions" means any amount of cash distributed to the
holders of the Incentive Distribution Rights pursuant to Section 6.4(a)(iii),
(iv) and (v).
"Indemnified Persons" has the meaning assigned to such term in Section
7.12(c).
"Indemnitee" means (a) the General Partner, any Departing Partner and
any Person who is or was an Affiliate of the General Partner or any Departing
Partner, (b) any Person who is or was a director, officer, employee, agent or
trustee of a Group Member, (c) any Person who is or was a member, officer,
director, employee, agent or trustee of the General Partner or any Departing
Partner or any Affiliate of the General Partner or any Departing Partner, or any
Affiliate of any such Person, and (d) any Person who is or was serving at the
request of the General Partner or any Departing Partner or any such Affiliate as
a director, officer, employee, member, partner, agent, fiduciary or trustee of
another Person; provided, that a Person shall not be an Indemnitee by reason of
providing, on a fee-for-services basis, trustee, fiduciary or custodial
services.
"Initial Closing Date" means December 3, 1996.
"Initial Unit Price" means, with respect to any Common Unit $20.625,
adjusted as appropriate to give effect to any distribution, subdivision or
combination of Common Units.
11
"Initial Offering" means the initial offering and sale of Common Units
to the public on December 3, 1996, as described in the Registration Statement.
"Interim Capital Transactions" means the following transactions if they
occur prior to the Liquidation Date: (a) borrowings, refinancings or refundings
of indebtedness and sales of debt securities (other than for working capital
purposes and other than for items purchased on open account in the ordinary
course of business) by any Group Member; (b) sales of equity interests by any
Group Member; and (c) sales or other voluntary or involuntary dispositions of
any assets of any Group Member other than (i) sales or other dispositions of
inventory in the ordinary course of business, (ii) sales or other dispositions
of other current assets, including receivables and accounts in the ordinary
course of business and (iii) sales or other dispositions of assets as part of
normal retirements or replacements.
"Limited Partner" means, unless the context otherwise requires, (a)
each Initial Limited Partner, each Substituted Limited Partner, each Additional
Limited Partner, and any Partner upon the change of its status from General
Partner to Limited Partner pursuant to Section 11.3 and (b) solely for purposes
of Articles V, VI, VII and IX and Section 12.4, each Assignee; provided,
however, that when the term "Limited Partner" is used herein in the context of
any vote or other approval, including Articles XIII and XIV, such term shall
not, solely for such purpose, include any holder of an Incentive Distribution
Right except as may otherwise be required by law.
"Limited Partner Interest" means the ownership interest of a Limited
Partner or Assignee in the Partnership, which may be evidenced by Common Units
or other Partnership Securities or a combination thereof or interest therein,
and includes any and all benefits to which such Limited Partner or Assignee is
entitled as provided in this Agreement, together with all obligations of such
Limited Partner or Assignee to comply with the terms and provisions of this
Agreement; provided, however, that when the term "Limited Partner Interest" is
used herein in the context of any vote or other approval, including Articles
XIII and XIV, such term shall not, solely for such purpose, include any holder
of an Incentive Distribution Right except as may otherwise be required by law.
"Liquidation Date" means (a) in the case of an event giving rise to the
dissolution of the Partnership of the type described in clauses (a) and (b) of
the first sentence of Section 12.2, the date on which the applicable time period
during which the Partners have the right to elect to reconstitute the
Partnership and continue its business has expired without such an election being
made, and (b) in the case of any other event giving rise to the dissolution of
the Partnership, the date on which such event occurs.
"Liquidator" means one or more Persons selected by the General Partner
to perform the functions described in Section 12.3 as liquidating trustee of the
Partnership within the meaning of the Delaware Act.
"Majority Interest" means at least a majority in Voting Power of the
Outstanding Limited Partner Interests.
"Master Credit Support Agreement" means the Master Credit Support
Agreement, dated as of December 3, 1996, as amended, between Genesis OLP and
Salomon which sets forth the agreement of Genesis OLP and Salomon relating to
the credit support to be provided by Salomon to Genesis OLP.
"Merger Agreement" has the meaning assigned to such term in Section
14.1.
"Minimum Quarterly Distribution" means $0.20 per Unit per Quarter,
subject to adjustment in accordance with Sections 6.6 and 6.8.
"National Securities Exchange" means an exchange registered with the
Commission under Section 6(a) of the Securities Exchange Act of 1934, as
amended, supplemented or restated from time to time, and any successor to such
statute, or the NASDAQ Stock Market or any successor thereto.
"Net Agreed Value" means, (a) in the case of any Contributed Property,
the Agreed Value of such property reduced by any liabilities either assumed by
the Partnership upon such contribution or to which such property is subject when
contributed, and (b) in the case of any property distributed to a Partner or
Assignee by the Partnership,
12
the Partnership's Carrying Value of such property
(as adjusted pursuant to Section 5.4(d)(ii)) at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner or
Assignee upon such distribution or to which such property is subject at the time
of distribution, in either case, as determined under Section 752 of the Code.
"Net Income" means, for any taxable year, the excess, if any, of the
Partnership's items of income and gain (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss) for
such taxable year over the Partnership's items of loss and deduction (other than
those items taken into account in the computation of Net Termination Gain or Net
Termination Loss) for such taxable year. The items included in the calculation
of Net Income shall be determined in accordance with Section 5.4(b) and shall
not include any items specially allocated under Section 6.1(d); provided that
the determination of the items that have been specially allocated under Section
6.1(d) shall be made as if Section 6.1(d)(xi) were not in this Agreement.
"Net Loss" means, for any taxable year, the excess, if any, of the
Partnership's items of loss and deduction (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss) for
such taxable year over the Partnership's items of income and gain (other than
those items taken into account in the computation of Net Termination Gain or Net
Termination Loss) for such taxable year. The items included in the calculation
of Net Loss shall be determined in accordance with Section 5.4(b) and shall not
include any items specially allocated under Section 6.1(d); provided that the
determination of the items that have been specially allocated under Section
6.1(d) shall be made as if Section 6.1(d)(xi) were not in this Agreement.
"Net Positive Adjustments" means, with respect to any Partner, the
excess, if any, of the total positive adjustments over the total negative
adjustments made to the Capital Account of such Partner pursuant to Book-Up
Events and Book-Down Events.
"Net Termination Gain" means, for any taxable year, the sum, if
positive, of all items of income, gain, loss or deduction recognized by the
Partnership after the Liquidation Date. The items included in the determination
of Net Termination Gain shall be determined in accordance with Section 5.4(b)
and shall not include any items of income, gain or loss specially allocated
under Section 6.1(d).
"Net Termination Loss" means, for any taxable year, the sum, if
negative, of all items of income, gain, loss or deduction recognized by the
Partnership after the Liquidation Date. The items included in the determination
of Net Termination Loss shall be determined in accordance with Section 5.4(b)
and shall not include any items of income, gain or loss specially allocated
under Section 6.1(d).
"Ninety Percent Interest" means at least 90% in Voting Power of the
Outstanding Limited Partner Interests.
"Non-citizen Assignee" means a Person whom the General Partner has
determined in its discretion does not constitute an Eligible Citizen and as to
whose Limited Partner Interest the General Partner has become the Substituted
Limited Partner, pursuant to Section 4.8.
"Non-Competition Agreement" means the Non-Competition Agreement, dated
as of December 3, 1996, among the Partnership, Genesis OLP, Salomon, Basis
Petroleum, Inc. and Howell.
"Nonrecourse Built-in Gain" means with respect to any Contributed
Properties or Adjusted Properties that are subject to a mortgage or pledge
securing a Nonrecourse Liability, the amount of any taxable gain that would be
allocated to the Partners pursuant to Sections 6.2(b)(i)(A), 6.2(b)(ii)(A) and
6.2(b)(iii) if such properties were disposed of in a taxable transaction in full
satisfaction of such liabilities and for no other consideration.
"Nonrecourse Deductions" means any and all items of loss, deduction or
expenditures (including any expenditure described in Section 705(a)(2)(B) of the
Code) that, in accordance with the principles of Treasury Regulation Section
1.704-2(b), are attributable to a Nonrecourse Liability.
"Nonrecourse Liability" has the meaning set forth in Treasury
Regulation Section 1.752-1(a)(2).
13
"Notice of Election to Purchase" has the meaning assigned to such term
in Section 15.1(b) hereof.
"Operating Expenditures" means all Partnership Group expenditures,
including, but not limited to, taxes, reimbursements of the General Partner,
debt service payments, guarantee fees and capital expenditures, subject to the
following:
(a) Payments (including prepayments) of principal of and premium
on indebtedness shall not be an Operating Expenditure if the payment is (i)
required in connection with the sale or other disposition of assets or (ii) made
in connection with the refinancing or refunding of indebtedness with the
proceeds from new indebtedness or from the sale of equity interests. For
purposes of the foregoing, at the election and in the reasonable discretion of
the General Partner, any payment of principal or premium shall be deemed to be
refunded or refinanced by any indebtedness incurred or to be incurred by the
Partnership Group within 180 days before or after such payment to the extent of
the principal amount of such indebtedness.
(b) Operating Expenditures shall not include (i) capital
expenditures made for Acquisitions or for Capital Improvements, (ii) payment of
transaction expenses relating to Interim Capital Transactions or (iii)
distributions to Partners. Where capital expenditures are made in part for
Acquisitions or for Capital Improvements and in part for other purposes, the
General Partner's good faith allocation between the amounts paid for each shall
be conclusive.
"Operating Surplus" means, with respect to any period ending prior to
the Liquidation Date, on a cumulative basis and without duplication,
(a) the sum of (i) $20 million plus all cash and cash equivalents
of the Partnership Group on hand as of the close of business on the Initial
Closing Date, (ii) all cash receipts of the Partnership Group for the period
beginning on the Initial Closing Date and ending with the last day of such
period, other than cash receipts from Interim Capital Transactions (except to
the extent specified in Section 6.5) and (iii) all cash receipts of the
Partnership Group after the end of such period but on or before the date of
determination of Operating Surplus with respect to such period resulting from
borrowings for working capital purposes, less
(b) the sum of (i) Operating Expenditures for the period beginning
on the Initial Closing Date and ending with the last day of such period and (ii)
the amount of cash reserves that is necessary or advisable in the reasonable
discretion of the General Partner to provide funds for future Operating
Expenditures provided, however, that disbursements made (including contributions
to a Group Member or disbursements on behalf of a Group Member) or cash reserves
established, increased or reduced after the end of such period but on or before
the date of determination of Available Cash with respect to such period shall be
deemed to have been made, established, increased or reduced for purposes of
determining Operating Surplus, within such period if the General Partner so
determines.
Notwithstanding the foregoing, "Operating Surplus" with respect to the
Quarter in which the Liquidation Date occurs and any subsequent Quarter shall
equal zero.
"Opinion of Counsel" means a written opinion of counsel (who may be
regular counsel to the Partnership or the General Partner or any of their
Affiliates) acceptable to the General Partner in its reasonable discretion.
"Outstanding" means, with respect to Partnership Securities, all
Partnership Securities that are issued by the Partnership and reflected as
outstanding on the Partnership's books and records as of the date of
determination; provided, however, that if at any time any Person or Group (other
than the General Partner or its Affiliates) beneficially owns 20% or more of any
Outstanding Partnership Securities of any class then Outstanding, all
Partnership Securities owned by such Person or Group shall not be voted on any
matter and shall not be considered to be Outstanding when sending notices of a
meeting of Limited Partners to vote on any matter (unless otherwise required by
law), calculating required votes, determining the presence of a quorum or for
other similar purposes under this Agreement, except that such Partnership
Securities shall be considered to be Outstanding for purposes of
14
Section 11.1(b)(iv) (such Partnership Securities shall not, however, be treated
as aseparate class of Partnership Securities for purposes of this Agreement).
"Partner" means the General Partner and each Limited Partner.
"Partner Nonrecourse Debt" has the meaning set forth in Treasury
Regulation Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Treasury Regulation Section 1.704-2(i)(2).
"Partner Nonrecourse Deductions" means any and all items of loss,
deduction or expenditure (including any expenditure described in Section
705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury
Regulation Section 1.704-2(i), are attributable to a Partner Nonrecourse Debt.
"Partnership" means Genesis Energy, L.P., a Delaware limited
partnership, and any successors thereto.
"Partnership Group" means the Partnership and its Subsidiaries, treated
as a single consolidated entity.
"Partnership Interest" means an ownership interest in the Partnership,
which shall include General Partner Interests and Limited Partner Interests.
"Partnership Minimum Gain" means that amount determined in accordance
with the principles of Treasury Regulation Section 1.704-2(d).
"Partnership Security" means any class or series of equity interest in
the Partnership (but excluding any options, rights, warrants and appreciation
rights relating to an equity interest in the Partnership), including Common
Units and Incentive Distribution Rights.
"Percentage Interest" means as of any date of determination (a) as to
the General Partner (in its capacity as General Partner without reference to any
Limited Partner Interests held by it), 2.0%, (b) as to any Unitholder or
Assignee holding Units, the product obtained by multiplying (i) 98% less the
percentage applicable to paragraph (c) by (ii) the quotient obtained by dividing
(A) the number of Units held by such Unitholder or Assignee by (B) the total
number of all Outstanding Units, and (c) as to the holders of additional
Partnership Securities issued by the Partnership in accordance with Section 5.5,
the percentage established as a part of such issuance. The Percentage Interest
with respect to an Incentive Distribution Right shall at all times be zero.
"Person" means an individual or a corporation, limited liability
company, partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or other entity.
"Pro Rata" means (a) when modifying Units or any class thereof,
apportioned among all designated Units in accordance with their relative
Percentage Interests, (b) when modifying Partners and Assignees, apportioned
among all Partners and Assignees in accordance with their relative Percentage
Interests and (c) when modifying holders of Incentive Distribution Rights,
apportioned equally among all holders of Incentive Distribution Rights in
accordance with the relative number or percentage of Incentive Distribution
Rights held by each such holder.
"Proxy Statement" means the definitive Proxy Statement filed by the
Partnership with the Commission under the Securities Exchange Act of 1934, as
amended, for the purpose of soliciting the votes of the holders of Common Units
with respect to the Restructuring, as it has been or as it may be amended or
supplemented from time to time.
"Purchase Date" means the date determined by the General Partner as the
date for purchase of all Limited Partner Interests of a certain class (other
than Limited Partner Interests owned by the General Partner and its Affiliates)
pursuant to Article XV.
15
"Quarter" means, unless the context requires otherwise, a calendar
quarter.
"Recapture Income" means any gain recognized by the Partnership
(computed without regard to any adjustment required by Section 734 or Section
743 of the Code) upon the disposition of any property or asset of the
Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to such
property or asset.
"Record Date" means the date established by the General Partner for
determining (a) the identity of the Record Holders entitled to notice of, or to
vote at, any meeting of Limited Partners or entitled to vote by ballot or give
approval of Partnership action in writing without a meeting or entitled to
exercise rights in respect of any lawful action of Limited Partners or (b) the
identity of Record Holders entitled to receive any report or distribution or
participate in any offer.
"Record Holder" means the Person in whose name a Common Unit is
registered on the books of the Transfer Agent as of the opening of business on a
particular Business Day, or with respect to other Partnership Securities, the
Person in whose name any such other Partnership Security is registered on the
books that the General Partner has caused to be kept as of the opening of
business on such Business Day.
"Redeemable Interests" means any Limited Partner Interests for which a
redemption notice has been given, and has not been withdrawn, pursuant to
Section 4.9.
"Registration Statement" means the Registration Statement on Form S-1
(Registration No. 333-11545) as amended, filed by the Partnership with the
Commission under the Securities Act to register the offering and sale of the
Common Units in the Initial Offering.
"Remaining Net Positive Adjustments" means as of the end of any taxable
period, (i) with respect to the Unitholders holding Common Units, the excess of
(a) the Net Positive Adjustments of the Unitholders holding Common Units as of
the end of such period over (b) the sum of those Partners' Share of Additional
Book Basis Derivative Items for each prior taxable period, (ii) with respect to
the General Partner (as holder of the General Partner Interest), the excess of
(a) the Net Positive Adjustments of the General Partner as of the end of such
period over (b) the sum of the General Partner's Share of Additional Book Basis
Derivative Items with respect to the General Partner Interest for each prior
taxable period, and (iii) with respect to the holders of Incentive Distribution
Rights, the excess of (a) the Net Positive Adjustments of the holders of
Incentive Distribution Rights as of the end of such period over (b) the sum of
the Share of Additional Book Basis Derivative Items of the holders of the
Incentive Distribution Rights for each prior taxable period.
"Required Allocations" means (a) any limitation imposed on any
allocation of Net Losses or Net Termination Losses under Section 6.1(b) or
6.1(c)(ii) and (b) any allocation of an item of income, gain, loss or deduction
pursuant to Section 6.1(d)(i), 6.1(d)(ii), 6.1(d)(iv), 6.1(d)(vii) or
6.1(d)(ix).
"Residual Gain" or "Residual Loss" means any item of gain or loss, as
the case may be, of the Partnership recognized for federal income tax purposes
resulting from a sale, exchange or other disposition of a Contributed Property
or Adjusted Property, to the extent such item of gain or loss is not allocated
pursuant to Section 6.2(b)(i)(A) or 6.2(b)(ii)(A), respectively, to eliminate
Book-Tax Disparities.
"Restructuring" has the meaning set forth in the recitals to this
Agreement.
"Salomon" means Salomon Smith Barney Holdings Inc, a Delaware
corporation, and Salomon Brothers Holdings, Inc., a Delaware corporation.
"Second Amended Agreement" has the meaning assigned to such term in the
recitals.
"Second Amended OLP Agreement" means the Second Amended and Restated
Agreement of Limited Partnership of Genesis OLP dated as of December 7, 2000.
16
"Second Liquidation Target Amount" has the meaning assigned to such
term in Section 6.1(c)(i)(D).
"Second Target Distribution" means $0.28 per Unit per Quarter, subject
to adjustment in accordance with Sections 6.6 and 6.8.
"Securities Act" means the Securities Act of 1933, as amended,
supplemented or restated from time to time and any successor to such statute.
"Security Agreement" means the Security Agreement, dated as of December
3, 1996, among Genesis OLP,. Salomon and the Secured Parties (as defined in the
Security Agreement) securing the obligations of Genesis OLP under the Master
Credit Support Agreement and creating a security interest in the Collateral (as
defined in the Security Agreement) in favor of the Collateral Agent (as defined
in the Security Agreement).
"Share of Additional Book Basis Derivative Items" means in connection
with any allocation of Additional Book Basis Derivative Items for any taxable
period, (i) with respect to the Unitholders holding Common Units, the amount
that bears the same ratio to such Additional Book Basis Derivative Items as the
Unitholders' Remaining Net Positive Adjustments as of the end of such period
bears to the Aggregate Remaining Net Positive Adjustments as of that time, (ii)
with respect to the General Partner (as holder of the General Partner Interest),
the amount that bears the same ratio to such Additional Book Basis Derivative
Items as the General Partner's Remaining Net Positive Adjustments as of the end
of such period bears to the Aggregate Remaining Net Positive Adjustment as of
that time, and (iii) with respect to the Partners holding Incentive Distribution
Rights, the amount that bears the same ratio to such Additional Book Basis
Derivative Items as the Remaining Net Positive Adjustments of the Partners
holding the Incentive Distribution Rights as of the end of such period bears to
the Aggregate Remaining Net Positive Adjustments as of that time.
"Special Approval" means approval by a majority of the members of the
Audit Committee.
"Subsidiary" means, with respect to any Person, (a) a corporation of
which more than 50% of the voting power of shares entitled (without regard to
the occurrence of any contingency) to vote in the election of directors or other
governing body of such corporation is owned, directly or indirectly, at the date
of determination, by such Person, by one or more Subsidiaries of such Person or
a combination thereof, (b) a partnership (whether general or limited) in which
such Person or a Subsidiary of such Person is, at the date of determination, a
general or limited partner of such partnership, but only if more than 50% of the
partnership interests of such partnership (considering all of the partnership
interests of such partnership as a single class) is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person, or a combination thereof, or (c) any other Person
(other than a corporation or a partnership) in which such Person, one or more
Subsidiaries of such Person, or a combination thereof, directly or indirectly,
at the date of determination, has (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of a majority of the directors or
other governing body of such Person.
"Substituted Limited Partner" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 10.1 in place of and with
all the rights of a Limited Partner and who is shown as a Limited Partner on the
books and records of the Partnership.
"Surviving Business Entity" has the meaning assigned to such term in
Section 14.2(b).
"Third Amended Agreement" has the meaning assigned to such term in the
recitals.
"Third Amended OLP Agreement" means the Third Amended and Restated
Agreement of Limited Partnership of Genesis OLP, dated as of July 31, 2002.
"Third Liquidation Target Amount" has the meaning assigned to such term
in Section 6.1(c)(i)(E).
17
"Third Target Distribution" means $0.33 per Unit per Quarter, subject
to adjustment in accordance with Sections 6.6 and 6.8.
"Trading Day" has the meaning assigned to such term in Section 15.1(a).
"Transfer" has the meaning assigned to such term in Section 4.4(a).
"Transfer Agent" means such bank, trust company or other Person
(including the General Partner or one of its Affiliates) as shall be appointed
from time to time by the Partnership to act as registrar and transfer agent for
the Common Units.
"Transfer Application" means an application and agreement for transfer
of Partnership Securities in the form set forth on the back of a Certificate or
in a form substantially to the same effect in a separate instrument.
"Two-Thirds Interest" means at least 66?% in Voting Power of the
Outstanding Limited Partner Interests.
"Unit" means a Partnership Security that is designated as a "Unit" and
shall include Common Units but shall not include (a) a General Partner Interest
or (b) Incentive Distribution Rights.
"Unitholders" mean the holders of Units.
"Unpaid MQD" has the meaning assigned to such term in Section
6.1(c)(i)(B).
"Unrealized Gain" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (a) the fair
market value of such property as of such date (as determined under Section
5.4(d)) over (b) the Carrying Value of such property as of such date (prior to
any adjustment to be made pursuant to Section 5.4(d) as of such date).
"Unrealized Loss" attributable to any item of Partnership property
means, as of any date of determination, the excess, if any, of (a) the Carrying
Value of such property as of such date (prior to any adjustment to be made
pursuant to Section 5.4(d) as of such date) over (b) the fair market value of
such property as of such date (as determined under Section 5.4(d)).
"Unrecovered Capital" means at any time, with respect to a Unit, the
Initial Unit Price less the sum of (i) all distributions constituting Capital
Surplus theretofore made in respect of a Common Unit sold in the initial
offering and sale of Common Units to the public, as described in the
Registration Statement and (ii) any distributions of cash (or the Net Agreed
Value of any distributions in kind) in connection with the dissolution and
liquidation of the Partnership theretofore made in respect of such a Common
Unit, adjusted as the General Partner determines to be appropriate to give
effect to any distribution, subdivision or combination of such Units.
"U.S. GAAP" means United States Generally Accepted Accounting
Principles consistently applied.
"Voting Power" means the right, if any, of the holder of a Partnership
Security to vote on Partnership matters. Each Common Unit shall entitle the
holder thereof to one vote. Each additional Partnership Security shall entitle
the holder thereof to such vote, if any, as shall be established at the time of
issuance of such Partnership Security.
"Withdrawal Opinion of Counsel" has the meaning assigned to such term
in Section 11.1(b).
1.2 Construction.
Unless the context requires otherwise: (a) any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
18
vice versa; (b) references to Articles and Sections refer to Articles and
Sections of this Agreement; and (c) the term "include" or "includes" means
includes, without limitation, and "including" means including, without
limitation.
ARTICLE II
ORGANIZATION
2.1 Continuation of Existence.
The General Partner and the Limited Partners hereby amend and restate
the Third Amended Agreement in its entirety to continue the Partnership as a
limited partnership pursuant to the provisions of the Delaware Act and to set
forth the rights and obligations of the Partners and certain matters related
thereto. This amendment and restatement shall become effective on the date of
this Agreement. Except as expressly provided to the contrary in this Agreement,
the rights, duties (including fiduciary duties), liabilities and obligations of
the Partners and the administration, dissolution and termination of the
Partnership shall be governed by the Delaware Act. All Partnership Interests
shall constitute personal property of the owner thereof for all purposes and a
Partner has no interest in specific Partnership property.
2.2 Name
The name of the Partnership shall be "Genesis Energy, L.P." The
Partnership's business may be conducted under any other name or names deemed
necessary or appropriate by the General Partner in its sole discretion,
including the name of the General Partner. The words "Limited Partnership,"
"L.P.," "Ltd." or similar words or letters shall be included in the
Partnership's name where necessary for the purpose of complying with the laws of
any jurisdiction that so requires. The General Partner in its discretion may
change the name of the Partnership at any time and from time to time and shall
notify the Limited Partners of such change in the next regular communication to
the Limited Partners.
2.3 Registered Office; Registered Agent; Principal Office; Other Offices.
Unless and until changed by the General Partner, the registered office
of the Partnership in the State of Delaware shall be located at 1209 Orange
Street, New Castle County, Wilmington, Delaware 19801, and the registered agent
for service of process on the Partnership in the State of Delaware at such
registered office shall be CT Corporation System. The principal office of the
Partnership shall be located at 500 Dallas, Suite 2500, Houston, Texas 77002 or
such other place as the General Partner may from time to time designate by
notice to the Limited Partners. The Partnership may maintain offices at such
other place or places within or outside the State of Delaware as the General
Partner deems necessary or appropriate. The address of the General Partner shall
be 500 Dallas, Suite 2500, Houston, Texas 77002 or such other place as the
General Partner may from time to time designate by notice to the Limited
Partners.
2.4 Purpose and Business.
The purpose and nature of the business to be conducted by the
Partnership shall be to (a) engage directly in, or enter into or form any
corporation, partnership, joint venture, limited liability company or other
arrangement to engage indirectly in, any business activity that Genesis OLP is
permitted to engage in by the Fourth Amended OLP Agreement and, in connection
therewith, to exercise all of the rights and powers conferred upon the
Partnership pursuant to the agreements relating to such business activity, (b)
engage directly in, or to enter into or form any corporation, partnership, joint
venture, limited liability company or other arrangement to engage indirectly in,
any business activity that is approved by the General Partner and which lawfully
may be conducted by a limited partnership organized pursuant to the Delaware Act
and, in connection therewith, to exercise all of the rights and powers conferred
upon the Partnership pursuant to the agreements relating to such business
activity, and (c) do anything necessary or appropriate to the foregoing,
including the making of capital contributions or loans to a Group Member. The
General Partner has no obligation or duty to the Partnership, the Limited
Partners, or the Assignees to propose or approve, and in its discretion may
decline to propose or approve, the conduct by the Partnership of any business.
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2.5 Powers.
The Partnership shall be empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described in Section
2.4 and for the protection and benefit of the Partnership.
2.6 Power of Attorney.
(a) Each Limited Partner and each Assignee hereby constitutes and appoints
the General Partner and, if a Liquidator shall have been selected
pursuant to Section 12.3, the Liquidator, severally (and any successor
to the Liquidator by merger, transfer, assignment, election or
otherwise) and each of their authorized officers and attorneys-in-fact,
as the case may be, with full power of substitution, as his true and
lawful agent and attorney-in-fact, with full power and authority in his
name, place and stead, to:
(i) execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (A) all certificates, documents and
other instruments (including this Agreement and the Certificate
of Limited Partnership and all amendments or restatements
hereof or thereof) that the General Partner or the Liquidator
deems necessary or appropriate to form, qualify or continue the
existence or qualification of the Partnership as a limited
partnership (or a partnership in which the limited partners have
limited liability) in the State of Delaware and in all other
jurisdictions in which the Partnership may conduct business or own
property; (B) all certificates, documents and other instruments
that the General Partner or the Liquidator deems necessary or
appropriate to reflect, in accordance with its terms, any
amendment, change, modification or restatement of this Agreement;
(C) all certificates, documents and other instruments (including
conveyances and a certificate of cancellation) that the General
Partner or the Liquidator deems necessary or appropriate to
reflect the dissolution and liquidation of the Partnership
pursuant to the terms of this Agreement; (D) all
certificates, documents and other instruments relating to the
admission, withdrawal, removal or substitution of any Partner
pursuant to, or other events described in, Article IV, X, XI or
XII; (E) all certificates, documents and other instruments
relating to the determination of the rights, preferences and
privileges of any class or series of Partnership Securities issued
pursuant to Section 5.5; and (F) all certificates, documents and
other instruments (including agreements and a certificate of
merger) relating to a merger or consolidation of the
Partnership pursuant to Article XIV; and
(ii) execute, swear to, acknowledge, deliver, file and record all
ballots, consents, approvals, waivers, certificates, documents
and other instruments necessary or appropriate, in the discretion
of the General Partner or the Liquidator, to (A) make, evidence,
give, confirm or ratify any vote, consent, approval, agreement
or other action that is made or given by the Partners hereunder
or is consistent with the terms of this Agreement or is necessary
or appropriate, in the discretion of the General Partner or the
Liquidator or (B) effectuate the terms or intent of this
Agreement; provided, that when required by Section 13.3 or any
other provision of this Agreement that establishes a
percentage of the Limited Partners or of the Limited Partners
of any class or series required to take any action, the General
Partner and the Liquidator may exercise the power of attorney made
in this Section 2.6(a)(ii) only after the necessary vote, consent
or approval of the Limited Partners or of the Limited Partners of
such class or series, as applicable.
Nothing contained in this Section 2.6(a) shall be construed as
authorizing the General Partner to amend this Agreement except in accordance
with Article XIII or as may be otherwise expressly provided for in this
Agreement.
(b) The foregoing power of attorney is hereby declared to be irrevocable and a
power coupled with an interest, and it shall survive and, to the maximum extent
permitted by law, not be affected by the subsequent death, incompetency,
disability, incapacity, dissolution, bankruptcy or termination of any Limited
Partner or Assignee and the transfer of all or any portion of such Limited
Partner's or Assignee's Partnership Interest and shall extend to such Limited
Partner's or Assignee's heirs, successors, assigns and personal representatives.
Each such Limited Partner or Assignee hereby agrees to be bound by any
representation made by the General Partner or the Liquidator acting in good
faith pursuant to such power of attorney; and each such Limited Partner or
Assignee, to the maximum extent permitted by law, hereby waives any and all
defenses that may be available to contest, negate or disaffirm the action of the
General
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Partner or the Liquidator taken in good faith under such power of
attorney. Each Limited Partner or Assignee shall execute and deliver to the
General Partner or the Liquidator, within 15 days after receipt of the request
therefor, such further designation, powers of attorney and other instruments as
the General Partner or the Liquidator deems necessary to effectuate this
Agreement and the purposes of the Partnership.
2.7 Term.
The term of the Partnership shall continue until the close of
Partnership business on December 31, 2086 or until the earlier dissolution of
the Partnership in accordance with the provisions of Article XII. The existence
of the Partnership as a separate legal entity shall continue until the
cancellation of the Certificate of Limited Partnership as provided in the
Delaware Act.
2.8 Title to Partnership Assets.
Title to Partnership assets, whether real, personal or mixed and
whether tangible or intangible, shall be deemed to be owned by the Partnership
as an entity, and no Partner or Assignee, individually or collectively, shall
have any ownership interest in such Partnership assets or any portion thereof.
Title to any or all of the Partnership assets may be held in the name of the
Partnership, the General Partner, one or more of its Affiliates or one or more
nominees, as the General Partner may determine. The General Partner hereby
declares and warrants that any Partnership assets for which record title is held
in the name of the General Partner or one or more of its Affiliates or one or
more nominees shall be held by the General Partner or such Affiliate or nominee
for the use and benefit of the Partnership in accordance with the provisions of
this Agreement; provided, however, that the General Partner shall use reasonable
efforts to cause record title to such assets (other than those assets in respect
of which the General Partner determines that the expense and difficulty of
conveyancing makes transfer of record title to the Partnership impracticable) to
be vested in the Partnership as soon as reasonably practicable; provided,
further, that, prior to the withdrawal or removal of the General Partner or as
soon thereafter as practicable, the General Partner shall use reasonable efforts
to effect the transfer of record title to the Partnership and, prior to any such
transfer, will provide for the use of such assets in a manner satisfactory to
the General Partner. All Partnership assets shall be recorded as the property of
the Partnership in its books and records, irrespective of the name in which
record title to such Partnership assets is held.
ARTICLE III
RIGHTS OF LIMITED PARTNERS
3.1 Limitation of Liability.
The Limited Partners and the Assignees shall have no liability under
this Agreement except as expressly provided in this Agreement or the Delaware
Act.
3.2 Management of Business.
No Limited Partner or Assignee, in its capacity as such, shall
participate in the operation, management or control (within the meaning of the
Delaware Act) of the Partnership's business, transact any business in the
Partnership's name or have the power to sign documents for or otherwise bind the
Partnership. Any action taken by any Affiliate of the General Partner or any
officer, director, employee, member, general partner, agent or trustee of the
General Partner or any of its Affiliates, or any officer, director, employee,
member, general partner, agent or trustee of a Group Member, in its capacity as
such, shall not be deemed to be participation in the control of the business of
the Partnership by a limited partner of the Partnership (within the meaning of
Section 17-303(a) of the Delaware Act) and shall not affect, impair or eliminate
the limitations on the liability of the Limited Partners or Assignees under this
Agreement.
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3.3 Outside Activities of the Limited Partners.
Subject to the provisions of Section 7.5, which shall continue to be
applicable to the Persons referred to therein, regardless of whether such
Persons shall also be Limited Partners or Assignees, any Limited Partner or
Assignee shall be entitled to and may have business interests and engage in
business activities in addition to those relating to the Partnership, including
business interests and activities in direct competition with the Partnership
Group. Neither the Partnership nor any of the other Partners or Assignees shall
have any rights by virtue of this Agreement in any business ventures of any
Limited Partner or Assignee.
3.4 Rights of Limited Partners.
(a) In addition to other rights provided by this Agreement or by applicable
law, and except as limited by Section 3.4(b), each Limited Partner
shall have the right, for a purpose reasonably related to such Limited
Partner's interest as a limited partner in the Partnership, upon
reasonable written demand and at such Limited Partner's own expense:
(i) to obtain true and full information regarding the status of
the business and financial condition of the Partnership;
(ii) promptly after becoming available, to obtain a copy of the
Partnership's federal, state and local tax returns for each year;
(iii) to have furnished to him a current list of the name and last
known business, residence or mailing address of each Partner;
(iv) to have furnished to him a copy of this Agreement and the
Certificate of Limited Partnership and all amendments thereto, together
with a copy of the executed copies of all powers of attorney pursuant
to which this Agreement, the Certificate of Limited Partnership and all
amendments thereto have been executed;
(v) to obtain true and full information regarding the amount of cash
and a description and statement of the Net Agreed Value of any other
Capital Contribution by each Partner and which each Partner has agreed
to contribute in the future, and the date on which each became a
Partner; and
(vi) to obtain such other information regarding the affairs of the
Partnership as is just and reasonable.
(b) The General Partner may keep confidential from the Limited Partners and
Assignees, for such period of time as the General Partner deems
reasonable, (i) any information that the General Partner reasonably
believes to be in the nature of trade secrets or (ii) other information
the disclosure of which the General Partner in good faith believes (A)
is not in the best interests of the Partnership Group, (B) could damage
the Partnership Group or (C) that any Group Member is required by law
or by agreement with any third party to keep confidential (other than
agreements with Affiliates of the Partnership the primary purpose of
which is to circumvent the obligations set forth in this Section 3.4).
ARTICLE IV
CERTIFICATES; RECORD HOLDERS; TRANSFER OF
PARTNERSHIP INTERESTS; REDEMPTION OF
PARTNERSHIP INTERESTS
4.1 Certificates.
Upon the Partnership's issuance of Common Units to any Person, the
Partnership shall issue one or more Certificates in the name of such Person
evidencing the number of such Common Units being so issued. In addition, the
General Partner may cause the Partnership to issue Certificates evidencing
ownership of one or more other classes or series of Partnership Securities.
Certificates shall be executed on behalf of the Partnership by the Chairman of
the Board,
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President or any Vice President and the Secretary or any Assistant
Secretary of the General Partner. No Common Unit Certificate shall be valid for
any purpose until it has been countersigned by the Transfer Agent; provided,
however, that if the General Partner elects to issue Common Units in global
form, the Common Unit Certificates shall be valid upon receipt of a certificate
from the Transfer Agent certifying that the Common Units have been duly
registered in accordance with the directions of the Partnership.
4.2 Mutilated, Destroyed, Lost or Stolen Certificates.
(a) If any mutilated Certificate is surrendered to the Transfer Agent, the
appropriate officers of the General Partner on behalf of the
Partnership shall execute and deliver and, in the case of a Common Unit
Certificate, the Transfer Agent shall countersign, in exchange
therefor, a new Certificate evidencing the same number and type of
Partnership Securities as the Certificate so surrendered.
(b) The appropriate officers of the General Partner on behalf of the
Partnership shall execute and deliver and, in the case of a Common Unit
Certificate, the Transfer Agent shall countersign (or, in the case of
Common Units issued in global form, register in accordance with the
rules and regulations of the Depositary), a new Certificate in place of
any Certificate previously issued if the Record Holder of the
Certificate:
(i) makes proof by affidavit, in form and substance satisfactory to the
Partnership, that a previously issued Certificate has been lost,
destroyed or stolen;
(ii) requests the issuance of a new Certificate before the Partnership
has notice that the Certificate has been acquired by a purchaser for
value in good faith and without notice of an adverse claim;
(iii) if requested by the Partnership, delivers to the Partnership a
bond, in form and substance satisfactory to the Partnership, with
surety or sureties and with fixed or open penalty as the Partnership
may reasonably direct, in its sole discretion, to indemnify the
Partnership, the General Partner and the Transfer Agent against any
claim that may be made on account of the alleged loss, destruction or
theft of the Certificate; and
(iv) satisfies any other reasonable requirements imposed by the
Partnership.
If a Limited Partner or Assignee fails to notify the Partnership within
a reasonable time after he has notice of the loss, destruction or theft of a
Certificate, and a transfer of the Limited Partner Interests represented by the
Certificate is registered before the Partnership, the General Partner or the
Transfer Agent receives such notification, the Limited Partner or Assignee shall
be precluded from making any claim against the Partnership, the General Partner
or the Transfer Agent for such transfer or for a new Certificate.
(c) As a condition to the issuance of any new Certificate under this Section
4.2, the Partnership may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Transfer Agent)
reasonably connected therewith.
4.3 Record Holders.
The Partnership shall be entitled to recognize the Record Holder as the
Partner or Assignee with respect to any Partnership Interest and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest in
such Partnership Interest on the part of any other Person, regardless of whether
the Partnership shall have actual or other notice thereof, except as otherwise
provided by law or any applicable rule, regulation, guideline or requirement of
any National Securities Exchange on which Limited Partner Interests are listed
for trading. Without limiting the foregoing, when a Person (such as a broker,
dealer, bank, trust company or clearing corporation or an agent of any of the
foregoing) is acting as nominee, agent or in some other representative capacity
for another Person in acquiring and/or holding Limited Partner Interests, as
between the Partnership on the one hand, and such other Persons on the other,
such representative Person (a) shall be the Partner or Assignee (as the case may
be) of record and beneficially, (b) must
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execute and deliver a Transfer
Application and (c) shall be bound by this Agreement and shall have the rights
and obligations of a Partner or Assignee (as the case may be) hereunder and as,
and to the extent, provided for herein.
4.4 Transfer Generally.
(a) The term "transfer," when used in this Agreement with respect to a
Partnership Interest, shall be deemed to refer to a transaction (i) by which the
General Partner assigns its General Partner Interest to another Person
or by which the holder of Incentive Distribution Rights assigns its Incentive
Distribution Rights to another Person, or (ii) by which the holder of a Limited
Partner Interest (other than an Incentive Distribution Right) assigns such
Limited Partner Interest to another Person who is or becomes a Limited Partner
or an Assignee, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or otherwise.
(b) No Partnership Interest shall be transferred, in whole or in part, except in
accordance with the terms and conditions set forth in this Article IV. Any
transfer or purported transfer of a Partnership Interest not made in accordance
with this Article IV shall be null and void.
(c) Nothing contained in this Agreement shall be construed to prevent a
disposition by any stockholder, member or other owner of the General Partner of
any or all of the shares of stock, membership interests or other ownership
interests in the General Partner.
4.5 Registration and Transfer of Limited Partner Interests.
(a) The Partnership shall keep or cause to be kept on behalf of the Partnership
a register in which, subject to such reasonable regulations as it may prescribe
and subject to the provisions of Section 4.5(b), the Partnership will provide
for the registration and transfer of Limited Partner Interests. The Transfer
Agent is hereby appointed registrar and transfer agent for the purpose of
registering Common Units and transfers of such Common Units as herein provided.
The Partnership shall not recognize transfers of Certificates evidencing Limited
Partner Interests unless such transfers are affected in the manner described in
this Section 4.5. Upon surrender of a Certificate for registration of transfer
of any Limited Partner Interest, and subject to the provisions of Section
4.5(b), the appropriate officers of the General Partner on behalf of the
Partnership shall execute and deliver and, in the case of Common Units, the
Transfer Agent shall countersign (or, in the case of Common Units issued in
global form, register in accordance with the rules and regulations of the
Depositary), in the name of the holder or the designated transferee or
transferees, as required pursuant to the holder's instructions, one or more new
Certificates evidencing the same aggregate number and type of Limited Partner
Interests as was evidenced by the Certificate so surrendered.
(b) Except as otherwise provided in Section 4.8, the Partnership shall not
recognize any transfer of Limited Partner Interests until the Certificates
evidencing such Limited Partner Interests are surrendered for registration of
transfer and are accompanied by a Transfer Application duly executed by the
transferee (or the transferee's attorney-in-fact duly authorized in writing). No
charge shall be imposed by the Partnership for such transfer; provided, that as
a condition to the issuance of any new Certificate under this Section 4.5, the
Partnership may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed with respect thereto.
(c) Limited Partner Interests may be transferred only in the manner described in
this Section 4.5. The transfer of any Limited Partner Interests and the
admission of any new Limited Partner shall not constitute an amendment to this
Agreement.
(d) Until admitted as a Substituted Limited Partner pursuant to Section 10.2,
the Record Holder of a Limited Partner Interest shall be an Assignee in respect
of such Limited Partner Interest. Limited Partners may include custodians,
nominees or any other individual or entity in its own or any representative
capacity.
(e) A transferee of a Limited Partner Interest who has completed and delivered a
Transfer Application shall be deemed to have (i) requested admission as a
Substituted Limited Partner, (ii) agreed to comply with and be bound by and to
have executed this Agreement, (iii) represented and warranted that such
transferee has the right, power and authority
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and, if an individual, the capacity to enter into this Agreement, (iv) granted
the powers of attorney set forth in this Agreement and (v) given the consents
and approvals and made the waivers contained in this Agreement.
4.6 Transfer of a General Partner's General Partner Interest.
Prior to December 31, 2006, the General Partner shall not transfer all
or any part of its General Partner Interest to a Person unless such transfer (a)
has been approved by the prior written consent or vote of the holders of a
Majority Interest or (b) is of all, but not less than all, of its General
Partner Interest to (i) an Affiliate of the General Partner or (ii) another
Person in connection with the merger or consolidation of the General Partner
with or into another Person or the transfer by the General Partner of all or
substantially all of its assets to another Person. Notwithstanding anything
herein to the contrary, no transfer by the General Partner of all or any part of
its General Partner Interest to another Person shall be permitted unless (x) the
transferee agrees to assume the rights and duties of the General Partner under
this Agreement and the Fourth Amended OLP Agreement and to be bound by the
provisions of this Agreement and the Fourth Amended OLP Agreement, (y) the
Partnership receives an Opinion of Counsel that such transfer would not result
in the loss of limited liability of any Limited Partner of any limited partner
of Genesis OLP or cause the Partnership or Genesis OLP to be treated as an
association taxable as a corporation or otherwise to be taxed as an entity for
federal income tax purposes (to the extent not already so treated or taxed) and
(z) such transferee also agrees to purchase all (or the appropriate portion
thereof, if applicable) of the partnership interest of the General Partner as
the general partner of each other Group Member. In the case of a transfer
pursuant to and in compliance with this Section 4.6, the transferee or successor
(as the case may be) shall, subject to compliance with the terms of Section
10.3, be admitted to the Partnership as a General Partner immediately prior to
the transfer of the General Partner Interest, and the business of the
Partnership shall continue without dissolution.
4.7 Restrictions on Transfers.
(a) Notwithstanding the other provisions of this Article IV, no transfer of any
Partnership Interest shall be made if such transfer would (i) violate the then
applicable federal or state securities laws or rules and regulations of the
Commission, any state securities commission or any other governmental authority
with jurisdiction over such transfer, (ii) terminate the existence or
qualification of the Partnership or Genesis OLP under the laws of the
jurisdiction of its formation or (iii) cause the Partnership or Genesis OLP to
be treated as an association taxable as a corporation or otherwise to be taxed
as an entity for federal income tax purposes (to the extent not already so
treated or taxed).
(b) The General Partner may impose restrictions on the transfer of Partnership
Interests if a subsequent Opinion of Counsel determines that such restrictions
are necessary to avoid a significant risk of the Partnership or Genesis OLP
becoming taxable as a corporation or otherwise to be taxed as an entity for
federal income tax purposes. The restrictions may be imposed by making such
amendments to this Agreement as the General Partner may determine to be
necessary or appropriate to impose such restrictions; provided, however, that
any amendment that the General Partner believes, in the exercise of its
reasonable discretion, could result in the delisting or suspension of trading of
any class of Limited Partner Interests on the principal National Securities
Exchange on which such class of Limited Partner Interests is then traded must be
approved, prior to such amendment being effected, by the holders of at least a
majority of the Outstanding Limited Partner Interests of such class.
(c) Nothing contained in this Article IV, or elsewhere in this Agreement, shall
preclude the settlement of any transactions involving Partnership Interests
entered into through the facilities of any National Securities Exchange on which
such Partnership Interests are listed for trading.
4.8 Citizenship Certificates; Non-citizen Assignees.
(a) If any Group Member is or becomes subject to any federal, state or local law
or regulation that, in the reasonable determination of the General Partner,
creates a substantial risk of cancellation or forfeiture of any property in
which the Group Member has an interest based on the nationality, citizenship or
other related status of a Limited Partner or Assignee, the General Partner may
request any Limited Partner or Assignee to furnish to the General Partner,
within 30 days after receipt of such request, an executed Citizenship
Certification or such other information concerning his
25
nationality, citizenship or other related status (or, if the Limited Partner or
Assignee is a nominee holding for the account of another Person, the
nationality, citizenship or other related status of such Person) as the General
Partner may request. If a Limited Partner or Assignee fails to furnish to the
General Partner within the aforementioned 30-day period such Citizenship
Certification or other requested information or if upon receipt of such
Citizenship Certification or other requested information the General Partner
determines, with the advice of counsel, that a Limited Partner or Assignee is
not an Eligible Citizen, the Limited Partner Interests owned by such Limited
Partner or Assignee shall be subject to redemption in accordance with the
provisions of Section 4.9. In addition, the General Partner may require that the
status of any such Limited Partner or Assignee be changed to that of a
Non-citizen Assignee and, thereupon, the General Partner shall be substituted
for such Non-citizen Assignee as the Limited Partner in respect of his Limited
Partner Interests.
(b) The General Partner shall, in exercising voting rights in respect of Limited
Partner Interests held by it on behalf of Non-citizen Assignees, distribute the
votes in the same ratios as the votes of Limited Partners (including without
limitation the General Partner) in respect of Limited Partner Interests other
than those of Non-citizen Assignees are cast, either for, against or abstaining
as to the matter.
(c) Upon dissolution of the Partnership, a Non-citizen Assignee shall have no
right to receive a distribution in kind pursuant to Section 12.4 but shall be
entitled to the cash equivalent thereof, and the Partnership shall provide cash
in exchange for an assignment of the Non-citizen Assignee's share of the
distribution in kind. Such payment and assignment shall be treated for
Partnership purposes as a purchase by the Partnership from the Non-citizen
Assignee of his Limited Partner Interest (representing his right to receive his
share of such distribution in kind).
(d) At any time after he can and does certify that he has become an Eligible
Citizen, a Non-citizen Assignee may, upon application to the General Partner,
request admission as a Substituted Limited Partner with respect to any Limited
Partner Interests of such Non-citizen Assignee not redeemed pursuant to Section
4.9, and upon his admission pursuant to Section 10.2, the General Partner shall
cease to be deemed to be the Limited Partner in respect of the Non-citizen
Assignee's Limited Partner Interests.
4.9 Redemption of Partnership Interests of Non-citizen Assignees.
(a) If at any time a Limited Partner or Assignee fails to furnish a
Citizenship Certification or other information requested within the
30-day period specified in Section 4.8(a), or if upon receipt of such
Citizenship Certification or other information the General Partner
determines, with the advice of counsel, that a Limited Partner or
Assignee is not an Eligible Citizen, the Partnership may, unless the
Limited Partner or Assignee establishes to the satisfaction of the
General Partner that such Limited Partner or Assignee is an Eligible
Citizen or has transferred his Limited Partner Interests to a Person
who is an Eligible Citizen and who furnishes a Citizenship
Certification to the General Partner prior to the date fixed for
redemption as provided below, redeem the Limited Partner Interest of
such Limited Partner or Assignee as follows:
(i) The General Partner shall, not later than the 30th day before the
date fixed for redemption, give notice of redemption to the Limited
Partner or Assignee, at his last address designated on the records
of the Partnership or the Transfer Agent, by registered or certified
mail, postage prepaid. The notice shall be deemed to have been given
when so mailed. The notice shall specify the Redeemable Interests,
the date fixed for redemption, the place of payment, that payment
of the redemption price will be made upon surrender of the
Certificate evidencing the Redeemable Interests and that on and
after the date fixed for redemption no further allocations or
distributions to which the Limited Partner or Assignee would
otherwise be entitled in respect of the Redeemable Interests will
accrue or be made.
(ii) The aggregate redemption price for Redeemable Interests shall
be an amount equal to the Current Market Price (the date of
determination of which shall be the date fixed for redemption) of
Limited Partner Interests of the class to be so redeemed multiplied
by the number of Limited Partner Interests of each such class
included among the Redeemable Interests. The redemption price
shall be paid, in the discretion of the General Partner, in cash or
by delivery of a promissory note of the Partnership in the principal
amount of
26
the redemption price, bearing interest at the rate of 10% annually
and payable in three equal annual installments of principal together
with accrued interest, commencing one year after the redemption date.
(iii) Upon surrender by or on behalf of the Limited Partner or Assignee,
at the place specified in the notice of redemption, of the Certificate
evidencing the Redeemable Interests, duly endorsed in blank or
accompanied by an assignment duly executed in blank, the Limited
Partner or Assignee or his duly authorized representative shall be
entitled to receive the payment therefor.
(iv) After the redemption date, Redeemable Interests shall no longer
constitute issued and Outstanding Limited Partner Interests.
(b) The provisions of this Section 4.9 shall also be applicable to Limited
Partner Interests held by a Limited Partner or Assignee as nominee of a
Person determined to be other than an Eligible Citizen.
(c) Nothing in this Section 4.9 shall prevent the recipient of a notice of
redemption from transferring his Limited Partner Interests before the
redemption date if such transfer is otherwise permitted under this
Agreement. Upon receipt of notice of such a transfer, the General
Partner shall withdraw the notice of redemption, provided the
transferee of such Limited Partner Interests certifies to the
satisfaction of the General Partner in a Citizenship Certification
delivered in connection with the Transfer Application that he is an
Eligible Citizen. If the transferee fails to make such certification,
such redemption shall be effected from the transferee on the original
redemption date.
ARTICLE V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF
PARTNERSHIP INTERESTS
5.1 Previous Capital Contributions.
The Partners (or their predecessors) have heretofore made Capital
Contributions to the Partnership as provided in the First Amended Agreement.
5.2 Additional Contributions by General Partner.
Upon the issuance of any additional Limited Partner Interests, the
General Partner shall be required to make an additional Capital Contribution
equal to 2/98ths of any amount contributed to the Partnership by the Limited
Partners in exchange for such additional Limited Partner Interests. Except as
set forth in the immediately preceding sentence and Article XII, the General
Partner shall not be obligated to make any Capital Contributions to the
Partnership.
5.3 Interest and Withdrawal.
No interest shall be paid by the Partnership on Capital Contributions.
No Partner or Assignee shall be entitled to the withdrawal or return of its
Capital Contribution, except to the extent, if any, that distributions made
pursuant to this Agreement or upon termination of the Partnership may be
considered as such by law and then only to the extent provided for in this
Agreement. Except to the extent expressly provided in this Agreement, no Partner
or Assignee shall have priority over any other Partner or Assignee either as to
the return of Capital Contributions or as to profits, losses or distributions.
Any such return shall be a compromise to which all Partners and Assignees agree
within the meaning of Section 17-502(b) of the Delaware Act.
5.4 Capital Accounts.
(a) The Partnership shall maintain for each Partner (or a beneficial owner
of Partnership Interests held by a nominee in any case in which the
nominee has furnished the identity of such owner to the Partnership in
accordance with Section 6031(c) of the Code or any other method
acceptable to the General Partner in its sole discretion) owning a
Partnership Interest a separate Capital Account with respect to such
Partnership Interest in accordance with the rules of
27
Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital Account
shall be increased by (i) the amount of all Capital Contributions made
to the Partnership with respect to such Partnership Interest pursuant
to this Agreement (including the Third Amended Agreement) and (ii) all
items of Partnership income and gain (including, without limitation,
income and gain exempt from tax) computed in accordance with Section
5.4(b) and allocated with respect to such Partnership Interest
pursuant to Section 6.1, and decreased by (x) the amount of cash or
Net Agreed Value of all actual and deemed distributions of cash or
property made with respect to such Partnership Interest and (y) all
items of Partnership deduction and loss computed in accordance with
Section 5.4(b) and allocated with respect to such Partnership Interest
pursuant to Section 6.1.
(b) For purposes of computing the amount of any item of income, gain, loss
or deduction which is to be allocated pursuant to Article VI and is to
be reflected in the Partners' Capital Accounts, the determination,
recognition and classification of any such item shall be the same as
its determination, recognition and classification for federal income
tax purposes (including, without limitation, any method of
depreciation, cost recovery or amortization used for that purpose),
provided, that:
(i) Solely for purposes of this Section 5.4, the Partnership shall be
treated as owning directly its proportionate share (as determined by
the General Partner based upon the provisions of the Fourth Amended OLP
Agreement) of all property owned by Genesis OLP or any other Subsidiary
that is classified as a partnership for federal income tax purposes.
(ii) All underwriting discounts and commissions incurred by the
Partnership in connection with the issuance of Partnership Securities
that can neither be deducted nor amortized under Section 709 of
the Code shall, for purposes of Capital Account maintenance, be
treated as an item of deduction at the time such costs are incurred
and shall be allocated 100% to the holders of such Partnership
Securities in accordance with their relative Percentage Interests.
All other fees and other expenses incurred by the Partnership to
promote the sale of (or to sell) Partnership Securities that can
neither be deducted nor amortized under Section 709 of the Code, if
any, shall, for purposes of Capital Account maintenance, be
treated as an item of deduction at the time such fees and other
expenses are incurred and shall be allocated among the Partners
pursuant to Section 6.1.
(iii) Except as otherwise provided in Treasury Regulation Section
1.704- 1(b)(2)(iv)(m), the computation of all items of income, gain,
loss and deduction shall be made without regard to any election under
Section 754 of the Code which may be made by the Partnership and,
as to those items described in Section 705(a)(1)(B) or 705(a)(2)(B)
of the Code, without regard to the fact that such items are not
includable in gross income or are neither currently deductible nor
capitalized for federal income tax purposes. To the extent an
adjustment to the adjusted tax basis of any Partnership asset
pursuant to Section 734(b) or 743(b) of the Code is required, pursuant
to Treasury Regulation Section 1.704-1(b)(2)(iv)(m) to be taken into
account in determining Capital Accounts, the amount of such adjustment
in the Capital Accounts shall be treated as an item of gain or loss.
(iv) Any income, gain or loss attributable to the taxable disposition
of any Partnership property shall be determined as if the adjusted
basis of such property as of such date of disposition were equal in
amount to the Partnership's Carrying Value with respect to such
property as of such date.
(v) In accordance with the requirements of Section 704(b) of the Code,
any deductions for depreciation, cost recovery or amortization
attributable to any Contributed Property shall be determined as if the
adjusted basis of such property on the date it was acquired by the
Partnership were equal to the Agreed Value of such property. Upon an
adjustment pursuant to Section 5.4(d) to the Carrying Value of any
Partnership property subject to depreciation, cost recovery or
amortization, any further deductions for such depreciation, cost
recovery or amortization attributable to such property shall be
determined (A) as if the adjusted basis of such property were equal
to the Carrying Value of such property immediately following such
adjustment and (B) using a rate of depreciation, cost recovery or
amortization derived from the same method and useful life (or, if
applicable, the remaining useful life) as is applied for federal
income tax purposes; provided, however, that, if the asset has a zero
adjusted basis for federal income tax purposes, depreciation,
28
cost recovery or amortization deductions shall be determined using any
reasonable method that the General Partner may adopt.
(vi) If the Partnership's adjusted basis in a depreciable or cost
recovery property is reduced for federal income tax purposes pursuant
to Section 48(q)(1) or 48(q)(3) of the Code, the amount of such
reduction shall, solely for purposes hereof, be deemed to be an
additional depreciation or cost recovery deduction in the year such
property is placed in service and shall be allocated among the Partners
pursuant to Section 6.1. Any restoration of such basis pursuant to
Section 48(q)(2) of the Code shall, to the extent possible, be
allocated in the same manner to the Partners to whom such deemed
deduction was allocated.
(c) A transferee of a Partnership Interest shall succeed to a pro rata
portion of the Capital Account of the transferor relating to the
Partnership Interest so transferred.
(d) (i) In accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f), on an issuance of additional Partnership
Interests for cash or Contributed Property or the conversion of the
General Partner's Combined Interest to Common Units pursuant to Section
11.3(b), the Capital Account of all Partners and the Carrying Value of
each Partnership property immediately prior to such issuance shall be
adjusted upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to such Partnership property, as if such
Unrealized Gain or Unrealized Loss had been recognized on an actual
sale of each such property immediately prior to such issuance and had
been allocated to the Partners at such time pursuant to Section 6.1 in
the same manner as any item of gain or loss actually recognized during
such period would have been allocated. In determining such Unrealized
Gain or Unrealized Loss, the aggregate cash amount and fair market
value of all Partnership assets (including cash or cash equivalents)
immediately prior to the issuance of additional Partnership Securities
shall be determined by the General Partner using such reasonable method
of valuation as it may adopt; provided, however, that the General
Partner, in arriving at such valuation, must take fully into account
the fair market value of the Partnership Interests of all Partners at
such time. The General Partner shall allocate such aggregate value
among the assets of the Partnership (in such manner as it determines in
its discretion to be reasonable) to arrive at a fair market value for
individual properties.
(ii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)
(f), immediately prior to any actual or deemed distribution to a
Partner of any Partnership property (other than a distribution of
cash that is not in redemption or retirement of a Partnership
Interest), the Capital Accounts of all Partners and the Carrying Value
of all Partnership property shall be adjusted upward or downward
to reflect any Unrealized Gain or Unrealized Loss attributable to such
Partnership property, as if such Unrealized Gain or Unrealized Loss had
been recognized in a sale of such property immediately prior to such
distribution for an amount equal to its fair market value, and had been
allocated to the Partners, at such time, pursuant to Section 6.1 in the
same manner as any item of gain or loss actually recognized during such
period would have been allocated. In determining such Unrealized
Gain or Unrealized Loss the aggregate cash amount and fair market value
of all Partnership assets (including, without limitation, cash or cash
equivalents) immediately prior to a distribution shall (A) in the case
of an actual distribution that is not made pursuant to Section 12.4 or
in the case of a deemed contribution and/or distribution occurring
as a result of a termination of the Partnership pursuant to Section 708
of the Code, be determined and allocated in the same manner as that
provided in Section 5.4(d)(i) or (B) in the case of a liquidating
distribution pursuant to Section 12.4, be determined and
allocated by the Liquidator using such reasonable method of valuation
as it may adopt.
5.5 Issuances of Additional Partnership Securities.
(a) The Partnership may issue additional Partnership Securities and options,
rights, warrants and appreciation rights relating to Partnership Securities for
any Partnership purpose at any time and from time to time to such Persons for
such consideration and on such terms and conditions as shall be established by
the General Partner in its sole discretion, all without the approval of any
Limited Partners.
(b) Each additional Partnership Security authorized to be issued by the
Partnership pursuant to Section 5.5(a) may be issued in one or more classes, or
one or more series of any such classes, with such designations, preferences,
rights, powers and duties (which may be senior to existing classes and series of
Partnership Securities), as shall be fixed
29
by the General Partner in the exercise of its sole discretion, including (i) the
right to share Partnership profits and losses or items thereof; (ii) the right
to share in Partnership distributions; (iii) the rights upon dissolution and
liquidation of the Partnership; (iv) whether, and the terms and conditions upon
which, the Partnership may redeem such Partnership Security; (v) whether such
Partnership Security is issued with the privilege of conversion or exchange and,
if so, the terms and conditions of such conversion or exchange; (vi) the terms
and conditions upon which such Partnership Security will be issued, evidenced by
certificates and assigned or transferred; (vii) the method for determining the
Percentage Interest as to such Partnership Security and (viii) the right, if
any, of such Partnership Security to vote on Partnership matters, including
matters relating to the relative rights, preferences and privileges of such
Partnership Security.
(c) The General Partner is hereby authorized and directed to take all actions
that it deems necessary or appropriate in connection with (i) each issuance of
Partnership Securities pursuant to this Section 5.5, (ii) the conversion of the
General Partner Interest or any Incentive Distribution Rights into Common Units
pursuant to the terms of this Agreement, (iii) the admission of Additional
Limited Partners and (iv) all additional issuances of Partnership Securities.
The General Partner is further authorized and directed to specify the relative
rights, powers and duties of the holders of Partnership Securities being so
issued. The General Partner shall do all things necessary to comply with the
Delaware Act and is authorized and directed to do all things it deems to be
necessary or advisable in connection with any future issuance of Partnership
Securities or in connection with the conversion of the General Partner Interest
or any Incentive Distribution Rights into Common Units pursuant to the terms of
this Agreement, including compliance with any statute, rule, regulation or
guideline of any federal, state or other governmental agency or any National
Securities Exchange on which the Common Units or other Partnership Securities
are listed for trading.
(d) No fractional Units shall be issued by the Partnership.
5.6 Limited Preemptive Right.
Except as provided in this Section 5.6 and in Section 5.2, no Person
shall have any preemptive, preferential or other similar right with respect to
(a) additional Capital Contributions; (b) the issuance of any class or series of
Partnership Interests, whether unissued, held in the treasury or hereafter
created; (c) issuance of obligations, evidence of indebtedness or other
securities of the Partnership convertible into or exchangeable for, or carrying
or accompanied by any rights to receive, purchase or subscribe to, any such
Partnership Interests; (d) issuance of any right of subscription to or right to
receive, or any warrant or option for the purchase of, any such Partnership
Interests; or (e) issuance or sale of any other securities that may be issued or
sold by the Partnership. The General Partner shall have the right, which it may
from time to time assign in whole or in part to any of its Affiliates, to
purchase Partnership Securities from the Partnership whenever, and on the same
terms that, the Partnership issues Partnership Securities to Persons other than
the General Partner and its Affiliates, to the extent necessary to maintain the
Percentage Interests of the General Partner and its Affiliates equal to that
which existed immediately prior to the issuance of such Partnership Securities.
5.7 Splits and Combinations.
(a) Subject to Sections 5.7(d), 6.6 and 6.8 (dealing with adjustments of
distribution levels) the Partnership may make a Pro Rata distribution of
Partnership Securities to all Record Holders or may effect a subdivision or
combination of Partnership Securities so long as, after any such event, each
Partner shall have the same Percentage Interest in the Partnership as before
such event, and any amounts calculated on a per Unit basis or stated as a number
of Units are proportionately adjusted.
(b) Whenever such a distribution, subdivision or combination of Partnership
Securities is declared, the General Partner shall select a Record Date as of
which the distribution, subdivision or combination shall be effective and shall
send notice thereof at least 20 days prior to such Record Date to each Record
Holder as of a date not less than 10 days prior to the date of such notice. The
General Partner also may cause a firm of independent public accountants selected
by it to calculate the number of Partnership Securities to be held by each
Record Holder after giving effect to such distribution, subdivision or
combination. The General Partner shall be entitled to rely on any certificate
provided by such firm as conclusive evidence of the accuracy of such
calculation.
30
(c) Promptly following any such distribution, subdivision or combination, the
Partnership may issue Certificates to the Record Holders of Partnership
Securities as of the applicable Record Date representing the new number of
Partnership Securities held by such Record Holders, or the General Partner may
adopt such other procedures as it may deem appropriate to reflect such changes.
If any such combination results in a smaller total number of Partnership
Securities Outstanding, the Partnership shall require, as a condition to the
delivery to a Record Holder of such new Certificate, the surrender of any
Certificate held by such Record Holder immediately prior to such Record Date.
(d) The Partnership shall not issue fractional Common Units upon any
distribution, subdivision or combination of Common Units. If a distribution,
subdivision or combination of Common Units would result in the issuance of
fractional Common Units but for the provisions of Section 5.5(d) and this
Section 5.7(d), each fractional Common Unit shall be rounded to the nearest
whole Common Unit (and a 0.5 Common Unit shall be rounded to the next higher
Common Unit).
5.8 Fully Paid and Non-Assessable Nature of Limited Partner Interests.
All Limited Partner Interests issued pursuant to, and in accordance
with the requirements of, this Article V shall be fully paid and non-assessable
Limited Partner Interests in the Partnership, except as such non-assessability
may be affected by Section 17-607 of the Delaware Act.
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
6.1 Allocations for Capital Account Purposes.
For purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among themselves, the Partnership's items of income,
gain, loss and deduction (computed in accordance with Section 5.4(b)) shall be
allocated among the Partners in each taxable year (or portion thereof) as
provided herein below.
(a) Net Income. After giving effect to the special allocations set
forth in Section 6.1(d), Net Income for each taxable year and
all items of income, gain, loss and deduction taken into
account in computing Net Income for such taxable year shall be
allocated as follows:
(i) First, 100% to the General Partner, in an amount equal to
the aggregate Net Losses allocated to the General Partner
pursuant to Section 6.1(b)(iii) for all previous taxable years
until the aggregate Net Income allocated to the General
Partner pursuant to this Section 6.1(a)(i) for the current
taxable year and all previous taxable years is equal to the
aggregate Net Losses allocated to the General Partner pursuant
to Section 6.1(b)(iii) for all previous taxable years; and
(ii) Second, 100% among the General Partner and the
Unitholders, in accordance with their respective Percentage
Interests, until the aggregate Net Income allocated to such
Partners pursuant to this Section 6.1(a)(ii) for the current
taxable year and all previous taxable years is equal to the
aggregate Net Losses allocated to such Partners pursuant to
Section 6.1(b)(ii) for all previous taxable years; and
(iii) Third, the balance, if any, 100% among the General
Partner and the Unitholders, in accordance with their
respective Percentage Interests.
(b) Net Losses. After giving effect to the special allocations set
forth in Section 6.1(d), Net Losses for each taxable period
and all items of income, gain, loss and deduction taken into
account in computing Net Losses for such taxable period shall
be allocated as follows:
(i) First, 100% among the General Partner and the Unitholders,
in accordance with their respective Percentage Interests,
until the aggregate Net Losses allocated pursuant to this
Section 6.1(b)(i) for the current taxable year and all
previous taxable years is equal to the aggregate Net Income
allocated to such
31
Partners pursuant to Section 6.1(a)(iii) for all previous
taxable years; provided that the Net Losses shall not
be allocated pursuant to this Section 6.1(b)(i) to the extent
that such allocation would cause any Unitholder to have a
deficit balance in its Adjusted Capital Account at the end of
such taxable year (or increase any existing deficit balance in
its Adjusted Capital Account);
(ii) Second, 100% among the General Partner and the
Unitholders, in accordance with their respective Percentage
Interests; provided that Net Losses shall not be allocated
pursuant to this Section 6.1(b)(ii) to the extent that such
allocation would cause any Unitholder to have a deficit
balance in its Adjusted Capital Account at the end of such
taxable year (or increase any existing deficit balance in its
Adjusted Capital Account); and
(iii) Third, the balance, if any, 100% to the General Partner.
(c) Net Termination Gains and Losses. After giving effect to the
special allocations set forth in Section 6.1(d), all items of
income, gain, loss and deduction taken into account in
computing Net Termination Gain or Net Termination Loss for
such taxable period shall be allocated in the same manner as
such Net Termination Gain or Net Termination Loss is allocated
hereunder. All allocations under this Section 6.1(c) shall be
made after Capital Account balances have been adjusted by all
other allocations provided under this Section 6.1 and after
all distributions of Available Cash provided under Sections
6.4 and 6.5 have been made; provided, however, that solely for
purposes of this Section 6.1(c), Capital Accounts shall not be
adjusted for distributions made pursuant to Section 12.4.
(i) If a Net Termination Gain is recognized (or deemed
recognized pursuant to Section 5.4(d)), such Net Termination
Gain shall be allocated among the Partners in the following
manner (and the Capital Accounts of the Partners shall be
increased by the amount so allocated in each of the following
subclauses, in the order listed, before an allocation is made
pursuant to the next succeeding subclause):
(A) First, to each Partner having a deficit balance in its
Capital Account, in the proportion that such deficit
balance bears to the total deficit balances in the Capital
Accounts of all Partners, until each such Partner has been
allocated Net Termination Gain equal to any such deficit
balance in its Capital Account;
(B) Second, among the General Partner and all Unitholders, in
accordance with s their respective Percentage Interests
until the Capital Account in respect of each Common Unit
then Outstanding is equal to the sum of (1) its
Unrecovered Capital and (2) the Minimum Quarterly
Distribution for the Quarter during which the Liquidation
Date occurs, reduced by any distribution pursuant to
Section 6.4(a)(i) with respect to such Common Unit for
such Quarter (the amount determined pursuant to this
clause (2) is hereinafter defined as the "Unpaid MQD");
(C) Third, 100% among the General Partner and all Unitholders,
in accordance with their respective Percentage Interests,
until the Capital Account in respect of each Common Unit
then Outstanding is equal to the sum of (1) its
Unrecovered Capital, (2) the Unpaid MQD and (3) the excess
of (a) the First Target Distribution less the Minimum
Quarterly Distribution for each Quarter of the
Partnership's existence over (bb) the cumulative per Unit
amount of any distributions of Available Cash that is
deemed to be Operating Surplus made pursuant to Section
6.4(a)(ii) (the sum of (1), (2) and (3) is hereinafter
defined as the "First Liquidation Target Amount");
(D) Fourth, among the General Partner, the holders of the
Incentive Distribution Rights and all Unitholders,
as follows: (1) to the General Partner in accordance with
its Percentage Interest, 13.2665% to the holders of the
Incentive Distribution Rights, Pro Rata, and to all
Unitholders, Pro Rata, a percentage equal to 100% less
the sum of the percentages applicable to subclauses
(1) and (2) of this clause (D), until the Capital
Account in respect of each Common Unit then Outstanding
is equal to the sum of (1) the First Liquidation Target
Amount and (2) the excess of (aa) the Second Target
Distribution less the First Target Distribution for each
Quarter of the Partnership's existence over (bb) the
cumulative per Unit amount of any distributions of
Available Cash that is deemed to be
32
Operating Surplus made pursuant to Sections 6.4(a)(iii)
(the sum of (1) and (2) is hereinafter defined as the
"Second Liquidation Target Amount");
(E) Fifth, among the General Partner, the holders of the
Incentive Distribution Rights and all Unitholders, as
follows: (1) to the General Partner in accordance
with its Percentage Interest, (2) 23.4712% to the holders
of the Incentive Distribution Rights, Pro Rata, and (3) to
all Unitholders, Pro Rata, a percentage equal to 100% less
the sum of the percentages applicable to subclauses (1)
and (2) of this clause (E), until the Capital Account in
respect of each Common Unit then Outstanding is equal to
the sum of (1) the Second Liquidation Target Amount, and
(2) the excess of (aa) the Third Target Distribution less
the Second Target Distribution for each Quarter of the
Partnership's existence over (bb) the cumulative per
Unit amount of any distributions of Available Cash
that is deemed to be Operating Surplus made pursuant
to Sections 6.4(a) (iv) (the sum of (1) and (2) is
hereinafter defined as the "Third Liquidation Target
Amount"); and
(F) Finally, among the General Partner, the holders of the
Incentive Distribution Rights and all Unitholders, as
follows: (1) to the General Partner in accordance with its
Percentage Interest, (2) 48.9821% to the holders of the
Incentive Distribution Rights, Pro Rata, and (3) to all
Unitholders, Pro Rata, a percentage equal to 100% less the
sum of the percentages applicable to subclauses (1) and
(2) of this clause (F).
(ii) If a Net Termination Loss is recognized (or deemed
recognized pursuant to Section 5.4(d)), such Net Termination
Loss shall be allocated among the Partners in the following
manner:
(A) First, among the General Partner and all Unitholders
holding Common Units in accordance with their respective
Percentage Interests until the Capital Account in respect
of each Common Unit then Outstanding has been reduced to
zero; and
(B) Second, the balance, if any, 100% to the General Partner.
(d) Special Allocations. Notwithstanding any other provision of
this Section 6.1, the following special allocations shall be
made for such taxable period:
(i) Partnership Minimum Gain Chargeback. Notwithstanding
any other provision of this Section 6.1, if there is a net
decrease in Partnership Minimum Gain during any Partnership
taxable period, each Partner shall be allocated items of
Partnership income and gain for such period (and, if
necessary, subsequent periods) in the manner and amounts
provided in Treasury Regulation Sections 1.704-2(f)(6),
1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor
provision. For purposes of this Section 6.1(d), each
Partner's Adjusted Capital Account balance shall be
determined, and the allocation of income or gain required
hereunder shall be effected, prior to the application of any
other allocations pursuant to this Section 6.1(d) with
respect to such taxable period (other than an allocation
pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii)). This Section
6.1(d)(i) is intended to comply with the Partnership Minimum
Gain chargeback requirement in Treasury Regulation Section
1.704-2(f) and shall be interpreted consistently therewith.
(ii) Chargeback of Partner Nonrecourse Debt Minimum Gain.
Notwithstanding the other provisions of this Section 6.1
(other than Section 6.1(d)(i)), except as provided in
Treasury Regulation Section 1.704-2(i)(4), if there is a
net decrease in Partner Nonrecourse Debt Minimum Gain
during any Partnership taxable period, any Partner with a
share of Partner Nonrecourse Debt Minimum Gain at the
beginning of such taxable period shall be allocated items of
Partnership income and gain for such period (and, if
necessary, subsequent periods) in the manner and amounts
provided in Treasury Regulation Sections 1.704-2(i)(4) and
1.704- 2(j)(2)(ii), or any successor provisions. For
purposes of this Section 6.1(c), each Partner's Adjusted
Capital Account balance shall be determined, and the
allocation of income or gain required hereunder shall be
effected, prior to the application of any other allocations
pursuant to this Section 6.1(d), other than Section 6.1(d)(i)
and other than an allocation pursuant to Sections 6.1(d)(v)
and 6.1(d)(vi), with respect to such taxable
33
period. This Section 6.1(d)(ii) is intended to comply with
the chargeback of items of income and gain requirement in
Treasury Regulation Section 1.704-2(i)(4) and shall be
interpreted consistently therewith.
(iii) Priority Allocations. Partnership gross income or gain
for the taxable period, if any, shall be allocated (1) to the
holders of Incentive Distribution Rights, Pro Rata, until the
aggregate amount of such items allocated to the holders of
Incentive Distribution Rights pursuant to this paragraph
6.1(d)(iii) for the current taxable year and all previous
taxable years is equal to the cumulative amount of all
Incentive Distributions made to the holders of Incentive
Distribution Rights from the Closing Date to a date 45 days
after the end of the current taxable year; and (2) to the
General Partner an amount equal to 2/98ths of the sum of the
amounts allocated in clause (1) above.
(iv) Qualified Income Offset. In the event any Partner
unexpectedly receives any adjustments, allocations or
distributions described in Treasury Regulation Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain
shall be specially allocated to such Partner in an amount
and manner sufficient to eliminate, to the extent required by
the Treasury Regulations promulgated under Section 704(b)
of the Code, the deficit balance, if any, in its Adjusted
Capital Account created by such adjustments, allocations or
distributions as quickly as possible unless such deficit
balance is otherwise eliminated pursuant to Section 6.1(d)(i)
or 6.1(d)(ii).
(v) Gross Income Allocations. In the event any Partner has a
deficit balance in its Capital Account at the end of any
Partnership taxable period in excess of the sum of (A) the
amount such Partner is required to restore pursuant to the
provisions of this Agreement and (B) the amount such Partner
is deemed obligated to restore pursuant to Treasury
Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such
Partner shall be specially allocated items of Partnership
gross income and gain in the amount of such excess as quickly
as possible; provided, that an allocation pursuant to this
Section 6.1(d)(v) shall be made only if and to the extent
that such Partner would have a deficit balance in its
Capital Account as adjusted after all other allocations
provided for in this Section 6.1 have been tentatively
made as if this Section 6.1(d)(v) were not in this Agreement.
(vi) Nonrecourse Deductions. Nonrecourse Deductions for any
taxable period shall be allocated to the Partners in
accordance with their respective Percentage Interests. If the
General Partner determines in its good faith discretion that
the Partnership's Nonrecourse Deductions must be allocated in
a different ratio to satisfy the safe harbor requirements of
the Treasury Regulations promulgated under Section 704(b) of
the Code, the General Partner is authorized, upon notice to
the other Partners, to revise the prescribed ratio to the
numerically closest ratio that does satisfy such requirements.
(vii) Partner Nonrecourse Deductions. Partner Nonrecourse
Deductions for any taxable period shall be allocated 100% to
the Partner that bears the Economic Risk of Loss with respect
to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable in accordance with
Treasury Regulation Section 1.704-2(i). If more than one
Partner bears the Economic Risk of Loss with respect to a
Partner Nonrecourse Debt, such Partner Nonrecourse Deductions
attributable thereto shall be allocated between or among such
Partners in accordance with the ratios in which they share
such Economic Risk of Loss.
(viii) Nonrecourse Liabilities. For purposes of Treasury
Regulation Section 1.752-3(a)(3), the Partners agree that
Nonrecourse Liabilities of the Partnership in excess of the
sum of (A) the amount of Partnership Minimum Gain and (B) the
total amount of Nonrecourse Built-in Gain shall be allocated
among the Partners in accordance with their respective
Percentage Interests.
(ix) Code Section 754 Adjustments. To the extent an adjustment
to the adjusted tax basis of any Partnership asset pursuant to
Section 734(b) or 743(b) of the Code is required, pursuant to
Treasury Regulation Section 1.704- 1(b)(2)(iv)(m), to be taken
into account in determining Capital Accounts, the amount of
such adjustment to the Capital Accounts shall be treated as an
item of gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases such basis), and
such item of gain or loss shall be specially
34
allocated to the Partners in a manner consistent with the
manner in which their Capital Accounts are required to be
adjusted pursuant to such Section of the Treasury Regulations.
(x) Curative Allocation.
(A) Notwithstanding any other provision of this Section 6.1,
other than the Required Allocations, the Required
Allocations shall be taken into account in making the
Agreed Allocations so that, to the extent possible, the
net amount of items of income, gain, loss and deduction
allocated to each Partner pursuant to the Required
Allocations and the Agreed Allocations, together, shall
be equal to the net amount of such items that would have
been allocated to each such Partner under the Agreed
Allocations had the Required Allocations and the related
Curative Allocation not otherwise been provided in this
Section 6.1. Notwithstanding the preceding sentence,
Required Allocations relating to (1) Nonrecourse
Deductions shall not be taken into account except to the
extent that there has been a decrease in Partnership
Minimum Gain and (2) Partner Nonrecourse Deductions shall
not be taken into account except to the extent that there
has been a decrease in Partner Nonrecourse Debt Minimum
Gain. Allocations pursuant to this Section 6.1(d)(x)(A)
shall only be made with respect to Required Allocations to
the extent the General Partner reasonably determines that
such allocations will otherwise be inconsistent with the
economic agreement among the Partners. Further, allocations
pursuant to this Section 6.1(d)(x)(A) shall be deferred
with respect to allocations pursuant to clauses (1) and
(2) hereof to the extent the General Partner reasonably
determines that such allocations are likely to be offset by
subsequent Required Allocations.
(B) The General Partner shall have reasonable discretion,
with respect to each taxable period, to (1) apply the
provisions of Section 6.1(d)(x)(A) in whatever order is
most likely to minimize the economic distortions that might
otherwise result from the Required Allocations, and (2)
divide all allocations pursuant to Section 6.1(d)(x)(A)
among the Partners in a manner that is likely to minimize
such economic distortions.
(xi) Corrective Allocations. In the event of any allocation of
Additional Book Basis Derivative Items or any Book-Down Event
or any recognition of a Net Termination Loss, the following
rules shall apply:
(A) In the case of any allocation of Additional Book Basis
Derivative Items (other than an allocation of Unrealized
Gain or Unrealized Loss under Section 5.4(d)), the
General Partner shall allocate additional items of gross
income and gain away from the holders of Incentive
Distribution Rights to the Unitholders and the General
Partner, or additional items of deduction and loss away
from the Unitholders and the General Partner to the
holders of Incentive Distribution Rights, to the extent
that the Additional Book Basis Derivative Items allocated
to the Unitholders or the General Partner exceed their
Share of Additional Book Basis Derivative Items. For
this purpose, the Unitholders and the General Partner
shall be treated as being allocated Additional Book Basis
Derivative Items to the extent that such Additional Book
Basis Derivative Items have reduced the amount of income
that would otherwise have been allocated to the
Unitholders or the General Partner under the Partnership
Agreement (e.g., Additional Book Basis Derivative
Items taken into account in computing cost of goods
sold would reduce the amount of book income otherwise
available for allocation among the Partners). Any
allocation made pursuant to this Section 6.1(d)(xi)(A)
shall be made after all of the other Agreed Allocations
have been made as if this Section 6.1(d)(xi)(A) were not
in this Agreement and, to the extent necessary, shall
require the reallocation of items that have been allocated
pursuant to such other Agreed Allocations.
(B) In the case of any negative adjustments to the Capital
Accounts of the Partners resulting from a Book-Down Event
or from the recognition of a Net Termination Loss, such
negative adjustment (1) shall first be allocated, to the
extent of the Aggregate Remaining Net Positive
Adjustments, in such a manner, as determined by the
General Partner, that to the extent possible the aggregate
Capital Accounts of the Partners will equal the amount
that would have been the Capital Account balance of the
Partners if no prior Book-Up Events had occurred, and
(2) any negative
35
adjustment in excess of the Aggregate Remaining Net
Positive Adjustments shall be allocated pursuant to
Section 6.1(c) hereof.
(C) In making the allocations required under this Section
6.1(d)(xi), the General Partner may apply whatever
conventions or other methodology it determines will
satisfy the purpose of this Section 6.1(d)(xi).
6.2 Allocations for Tax Purposes.
(a) Except as otherwise provided herein, for federal income tax purposes,
each item of income, gain, loss and deduction shall be allocated among
the Partners in the same manner as its correlative item of "book"
income, gain, loss or deduction is allocated pursuant to Section 6.1.
(b) In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss,
depreciation, amortization and cost recovery deductions shall be
allocated for federal income tax purposes among the Partners as
follows:
(i) (A) In the case of a Contributed Property, such items attributable
thereto shall be allocated among the Partners in the manner provided
under Section 704(c) of the Code that takes into account the variation
between the Agreed Value of such property and its adjusted basis at the
time of contribution; and (B) any item of Residual Gain or Residual
Loss attributable to a Contributed Property shall be allocated among
the Partners in the same manner as its correlative item of "book" gain
or loss is allocated pursuant to Section 6.1.
(ii)(A) In the case of an Adjusted Property, such items shall (1) first, be
allocated among the Partners in a manner consistent with the
principles of Section 704(c) of the Code to take into account the
Unrealized Gain or Unrealized Loss attributable to such property and
the allocations thereof pursuant to Section 5.4(d)(i) or 5.4(d)(ii),
and (2) second, in the event such property was originally a Contributed
Property, be allocated among the Partners in a manner consistent with
Section 6.2(b)(i)(A); and (B) any item of Residual Gain or Residual
Loss attributable to an Adjusted Property shall be allocated among
the Partners in the same manner as its correlative item of "book"
gain or loss is allocated pursuant to Section 6.1.
(iii)The General Partner shall apply the principles of Treasury Regulation
Section 1.704-3(d) to eliminate Book-Tax Disparities.
(c) For the proper administration of the Partnership and for the
preservation of uniformity of the Limited Partner Interests (or any
class or classes thereof), the General Partner shall have sole
discretion to (i) adopt such conventions as it deems appropriate in
determining the amount of depreciation, amortization and cost recovery
deductions; (ii) make special allocations for federal income tax
purposes of income (including gross income) or deductions; and (iii)
amend the provisions of this Agreement as appropriate (x) to reflect
the proposal or promulgation of Treasury Regulations under Section
704(b) or Section 704(c) of the Code or (y) otherwise to preserve or
achieve uniformity of the Limited Partner Interests (or any class or
classes thereof). The General Partner may adopt such conventions, make
such allocations and make such amendments to this Agreement as provided
in this Section 6.2(c) only if such conventions, allocations or
amendments would not have a material adverse effect on the Partners,
the holders of any class or classes of Limited Partner Interests issued
and Outstanding or the Partnership, and if such allocations are
consistent with the principles of Section 704 of the Code.
(d) The General Partner in its discretion may determine to depreciate or
amortize the portion of an adjustment under Section 743(b) of the Code
attributable to unrealized appreciation in any Adjusted Property (to
the extent of the unamortized Book-Tax Disparity) using a predetermined
rate derived from the depreciation or amortization method and useful
life applied to the Partnership's common basis of such property,
despite any inconsistency of such approach with Treasury Regulation
Section 1.167(c)-l(a)(6) or any successor regulations thereto. If the
General Partner determines that such reporting position cannot
reasonably be taken, the General Partner may adopt depreciation and
amortization conventions under which all purchasers acquiring Limited
Partner Interests in the same month would receive depreciation and
amortization deductions, based upon the same applicable rate as if they
had purchased a direct interest
36
in the Partnership's property. If the General Partner chooses not to
utilize such aggregate method, the General Partner may use any other
reasonable depreciation and amortization conventions to preserve the
uniformity of the intrinsic tax characteristics of any Limited Partner
Interests, so long as such conventions would not have a material
adverse effect on the Limited Partners or the Record Holders of any
class or classes of Limited Partner Interests.
(e) Any gain allocated to the Partners upon the sale or other taxable
disposition of any Partnership asset shall, to the extent possible,
after taking into account other required allocations of gain pursuant
to this Section 6.2, be characterized as Recapture Income in the same
proportions and to the same extent as such Partners (or their
predecessors in interest) have been allocated any deductions directly
or indirectly giving rise to the treatment of such gains as Recapture
Income.
(f) All items of income, gain, loss, deduction and credit recognized by the
Partnership for federal income tax purposes and allocated to the
Partners in accordance with the provisions hereof shall be determined
without regard to any election under Section 754 of the Code that may
be made by the Partnership; provided, however, that such allocations,
once made, shall be adjusted as necessary or appropriate to take into
account those adjustments permitted or required by Sections 734 and 743
of the Code.
(g) Each item of Partnership income, gain, loss and deduction attributable
to a transferred Partnership Interest, shall for federal income tax
purposes, be determined on an annual basis and prorated on a monthly
basis and shall be allocated to the Partners as of the opening of the
New York Stock Exchange on the first Business Day of each month;
provided, however, that gain or loss on a sale or other disposition of
any assets of the Partnership or any other extraordinary item of income
or loss realized or recognized other than in the ordinary course of
business shall be allocated to the Partners as of the opening of the
New York Stock Exchange on the first Business Day of the month in which
such gain or loss is recognized for federal income tax purposes. The
General Partner may revise, alter or otherwise modify such methods of
allocation as it determines necessary, to the extent permitted or
required by Section 706 of the Code and the regulations or rulings
promulgated thereunder.
(h) Allocations that would otherwise be made to a Limited Partner under the
provisions of this Article VI shall instead be made to the beneficial
owner of Limited Partner Interests held by a nominee in any case in
which the nominee has furnished the identity of such owner to the
Partnership in accordance with Section 6031(c) of the Code or any other
method acceptable to the General Partner in its sole discretion.
6.3 Requirement and Characterization of Distributions; Distributions to
Record Holders.
(a) Within 45 days following the end of each Quarter, an amount equal to 100% of
Available Cash with respect to such Quarter shall, subject to Section 17-607 of
the Delaware Act, be distributed in accordance with this Article VI by the
Partnership to the Partners as of the Record Date selected by the General
Partner. All amounts of Available Cash distributed by the Partnership on any
date from any source shall be deemed to be Operating Surplus until the sum of
all amounts of Available Cash theretofore distributed by the Partnership to the
Partners pursuant to Section 6.4 equals the Operating Surplus from the Closing
Date through the close of the immediately preceding Quarter. Any remaining
amounts of Available Cash distributed by the Partnership on such date shall,
except as otherwise provided in Section 6.5, be deemed to be "Capital Surplus."
All distributions required to be made under this Agreement shall be made subject
to Section 17-607 of the Delaware Act.
(b) Notwithstanding Section 6.3(a), in the event of the dissolution and
liquidation of the Partnership, all receipts received during or after the
Quarter in which the Liquidation Date occurs, other than from borrowings
described in (a)(ii) of the definition of Available Cash, shall be applied and
distributed solely in accordance with, and subject to the terms and conditions
of, Section 12.4.
(c) The General Partner shall have the discretion to treat taxes paid by the
Partnership on behalf of, or amounts withheld with respect to, all or less than
all of the Partners, as a distribution of Available Cash to such Partners.
(d) Each distribution in respect of a Partnership Interest shall be paid by the
Partnership, directly or through the Transfer Agent or through any other Person
or agent, only to the Record Holder of such Partnership Interest as of the
37
Record Date set for such distribution. Such payment shall constitute full
payment and satisfaction of the Partnership's liability in respect of such
payment, regardless of any claim of any Person who may have an interest in such
payment by reason of an assignment or otherwise.
6.4 Distributions of Available Cash from Operating Surplus.
(a) Available Cash with respect to any Quarter that is deemed to be
Operating Surplus pursuant to the provisions of Section 6.3 or 6.5,
subject to Section 17-607 of the Delaware Act, shall be distributed as
follows, except as otherwise required by Section 5.6(b) in respect of
other Partnership Securities issued pursuant thereto:
(i) First, 100% among General Partner and the Unitholders in accordance
with their respective Percentage Interests, until there has been
distributed in respect of each Unit then Outstanding an amount equal to
the Minimum Quarterly Distribution for such Quarter;
(ii) Second, 100% among the General Partner and the Unitholders in
accordance with their respective Percentage Interests, until there has
been distributed in respect of each Unit then Outstanding an amount
equal to the excess of the First Target Distribution over the Minimum
Quarterly Distribution for such Quarter;
(iii) Third, among the General Partner, the holders of the Incentive
Distribution Rights and all Unitholders, as follows: (A) to the General
Partner in accordance with its Percentage Interest, (B) 13.2665% to the
holders of the Incentive Distribution Rights, Pro Rata, and (C) to all
Unitholders, Pro Rata, a percentage equal to 100% less the sum of the
percentages applicable to subclauses (A) and (B) of this clause (iii),
until there has been distributed in respect of each Unit then
Outstanding an amount equal to the excess of the Second Target
Distribution over the First Target Distribution for such Quarter;
(iv) Fourth, among the General Partner, the holders of the Incentive
Distribution Rights and all Unitholders, as follows: (A) to the General
Partner in accordance with its Percentage Interest, (B) 23.4712% to the
holders of the Incentive Distribution Rights, Pro Rata, and (C) to all
Unitholders, Pro Rata, a percentage equal to 100% less the sum of the
percentages applicable to subclauses (A) and (B) of this clause (iv)
until there has been distributed in respect of each Unit then
Outstanding an amount equal to the excess of the Third Target
Distribution over the Second Target Distribution for such Quarter; and
(v) Thereafter, among the General Partner, the holders of the Incentive
Distribution Rights and all Unitholders, as follows: (A) to the General
Partner in accordance with its Percentage Interest, (B) 48.9821% to the
holders of the Incentive Distribution Rights, Pro Rata, and (C) to all
Unitholders, Pro Rata, a percentage equal to 100% less the sum of the
percentages applicable to subclauses (A) and (B) of this clause (v);
provided, however, if the Minimum Quarterly Distribution, the First Target
Distribution, the Second Target Distribution and the Third Target Distribution
have been reduced to zero pursuant to the second sentence of Section 6.6(a), the
distribution of Available Cash that is deemed to be Operating Surplus with
respect to any Quarter will be made solely in accordance with Section 6.4(a)(v).
6.5 Distributions of Available Cash from Capital Surplus
Available Cash that is deemed to be Capital Surplus pursuant to the
provisions of Section 6.3(a) shall, subject to Section 17-607 of the Delaware
Act, be distributed, unless the provisions of Section 6.3 require otherwise,
100% to the General Partner and the Unitholders in accordance with their
respective Percentage Interests, until a hypothetical holder of a Common Unit
acquired on the Initial Closing Date has received with respect to such Common
Unit, during the period since the Closing Date through such date, distributions
of Available Cash that are deemed to be Capital Surplus in an aggregate amount
equal to the Initial Unit Price. Thereafter, all Available Cash shall be
distributed as if it were Operating Surplus and shall be distributed in
accordance with Section 6.4.
38
6.6 Adjustment of Minimum Quarterly Distribution and Target Distribution
Levels.
(a) The Minimum Quarterly Distribution, First Target Distribution, Second Target
Distribution and Third Target Distribution shall be proportionately adjusted in
the event of any distribution, combination or subdivision (whether effected by a
distribution payable in Units or otherwise) of Units or other Partnership
Securities in accordance with Section 5.7. In the event of a distribution of
Available Cash that is deemed to be from Capital Surplus, the then applicable
Minimum Quarterly Distribution, First Target Distribution, Second Target
Distribution and Third Target Distribution shall be adjusted proportionately
downward to equal the product obtained by multiplying the otherwise applicable
Minimum Quarterly Distribution, First Target Distribution, Second Target
Distribution and Third Target Distribution, as the case may be, by a fraction of
which the numerator is the Unrecovered Capital of the Common Units immediately
after giving effect to such distribution and of which the denominator is the
Unrecovered Capital of the Common Units immediately prior to giving effect to
such distribution.
(b) The Minimum Quarterly Distribution, First Target Distribution, Second Target
Distribution and Third Target Distribution shall also be subject to adjustment
pursuant to Section 6.8.
6.7 Special Provisions Relating to the Holders of Incentive Distribution
Rights.
Notwithstanding anything to the contrary set forth in this Agreement,
the holders of the Incentive Distribution Rights (a) shall (i) possess the
rights and obligations provided in this Agreement with respect to a Limited
Partner pursuant to Articles III and VII and (ii) have a Capital Account as a
Partner pursuant to Section 5.4 and all other provisions related thereto and (b)
shall not (i) be entitled to vote on any matters requiring the approval or vote
of the holders of Outstanding Units, (ii) be entitled to any distributions other
than as provided in Sections 6.4(a)(iii), (iv) and (v) and Section 12.4 or (iii)
be allocated items of income, gain, loss or deduction other than as specified in
this Article VI.
6.8 Entity-Level Taxation.
If legislation is enacted or the interpretation of existing language is
modified by the relevant governmental authority which causes the Partnership to
be treated as an association taxable as a corporation or otherwise subjects the
Partnership to entity-level taxation for federal income tax purposes, the then
applicable Minimum Quarterly Distribution, First Target Distribution, Second
Target Distribution and Third Target Distribution shall be adjusted to equal the
product obtained by multiplying (a) the amount thereof by (b) one minus the sum
of (i) the highest marginal federal corporate (or other entity, as applicable)
income tax rate of the Partnership for the taxable year of the Partnership in
which such Quarter occurs (expressed as a percentage) plus (ii) the effective
overall state and local income tax rate (expressed as a percentage) applicable
to the Partnership for the calendar year next preceding the calendar year in
which such Quarter occurs (after taking into account the benefit of any
deduction allowable for federal income tax purposes with respect to the payment
of state and local income taxes), but only to the extent of the increase in such
rates resulting from such legislation or interpretation. Such effective overall
state and local income tax rate shall be determined for the taxable year next
preceding the first taxable year during which the Partnership is taxable for
federal income tax purposes as an association taxable as a corporation or is
otherwise subject to entity-level taxation by determining such rate as if the
Partnership had been subject to such state and local taxes during such preceding
taxable year.
ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
7.2 Management.
(a) The General Partner shall conduct, direct and manage all activities of
the Partnership. Except as otherwise expressly provided in this
Agreement, all management powers over the business and affairs of the
Partnership shall be
39
exclusively vested in the General Partner, and no
Limited Partner or Assignee shall have any management power over the
business and affairs of the Partnership. In addition to the powers now
or hereafter granted a general partner of a limited partnership under
applicable law or that are granted to the General Partner under any
other provision of this Agreement, the General Partner, subject to
Section 7.3, shall have full power and authority to do all things and
on such terms as it, in its sole discretion, may deem necessary or
appropriate to conduct the business of the Partnership, to exercise all
powers set forth in Section 2.5 and to effectuate the purposes set
forth in Section 2.4, including the following:
(i) the making of any expenditures, the lending or borrowing of money,
the assumption or guarantee of, or other contracting for, indebtedness
and other liabilities, the issuance of evidences of indebtedness,
including indebtedness that is convertible into Partnership Securities,
and the incurring of any other obligations;
(ii) the making of tax, regulatory and other filings, or rendering of
periodic or other reports to governmental or other agencies having
jurisdiction over the business or assets of the Partnership;
(iii) the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or exchange of any or all of the assets of the
Partnership or the merger or other combination of the Partnership with
or into another Person (the matters described in this clause (iii)
being subject, however, to any prior approval that may be required by
Section 7.3);
(iv) the use of the assets of the Partnership (including cash on hand)
for any purpose consistent with the terms of this Agreement, including
the financing of the conduct of the operations of the Partnership
Group, subject to Section 7.6 the lending of funds to other Persons
(including Genesis OLP and any Group Member), the repayment of
obligations of Genesis OLP and any Group Member and the making of
capital contributions to any Group Member;
(v) the negotiation, execution and performance of any contracts,
conveyances or other instruments (including instruments that limit the
liability of the Partnership under contractual arrangements to all or
particular assets of the Partnership, with the other party to the
contract to have no recourse against the General Partner or its assets
other than its interest in the Partnership, even if same results in the
terms of the transaction being less favorable to the Partnership than
would otherwise be the case);
(vi) the distribution of Partnership cash;
(vii) the selection and dismissal of employees (including employees
having titles such as "president," "vice president," "secretary" and
"treasurer") and agents, outside attorneys, accountants, consultants
and contractors and the determination of their compensation and other
terms of employment or hiring;
(viii) the maintenance of such insurance for the benefit of the
Partnership Group and the Partners as it deems necessary or
appropriate;
(ix) the formation of, or acquisition of an interest in, and the
contribution of property and the making of loans to, any further
limited or general partnerships, joint ventures, corporations or other
relationships (including the acquisition of interests in, and the
contributions of property to, Genesis OLP from time to time), subject,
however, to the restrictions set forth in Section 2.4;
(x) the control of any matters affecting the rights and obligations of
the Partnership, including the bringing and defending of actions at law
or in equity and otherwise engaging in the conduct of litigation and
the incurring of legal expense and the settlement of claims and
litigation;
(xi) the indemnification of any Person against liabilities and
contingencies to the extent permitted by law;
40
(xii) the entering into of listing agreements with any National
Securities Exchange and the delisting of some or all of the Limited
Partner Interests from, or requesting that trading be suspended on, any
such exchange (subject to any prior approval that may be required under
Section 4.7);
(xiii) the purchase, sale or other acquisition or disposition of
Partnership Securities, and the issuance of additional Partnership
Securities and options, rights, warrants and appreciation rights
relating to Partnership Securities; and
(xiv) the undertaking of any action in connection with the
Partnership's participation as a partner of Genesis OLP.
(b) Notwithstanding any other provision of this Agreement, the Fourth
Amended OLP Agreement, the Delaware Act or any applicable law, rule or
regulation, each of the Partners and each other Person who may acquire
an interest in the Partnership hereby (i) approves, ratifies and
confirms the execution, delivery and performance by the parties thereto
of this Agreement, the First Amended OLP Agreement and the other
agreements described in or filed as part of the Proxy Statement; (ii)
agrees that the General Partner (on its own or through any officer of
the Partnership) is authorized to execute, deliver and perform the
agreements referred to in clause (i) of this sentence and the other
agreements, acts, transactions and matters described in or contemplated
by the Proxy Statement on behalf of the Partnership without any further
act, approval or vote of the Partners or the other Persons who may
acquire an interest in the Partnership; and (iii) agrees that the
execution, delivery or performance by the General Partner, any Group
Member or any Affiliate of any of them, of this Agreement or any
agreement authorized or permitted under this Agreement (including the
exercise by the General Partner or any Affiliate of the General Partner
of the rights accorded pursuant to Article XV), shall not constitute a
breach by the General Partner of any duty that the General Partner may
owe the Partnership or the Limited Partners or any other Persons under
this Agreement (or any other agreements) or of any duty stated or
implied by law or equity.
7.3 Certificate of Limited Partnership.
The General Partner has caused the Certificate of Amended and Restated
Limited Partnership to be filed with the Secretary of State of the State of
Delaware as required by the Delaware Act and shall use all reasonable efforts to
cause to be filed such other certificates or documents as may be determined by
the General Partner in its sole discretion to be reasonable and necessary or
appropriate for the formation, continuation, qualification and operation of a
limited partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware or any other state in which the Partnership
may elect to do business or own property. To the extent that such action is
determined by the General Partner in its sole discretion to be reasonable and
necessary or appropriate, the General Partner shall file amendments to and
restatements of the Certificate of Limited Partnership and do all things to
maintain the Partnership as a limited partnership (or a partnership or other
entity in which the limited partners have limited liability) under the laws of
the State of Delaware or of any other state in which the Partnership may elect
to do business or own property. Subject to the terms of Section 3.4(a), the
General Partner shall not be required, before or after filing, to deliver or
mail a copy of the Certificate of Limited Partnership, any qualification
document or any amendment thereto to any Limited Partner or Assignee.
7.4 Restrictions on General Partner's Authority.
(a) The General Partner may not, without written approval of the specific act by
holders of all of the Outstanding Limited Partner Interests or by other written
instrument executed and delivered by holders of all of the Outstanding Limited
Partner Interests subsequent to the date of this Agreement, take any action in
contravention of this Agreement, including, except as otherwise provided in this
Agreement (i) committing any act that would make it impossible to carry on the
ordinary business of the Partnership; (ii) possessing Partnership property, or
assigning any rights in specific Partnership property, for other than a
Partnership purpose; (iii) admitting a Person as a Partner; (iv) amending this
Agreement in any manner; or (v) transferring its General Partner Interest.
41
(b) Except as provided in Articles XII and XIV, the General Partner may not
sell, exchange or otherwise dispose of all or substantially all of the assets of
the Partnership Group in a single transaction or a series of related
transactions (including by way of merger, consolidation or other combination) or
approve on behalf of the Partnership the sale, exchange or other disposition of
all or substantially all of the assets of the Partnership, without the approval
of holders of a Majority Interest; provided, however, that this provision shall
not preclude or limit the General Partner's ability to mortgage, pledge,
hypothecate or grant a security interest in all or substantially all of the
assets of the Partnership Group and shall not apply to any forced sale of any or
all of the assets of the Partnership Group pursuant to the foreclosure of, or
other realization upon, any such encumbrance; and provided, further, that this
provision shall not preclude or limit the ability of Genesis OLP to sell,
exchange or otherwise dispose of all of the assets of Genesis OLP in a single
transaction or a series of related transactions that is approved by the limited
partners of Genesis OLP as provided in Section 7.3(b) of the Fourth Amended OLP
Agreement.
(c) Without the approval of holders of a Majority Interest, the General Partner
shall not, on behalf of the Partnership, (i) consent to any amendment to the
Fourth Amended OLP Agreement or, except as expressly permitted by Section
7.9(d), take any action permitted to be taken by a partner of Genesis OLP, in
either case, that would have a material adverse effect on the Partnership as a
partner of Genesis OLP or (ii) except as permitted under Sections 4.6, 11.1 and
11.2, elect or cause the Partnership to elect a successor general partner of
Genesis OLP.
7.5 Reimbursement of the General Partner.
(a) Except as provided in this Section 7.4 and elsewhere in this Agreement or in
the Fourth Amended OLP Agreement, the General Partner shall not be compensated
for its services as general partner of any Group Member.
(b) The General Partner shall be reimbursed on a monthly basis, or such other
reasonable basis as the General Partner may determine in its sole discretion,
for (i) all direct and indirect expenses it incurs or payments it makes on
behalf of the Partnership (including salary, bonus, incentive compensation and
other amounts paid to any Person, including Affiliates of the General Partner,
to perform services for the Partnership or for the General Partner in the
discharge of its duties to the Partnership), and (ii) all other necessary or
appropriate expenses allocable to the Partnership or otherwise reasonably
incurred by the General Partner in connection with operating the Partnership's
business (including expenses allocated to the General Partner by its
Affiliates). The General Partner shall determine the expenses that are allocable
to the Partnership in any reasonable manner determined by the General Partner in
its sole discretion. Reimbursements pursuant to this Section 7.4 shall be in
addition to any reimbursement to the General Partner as a result of
indemnification pursuant to Section 7.7.
(c) The General Partner, in its sole discretion and without the approval of the
Limited Partners (who shall have no right to vote in respect thereof), may
propose and adopt on behalf of the Partnership employee benefit plans, employee
programs and employee practices (including plans, programs and practices
involving the issuance of Partnership Securities or options to purchase
Partnership Securities), or cause the Partnership to issue Partnership
Securities pursuant to any employee benefit plan, employee program or employee
practice maintained or sponsored by the General Partner or any of its
Affiliates, in each case for the benefit of employees of the General Partner,
any Group Member or any Affiliate, or any of them, in respect of services
performed, directly or indirectly, for the benefit of the Partnership Group. The
Partnership agrees to issue and sell to the General Partner or any of its
Affiliates any Partnership Securities that the General Partner or such Affiliate
is obligated to provide to any employees pursuant to any such employee benefit
plans, employee programs or employee practices. Expenses incurred by the General
Partner in connection with any such plans, programs and practices (including the
net cost to the General Partner or such Affiliate of Partnership Securities
purchased by the General Partner or such Affiliate from the Partnership to
fulfill options or awards under such plans, programs and practices) shall be
reimbursed in accordance with Section 7.4(b). Any and all obligations of the
General Partner under any employee benefit plans, employee programs or employee
practices adopted by the General Partner as permitted by this Section 7.4(c)
shall constitute obligations of the General Partner hereunder and shall be
assumed by any successor General Partner approved pursuant to Section 11.1 or
11.2 or the transferee of or successor to all of the General Partner's General
Partner Interest pursuant to Section 4.6.
42
7.6 Outside Activities.
(a) The General Partner, for so long as it is the general partner of the
Partnership (i) agrees that its sole business will be to act as a general
partner or managing member, as the case may be, of the Partnership, Genesis OLP
and any other partnership or limited liability company of which the Partnership
or Genesis OLP is, directly or indirectly, a partner or member and to undertake
activities that are ancillary or related thereto (including being a limited
partner or member in the Partnership or any such other partnership or limited
liability company) and (ii) shall not, directly or indirectly, engage in any
business or activity or incur any debts or liabilities except in connection with
or incidental to (A) its performance as general partner or managing member, as
the case may be, of one or more Group Members or as described in or contemplated
by the Registration Statement or the Proxy Statement or (B) the acquiring,
owning or disposing of debt or equity securities of any Group Member.
(b) Salomon, Basis Petroleum, Inc. and Howell continue to be parties to the
Non-Competition Agreement, which agreement sets forth certain restrictions on
their ability to engage in the business of (i) crude oil gathering at the
wellhead in the states of Alabama, Florida, Kansas, Louisiana, Mississippi, New
Mexico, Oklahoma or Texas, or any states contiguous to such states, and (ii)
transporting for third parties crude oil by pipeline along the routes of the
Partnership's crude oil pipelines owned as of the Initial Closing Date. The
Non-Competition Agreement remains in effect in accordance with its terms.
(c) Except as specifically restricted by Section 7.5(a) and the Non-Competition
Agreement, each Indemnitee (other than the General Partner) shall have the right
to engage in businesses of every type and description and other activities for
profit and to engage in and possess an interest in other business ventures of
any and every type or description, whether in businesses engaged in or
anticipated to be engaged in by any Group Member, independently or with others,
including business interests and activities in direct competition with the
business and activities of any Group Member, and none of the same shall
constitute a breach of this Agreement or any duty expressed or implied by law to
any Group Member or any Partner. Neither any Group Member, nor any Limited
Partner nor any other Person shall have any rights by virtue of this Agreement,
the Fourth Amended OLP Agreement or the partnership relationship established
hereby or thereby in any business ventures of any Indemnitee.
(d) Subject to the terms of Sections 7.5(a), 7.5(b) and 7.5(c) and the
Non-Competition Agreement, but otherwise notwithstanding anything to the
contrary in this Agreement, (i) the engaging in competitive activities by any
Indemnitees (other than the General Partner) in accordance with the provisions
of this Section 7.5 is hereby approved by the Partnership and all Partners and
(ii) it shall be deemed not to be a breach of the General Partner's fiduciary
duty or any other obligation of any type whatsoever of the General Partner for
the Indemnitees (other than the General Partner) to engage in such business
interests and activities in preference to or to the exclusion of the
Partnership, and the General Partner and the Indemnitees shall have no
obligation to present business opportunities to the Partnership.
(e) The General Partner and any of its Affiliates may acquire Partnership
Securities in addition to those heretofore acquired and, except as otherwise
provided in this Agreement, shall be entitled to exercise all rights relating to
such Partnership Securities.
(f) The term "Affiliates" when used in Section 7.5 with respect to the General
Partner shall not include any Group Member or any Subsidiary of the Group
Member.
7.7 Loans from the General Partner; Loans or Contributions from the
Partnership; Contracts with Affiliates; Certain Restrictions on the General
Partner.
(a) The General Partner or any Affiliate thereof may lend to any Group Member,
and any Group Member may borrow from the General Partner or any of its
Affiliates, funds needed or desired by the Group Member for such periods of time
and in such amounts as the General Partner may determine; provided, however,
that in any such case the lending party may not charge the borrowing party
interest at a rate greater than the rate that would be charged the borrowing
party or impose terms less favorable to the borrowing party than would be
charged or imposed on the borrowing party by unrelated lenders on comparable
loans made on an arm's-length basis (without reference to the lending party's
financial abilities or guarantees). The borrowing party shall reimburse the
lending party for any costs (other than any
43
additional interest costs) incurred by the lending party in connection with the
borrowing of such funds. For purposes of this Section 7.6(a) and Section 7.6(b),
the term "Group Member" shall include any Affiliate of a Group Member that is
controlled by the Group Member. No Group Member may lend funds to the General
Partner or any of its Affiliates (other than another Group Member).
(b) The Partnership may lend or contribute to any Group Member, and any Group
Member may borrow from the Partnership, funds on terms and conditions
established in the sole discretion of the General Partner; provided, however,
that the Partnership may not charge the Group Member interest at a rate less
than the rate that would be charged to the Group Member (without reference to
the General Partner's financial abilities or guarantees) by unrelated lenders on
comparable loans. The foregoing authority shall be exercised by the General
Partner in its sole discretion and shall not create any right or benefit in
favor of any Group Member or any other Person.
(c) The General Partner may itself, or may enter into an agreement with any of
its Affiliates to, render services to a Group Member or to the General Partner
in the discharge of its duties as general partner of the Partnership. Any
services rendered to a Group Member by the General Partner or any of its
Affiliates shall be on terms that are fair and reasonable to the Partnership;
provided, however, that the requirements of this Section 7.6(c) shall be deemed
satisfied as to (i) any transaction approved by Special Approval, (ii) any
transaction, the terms of which are no less favorable to the Partnership Group
than those generally being provided to or available from unrelated third parties
or (iii) any transaction that, taking into account the totality of the
relationships between the parties involved (including other transactions that
may be particularly favorable or advantageous to the Partnership Group), is
equitable to the Partnership Group. The provisions of Section 7.4 shall apply to
the rendering of services described in this Section 7.6(c).
(d) The Partnership Group may transfer assets to joint ventures, other
partnerships, corporations, limited liability companies or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions as are consistent with this Agreement and applicable
law.
(e) Neither the General Partner nor any of its Affiliates shall sell, transfer
or convey any property to, or purchase any property from the Partnership,
directly or indirectly, except pursuant to transactions that are fair and
reasonable to the Partnership; provided, however, that the requirements of this
Section 7.6(e) shall be deemed to be satisfied as to (i) the transactions
effected pursuant to Sections 5.2 and 5.3 of the First Amended Agreement, the
Conveyance Agreement and any other transactions described in or contemplated by
the Registration Statement or the Proxy Statement, (ii) any transaction approved
by Special Approval, (iii) any transaction, the terms of which are no less
favorable to the Partnership than those generally being provided to or available
from unrelated third parties, or (iv) any transaction that, taking into account
the totality of the relationships between the parties involved (including other
transactions that may be particularly favorable or advantageous to the
Partnership), is equitable to the Partnership. With respect to any contribution
of assets to the Partnership in exchange for Partnership Securities, the Audit
Committee, in determining whether the appropriate number of Partnership
Securities are being issued, may take into account, among other things, the fair
market value of the assets, the liquidated and contingent liabilities assumed,
the tax basis in the assets, the extent to which tax-only allocations to the
transferor will protect the existing partners of the Partnership against a low
tax basis, and such other factors as the Audit Committee deems relevant under
the circumstances. (f) The General Partner and its Affiliates will have no
obligation to permit any Group Member to use any facilities or assets of the
General Partner and its Affiliates, except as may be provided in contracts
entered into from time to time specifically dealing with such use, nor shall
there be any obligation on the part of the General Partner or its Affiliates to
enter into such contracts.
(g) Without limitation of Sections 7.6(a) through 7.6(f), and notwithstanding
anything to the contrary in this Agreement, the existence of the conflicts of
interest described in the Registration Statement or the Proxy Statement are
hereby approved by all Partners.
7.8 Indemnification.
(a) To the fullest extent permitted by law but subject to the limitations
expressly provided in this Agreement, all Indemnitees shall be indemnified and
held harmless by the Partnership from and against any and all losses, claims,
44
damages, liabilities, joint or several, expenses (including legal fees and
expenses), judgments, fines, penalties, interest, settlements or other amounts
arising from any and all claims, demands, actions, suits or proceedings, whether
civil, criminal, administrative or investigative, in which any Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, by reason of
its status as an Indemnitee; provided, that in each case the Indemnitee acted in
good faith and in a manner that such Indemnitee reasonably believed to be in, or
not opposed to, the best interests of the Partnership and, with respect to any
criminal proceeding, had no reasonable cause to believe its conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere, or its equivalent,
shall not create a presumption that the Indemnitee acted in a manner contrary to
that specified above. Any indemnification pursuant to this Section 7.7 shall be
made only out of the assets of the Partnership, it being agreed that the General
Partner shall not be personally liable for such indemnification and shall have
no obligation to contribute or loan any monies or property to the Partnership to
enable it to effectuate such indemnification.
(b) To the fullest extent permitted by law, expenses (including legal fees and
expenses) incurred by an Indemnitee who is indemnified pursuant to Section
7.7(a) in defending any claim, demand, action, suit or proceeding shall, from
time to time, be advanced by the Partnership prior to the final disposition of
such claim, demand, action, suit or proceeding upon receipt by the Partnership
of any undertaking by or on behalf of the Indemnitee to repay such amount if it
shall be determined that the Indemnitee is not entitled to be indemnified as
authorized in this Section 7.7.
(c) The indemnification provided by this Section 7.7 shall be in addition to any
other rights to which an Indemnitee may be entitled under any agreement,
pursuant to any vote of the holders of Outstanding Limited Partner Interests, as
a matter of law or otherwise, both as to actions in the Indemnitee's capacity as
an Indemnitee and as to actions in any other capacity (including any capacity
under the Underwriting Agreement dated November 26, 1996 among the Partnership,
Genesis OLP, and the underwriters and other parties named therein), and shall
continue as to an Indemnitee who has ceased to serve in such capacity and shall
inure to the benefit of the heirs, successors, assigns and administrators of the
Indemnitee.
(d) The Partnership may purchase and maintain (or reimburse the General Partner
or its Affiliates for the cost of) insurance, on behalf of the General Partner,
its Affiliates and such other Persons as the General Partner shall determine,
against any liability that may be asserted against or expense that may be
incurred by such Person in connection with the Partnership's activities or such
Person's activities on behalf of the Partnership, regardless of whether the
Partnership would have the power to indemnify such Person against such liability
under the provisions of this Agreement.
(e) For purposes of this Section 7.7, the Partnership shall be deemed to have
requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Partnership also imposes
duties on, or otherwise involves services by, it to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute "fines"
within the meaning of Section 7.7(a); and action taken or omitted by it with
respect to any employee benefit plan in the performance of its duties for a
purpose reasonably believed by it to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose that is in, or not
opposed to, the best interests of the Partnership.
(f) In no event may an Indemnitee subject the Limited Partners to personal
liability by reason of the indemnification provisions set forth in this
Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in part under
this Section 7.7 because the Indemnitee had an interest in the transaction with
respect to which the indemnification applies if the transaction was otherwise
permitted by the terms of this Agreement.
(h) The provisions of this Section 7.7 are for the benefit of the Indemnitees,
their heirs, successors, assigns and administrators and shall not be deemed to
create any rights for the benefit of any other Persons.
(i) No amendment, modification or repeal of this Section 7.7 or any provision
hereof shall in any manner terminate, reduce or impair the right of any past,
present or future Indemnitee to be indemnified by the Partnership, nor the
obligations of the Partnership to indemnify any such Indemnitee under and in
accordance with the provisions of this
45
Section 7.7 as in effect immediately prior to such amendment, modification or
repeal with respect to claims arising from or relating to matters occurring, in
whole or in part, prior to such amendment, modification or repeal, regardless of
when such claims may arise or be asserted.
7.9 Liability of Indemnitees.
(a) Notwithstanding anything to the contrary set forth in this Agreement, no
Indemnitee shall be liable for monetary damages to the Partnership, the Limited
Partners, the Assignees or any other Persons who have acquired interests in
Partnership Securities, for losses sustained or liabilities incurred as a result
of any act or omission if such Indemnitee acted in good faith.
(b) Subject to its obligations and duties as General Partner set forth in
Section 7.1(a), the General Partner may exercise any of the powers granted to it
by this Agreement and perform any of the duties imposed upon it hereunder either
directly or by or through its agents, and the General Partner shall not be
responsible for any misconduct or negligence on the part of any such agent
appointed by the General Partner in good faith.
(c) To the extent that, at law or in equity, an Indemnitee has duties (including
fiduciary duties) and liabilities relating thereto to the Partnership or to the
Partners, the General Partner and any other Indemnitee acting in connection with
the Partnership's business or affairs shall not be liable to the Partnership or
to any Partner for its good faith reliance on the provisions of this Agreement.
The provisions of this Agreement, to the extent that they restrict or otherwise
modify the duties and liabilities of an Indemnitee otherwise existing at law or
in equity, are agreed by the Partners to replace such other duties and
liabilities of such Indemnitee.
(d) Any amendment, modification or repeal of this Section 7.8 or any provision
hereof shall be prospective only and shall not in any way affect the limitations
on the liability of the Indemnitees under this Section 7.8 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
7.10 Resolution of Conflicts of Interest.
(a) Unless otherwise expressly provided in this Agreement or the Fourth Amended
OLP Agreement, whenever a potential conflict of interest exists or arises
between the General Partner or any of its Affiliates, on the one hand, and the
Partnership, Genesis OLP, any Partner, or any Assignee on the other, any
resolution or course of action by the General Partner or its Affiliates in
respect of such conflict of interest shall be permitted and deemed approved by
all Partners, and shall not constitute a breach of this Agreement, of the Fourth
Amended OLP Agreement, of any agreement contemplated herein, or of any duty
stated or implied by law or equity, if the resolution or course of action is, or
by operation of this Agreement is deemed to be, fair and reasonable to the
Partnership. The General Partner shall be authorized but not required in
connection with its resolution of such conflict of interest to seek Special
Approval of such resolution. Any conflict of interest and any resolution of such
conflict of interest shall be conclusively deemed fair and reasonable to the
Partnership if such conflict of interest or resolution is (i) approved by
Special Approval (as long as the material facts known to the General Partner or
any of its Affiliates regarding any proposed transaction were disclosed to the
Audit Committee at the time it gave its approval), (ii) on terms no less
favorable to the Partnership than those generally being provided to or available
from unrelated third parties or (iii) fair to the Partnership, taking into
account the totality of the relationships between the parties involved
(including other transactions that may be particularly favorable or advantageous
to the Partnership). The General Partner may also adopt a resolution or course
of action that has not received Special Approval. The General Partner (including
the Audit Committee in connection with Special Approval) shall be authorized in
connection with its determination of what is "fair and reasonable" to the
Partnership and in connection with its resolution of any conflict of interest to
consider (A) the relative interests of any party to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such interest;
(B) any customary or accepted industry practices and any customary or historical
dealings with a particular Person; (C) any applicable generally accepted
accounting practices or principles; and (D) such additional factors as the
General Partner (including the Audit Committee) determines in its sole
discretion to be relevant, reasonable or appropriate under the circumstances.
Nothing contained in this Agreement, however, is intended to nor shall it be
construed to require the General Partner
46
(including the Audit Committee) to consider the interests of any Person other
than the Partnership. In the absence of bad faith by the General Partner, the
resolution, action or terms so made, taken or provided by the General Partner
with respect to such matter shall not constitute a breach of this Agreement or
any other agreement contemplated herein or a breach of any standard of care or
duty imposed herein or therein or, to the extent permitted by law, under the
Delaware Act or any other law, rule or regulation.
(b) Whenever this Agreement or any other agreement contemplated hereby provides
that the General Partner or any of its Affiliates is permitted or required to
make a decision (i) in its "sole discretion" or "discretion," that it deems
"necessary or appropriate" or "necessary or advisable" or under a grant of
similar authority or latitude, except as otherwise provided herein, the General
Partner or such Affiliate shall be entitled to consider only such interests and
factors as it desires and shall have no duty or obligation to give any
consideration to any interest of, or factors affecting, the Partnership, Genesis
OLP, any Limited Partner or any Assignee, (ii) it may make such decision in its
sole discretion (regardless of whether there is a reference to "sole discretion"
or "discretion") unless another express standard is provided for, or (iii) in
"good faith" or under another express standard, the General Partner or such
Affiliate shall act under such express standard and shall not be subject to any
other or different standards imposed by this Agreement, the Fourth Amended OLP
Agreement, any other agreement contemplated hereby or under the Delaware Act or
any other law, rule or regulation. In addition, any actions taken by the General
Partner or such Affiliate consistent with the standards of "reasonable
discretion" set forth in the definition of Available Cash shall not constitute a
breach of any duty of the General Partner to the Partnership or the Limited
Partners. The General Partner shall have no duty, express or implied, to sell or
otherwise dispose of any asset of the Partnership Group other than in the
ordinary course of business. No borrowing by any Group Member or the approval
thereof by the General Partner shall be deemed to constitute a breach of any
duty of the General Partner to the Partnership or the Limited Partners or the
Assignees by reason of the fact that the purpose or effect of such borrowing is
directly or indirectly to enable distributions to the General Partner or its
Affiliates (including in their capacities as Limited Partners) to exceed the
General Partner's Percentage Interest of the total amount distributed to all
Partners.
(c) Whenever a particular transaction, arrangement or resolution of a conflict
of interest is required under this Agreement to be "fair and reasonable" to any
Person, the fair and reasonable nature of such transaction, arrangement or
resolution shall be considered in the context of all similar or related
transactions.
(d) The Limited Partners hereby authorize the General Partner, on behalf of the
Partnership as a partner of a Group Member, to approve of actions by the general
partner of such Group Member similar to those actions permitted to be taken by
the General Partner pursuant to this Section 7.9.
7.11 Other Matters Concerning the General Partner.
(a) The General Partner may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, debenture or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties.
(b) The General Partner may consult with legal counsel, accountants, appraisers,
management consultants, investment bankers and other consultants and advisers
selected by it, and any act taken or omitted to be taken in reliance upon the
opinion (including an Opinion of Counsel) of such Persons as to matters that the
General Partner reasonably believes to be within such Person's professional or
expert competence shall be conclusively presumed to have been done or omitted in
good faith and in accordance with such opinion.
(c) The General Partner shall have the right, in respect of any of its powers or
obligations hereunder, to act through any of its duly authorized officers, a
duly appointed attorney or attorneys-in-fact or the duly authorized officers of
the Partnership.
(d) Any standard of care and duty imposed by this Agreement or under the
Delaware Act or any applicable law, rule or regulation shall be modified, waived
or limited, to the extent permitted by law, as required to permit the General
Partner to act under this Agreement or any other agreement contemplated by this
Agreement and to make any
47
decision pursuant to the authority prescribed in this
Agreement, so long as such action is reasonably believed by the General Partner
to be in, or not inconsistent with, the best interests of the Partnership.
7.12 Purchase or Sale of Partnership Securities.
The General Partner may cause the Partnership to purchase or otherwise
acquire Partnership Securities. As long as Partnership Securities are held by
any Group Member, such Partnership Securities shall not be considered
Outstanding for any purpose, except as otherwise provided herein. The General
Partner and any Affiliate of the General Partner may also purchase or otherwise
acquire and sell or otherwise dispose of Partnership Securities for its own
account, subject to the provisions of Articles IV and X.
7.13 Registration Rights of the General Partner and its Affiliates.
(a) If (i) the General Partner or any Affiliate of the General Partner
(including for purposes of this Section 7.12, any Person that is an Affiliate of
the General Partner at the date hereof notwithstanding that it may later cease
to be an Affiliate of the General Partner) holds Partnership Securities that it
desires to sell and (ii) Rule 144 of the Securities Act (or any successor rule
or regulation to Rule 144) or another exemption from registration is not
available to enable such holder of Partnership Securities (the "Holder") to
dispose of the number of Partnership Securities it desires to sell at the time
it desires to do so without registration under the Securities Act, then upon the
request of Holder, the Partnership shall file with the Commission as promptly as
practicable after receiving such request, and use all reasonable efforts to
cause to become effective and remain effective for a period of not less than six
months following its effective date or such shorter period as shall terminate
when all Partnership Securities covered by such registration statement have been
sold, a registration statement under the Securities Act registering the offering
and sale of the number of Partnership Securities specified by the Holder;
provided, however, that the Partnership shall not be required to effect more
than three registrations pursuant to this Section 7.12(a); and provided further,
however, that if the Audit Committee determines in its good faith judgment that
a postponement of the requested registration for up to six months would be in
the best interests of the Partnership and its Partners due to a pending
transaction, investigation or other event, the filing of such registration
statement or the effectiveness thereof may be deferred for up to six months, but
not thereafter. In connection with any registration pursuant to the immediately
preceding sentence, the Partnership shall (i) promptly prepare and file (A) such
documents as may be necessary to register or qualify the Partnership Securities
subject to such registration under the securities laws of such states as the
Holder shall reasonably request; provided, however, that no such qualification
shall be required in any jurisdiction where, as a result thereof, the
Partnership would become subject to general service of process or to taxation or
qualification to do business as a foreign corporation or partnership doing
business in such jurisdiction solely as a result of such registration and (B)
such documents as may be necessary to apply for listing or to list the
Partnership Securities subject to such registration on such National Securities
Exchange as the Holder shall reasonably request, and (ii) do any and all other
acts and things that may reasonably be necessary or advisable to enable the
Holder to consummate a public sale of such Partnership Securities in such
states. Except as set forth in Section 7.12(c), all costs and expenses of any
such registration and offering (other than the underwriting discounts and
commissions) shall be paid by the Partnership, without reimbursement by the
Holder.
(b) If the Partnership shall at any time propose to file a registration
statement under the Securities Act for an offering of Partnership Securities for
cash (other than an offering relating solely to an employee benefit plan), the
Partnership shall use all reasonable efforts to include such number or amount of
Partnership Securities held by the Holder in such registration statement as the
Holder shall request. If the proposed offering pursuant to this Section 7.12(b)
shall be an underwritten offering, then, in the event that the managing
underwriter or managing underwriters of such offering advise the Partnership and
the Holder in writing that in their opinion the inclusion of all or some of the
Holder's Partnership Securities would adversely and materially affect the
success of the offering, the Partnership shall include in such offering only
that number or amount, if any, of Partnership Securities held by the Holder
that, in the opinion of the managing underwriter or managing underwriters, will
not so adversely and materially affect the offering. Except as set forth in
Section 7.12(c), all costs and expenses of any such registration and offering
(other than the underwriting discounts and commissions) shall be paid by the
Partnership, without reimbursement by the Holder.
(c) If underwriters are engaged in connection with any registration referred to
in this Section 7.12, the Partnership shall provide indemnification,
representations, covenants, opinions and other assurance to the underwriters
48
in form and substance reasonably satisfactory to such underwriters. Further, in
addition to and not in limitation of the Partnership's obligation under Section
7.7, the Partnership shall, to the fullest extent permitted by law, indemnify
and hold harmless the Holder, its officers, directors and each Person who
controls the Holder (within the meaning of the Securities Act) and any agent
thereof (collectively, "Indemnified Persons") against any losses, claims,
demands, actions, causes of action, assessments, damages, liabilities (joint or
several), costs and expenses (including interest, penalties and reasonable
attorneys' fees and disbursements), resulting to, imposed upon, or incurred by
the Indemnified Persons, directly or indirectly, under the Securities Act or
otherwise (hereinafter referred to in this Section 7.12(c) as a "claim" and in
the plural as "claims") based upon, arising out of or resulting from any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which any Partnership Securities were registered
under the Securities Act or any state securities or Blue Sky laws, in any
preliminary prospectus (if used prior to the effective date of such registration
statement), or in any summary or final prospectus or in any amendment or
supplement thereto (if used during the period the Partnership is required to
keep the registration statement current), or arising out of, based upon or
resulting from the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements made therein
not misleading; provided, however, that the Partnership shall not be liable to
any Indemnified Person to the extent that any such claim arises out of, is based
upon or results from an untrue statement or alleged untrue statement or omission
or alleged omission made in such registration statement, such preliminary,
summary or final prospectus or such amendment or supplement, in reliance upon
and in conformity with written information furnished to the Partnership by or on
behalf of such Indemnified Person specifically for use in the preparation
thereof.
(d) The provisions of Section 7.12(a) and 7.12(b) shall continue to be
applicable with respect to the General Partner (and any of the General Partner's
Affiliates) after it ceases to be a general partner of the Partnership, during a
period of two years subsequent to the effective date of such cessation and for
so long thereafter as is required for the Holder to sell all of the Partnership
Securities with respect to which it has requested during such two-year period
inclusion in a registration statement otherwise filed or that a registration
statement be filed; provided, however, that the Partnership shall not be
required to file successive registration statements covering the same
Partnership Securities for which registration was demanded during such two-year
period. The provisions of Section 7.12(c) shall continue in effect thereafter.
(e) Any request to register Partnership Securities pursuant to this Section 7.12
shall (i) specify the Partnership Securities intended to be offered and sold by
the Person making the request, (ii) express such Person's present intent to
offer such Partnership Securities for distribution, (iii) describe the nature or
method of the proposed offer and sale of Partnership Securities, and (iv)
contain the undertaking of such Person to provide all such information and
materials and take all action as may be required in order to permit the
Partnership to comply with all applicable requirements in connection with the
registration of such Partnership Securities.
7.14 Reliance by Third Parties.
Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner and any officer of the General Partner authorized by the General Partner
to act on behalf of and in the name of the Partnership has full power and
authority to encumber, sell or otherwise use in any manner any and all assets of
the Partnership and to enter into any authorized contracts on behalf of the
Partnership, and such Person shall be entitled to deal with the General Partner
or any such officer as if it were the Partnership's sole party in interest, both
legally and beneficially. Each Limited Partner hereby waives any and all
defenses or other remedies that may be available against such Person to contest,
negate or disaffirm any action of the General Partner or any such officer in
connection with any such dealing. In no event shall any Person dealing with the
General Partner or any such officer or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expedience of any act or action of the General Partner or
any such officer or its representatives. Each and every certificate, document or
other instrument executed on behalf of the Partnership by the General Partner or
its representatives shall be conclusive evidence in favor of any and every
Person relying thereon or claiming thereunder that (a) at the time of the
execution and delivery of such certificate, document or instrument, this
Agreement was in full force and effect, (b) the Person executing and delivering
such certificate, document or instrument was duly authorized and empowered to do
so for and on behalf of the Partnership and (c) such certificate, document or
instrument was duly executed and delivered in accordance with the terms and
provisions of this Agreement and is binding upon the Partnership.
49
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
8.2 Records and Accounting.
The General Partner shall keep or cause to be kept at the principal
office of the Partnership, appropriate books and records with respect to the
Partnership's business, including all books and records necessary to provide to
the Limited Partners any information required to be provided pursuant to Section
3.4(a). Any books and records maintained by or on behalf of the Partnership in
the regular course of its business, including the record of the Record Holders
and Assignees of Units or other Partnership Securities, books of account and
records of Partnership proceedings, may be kept on, or be in the form of,
computer disks, hard drives, punch cards, magnetic tape, photographs,
micrographics or any other information storage device; provided, that the books
and records so maintained are convertible into clearly legible written form
within a reasonable period of time. The books of the Partnership shall be
maintained, for financial reporting purposes, on an accrual basis in accordance
with U.S. GAAP.
8.3 Fiscal Year.
The fiscal year of the Partnership shall be the calendar year.
8.4 Reports.
(a) As soon as practicable, but in no event later than 120 days after the close
of each fiscal year of the Partnership, the General Partner shall cause to be
mailed or furnished to each Record Holder of a Limited Partner Interest as of a
date selected by the General Partner in its discretion, an annual report
containing financial statements of the Partnership for such fiscal year of the
Partnership, presented in accordance with U.S. GAAP, including a balance sheet
and statements of operations, Partnership equity and cash flows, such statements
to be audited by a firm of independent public accountants selected by the
General Partner.
(b) As soon as practicable, but in no event later than 90 days after the close
of each Quarter except the last Quarter of each year, the General Partner shall
cause to be mailed or furnished to each Record Holder of a Limited Partner
Interest, as of a date selected by the General Partner in its discretion, a
report containing unaudited financial statements of the Partnership and such
other information as may be required by applicable law, regulation or rule of
any National Securities Exchange on which Limited Partner Interests are listed
for trading, or as the General Partner determines to be necessary or
appropriate.
ARTICLE IX
TAX MATTERS
9.2 Tax Returns and Information.
The Partnership shall timely file all returns of the Partnership that
are required for federal, state and local income tax purposes on the basis of
the accrual method and a taxable year ending on December 31. The tax information
reasonably required by Record Holders for federal and state income tax reporting
purposes with respect to a taxable year shall be furnished to them within 90
days of the close of the calendar year in which the Partnership's taxable year
ends. The classification, realization and recognition of income, gain, losses
and deductions and other items shall be on the accrual method of accounting for
federal income tax purposes.
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9.3 Tax Elections.
(a) The Partnership has made the election under Section 754 of the Code in
accordance with applicable regulations thereunder, subject to the reservation of
the right to seek to revoke any such election upon the General Partner's
determination that such revocation is in the best interests of the Limited
Partners. Notwithstanding any other provision herein contained, for the purposes
of computing the adjustments under Section 743(b) of the Code, the General
Partner shall be authorized (but not required) to adopt a convention whereby the
price paid by a transferee of a Limited Partner Interest will be deemed to be
the lowest quoted closing price of such Limited Partner Interests on any
National Securities Exchange on which such Limited Partner Interests are traded
during the calendar month in which such transfer is deemed to occur pursuant to
Section 6.2(g) without regard to the actual price paid by such transferee.
(b) The Partnership has elected to deduct expenses incurred in organizing the
Partnership ratably over a sixty-month period as provided in Section 709 of the
Code.
(c) Except as otherwise provided herein, the General Partner shall determine
whether the Partnership should make any other elections permitted by the Code.
9.4 Tax Controversies.
Subject to the provisions hereof, the General Partner is designated as
the Tax Matters Partner (as defined in the Code) and is authorized and required
to represent the Partnership (at the Partnership's expense) in connection with
all examinations of the Partnership's affairs by tax authorities, including
resulting administrative and judicial proceedings, and to expend Partnership
funds for professional services and costs associated therewith. Each Partner
agrees to cooperate with the General Partner and to do or refrain from doing any
or all things reasonably required by the General Partner to conduct such
proceedings.
9.5 Withholding.
Notwithstanding any other provision of this Agreement, the General
Partner is authorized to take any action that it determines in its discretion to
be necessary or appropriate to cause the Partnership to comply with any
withholding requirements established under the Code or any other federal, state
or local law including pursuant to Sections 1441, 1442, 1445 and 1446 of the
Code. To the extent that the Partnership is required or elects to withhold and
pay over to any taxing authority any amount resulting from the allocation or
distribution of income to any Partner or Assignee (including by reason of
Section 1446 of the Code), the amount withheld may at the discretion of the
General Partner be treated by the Partnership as a distribution of cash pursuant
to Section 6.3 in the amount of such withholding from such Partner.
ARTICLE X
ADMISSION OF PARTNERS
10.1 Admission of Substituted Limited Partner.
By transfer of a Limited Partner Interest in accordance with Article
IV, the transferor shall be deemed to have given the transferee the right to
seek admission as a Substituted Limited Partner subject to the conditions of,
and in the manner permitted under, this Agreement. A transferor of a Certificate
representing a Limited Partner Interest shall, however, only have the authority
to convey to a purchaser or other transferee who does not execute and deliver a
Transfer Application (a) the right to negotiate such Certificate to a purchaser
or other transferee and (b) the right to transfer the right to request admission
as a Substituted Limited Partner to such purchaser or other transferee in
respect of the transferred Limited Partner Interests. Each transferee of a
Limited Partner Interest (including any nominee holder or an agent acquiring
such Limited Partner Interest for the account of another Person) who executes
and delivers a Transfer Application shall, by virtue of such execution and
delivery, be an Assignee and be deemed to have applied to become a Substituted
Limited Partner with respect to the Limited Partner Interest so transferred to
such Person. Such Assignee shall become a Substituted Limited Partner (x) at
such time as the General Partner consents thereto, which consent may be given or
withheld in the General Partner's discretion, and (y) when any such admission is
shown on the books and records of the Partnership. If such consent is
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withheld, such transferee shall be an Assignee. An Assignee shall have an
interest in the Partnership equivalent to that of a Limited Partner with respect
to allocations and distributions, including liquidating distributions, of the
Partnership. With respect to voting rights attributable to Limited Partner
Interests that are held by Assignees, the General Partner shall be deemed to be
the Limited Partner with respect thereto and shall, in exercising the voting
rights in respect of such Limited Partner Interests on any matter, vote such
Limited Partner Interests at the written direction of the Assignee who is the
Record Holder of such Limited Partner Interests. If no such written direction is
received, such Limited Partner Interests will not be voted. An Assignee shall
have no other rights of a Limited Partner.
10.2 Admission of Successor General Partner.
A successor General Partner approved pursuant to Section 11.1 or 11.2
or the transferee of or successor to all of the General Partner Interest
pursuant to Section 4.6 who is proposed to be admitted as a successor General
Partner shall be admitted to the Partnership as the General Partner, effective
immediately prior to the withdrawal or removal of the General Partner pursuant
to Section 11.1 or 11.2 or the transfer of the General Partner Interest pursuant
to Section 4.6; provided, however, that no such successor shall be admitted to
the Partnership until compliance with the terms of Section 4.6 has occurred and
such successor has executed and delivered such other documents or instruments as
may be required to effect such admission. Any such successor shall, subject to
the terms hereof, carry on the business of the Group Members without
dissolution.
10.3 Admission of Additional Limited Partners.
(a) A Person (other than the General Partner or a Substituted Limited Partner)
who makes a Capital Contribution to the Partnership in accordance with this
Agreement in exchange for Limited Partner Interests shall be admitted to the
Partnership as an Additional Limited Partner only upon furnishing to the General
Partner (i) evidence of acceptance in form satisfactory to the General Partner
of all of the terms and conditions of this Agreement, including the power of
attorney granted in Section 2.6, and (ii) such other documents or instruments as
may be required in the discretion of the General Partner to effect such Person's
admission as an Additional Limited Partner.
(b) Notwithstanding anything to the contrary in this Section 10.4, no Person
shall be admitted as an Additional Limited Partner without the consent of the
General Partner, which consent may be given or withheld in the General Partner's
discretion. The admission of any Person as an Additional Limited Partner shall
become effective on the date upon which the name of such Person is recorded as
such in the books and records of the Partnership, following the consent of the
General Partner to such admission.
10.4 Amendment of Agreement and Certificate of Limited Partnership.
To effect the admission to the Partnership of any Partner, the General
Partner shall take all steps necessary and appropriate under the Delaware Act to
amend the records of the Partnership to reflect such admission and, if
necessary, to prepare as soon as practicable an amendment to this Agreement and,
if required by law, the General Partner shall prepare and file an amendment to
the Certificate of Limited Partnership, and the General Partner may for this
purpose, among others, exercise the power of attorney granted pursuant to
Section 2.6.
ARTICLE XI
WITHDRAWAL OR REMOVAL OF PARTNERS
11.1 Withdrawal of the General Partner.
(a) The General Partner shall be deemed to have withdrawn from the
Partnership upon the occurrence of any one of the following events
(each such event herein referred to as an "Event of Withdrawal");
(i) the General Partner voluntarily withdraws from the Partnership by
giving written notice to the Limited Partners (and it shall be deemed
that the General Partner has withdrawn pursuant to this Section
11.1(a)(i) if the General Partner voluntarily withdraws as a general
partner of Genesis OLP);
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(ii) the General Partner transfers all of its General Partner Interest
pursuant to Section 4.6;
(iii) the General Partner is removed pursuant to Section 11.2;
(iv) the General Partner (A) makes a general assignment for the
benefit of creditors; (B) files a voluntary bankruptcy petition for
relief under Chapter 7 of the United States Bankruptcy Code;
(C) files a petition or answer seeking for itself a liquidation,
dissolution or similar relief (but not a reorganization) under any
law; (D) files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against the
General Partner in a proceeding of the type described in clauses
(A)-(C) of this Section 11.1(a)(iv); or (E) seeks, consents to or
acquiesces in the appointment of a trustee (but not a debtor in
possession), receiver or liquidator of the General Partner
or of all or any substantial part of its properties;
(v)a final and non-appealable order of relief under Chapter 7 of the
United States Bankruptcy Code is entered by a court with appropriate
jurisdiction pursuant to a voluntary or involuntary petition by or
against the General Partner; or
(vi) (A) in the event the General Partner is a corporation, a
certificate of dissolution or its equivalent is filed for the General
Partner, or 90 days expire after the date of notice to the General
Partner of revocation of its charter without a reinstatement of its
charter, under the laws of its state of incorporation; (B) in the event
the General Partner is a partnership or a limited liability company,
the dissolution and commencement of winding up of the General Partner;
(C) in the event the General Partner is acting in such capacity by
virtue of being a trustee of a trust, the termination of the trust;
(D) in the event the General Partner is a natural person, his death or
adjudication of incompetency; and (E) otherwise in the event of the
termination of the General Partner.
If an Event of Withdrawal specified in Section 11.1(a)(iv), (v) or
(vi)(A), (B), (C) or (E) occurs, the withdrawing General Partner shall give
notice to the Limited Partners within 30 days after such occurrence. The
Partners hereby agree that only the Events of Withdrawal described in this
Section 11.1 shall result in the withdrawal of the General Partner from the
Partnership.
(b) Withdrawal of the General Partner from the Partnership upon the occurrence
of an Event of Withdrawal shall not constitute a breach of this Agreement under
the following circumstances: (i) at any time during the period beginning on the
Initial Closing Date and ending at 12:00 midnight, Eastern Standard Time, on
December 31, 2006, the General Partner voluntarily withdraws by giving at least
90 days' advance notice of its intention to withdraw to the Limited Partners;
provided that prior to the effective date of such withdrawal, the withdrawal is
approved by the holders of a Majority Interest and the General Partner delivers
to the Partnership an Opinion of Counsel ("Withdrawal Opinion of Counsel") that
such withdrawal (following the selection of the successor General Partner) would
not result in the loss of the limited liability of any Limited Partner or any
limited partner of Genesis OLP or cause the Partnership or Genesis OLP to be
treated as an association taxable as a corporation or otherwise to be taxed as
an entity for federal income tax purposes (to the extent not previously treated
as such); (ii) at any time after 12:00 midnight, Eastern Standard Time, on
December 31, 2006, the General Partner voluntarily withdraws by giving at least
90 days' advance notice to the Limited Partners, such withdrawal to take effect
on the date specified in such notice; (iii) at any time that the General Partner
ceases to be the General Partner pursuant to Section 11.1(a)(ii) or is removed
pursuant to Section 11.2; or (iv) notwithstanding clause (i) of this sentence,
at any time that the General Partner voluntarily withdraws by giving at least 90
days' advance notice of its intention to withdraw to the Limited Partners, such
withdrawal to take effect on the date specified in the notice, if at the time
such notice is given one Person and its Affiliates (other than the General
Partner and its Affiliates) own beneficially or of record or control at least
50% of the Outstanding Limited Partner Interests. The withdrawal of the General
Partner from the Partnership upon the occurrence of an Event of Withdrawal shall
also constitute the withdrawal of the General Partner as general partner or
managing member of the other Group Members. If the General Partner gives a
notice of withdrawal pursuant to Section 11.1(a)(i), the holders of a Majority
Interest, may, prior to the effective date of such withdrawal, elect a successor
General Partner. The Person so elected as successor General Partner shall
automatically become a successor general partner or managing member of the other
Group Members of which the General Partner is a general partner. If, prior to
the effective date of the General Partner's withdrawal, a successor is not
selected by the Limited Partners as provided herein or the Partnership does not
receive a
53
Withdrawal Opinion of Counsel, the Partnership shall be dissolved in
accordance with Section 12.1. Any successor General Partner elected in
accordance with the terms of this Section 11.1 shall be subject to the
provisions of Section 10.3.
11.2 Removal of the General Partner.
The General Partner may be removed with or without Cause. If Cause
exists the General Partner may be removed if such removal is approved by the
holders of a Two-Thirds Interest (including Limited Partner Interests held by
the General Partner and its Affiliates). Any such action by such holders for
removal of the General Partner with Cause must also provide for the election of
a successor General Partner by the holders of a Two-Thirds Interest (including
Limited Partner Interests held by the General Partner and its Affiliates). If
such removal is without Cause, such removal must be approved by the holders of a
Majority Interest (excluding any Limited Partner Interests held by the General
Partner and its Affiliates). Any such action by such holders for removal of the
General Partner without Cause must also provide for the election of a successor
General Partner by the holders of a Majority Interest (excluding any Limited
Partner Interests held by the General Partner and its Affiliates). If it is
proposed that the removal is without Cause, and an Affiliate of Denbury
Resources Inc., a Delaware corporation ("Denbury"), or Denbury is the General
Partner proposed to be removed and not proposed as a successor General Partner,
then any such action for removal must also provide for Denbury to be granted an
option immediately upon the effectiveness of the removal (the option to be
exercisable for a period of 45 days following the determination of fair market
value by independent appraisal in the manner set forth below) to purchase all of
the Partnership's then existing right, title and interest, if any, in the
Partnership's Mississippi pipeline system, with a termination point (as of July
31, 2002) at Maryland, Louisiana, and its associated real and personal property,
easements, rights of way and storage facilities, at 110% of its fair market
value (as determined by independent appraisal in the manner set forth below).
Such option is to contain additional terms and conditions as reasonably
acceptable to Denbury and the independent directors of the General Partner. Any
removal of the General Partner shall be effective immediately following the
admission of a successor General Partner, subject to the provisions of Section
10.2. Such removal shall also automatically constitute the removal of the
General Partner as general partner of the other Group Members of which the
General Partner is a general partner. If a Person is elected as a successor
General Partner in accordance with the terms of this Section 11.2, such Person
shall, upon admission pursuant to Section 10.2, automatically become a successor
general partner or managing member of the other Group Members of which the
General Partner is a general partner. The right of the Limited Partners to
remove the General Partner pursuant to this Section 11.2 shall not exist or be
exercised unless the Partnership has received an opinion opining as to the
matters covered by a Withdrawal Opinion of Counsel. Any successor General
Partner elected in accordance with the terms of this Section 11.2 shall be
subject to the provisions of Section 10.2.
Upon removal of Denbury or its Affiliate as General Partner without
Cause, and the granting of the option to Denbury as set forth above in the sixth
sentence of this Section 11.2 and the election of the successor General Partner
that is not Denbury or an Affiliate of Denbury, two independent appraisers shall
be promptly selected, one appraiser to be selected by the successor General
Partner and the other appraiser to be selected by Denbury. The fair market value
of the Mississippi pipeline system will be determined by the agreement of these
two independent appraisers acting reasonably and in good faith. In the event the
two appraisers so selected do not reach an agreement as to the fair market value
within 45 days following the selection of the second appraiser, the fair market
value shall be the mid-point between each of the values determined reasonably
and in good faith by the two appraisers.
11.3 Interest of Departing Partner and Successor General Partner.
(a) In the event of the withdrawal of the General Partner under circumstances
where such withdrawal does not violate this Agreement, if a successor General
Partner is elected in accordance with the terms of Section 11.1 or 11.2, the
Departing Partner shall have the option exercisable prior to the effective date
of the departure of such Departing Partner to require its successor to purchase
its General Partner Interest and all of the Incentive Distribution Rights
(collectively, the "Combined Interest") in exchange for an amount in cash equal
to the fair market value of such Combined Interest, such amount to be determined
and payable as of the effective date of its departure. If the General Partner is
removed by the Partners under circumstances where Cause exists or if the General
Partner withdraws under circumstances where such withdrawal violates this
Agreement or the Fourth Amended OLP Agreement, and if a successor General
Partner is elected in accordance with the terms of Section 11.1 or 11.2, such
successor shall have the option, exercisable prior to the effective date of the
departure of such Departing Partner, to purchase the Combined Interest of the
Departing Partner
54
for such fair market value of such Combined Interest. In
either event, the Departing Partner shall be entitled to receive all
reimbursements due such Departing Partner pursuant to Section 7.4, including any
employee-related liabilities (including severance liabilities), incurred in
connection with the termination of any employees employed by the General Partner
for the benefit of the Partnership or the other Group Members.
For purposes of this Section 11.3(a), the fair market value of the
Departing Partner's Combined Interest shall be determined by agreement between
the Departing Partner and its successor or, failing agreement within 30 days
after the effective date of such Departing Partner's departure, by an
independent investment banking firm or other independent expert selected by the
Departing Partner and its successor, which, in turn, may rely on other experts,
and the determination of which shall be conclusive as to such matter. If such
parties cannot agree upon one independent investment banking firm or other
independent expert within 45 days after the effective date of such departure,
then the Departing Partner shall designate an independent investment banking
firm or other independent expert, the Departing Partner's successor shall
designate an independent investment banking firm or other independent expert,
and such firms or experts shall mutually select a third independent investment
banking firm or independent expert, which third independent investment banking
firm or other independent expert shall determine the fair market value of the
Combined Interest. In making its determination, such third independent
investment banking firm or other independent expert may consider the then
current trading price of Common Units on any National Securities Exchange on
which Common Units are then listed, the value of the Partnership's assets, the
rights and obligations of the General Partner and other factors it may deem
relevant.
(b) If the Combined Interest is not purchased in the manner set forth in Section
11.3(a), the Departing Partner will have the right to convert the Combined
Interest into Common Units or to receive cash from the Partnership in exchange
for such Combined Interest. The Departing Partner's Combined Interest shall be
converted into Common Units pursuant to a valuation made by an investment
banking firm or other independent expert selected pursuant to Section 11.3(a),
without reduction in such Combined Interest (but subject to proportionate
dilution by reason of the admission of its successor). Any successor General
Partner shall indemnify the Departing Partner as to all debts and liabilities of
the Partnership arising on or after the date on which the Departing Partner
becomes a Limited Partner. For purposes of this Agreement, conversion of the
General Partner's Combined Interest to Common Units will be characterized as if
the General Partner contributed its Combined Interest to the Partnership in
exchange for the newly issued Common Units.
(c) If a successor General Partner is elected in accordance with the terms of
Section 11.1 or 11.2 and the option described in Section 11.3(a) is not
exercised by the party entitled to do so, the successor General Partner shall,
at the effective date of its admission to the Partnership, contribute to the
Partnership cash in the amount necessary to acquire a General Partner Interest
equal to the General Partner Interest of the Departing Partner. In such event,
such successor General Partner shall be entitled to such Percentage Interest of
all Partnership allocations and distributions and any other allocations and
distributions to which the Departing Partner was entitled.
11.4 Withdrawal of Limited Partners.
No Limited Partner shall have any right to withdraw from the
Partnership; provided, however, that when a transferee of a Limited Partner's
Limited Partner Interest becomes a Record Holder of the Limited Partner Interest
so transferred, such transferring Limited Partner shall cease to be a Limited
Partner with respect to the Limited Partner Interest so transferred.
ARTICLE XII
DISSOLUTION AND LIQUIDATION
12.1 Dissolution.
The Partnership shall not be dissolved by the admission of Substituted
Limited Partners or Additional Limited Partners or by the admission of a
successor General Partner in accordance with the terms of this Agreement. Upon
the removal or withdrawal of the General Partner, if a successor General Partner
is elected pursuant to Section 11.1 or 11.2, the Partnership shall not be
dissolved and such successor General Partner shall continue the business of the
Partnership. The Partnership shall dissolve, and (subject to Section 12.2) its
affairs shall be wound up, upon:
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(a) the expiration of its term as provided in Section 2.7;
(b) an Event of Withdrawal of the General Partner as provided in Section 11.1(a)
(other than Section 11.1(a)(ii)), unless a successor is elected and an Opinion
of Counsel is received as provided in Section 11.1(b) or 11.2 and such successor
is admitted to the Partnership pursuant to Section 10.3;
(c) an election to dissolve the Partnership by the General Partner that is
approved by the holders of a Majority Interest;
(d) the entry of a decree of judicial dissolution of the Partnership pursuant to
the provisions of the Delaware Act;
(e) the dissolution of Genesis OLP; or
(f) the sale of all or substantially all of the assets and properties of the
Partnership Group.
12.2 Continuation of the Business of the Partnership after Dissolution.
Upon (a) dissolution of the Partnership following an Event of
Withdrawal caused by the withdrawal or removal of the General Partner as
provided in Section 11.1(a)(i) or (iii) and the failure of the Partners to
select a successor to such Departing Partner pursuant to Section 11.1 or 11.2,
then within 90 days thereafter, or (b) dissolution of the Partnership upon an
event constituting an Event of Withdrawal as defined in Section 11.1(a)(iv), (v)
or (vi), then, to the maximum extent permitted by law, within 180 days
thereafter, the holders of a Majority Interest may elect to reconstitute the
Partnership and continue its business on the same terms and conditions set forth
in this Agreement by forming a new limited partnership on terms identical to
those set forth in this Agreement and having as the successor general partner a
Person approved by the holders of a Majority Interest. Unless such an election
is made within the applicable time period as set forth above, the Partnership
shall conduct only activities necessary to wind up its affairs. If such an
election is so made, then:
(a) the reconstituted Partnership shall continue until the end of the term set
forth in Section 2.7 unless earlier dissolved in accordance with this Article
XII;
(b) if the successor General Partner is not the former General Partner, then the
interest of the former General Partner shall be treated in the manner provided
in Section 11.3; and
(c) all necessary steps shall be taken to cancel this Agreement and the
Certificate of Limited Partnership and to enter into and, as necessary, to file
a new partnership agreement and certificate of limited partnership, and the
successor general partner may for this purpose exercise the powers of attorney
granted the General Partner pursuant to Section 2.6; provided, that the right of
the holders of a Majority Interest to approve a successor General Partner and to
reconstitute and to continue the business of the Partnership shall not exist and
may not be exercised unless the Partnership has received an Opinion of Counsel
that (x) the exercise of the right would not result in the loss of limited
liability of any Limited Partner and (y) neither the Partnership, the
reconstituted limited partnership, Genesis OLP nor any Group Member would be
treated as an association taxable as a corporation or otherwise be taxable as an
entity for federal income tax purposes upon the exercise of such right to
continue.
12.3 Liquidator.
Upon dissolution of the Partnership, unless the Partnership is
continued under an election to reconstitute and continue the Partnership
pursuant to Section 12.2, the General Partner shall select one or more Persons
to act as Liquidator. The Liquidator (if other than the General Partner) shall
be entitled to receive such compensation for its services as may be approved by
the holders of a Majority Interest. The Liquidator (if other than the General
Partner) shall agree not to resign at any time without 15 days' prior notice and
may be removed at any time, with or without cause, by notice of removal approved
by the holders of a Majority Interest. Upon dissolution, removal or resignation
of the Liquidator, a successor and substitute Liquidator (who shall have and
succeed to all rights, powers and duties of the
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original Liquidator) shall within 30 days thereafter be approved by the holders
of a Majority Interest. The right to approve a successor or substitute
Liquidator in the manner provided herein shall be deemed to refer also to any
such successor or substitute Liquidator approved in the manner herein provided.
Except as expressly provided in this Article XII, the Liquidator approved in the
manner provided herein shall have and may exercise, without further
authorization or consent of any of the parties hereto, all of the powers
conferred upon the General Partner under the terms of this Agreement (but
subject to all of the applicable limitations, contractual and otherwise, upon
the exercise of such powers, other than the limitation on sale set forth in
Section 7.3(b)) to the extent necessary or desirable in the good faith judgment
of the Liquidator to carry out the duties and functions of the Liquidator
hereunder for and during such period of time as shall be reasonably required in
the good faith judgment of the Liquidator to complete the winding up and
liquidation of the Partnership as provided for herein.
12.4 Liquidation.
The Liquidator shall proceed to dispose of the assets of the
Partnership, discharge its liabilities, and otherwise wind up its affairs in
such manner and over such period as the Liquidator determines to be in the best
interest of the Partners, subject to Section 17-804 of the Delaware Act and the
following:
(a) Disposition of Assets. The assets may be disposed of by public or private
sale or by distribution in kind to one or more Partners on such terms as the
Liquidator and such Partner or Partners may agree. If any property is
distributed in kind, the Partner receiving the property shall be deemed for
purposes of Section 12.4(c) to have received cash equal to its fair market
value; and contemporaneously therewith, appropriate cash distributions must be
made to the other Partners. The Liquidator may, in its absolute discretion,
defer liquidation or distribution of the Partnership's assets for a reasonable
time if it determines that an immediate sale of all or some of the Partnership's
assets would be impractical or would cause undue loss to the Partners. The
Liquidator may, in its absolute discretion, distribute the Partnership's assets,
in whole or in part, in kind if it determines that a sale would be impractical
or would cause undue loss to the Partners.
(b) Discharge of Liabilities. Liabilities of the Partnership include amounts
owed to Partners otherwise than in respect of their distribution rights under
Article VI. With respect to any liability that is contingent, conditional or
unmatured or is otherwise not yet due and payable, the Liquidator shall either
settle such claim for such amount as it thinks appropriate or establish a
reasonable reserve of cash or other assets to provide for its payment. When
paid, any unused portion of the reserve shall be distributed as additional
liquidation proceeds.
(c) Liquidation Distributions. All property and all cash in excess of that
required to discharge liabilities as provided in Section 12.4(b) shall be
distributed to the Partners in accordance with, and to the extent of, the
positive balances in their respective Capital Accounts, as determined after
taking into account all Capital Account adjustments (other than those made by
reason of distributions pursuant to this Section 12.4(c)) for the taxable year
of the Partnership during which the liquidation of the Partnership occurs (with
such date of occurrence being determined pursuant to Treasury Regulation Section
1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of such
taxable year (or, if later, within 90 days after said date of such occurrence).
12.5 Cancellation of Certificate of Limited Partnership.
Upon the completion of the distribution of Partnership cash and
property as provided in Section 12.4 in connection with the liquidation of the
Partnership, the Partnership shall be terminated and the Certificate of Limited
Partnership and all qualifications of the Partnership as a foreign limited
partnership in jurisdictions other than the State of Delaware shall be canceled
and such other actions as may be necessary to terminate the Partnership shall be
taken.
12.6 Return of Contributions.
The General Partner shall not be personally liable for, and shall have
no obligation to contribute or loan any monies or property to the Partnership to
enable it to effectuate, the return of the Capital Contributions of the Limited
Partners, or any portion thereof, it being expressly understood that any such
return shall be made solely from Partnership assets.
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12.7 Waiver of Partition.
To the maximum extent permitted by law, each Partner hereby waives any
right to partition of the Partnership property.
12.8 Capital Account Restoration.
No Limited Partner shall have any obligation to restore any negative
balance in its Capital Account upon liquidation of the Partnership. The General
Partner shall be obligated to restore any negative balance in its Capital
Account upon liquidation of its interest in the Partnership by the end of the
taxable year of the Partnership during which such liquidation occurs, or, if
later, within 90 days after the date of such liquidation.
ARTICLE XIII
AMENDMENT OF PARTNERSHIP AGREEMENT;
MEETINGS; RECORD DATE
13.1 Amendment to be Adopted Solely by the General Partner.
Each Partner agrees that the General Partner, without the approval of
any Partner or Assignee, may amend any provision of this Agreement and execute,
swear to, acknowledge, deliver, file and record whatever documents may be
required in connection therewith, to reflect:
(a) a change in the name of the Partnership, the location of the principal place
of business of the Partnership, the registered agent of the Partnership or the
registered office of the Partnership;
(b) admission, substitution, withdrawal or removal of Partners in accordance
with this Agreement;
(c) a change that, in the sole discretion of the General Partner, is necessary
or advisable to qualify or continue the qualification of the Partnership as a
limited partnership or a partnership in which the Limited Partners have limited
liability under the laws of any state or to ensure that no Group Member will be
treated as an association taxable as a corporation or otherwise taxed as an
entity for federal income tax purposes;
(d) a change that, in the discretion of the General Partner, (i) does not
adversely affect the Limited Partners in any material respect, (ii) is necessary
or advisable (A) to satisfy any requirements, conditions or guidelines contained
in any opinion, directive, order, ruling or regulation of any federal or state
agency or judicial authority or contained in any federal or state statute
(including the Delaware Act), (B) to facilitate the trading of Limited Partner
Interests (including the division of any class or classes of Outstanding Limited
Partner Interests into different classes to facilitate uniformity of tax
consequences within such classes of Limited Partner Interests) or comply with
any rule, regulation, guideline or requirement of any National Securities
Exchange on which Limited Partner Interests are or will be listed for trading,
compliance with any of which the General Partner determines in its discretion to
be in the best interests of the Partnership and the Limited Partners or (C) in
connection with action taken by the General Partner pursuant to Section 5.7, or
(iii) is required to effect the intent expressed in the Registration Statement
or the Proxy Statement or the intent of the provisions of this Agreement or is
otherwise contemplated by this Agreement;
(e) a change in the fiscal year or taxable year of the Partnership and any
changes that, in the discretion of the General Partner, are necessary or
advisable as a result of a change in the fiscal year or taxable year of the
Partnership including, if the General Partner shall so determine, a change in
the definition of "Quarter" and the dates on which distributions are to be made
by the Partnership;
(f) an amendment that is necessary, in the Opinion of Counsel, to prevent the
Partnership or the General Partner or its directors, officers, trustees or
agents from in any manner being subjected to the provisions of the Investment
Company Act of 1940, as amended, the Investment Advisers Act of 1940, as
amended, or "plan asset" regulations adopted under the Employee Retirement
Income Security Act of 1974, as amended, regardless of whether
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such are substantially similar to plan asset regulations currently applied or
proposed by the United States Department of Labor;
(g) an amendment that, in the discretion of the General Partner, is necessary or
advisable in connection with the authorization of issuance of any class or
series of Partnership Securities pursuant to Section 5.5;
(h) any amendment expressly permitted in this Agreement to be made by the
General Partner acting alone;
(i) an amendment effected, necessitated or contemplated by a Merger Agreement
approved in accordance with Section 14.3;
(j) an amendment that, in the discretion of the General Partner, is necessary or
advisable to reflect, account for and deal with appropriately the formation by
the Partnership of, or investment by the Partnership in, any corporation,
partnership, joint venture, limited liability company or other entity, in
connection with the conduct by the Partnership of activities permitted by the
terms of Section 2.4;
(k) a merger or conveyance pursuant to Section 14.3(d); or
(l) any other amendments substantially similar to the foregoing.
13.2 Amendment Procedures.
Except as provided in Sections 13.1 and 13.3, all amendments to this
Agreement shall be made in accordance with the following requirements.
Amendments to this Agreement may be proposed only by or with the consent of the
General Partner, which consent may be given or withheld in its sole discretion.
A proposed amendment shall be effective upon its approval by the holders of a
Majority Interest, unless a greater or different percentage is required under
this Agreement or by Delaware law. Each proposed amendment that requires the
approval of the holders of a specified percentage of Outstanding Limited Partner
Interests shall be set forth in a writing that contains the text of the proposed
amendment. If such an amendment is proposed, the General Partner shall seek the
written approval of the requisite percentage of Outstanding Limited Partner
Interests or call a meeting of the Limited Partners to consider and vote on such
proposed amendment. The General Partner shall notify all Record Holders upon
final adoption of any such proposed amendments.
13.3 Amendment Requirements.
(a) Notwithstanding the provisions of Sections 13.1 and 13.2, no provision of
this Agreement that establishes a percentage of Outstanding Limited Partner
Interests (including Limited Partner Interests deemed owned by the General
Partner) required to take any action shall be amended, altered, changed,
repealed or rescinded in any respect that would have the effect of reducing such
voting percentage unless such amendment is approved by the written consent or
the affirmative vote of holders of Outstanding Limited Partner Interests
(including Limited Partner Interests deemed owned by the General Partner) whose
aggregate Outstanding Limited Partner Interests constitute not less than the
voting requirement sought to be reduced.
(b) Notwithstanding the provisions of Sections 13.1 and 13.2, no amendment to
this Agreement may (i) enlarge the obligations of any Limited Partner without
its consent, unless such shall be deemed to have occurred as a result of an
amendment approved pursuant to Section 13.3(c), (ii) enlarge the obligations of,
restrict in any way any action by or rights of, or reduce in any way the amounts
distributable, reimbursable or otherwise payable to, the General Partner or any
of its Affiliates without its consent, which may be given or withheld in its
sole discretion, (iii) change Section 12.1(a) or 12.1(c), or (iv) change the
term of the Partnership or, except as set forth in Section 12.1(c) or 12.1(e),
give any Person the right to dissolve the Partnership.
(c) Except as provided in Section 14.3, and except as otherwise provided, and
without limitation of the General Partner's authority to adopt amendments to
this Agreement as contemplated in Section 13.1, any amendment that would have a
material adverse effect on the rights or preferences of any class of Partnership
Interests in relation to
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other classes of Partnership Interests must be approved by the holders of not
less than a majority of the Outstanding Partnership Interests of the class
affected.
(d) Notwithstanding any other provision of this Agreement, except for amendments
pursuant to Section 7.3 or 13.1 and except as otherwise provided by Section
14.3(b), no amendments shall become effective without the approval of the
holders of a Ninety Percent Interest unless the Partnership obtains an Opinion
of Counsel to the effect that such amendment will not affect the limited
liability of any Limited Partner under applicable law.
(e) Except as provided in Section 13.1, this Section 13.3 shall only be amended
with the approval of the holders of a Ninety Percent Interest.
13.4 Special Meetings.
All acts of Limited Partners to be taken pursuant to this Agreement
shall be taken in the manner provided in this Article XIII. Special meetings of
the Limited Partners may be called by the General Partner or by Limited Partners
owning 20% or more of the Outstanding Limited Partner Interests of the class or
classes for which a meeting is proposed and which are entitled to vote thereat.
Limited Partners shall call a special meeting by delivering to the General
Partner one or more requests in writing stating that the signing Limited
Partners wish to call a special meeting and indicating the general or specific
purposes for which the special meeting is to be called. Within 60 days after
receipt of such a call from Limited Partners or within such greater time as may
be reasonably necessary for the Partnership to comply with any statutes, rules,
regulations, listing agreements or similar requirements governing the holding of
a meeting or the solicitation of proxies for use at such a meeting, the General
Partner shall send a notice of the meeting to the Limited Partners either
directly or indirectly through the Transfer Agent. A meeting shall be held at a
time and place determined by the General Partner on a date not less than 10 days
nor more than 60 days after the mailing of notice of the meeting. Limited
Partners shall not vote on matters that would cause the Limited Partners to be
deemed to be taking part in the management and control of the business and
affairs of the Partnership so as to jeopardize the Limited Partners' limited
liability under the Delaware Act or the law of any other state in which the
Partnership is qualified to do business.
13.5 Notice of a Meeting.
Notice of a meeting called pursuant to Section 13.4 shall be given to
the Record Holders of the class or classes of Limited Partner Interests for
which a meeting is proposed in writing by mail or other means of written
communication in accordance with Section 16.1. The notice shall be deemed to
have been given at the time when deposited in the mail or sent by other means of
written communication.
13.6 Record Date.
For purposes of determining the Limited Partners entitled to notice of
or to vote at a meeting of the Limited Partners or to give approvals without a
meeting as provided in Section 13.11, the General Partner may set a Record Date,
which shall not be less than 10 nor more than 60 days before (a) the date of the
meeting (unless such requirement conflicts with any rule, regulation, guideline
or requirement of any National Securities Exchange on which Limited Partner
Interests are listed for trading, in which case the rule, regulation, guideline
or requirement of such exchange shall govern) or (b) in the event that approvals
are sought without a meeting, the date by which Limited Partners are requested
in writing by the General Partner to give such approvals.
13.7 Adjournment.
When a meeting is adjourned to another time or place, notice need not
be given of the adjourned meeting and a new Record Date need not be fixed, if
the time and place thereof are announced at the meeting at which the adjournment
is taken, unless such adjournment shall be for more than 45 days. At the
adjourned meeting, the Partnership may transact any business which might have
been transacted at the original meeting. If the adjournment is for more than 45
days or if a new Record Date is fixed for the adjourned meeting, a notice of the
adjourned meeting shall be given in accordance with this Article XIII.
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13.8 Waiver of Notice; Approval of Meeting; Approval of Minutes.
The transactions of any meeting of Limited Partners, however called and
noticed, and whenever held, shall be as valid as if occurred at a meeting duly
held after regular call and notice, if a quorum is present either in person or
by proxy, and if, either before or after the meeting, Limited Partners
representing such quorum who were present in person or by proxy and entitled to
vote, sign a written waiver of notice or an approval of the holding of the
meeting or an approval of the minutes thereof. All waivers and approvals shall
be filed with the Partnership records or made a part of the minutes of the
meeting. Attendance of a Limited Partner at a meeting shall constitute a waiver
of notice of the meeting, except when the Limited Partner does not approve, at
the beginning of the meeting, of the transaction of any business because the
meeting is not lawfully called or convened; and except that attendance at a
meeting is not a waiver of any right to disapprove the consideration of matters
required to be included in the notice of the meeting, but not so included, if
the disapproval is expressly made at the meeting.
13.9 Quorum.
The holders of a majority of the Outstanding Limited Partner Interests
(including Limited Partner Interests deemed owned by the General Partner) of the
class or classes for which a meeting has been called and which are entitled to
vote represented in person or by proxy shall constitute a quorum at a meeting of
Limited Partners of such class or classes unless any such action by the Limited
Partners requires approval by holders of a greater percentage of such Limited
Partner Interests, in which case the quorum shall be such greater percentage. At
any meeting of the Limited Partners duly called and held in accordance with this
Agreement at which a quorum is present, the act of Limited Partners holding
Outstanding Limited Partner Interests (including Limited Partner Interests
deemed owned by the General Partner) that in the aggregate represent a majority
of the Outstanding Limited Partner Interests (including Limited Partner
Interests deemed owned by the General Partner) entitled to vote and be present
in person or by proxy at such meeting shall be deemed to constitute the act of
all Limited Partners, unless a greater or different percentage is required with
respect to such action under the provisions of this Agreement, in which case the
act of the Limited Partners holding Outstanding Limited Partner Interests
(including Limited Partner Interests deemed owned by the General Partner) that
in the aggregate represent at least such greater or different percentage shall
be required. The Limited Partners present at a duly called or held meeting at
which a quorum is present may continue to transact business until adjournment,
notwithstanding the withdrawal of enough Limited Partners to leave less than a
quorum, if any action taken (other than adjournment) is approved by the required
percentage of Outstanding Limited Partner Interests (including Limited Partner
Interests deemed owned by the General Partner) specified in this Agreement. In
the absence of a quorum any meeting of Limited Partners may be adjourned from
time to time by the affirmative vote of holders of at least a majority of the
Outstanding Limited Partner Interests (including Limited Partner Interests
deemed owned by the General Partner) entitled to vote at such meeting
represented either in person or by proxy, but no other business may be
transacted, except as provided in Section 13.7.
13.10 Conduct of a Meeting.
The General Partner shall have full power and authority concerning the
manner of conducting any meeting of the Partners or solicitation of approvals in
writing, including the determination of Persons entitled to vote, the existence
of a quorum, the satisfaction of the requirements of Section 13.4, the conduct
of voting, the validity and effect of any proxies and the determination of any
controversies, votes or challenges arising in connection with or during the
meeting or voting. The General Partner shall designate a Person to serve as
chairman of any meeting and shall further designate a Person to take the minutes
of any meeting. All minutes shall be kept with the records of the Partnership
maintained by the General Partner. The General Partner may make such other
regulations consistent with applicable law and this Agreement as it may deem
advisable concerning the conduct of any meeting of the Partners or solicitation
of approvals in writing, including regulations in regard to the appointment of
proxies, the appointment and duties of inspectors of votes and approvals, the
submission and examination of proxies and other evidence of the right to vote,
and the revocation of approvals in writing.
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13.11 Action Without a Meeting.
If authorized by the General Partner, any action that may be taken at a
meeting of the Limited Partners may be taken without a meeting if an approval in
writing setting forth the action so taken is signed by Limited Partners owning
not less than the minimum percentage of the Outstanding Limited Partner
Interests (including Limited Partner Interests deemed owned by the General
Partner) that would be necessary to authorize or take such action at a meeting
at which all the Limited Partners were present and voted (unless such provision
conflicts with any rule, regulation, guideline or requirement of any National
Securities Exchange on which Limited Partner Interests are listed for trading,
in which case the rule, regulation, guideline or requirement of such exchange
shall govern). Prompt notice of the taking of action without a meeting shall be
given to the Limited Partners who have not approved in writing. The General
Partner may specify that any written ballot submitted to Limited Partners for
the purpose of taking any action without a meeting shall be returned to the
Partnership within the time period, which shall be not less than 20 days,
specified by the General Partner. If a ballot returned to the Partnership does
not vote all of the Limited Partner Interests held by a Limited Partner the
Partnership shall be deemed to have failed to receive a ballot for the Limited
Partner Interests that were not voted. If approval of the taking of any action
by the Limited Partners is solicited by any Person other than by or on behalf of
the General Partner, the written approvals shall have no force and effect unless
and until (a) they are deposited with the Partnership in care of the General
Partner, (b) approvals sufficient to take the action proposed are dated as of a
date not more than 90 days prior to the date sufficient approvals are deposited
with the Partnership and (c) an Opinion of Counsel is delivered to the General
Partner to the effect that the exercise of such right and the action proposed to
be taken with respect to any particular matter (i) will not cause the Limited
Partners to be deemed to be taking part in the management and control of the
business and affairs of the Partnership so as to jeopardize the Limited
Partners' limited liability, and (ii) is otherwise permissible under the state
statutes then governing the rights, duties and liabilities of the Partnership
and the Partners.
13.12 Voting and Other Rights.
(a) Only those Record Holders of the Limited Partner Interests on the Record
Date set pursuant to Section 13.6 (and also subject to the limitations contained
in the definition of "Outstanding") shall be entitled to notice of, and to vote
at, a meeting of Limited Partners or to act with respect to matters as to which
the holders of the Outstanding Limited Partner Interests have the right to vote
or to act. All references in this Agreement to votes of, or other acts that may
be taken by, the Outstanding Limited Partner Interests shall be deemed to be
references to the votes or acts of the Record Holders of such Outstanding
Limited Partner Interests.
(b) With respect to Limited Partner Interests that are held for a Person's
account by another Person (such as a broker, dealer, bank, trust company or
clearing corporation, or an agent of any of the foregoing), in whose name such
Limited Partner Interests are registered, such other Person shall, in exercising
the voting rights in respect of such Limited Partner Interests on any matter,
and unless the arrangement between such Persons provides otherwise, vote such
Limited Partner Interests in favor of, and at the direction of, the Person who
is the beneficial owner, and the Partnership shall be entitled to assume it is
so acting without further inquiry. The provisions of this Section 13.12(b) (as
well as all other provisions of this Agreement) are subject to the provisions of
Section 4.3.
ARTICLE XIV
MERGER
14.1 Authority.
The Partnership may merge or consolidate with one or more corporations,
limited liability companies, business trusts or associations, real estate
investment trusts, common law trusts or unincorporated businesses, including a
general partnership or limited partnership, formed under the laws of the State
of Delaware or any other state of the United States of America, pursuant to a
written agreement of merger or consolidation ("Merger Agreement") in accordance
with this Article XIV.
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14.2 Procedure for Merger or Consolidation.
Merger or consolidation of the Partnership pursuant to this Article XIV
requires the prior approval of the General Partner. If the General Partner shall
determine, in the exercise of its discretion, to consent to the merger or
consolidation, the General Partner shall approve the Merger Agreement, which
shall set forth:
(a) The names and jurisdictions of formation or organization of each of the
business entities proposing to merge or consolidate;
(b) The name and jurisdiction of formation or organization of the business
entity that is to survive the proposed merger or consolidation (the "Surviving
Business Entity");
(c) The terms and conditions of the proposed merger or consolidation;
(d) The manner and basis of exchanging or converting the equity securities of
each constituent business entity for, or into, cash, property or general or
limited partner interests, rights, securities or obligations of the Surviving
Business Entity; and (i) if any general or limited partner interests, securities
or rights of any constituent business entity are not to be exchanged or
converted solely for, or into, cash, property or general or limited partner
interests, rights, securities or obligations of the Surviving Business Entity,
the cash, property or general or limited partner interests, rights, securities
or obligations of any limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity) which the holders of such general or
limited partner interests, securities or rights are to receive in exchange for,
or upon conversion of their general or limited partner interests, securities or
rights, and (ii) in the case of securities represented by certificates, upon the
surrender of such certificates, which cash, property or general or limited
partner interests, rights, securities or obligations of the Surviving Business
Entity or any general or limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity), or evidences thereof, are to be
delivered;
(e) A statement of any changes in the constituent documents or the adoption of
new constituent documents (the articles or certificate of incorporation,
articles of trust, declaration of trust, certificate or agreement of limited
partnership, certificate of formation or limited liability company agreement or
other similar charter or governing document) of the Surviving Business Entity to
be effected by such merger or consolidation;
(f) The effective time of the merger, which may be the date of the filing of the
certificate of merger pursuant to Section 14.4 or a later date specified in or
determinable in accordance with the Merger Agreement (provided, that if the
effective time of the merger is to be later than the date of the filing of the
certificate of merger, the effective time shall be fixed no later than the time
of the filing of the certificate of merger and stated therein); and
(g) Such other provisions with respect to the proposed merger or consolidation
as are deemed necessary or appropriate by the General Partner.
14.3 Approval by Limited Partners of Merger or Consolidation.
(a) Except as provided in Section 14.3(d), the General Partner, upon its
approval of the Merger Agreement, shall direct that the Merger Agreement be
submitted to a vote of the Limited Partners, whether at a special meeting or by
written consent, in either case in accordance with the requirements of Article
XIII. A copy or a summary of the Merger Agreement shall be included in or
enclosed with the notice of a special meeting or the written consent.
(b) Except as provided in Section 14.3(d), the Merger Agreement shall be
approved upon receiving the affirmative vote or consent of the holders of a
Majority Interest unless the Merger Agreement contains any provision that, if
contained in an amendment to this Agreement, the provisions of this Agreement or
the Delaware Act would require the vote or consent of a greater percentage of
the Outstanding Limited Partner Interests or of any class of Limited Partners,
in which case such greater percentage vote or consent shall be required for
approval of the Merger Agreement.
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(c) Except as provided in Section 14.3(d), after such approval by vote or
consent of the Limited Partners, and at any time prior to the filing of the
certificate of merger pursuant to Section 14.4, the merger or consolidation may
be abandoned pursuant to provisions therefor, if any, set forth in the Merger
Agreement.
(d) Notwithstanding anything else contained in this Article XIV or in this
Agreement, the General Partner is permitted, in its discretion, without Limited
Partner approval, to merge the Partnership or any Group Member into, or convey
all of the Partnership's assets to, another limited liability entity which shall
be newly formed and shall have no assets, liabilities or operations at the time
of such Merger other than those it receives from the Partnership or other Group
Member if (i) the General Partner has received an Opinion of Counsel that the
merger or conveyance, as the case may be, would not result in the loss of the
limited liability of any Limited Partner or any limited partner in Genesis OLP
or cause the Partnership or Genesis OLP to be treated as an association taxable
as a corporation or otherwise to be taxed as an entity for federal income tax
purposes (to the extent not previously treated as such), (ii) the sole purpose
of such merger or conveyance is to effect a mere change in the legal form of the
Partnership into another limited liability entity and (iii) the governing
instruments of the new entity provide the Limited Partners and the General
Partner with the same rights and obligations as are herein contained.
14.4 Certificate of Merger.
Upon the required approval by the General Partner and the Limited
Partners of a Merger Agreement, a certificate of merger shall be executed and
filed with the Secretary of State of the State of Delaware in conformity with
the requirements of the Delaware Act.
14.5 Effect of Merger.
(a) At the effective time of the certificate of merger:
(i) all of the rights, privileges and powers of each of the business
entities that has merged or consolidated, and all property, real,
personal and mixed, and all debts due to any of those business entities
and all other things and causes of action belonging to each of those
business entities shall be vested in the Surviving Business Entity and
after the merger or consolidation shall be the property of the
Surviving Business Entity to the extent they were of each constituent
business entity;
(ii) the title to any real property vested by deed or otherwise in any
of those constituent business entities shall not revert and is not in
any way impaired because of the merger or consolidation;
(iii) all rights of creditors and all liens on or security interests in
property of any of those constituent business entities shall be
preserved unimpaired; and
(iv) all debts, liabilities and duties of those constituent business
entities shall attach to the Surviving Business Entity, and may be
enforced against it to the same extent as if the debts, liabilities and
duties had been incurred or contracted by it.
(b) A merger or consolidation effected pursuant to this Article XIV shall
not be deemed to result in a transfer or assignment of assets or
liabilities from one entity to another.
ARTICLE XV
RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS
15.1 Right to Acquire Limited Partner Interests.
(a) Notwithstanding any other provision of this Agreement, if at any time not
more than 20% of the total Limited Partner Interests of any class then
Outstanding are held by Persons other than the General Partner and its
Affiliates, the General Partner shall then have the right, which right it may
assign and transfer in whole or in part to the Partnership or any Affiliate of
the General Partner, exercisable in its sole discretion, to purchase all, but
not less than all,
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of such Limited Partner Interests of such class then
Outstanding held by Persons other than the General Partner and its Affiliates,
at the greater of (x) the Current Market Price as of the date three days prior
to the date that the notice described in Section 15.1(b) is mailed and (y) the
highest price paid by the General Partner or any of its Affiliates for any such
Limited Partner Interest of such class purchased during the 90-day period
preceding the date that the notice described in Section 15.1(b) is mailed. As
used in this Agreement, (i) "Current Market Price" as of any date of any class
of Limited Partner Interests listed or admitted to trading on any National
Securities Exchange means the average of the daily Closing Prices (as
hereinafter defined) per Limited Partner Interest of such class for the 20
consecutive Trading Days (as hereinafter defined) immediately prior to such
date; (ii) "Closing Price" for any day means the last sale price on such day,
regular way, or in case no such sale takes place on such day, the average of the
closing bid and asked prices on such day, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted for trading on the principal National
Securities Exchange (other than the Nasdaq Stock Market) on which such Limited
Partner Interests of such class are listed or admitted to trading or, if such
Limited Partner Interests of such class are not listed or admitted to trading on
any National Securities Exchange (other than the Nasdaq Stock Market), the last
quoted price on such day or, if not so quoted, the average of the high bid and
low asked prices on such day in the over-the-counter market, as reported by the
Nasdaq Stock Market or such other system then in use, or, if on any such day
such Limited Partner Interests of such class are not quoted by any such
organization, the average of the closing bid and asked prices on such day as
furnished by a professional market maker making a market in such Limited Partner
Interests of such class selected by the General Partner, or if on any such day
no market maker is making a market in such Limited Partner Interests of such
class, the fair value of such Limited Partner Interests on such day as
determined reasonably and in good faith by the General Partner; and (iii)
"Trading Day" means a day on which the principal National Securities Exchange on
which such Limited Partner Interests of any class are listed or admitted to
trading is open for the transaction of business or, if Limited Partner Interests
of a class are not listed or admitted to trading on any National Securities
Exchange, a day on which banking institutions in New York City generally are
open.
(b) If the General Partner, any Affiliate of the General Partner or the
Partnership elects to exercise the right to purchase Limited Partner Interests
granted pursuant to Section 15.1(a), the General Partner shall deliver to the
Transfer Agent notice of such election to purchase (the "Notice of Election to
Purchase") and shall cause the Transfer Agent to mail a copy of such Notice of
Election to Purchase to the Record Holders of Limited Partner Interests of such
class (as of a Record Date selected by the General Partner) at least 10, but not
more than 60, days prior to the Purchase Date. Such Notice of Election to
Purchase shall also be published for a period of at least three consecutive days
in at least two daily newspapers of general circulation printed in the English
language and published in the Borough of Manhattan, New York. The Notice of
Election to Purchase shall specify the Purchase Date and the price (determined
in accordance with Section 15.1(a)) at which Limited Partner Interests will be
purchased and state that the General Partner, its Affiliate or the Partnership,
as the case may be, elects to purchase such Limited Partner Interests, upon
surrender of Certificates representing such Limited Partner Interests in
exchange for payment, at such office or offices of the Transfer Agent as the
Transfer Agent may specify, or as may be required by any National Securities
Exchange on which such Limited Partner Interests are listed or admitted to
trading. Any such Notice of Election to Purchase mailed to a Record Holder of
Limited Partner Interests at his address as reflected in the records of the
Transfer Agent shall be conclusively presumed to have been given regardless of
whether the owner receives such notice. On or prior to the Purchase Date, the
General Partner, its Affiliate or the Partnership, as the case may be, shall
deposit with the Transfer Agent cash in an amount sufficient to pay the
aggregate purchase price of all of such Limited Partner Interests to be
purchased in accordance with this Section 15.1. If the Notice of Election to
Purchase shall have been duly given as aforesaid at least 10 days prior to the
Purchase Date, and if on or prior to the Purchase Date the deposit described in
the preceding sentence has been made for the benefit of the holders of Limited
Partner Interests subject to purchase as provided herein, then from and after
the Purchase Date, notwithstanding that any Certificate shall not have been
surrendered for purchase, all rights of the holders of such Limited Partner
Interests (including any rights pursuant to Articles IV, V, VI, and XII) shall
thereupon cease, except the right to receive the purchase price (determined in
accordance with Section 15.1(a)) for Limited Partner Interests therefor, without
interest, upon surrender to the Transfer Agent of the Certificates representing
such Limited Partner Interests, and such Limited Partner Interests shall
thereupon be deemed to be transferred to the General Partner, its Affiliate or
the Partnership, as the case may be, on the record books of the Transfer Agent
and the Partnership, and the General Partner or any Affiliate of the General
Partner, or the Partnership, as the case may be, shall be deemed to be the owner
of all such Limited Partner Interests from and after the Purchase Date and shall
have all rights as the owner of such Limited Partner Interests (including all
rights as owner of such Limited Partner Interests pursuant to Articles IV, V, VI
and XII).
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(c) At any time from and after the Purchase Date, a holder of an Outstanding
Limited Partner Interest subject to purchase as provided in this Section 15.1
may surrender his Certificate evidencing such Limited Partner Interest to the
Transfer Agent in exchange for payment of the amount described in Section
15.1(a), therefor, without interest thereon.
ARTICLE XVI
GENERAL PROVISIONS
16.1 Addresses and Notices.
Any notice, demand, request, report or proxy materials required or
permitted to be given or made to a Partner or Assignee under this Agreement
shall be in writing and shall be deemed given or made when delivered in person
or when sent by first class United States mail or by other means of written
communication to the Partner or Assignee at the address described below. Any
notice, payment or report to be given or made to a Partner or Assignee hereunder
shall be deemed conclusively to have been given or made, and the obligation to
give such notice or report or to make such payment shall be deemed conclusively
to have been fully satisfied, upon sending of such notice, payment or report to
the Record Holder of such Partnership Security at his address as shown on the
records of the Transfer Agent or as otherwise shown on the records of the
Partnership, regardless of any claim of any Person who may have an interest in
such Partnership Security by reason of any assignment or otherwise. An affidavit
or certificate of making of any notice, payment or report in accordance with the
provisions of this Section 16.1 executed by the General Partner, the Transfer
Agent or the mailing organization shall be prima facie evidence of the giving or
making of such notice, payment or report. If any notice, payment or report
addressed to a Record Holder at the address of such Record Holder appearing on
the books and records of the Transfer Agent or the Partnership is returned by
the United States Post Office marked to indicate that the United States Postal
Service is unable to deliver it, such notice, payment or report and any
subsequent notices, payments and reports shall be deemed to have been duly given
or made without further mailing (until such time as such Record Holder or
another Person notifies the Transfer Agent or the Partnership of a change in his
address) if they are available for the Partner or Assignee at the principal
office of the Partnership for a period of one year from the date of the giving
or making of such notice, payment or report to the other Partners and Assignees.
Any notice to the Partnership shall be deemed given if received by the General
Partner at the principal office of the Partnership designated pursuant to
Section 2.3. The General Partner may rely and shall be protected in relying on
any notice or other document from a Partner, Assignee or other Person if
believed by it to be genuine.
16.2 Further Action.
The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
16.3 Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.
16.4 Integration.
This Agreement constitutes the entire agreement among the parties
hereto pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.
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16.5 Creditors.
None of the provisions of this Agreement shall be for the benefit of,
or shall be enforceable by, any creditor of the Partnership.
16.6 Waiver.
No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach of any other covenant, duty, agreement or condition.
16.7 Counterparts.
This Agreement may be executed in counterparts, all of which together
shall constitute an agreement binding on all the parties hereto, notwithstanding
that all such parties are not signatories to the original or the same
counterpart. Each party shall become bound by this Agreement immediately upon
affixing its signature hereto or, in the case of a Person acquiring a Limited
Partner Interest, upon accepting the certificate evidencing such Limited Partner
Interest or executing and delivering a Transfer Application as herein described,
independently of the signature of any other party.
16.8 Applicable Law.
This Agreement shall be construed in accordance with and governed by
the laws of the State of Delaware, without regard to the principles of conflicts
of law.
16.9 Invalidity of Provisions.
If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
16.10 Consent of Partners.
Each Partner hereby expressly consents and agrees that, whenever in
this Agreement it is specified that an action may be taken upon the affirmative
vote or consent of less than all of the Partners, such action may be so taken
upon the concurrence of less than all of the Partners and each Partner shall be
bound by the results of such action.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GENERAL PARTNER
GENESIS ENERGY, INC.
By: \s\ Mark J. Gorman
-------------------------
Name: Mark J. Gorman
Title: President and Chief Executive Officer
LIMITED PARTNERS
All Limited Partners previously and hereafter
admitted as Limited Partners of the
Partnership, pursuant to powers of attorney
previously and hereafter executed in favor of, and
granted and delivered to the General Partner.
By: GENESIS ENERGY, INC.
General Partner, as attorney-in-fact for
all Limited Partners pursuant to the Powers
of Attorney granted pursuant to Section 2.6.
By: \s\ Mark J. Gorman
--------------------------
Name: Mark J. Gorman
Title: President and Chief Executive Officer