EXHIBIT 3.1
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AMENDED AND RESTATED AGREEMENT
OF
LIMITED PARTNERSHIP
OF
BUCKEYE PARTNERS, L.P.
(AS AMENDED AND RESTATED AS OF DECEMBER 15, 2004)
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BUCKEYE PARTNERS, L.P.
TABLE OF CONTENTS
ARTICLE I Definitions............................................................................... 1
ARTICLE II Organizational Matters.................................................................... 7
2.1 Formation..................................................................................... 7
2.2 Name.......................................................................................... 7
2.3 Principal Office; Registered Office........................................................... 8
2.4 Power of Attorney............................................................................. 8
2.5 Term.......................................................................................... 9
2.6 Organizational Limited Partner................................................................ 9
2.7 Organizational Certificate.................................................................... 9
ARTICLE III Purpose................................................................................... 10
3.1 Purpose....................................................................................... 10
ARTICLE IV Capital Contributions; Purchases Pursuant to Purchase Agreements; Additional
Issuances................................................................................. 10
4.1 General Partner Contributions................................................................. 10
4.2 Limited Partner Contributions................................................................. 10
4.3 Issuances of Additional LP Units and Other Securities......................................... 10
4.4 No Preemptive Rights.......................................................................... 11
4.5 No Interest................................................................................... 11
4.6 Loans from Partners........................................................................... 11
4.7 No Withdrawal................................................................................. 11
ARTICLE V Capital Accounts; Distributions........................................................... 11
5.1 Capital Accounts.............................................................................. 11
5.2 Distributions in Respect of Units............................................................. 13
ARTICLE VI Income Tax Matters........................................................................ 14
6.1 Tax Allocations............................................................................... 14
6.2 Preparation of Tax Returns.................................................................... 15
6.3 Tax Elections................................................................................. 15
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6.4 Tax Controversies............................................................................. 15
6.5 Withholding................................................................................... 15
ARTICLE VII Management and Operation of Business; Indemnification..................................... 15
7.1 Powers of General Partner..................................................................... 15
7.2 Duties of General Partner..................................................................... 17
7.3 Reliance by Third Parties..................................................................... 17
7.4 Compensation and Reimbursement of the General Partner......................................... 18
7.5 Purchase or Sale of LP Units and Other Partnership Securities................................. 18
7.6 Certain Undertakings Relating to the Separateness of the Partnership.......................... 18
7.7 Outside Activities; Contracts with Affiliates; Loans to or from Affiliates.................... 19
7.8 Tax Basis and Value Determinations............................................................ 21
7.9 Resolution of Conflicts of Interest; Standard of Care......................................... 21
7.10 Other Matters Concerning the General Partner.................................................. 22
7.11 Limited Liability; Indemnification............................................................ 23
ARTICLE VIII Rights and Obligations of Limited Partners................................................ 25
8.1 Limitation of Liability....................................................................... 25
8.2 Management of Business........................................................................ 25
8.3 Outside Activities............................................................................ 25
8.4 Return of Capital............................................................................. 25
8.5 Rights of Limited Partners Relating to the Partnership........................................ 25
ARTICLE IX Books, Records, Accounting and Reports................................................... 26
9.1 Books, Records and Accounting................................................................. 26
9.2 Fiscal Year................................................................................... 26
9.3 Reports....................................................................................... 26
ARTICLE X Issuance of LP Certificates; Transfer and Exchange of LP Units............................ 27
10.1 Initial Issuance of LP Certificates........................................................... 27
10.2 Registration, Registration of Transfer and Exchange........................................... 27
10.3 Mutilated, Destroyed, Lost or Stolen LP Certificates.......................................... 28
10.4 Persons Deemed Owners......................................................................... 28
ARTICLE XI Transfer of GP Units...................................................................... 28
11.1 Transfer of GP Units.......................................................................... 28
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11.2 Successor General Partner..................................................................... 29
ARTICLE XII Admission of Initial, Substituted and Additional Limited Partners and Successor
General Partner........................................................................... 29
12.1 Admission of Initial Limited Partners......................................................... 29
12.2 Admission of Substituted Limited Partners..................................................... 29
12.3 Admission of Successor General Partner........................................................ 29
12.4 Admission of Additional Limited Partners..................................................... 30
12.5 Amendment of Agreement and Certificate of Limited Partnership................................. 30
ARTICLE XIII Withdrawal or Removal of the General Partner.............................................. 30
13.1 Withdrawal or Removal of the General Partner.................................................. 30
13.2 Sale of Former General Partner's Interest..................................................... 31
ARTICLE XIV Dissolution and Liquidation............................................................... 32
14.1 Dissolution................................................................................... 32
14.2 Reconstitution................................................................................ 32
14.3 Liquidation................................................................................... 33
14.4 Distribution in Kind.......................................................................... 34
14.5 Cancellation of Certificate of Limited Partnership............................................ 34
14.6 Return of Capital............................................................................. 34
14.7 Waiver of Partition........................................................................... 34
14.8 Certain Prohibited Acts....................................................................... 34
ARTICLE XV Amendment of Partnership Agreement........................................................ 35
15.1 Amendments Which May be Adopted Solely by the General Partner................................. 35
15.2 Other Amendments.............................................................................. 36
15.3 Amendment Requirements........................................................................ 36
ARTICLE XVI Meetings.................................................................................. 36
16.1 Meetings...................................................................................... 36
16.2 Record Date................................................................................... 36
16.3 Conduct of Meeting............................................................................ 37
16.4 Action Without a Meeting...................................................................... 37
ARTICLE XVII Certain Restrictions...................................................................... 37
17.1 Additional Units.............................................................................. 37
17.2 Certain Amendments............................................................................ 37
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17.3 Sale of Assets................................................................................ 38
ARTICLE XVIII Right to Purchase Units................................................................... 38
18.1 Right to Purchase Units....................................................................... 38
18.2 Notice of Election to Purchase................................................................ 38
18.3 Purchase and Transfer of Units................................................................ 39
ARTICLE XIX General Provisions........................................................................ 39
19.1 Opinions Regarding Taxation as a Partnership.................................................. 39
19.2 Personal Property............................................................................. 39
19.3 Addresses and Notices......................................................................... 39
19.4 Headings...................................................................................... 39
19.5 Binding Effect................................................................................ 40
19.6 Integration................................................................................... 40
19.7 Waiver........................................................................................ 40
19.8 Counterparts.................................................................................. 40
19.9 Severability.................................................................................. 40
19.10 Applicable Law................................................................................ 40
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AMENDED AND RESTATED AGREEMENT
OF
LIMITED PARTNERSHIP
OF
BUCKEYE PARTNERS, L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of
December 15, 2004 (the "Agreement"), is entered into by and among Buckeye GP
LLC, a Delaware limited liability company (together with any successor in its
capacity as general partner of the Partnership, the "General Partner"), and the
additional Persons that become Partners of the Partnership as provided herein.
BACKGROUND
On December 31, 1998, Buckeye Management Company assigned and transferred
certain assets and liabilities, including all of its GP Units (as defined in
Article I below), to Buckeye Pipe Line Company. Buckeye Pipe Line Company
accepted the transfer of those certain assets and liabilities and the GP Units,
became the general partner of Buckeye Partners, L.P., and entered into the
Amended and Restated Agreement of Limited Partnership, dated as of December 31,
1998, which was further amended and restated as of April 24, 2002 (as so
amended, the "Prior Partnership Agreement").
On May 4, 2004, Buckeye Management Company and Buckeye Pipe Line Company
converted from Delaware corporations to Delaware limited liability companies. In
connection with such conversion, Buckeye Management Company changed its name to
Buckeye Management Company LLC, and Buckeye Pipe Line Company changed its name
to Buckeye Pipe Line Company LLC (the "Former GP").
In accordance with Section 11.1 of the Prior Partnership Agreement, the
Former GP has assigned and transferred certain assets and liabilities, including
all of its GP Units, to the General Partner pursuant to a Contribution,
Assignment and Assumption Agreement dated as of the date of this Agreement. The
General Partner has accepted the transfer of those certain assets and
liabilities and the GP Units, and in connection with this amendment and
restatement of the Prior Agreement, desires to become the general partner of
Buckeye Partners, L.P.
ARTICLE I
Definitions
The following definitions shall for all purposes, unless otherwise clearly
indicated to the contrary, apply to the terms used in this Agreement:
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"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with the Person in question; provided, however, that, for purposes of the
restrictive provisions of Sections 7.6, 7.7 and 7.9, neither the Partnership nor
any of the Operating Partnerships nor any of their respective subsidiaries shall
be deemed to be Affiliates of the General Partner. As used herein, the term
control means the possession, directly or indirectly, 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. For purposes of this
Agreement, Services Company, which provides services to the General Partner,
shall be deemed an Affiliate of the General Partner.
"Agent" has the meaning specified in Section 2.4
"Agreed Value" of any Contributed Property means the fair market value of
such property as of the time of contribution (or, in the case of cash, the
amount thereof), as determined by the General Partner using such reasonable
method of valuation as it may adopt.
"Agreement" means this amended and restated agreement of limited
partnership, as amended or amended and restated from time to time.
"Audit Committee" means a committee of the Board of Directors of the
General Partner composed entirely of three or more directors who meet the
independence, qualification and experience requirements of the New York Stock
Exchange, and two of whom are also S&P Independent Directors.
"BMC" means Buckeye Management Company LLC, a Delaware limited liability
company.
"Business Day" means any day other than a Saturday, a Sunday, or a legal
holiday recognized as such by the Government of the United States or the State
of New York.
"Capital Accounts" mean the capital accounts maintained with respect to
Units pursuant to Section 5.1(a).
"Capital Contribution" means any Contributed Property which a Partner
contributes to the Partnership.
"Carrying Value" means (a) with respect to Contributed Property, the
Agreed Value of such property reduced as of the time of determination (but not
below zero) by (i) all depreciation, cost recovery and amortization deductions
charged to the Capital Accounts pursuant to Section 5.1(a) with respect to such
property and (ii) an appropriate amount to reflect any sales, retirements and
other dispositions of assets included in such property, and (b) with respect to
any other property, the adjusted basis of such property for federal income tax
purposes as of the time of determination, in any case as may be adjusted from
time to time pursuant to Section 5.1(f).
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"Certificate of Limited Partnership" means the Amended and Restated
Certificate of Limited Partnership filed with the Secretary of State of the
State of Delaware as described in the first sentence of Section 2.7, as amended
or restated from time to time.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Contributed Property" means any cash, property or other consideration (in
such form as may be permitted under the Delaware Act) contributed to the
Partnership.
"Contributing Partner" means any Partner contributing Contributed Property
to the Partnership in exchange for Units (or any transferee of such Units).
"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act,
as amended from time to time, and any successor to such Act.
"Designated Expenses" mean all costs and expenses (direct or indirect)
incurred by the General Partner which are directly or indirectly related to the
formation, capitalization, business or activities of the Partnership Group
(including, without limitation, expenses, direct or indirect, reasonably
allocated to the General Partner by its Affiliates); provided, however, that
Designated Expenses shall not include (a) any cost or expense for which the
General Partner is not entitled to be reimbursed by reason of the proviso at the
end of Section 7.11(b), (b) severance costs not permitted to be reimbursed
pursuant to the Management Agreements in connection with the withdrawal of the
General Partner, or (c) any cost or expense for which the General Partner and
its Affiliates are not entitled to be reimbursed pursuant to the terms of the
Exchange Agreement.
"Eighty Percent Interest" means Limited Partners holding an aggregate of
at least 80% of the outstanding LP Units.
"ESOP" means the Buckeye Pipe Line Services Company Employee Stock
Ownership Plan Trust, as amended.
"ESOP Loan" means the loan to the ESOP due March 28, 2011 in the original
principal amount of $44,133,600, and shall include any loans refinancing such
loan.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor to such statute.
"Exchange Agreement" means the Third Amended and Restated Exchange
Agreement, dated as of December 15, 2004, among Holdco, the General Partner, the
Partnership and each of the Operating Partnerships, as amended or restated from
time to time.
"General Partner" has the meaning specified in the first paragraph.
"GP Unit" means a Partnership Interest issued pursuant to Section 4.1 and
representing a general partner's interest in the Partnership.
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"Group Member" means a member of the Partnership Group.
"Holdco" means, collectively MainLine Sub LLC and any entities which
control MainLine Sub LLC or are under common control with MainLine Sub LLC, but
excluding Buckeye GP LLC and the Partnership Group.
"Incentive Compensation Agreement" means the Fourth Amended and Restated
Incentive Compensation Agreement, dated as of December 15, 2004, between the
Partnership and Holdco.
"Indemnitee" means the General Partner, any Affiliate of the General
Partner, any Person who is or was a director, officer, manager, member, employee
or agent of the General Partner or any such Affiliate, or any Person who is or
was serving at the request of the General Partner or any such Affiliate as a
director, officer, manager, member, partner, trustee, employee or agent of
another Person.
"Issue Price" means the price at which a Unit is purchased from the
Partnership.
"Limited Partner" means any limited partner of the Partnership.
"Liquidator" has the meaning specified in Section 14.3.
"LP Certificate" means a certificate issued by the Partnership,
substantially in the form of Annex A to this Agreement, evidencing ownership of
one or more LP Units.
"LP Unit" means a Partnership Interest issued pursuant to Section 4.2 or
4.3 and representing a limited partner's interest in the Partnership.
"Majority Interest" means Limited Partners holding an aggregate of more
than 50% of the outstanding LP Units.
"Management Agreements" mean the management agreements, dated as of
October 4, 2001, pursuant to which the General Partner manages the Operating
Partnerships, in each case as amended or restated from time to time.
"NASDAQ" means the National Association of Securities Dealers Automated
Quotation System.
"National Securities Exchange" means an exchange registered with the
Securities and Exchange Commission under Section 6(a) of the Exchange Act.
"Net Agreed Value" means (a) in the case of any Contributed Property, the
Agreed Value of such Contributed Property reduced by any indebtedness either
assumed by the Partnership upon contribution of such Contributed Property or to
which such Contributed Property is subject when contributed, (b) in the case of
any property distributed to a Partner pursuant to Section 5.2, 14.3 or 14.4, the
fair market value of such property at the time of such distribution reduced by
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any indebtedness either assumed by such Partner upon such distribution or to
which such property is subject at the time of distribution.
"Operating Partnership Agreements" mean the amended and restated
agreements of limited partnership, dated as of December 15, 2004, governing the
rights and obligations of the partners of the Operating Partnerships and certain
related matters, as amended or restated from time to time.
"Operating Partnerships" means, collectively, Buckeye Pipe Line Company,
L.P., Buckeye Pipe Line Holdings, L.P., Everglades Pipe Line Company, L.P. and
Laurel Pipe Line Company, L.P., each a Delaware limited partnership, and each
other current or future subsidiary of the Partnership which is managed by the
General Partner pursuant to its organizational documents or any other
contractual arrangement with the General Partner.
"Opinion of Counsel" means a written opinion of counsel (who may be
regular counsel of the General Partner or any of its Affiliates) acceptable to
the General Partner.
"Organizational Limited Partner" means Pennsylvania Company, a Delaware
corporation, acting as the organizational limited partner pursuant to this
Agreement.
"Partner" means the General Partner or a Limited Partner.
"Partnership" means Buckeye Partners, L.P., a Delaware limited
partnership.
"Partnership Group" means the Partnership, the Operating Partnerships and
any subsidiary of any such entity, treated as a single consolidated entity.
"Partnership Interest" means a general partner's or limited partner's
interest in the Partnership.
"Partnership Securities" has the meaning specified in Section 4.3.
"Percentage Interest" means, with respect to any Partner, the number of
Units held by such Partner divided by the number of Units outstanding.
"Person" means an individual, a corporation, a limited liability company,
a partnership, a trust, an unincorporated organization, an association or any
other entity.
"Prior Partnership Agreement" has the meaning specified in the second
paragraph.
"Recapture Income" means any gain recognized by the Partnership upon the
disposition of any asset of the Partnership that is not a capital gain due to
the recapture of certain deductions previously taken with respect to such asset.
"Record Date" means the date established by the General Partner for
determining the identity of Limited Partners entitled (a) to notice of or to
vote at any meeting of Limited Partners, to vote by ballot or approve
Partnership action in writing without a meeting or to exercise rights
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in respect of any other lawful action of Limited Partners, or (b) to receive any
report or distribution.
"Record Holder" or "Holder" of (a) any LP Unit means the Person in whose
name such Unit is registered in the Units Register or (b) any GP Unit means the
General Partner.
"S&P Independent Director" means a duly appointed member of the Audit
Committee who was not at the time of such appointment or at any time in the
preceding five years, (a) a direct or indirect legal or beneficial owner of
interests in the Partnership or any of its Affiliates (excluding de minimis
ownership interests), (b) a creditor, supplier, employee, officer, director,
family member, manager, member or contractor of the Partnership or its
Affiliates, or (c) a person who controls (whether directly, indirectly or
otherwise) the Partnership or its Affiliates or any creditor, supplier,
employee, officer, director, manager, member or contractor of the Partnership or
its Affiliates; provided, however, that service by a director as a director of
Buckeye Pipe Line Company LLC at or prior to the date hereof shall not prevent a
member of the Board of Directors from being a S&P Independent Director.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and any successor to such statute.
"Services Agreement" means the Services Agreement, dated as of December
15, 2004, between the Partnership, the Operating Partnerships, Wood River Pipe
Lines LLC, Buckeye Terminals, LLC and Services Company.
"Services Company" means Buckeye Pipe Line Services Company, a
Pennsylvania corporation.
"Special Approval" means approval by a majority of the members of the
Audit Committee.
"Time of Delivery" means December 23, 1986.
"Transfer Agent" means the bank, trust company or other Person appointed
from time to time by the Partnership to act as successor transfer agent and
registrar for LP Units.
"Two-Thirds Interest" means Limited Partners holding an aggregate of at
least two-thirds of the outstanding LP Units.
"Unit" means a GP Unit or an LP Unit.
"Unit Price" of a Unit means, as of any date of determination, (a) if such
Unit is one of a class of Units listed or admitted to trading on a National
Securities Exchange, the average of the last reported sales prices per Unit
regular way or, in case no such reported sale takes place on any such day, the
average of the last reported bid and asked prices per Unit regular way, in
either case on the principal National Securities Exchange on which such class of
Units is listed or admitted to trading (or, if such class of Units is listed or
admitted to trading on the New York
6
Stock Exchange, on the New York Stock Exchange Composite Tape), for the five
trading days immediately preceding the date of determination; (b) if such Unit
is not of a class of Units listed or admitted to trading on a National
Securities Exchange but is of a class quoted by NASDAQ, the average of the last
reported sales prices per Unit or, in case no such reported sale takes place on
any such day or in case last reported sales prices are not quoted by NASDAQ, the
average of the last bid and asked prices per Unit, for the five trading days
immediately preceding such date of determination, as furnished by the National
Quotation Bureau Incorporated or such other nationally recognized quotation
service as may be selected by the General Partner for such purpose, if said
Bureau is not at the time furnishing quotations; or (c) if such Unit is not of a
class of Units listed for trading on a National Securities Exchange or quoted by
NASDAQ, an amount equal to the fair market value of such Unit as of such date of
determination, as determined by the General Partner using any reasonable method
of valuation it may select.
"Units Register" has the meaning specified in Section 10.2.
"Unrealized Gain" attributable to a Partnership property means, as of any
date of determination, the excess, if any, of the fair market value of such
property as of such date of determination over the Carrying Value of such
property as of such date of determination (prior to any adjustment to be made
pursuant to Section 5.1(f) as of such date).
"Unrealized Loss" attributable to a Partnership property means, as of any
date of determination, the excess, if any, of the Carrying Value of such
property as of such date of determination (prior to any adjustment to be made
pursuant to Section 5.1(f) as of such date) over the fair market value of such
property as of such date of determination.
ARTICLE II
Organizational Matters
2.1 Formation. BMC and the Organizational Limited Partner originally
formed the Partnership as a limited partnership pursuant to the provisions of
the Delaware Act. The General Partner, pursuant to the authority contained in
Article XV of this Agreement, does hereby amend and restate this 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. Except as expressly
provided herein to the contrary, the rights and obligations of the Partners and
the administration, dissolution and termination of the Partnership shall be
governed by the Delaware Act.
2.2 Name. The name of the Partnership shall be, and the business of the
Partnership shall be conducted under the name of, "Buckeye Partners, L.P.";
provided, however, that (a) the Partnership's business may be conducted under
any other name or names deemed advisable by the General Partner, (b) the General
Partner in its sole discretion may change the name of the Partnership at any
time and from time to time and (c) the name under which the Partnership conducts
business shall include "Ltd." or "Limited Partnership" (or similar words or
letters) where necessary for purposes of maintaining the limited liability
status of each Limited Partner or otherwise complying with the laws of any
jurisdiction that so requires.
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2.3 Principal Office; Registered Office. (a) The principal office of the
Partnership shall be ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such
other place as the General Partner may from time to time designate. The
Partnership may maintain offices at such other places as the General Partner
deems advisable.
(b) The address of the Partnership's registered office in the State
of Delaware shall be Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the name of the
Partnership's registered agent for service of process at such address shall be
The Corporation Trust Company.
2.4 Power of Attorney. (a) Each Limited Partner hereby constitutes and
appoints the General Partner or, if a Liquidator shall have been selected
pursuant to Section 14.3, the Liquidator, with full power of substitution, as
such Limited Partner's true and lawful agent and attorney-in-fact ("Agent"),
with full power and authority in such Limited Partner's 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, without limitation, this Agreement and the Certificate
of Limited Partnership and any amendments or restatements thereof) which the
Agent deems appropriate or necessary to form or 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) under the laws
of any state or jurisdiction; (B) all certificates, documents and other
instruments which the Agent deems appropriate or necessary to reflect any
amendments, changes or modifications of this Agreement in accordance with its
terms; (C) all conveyances and other documents or instruments which the Agent
deems appropriate or necessary 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, substitution,
withdrawal or removal of any Partner pursuant to Article XII, XIII or XIV and
other events described in Article XII, XIII or XIV; and (E) all certificates,
documents and other instruments (including, without limitation, this Agreement
and the Certificate of Limited Partnership and any amendments or restatements
thereof) relating to the determination of the rights, preferences and privileges
of any class or series of Units issued pursuant to Section 4.4; and
(ii) execute, swear to, acknowledge and file all ballots,
consents, approvals, waivers, certificates, documents and other instruments
which the Agent deems appropriate or necessary in order to make, evidence, give,
confirm or ratify any vote, consent, approval, agreement or other action which
is made or given by the Partners hereunder, is deemed to be made or given by the
Partners hereunder, is consistent with the terms of this Agreement or is deemed
by the Agent to be appropriate or necessary to effectuate the terms or intent of
this Agreement or the purposes of the Partnership; provided, however, that, if
any vote or approval of Limited Partners is specifically required for an action
by any provision of this Agreement, the Agent may exercise the power of attorney
made in this subsection (ii) to take such action only after such vote or
approval is obtained.
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(b) The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, and it shall survive and not
be affected by the subsequent death, incompetency, disability, incapacity,
dissolution, bankruptcy or termination of any Limited Partner and the transfer
of all or any portion of such Limited Partner's Units and shall extend to such
Limited Partner's heirs, transferees, successors, assigns and personal
representatives. Each Limited Partner hereby agrees to be bound by any
representations made by the Agent acting in good faith pursuant to such power of
attorney; and each Limited Partner hereby waives any and all defenses which may
be available to contest, negate or disaffirm the action of the Agent taken in
good faith pursuant to such power of attorney. Each Limited Partner shall
execute and deliver to the Agent, within 15 days after receipt of the Agent's
request therefor, such further designations, powers of attorney and other
instruments as the Agent deems appropriate or necessary to effectuate the terms
or intent of this Agreement or the purposes of the Partnership.
2.5 Term. The Partnership shall continue in existence until the close of
Partnership business on December 31, 2086 or until the earlier termination of
the Partnership in accordance with the provisions of Article XIV.
2.6 Organizational Limited Partner. At and as of the Time of Delivery, the
Partnership interest of the Organizational Limited Partner was terminated and
the Partnership Interest of BMC shall be as described in Section 4.1.
2.7 Organizational Certificate. An Amended and Restated Certificate of
Limited Partnership of the Partnership has been filed with the Secretary of
State of the State of Delaware as required by the Delaware Act. The General
Partner shall cause to be filed such other certificates or documents as may be
required for the formation, operation and qualification of a limited partnership
in Delaware and any other state in which the Partnership may elect to do
business. The General Partner shall thereafter file any necessary amendments to
the Certificate of Limited Partnership and any such other certificates and
documents and do all things requisite to the maintenance of the Partnership as a
limited partnership (or as a partnership in which the Limited Partners have
limited liability) under the laws of Delaware and any other state in which the
Partnership may elect to do business. Subject to applicable law, the General
Partner may omit from the Certificate of Limited Partnership and any such other
certificates and documents, and from all amendments thereto, the names and
addresses of the Limited Partners and information relating to the Capital
Contributions and shares of profits and compensation of the Limited Partners, or
state such information in the aggregate rather than with respect to each
individual Limited Partner.
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ARTICLE III
Purpose
3.1 Purpose. The purpose and business of the Partnership shall be to
engage in any lawful activity for which limited partnerships may be organized
under the Delaware Act.
ARTICLE IV
Capital Contributions; Purchases Pursuant
to Purchase Agreements; Additional Issuances
4.1 General Partner Contributions. (a) At and as of the Time of Delivery,
BMC contributed to the Partnership, in exchange for 121,212 GP Units (i.e., a 1%
Percentage Interest), an amount equal to $2,424,240.
(b) Following the Time of Delivery, whenever a Limited Partner makes
a Capital Contribution to the Partnership pursuant to Section 4.3, the General
Partner shall contribute to the Partnership, in exchange for a number of GP
Units equal to 1/99th of the total number of LP Units then being purchased,
Contributed Property (which may include LP Units) having a Net Agreed Value
equal to 1/99th of the aggregate Net Agreed Value of all Capital Contributions
to the Partnership then being made pursuant to Section 4.3, unless the General
Partner receives an Opinion of Counsel that the failure to make such additional
Capital Contribution would not result in the Partnership or any of the Operating
Partnerships being treated as an association taxable as a corporation for
federal income tax purposes.
4.2 Limited Partner Contributions. At and as of the Time of Delivery, each
underwriting firm which entered into an underwriting agreement with the
Partnership contributed to the Partnership, in exchange for the number of LP
Units specified therein an amount in cash equal to the Issue Price for such LP
Units (as specified in such underwriting agreement) multiplied by the number of
LP Units being so purchased.
4.3 Issuances of Additional LP Units and Other Securities. (a) The General
Partner is hereby authorized to cause the Partnership to issue, in addition to
the LP Units issued pursuant to Section 4.2, additional LP Units, or classes or
series thereof, or options, rights, warrants or appreciation rights relating
thereto or any other type of equity security that the Partnership may lawfully
issue, any secured or unsecured debt obligations of the Partnership, or debt
obligations of the Partnership convertible into any class or series of equity
securities of the Partnership (collectively, "Partnership Securities"), for any
Partnership purpose, at any time or from time to time, to Partners or to other
Persons (including, without limitation, to employee benefit plans sponsored by
the General Partner, the Partnership, any of the Operating Partnerships or any
of their respective Affiliates), for such consideration and on such terms and
conditions, and entitling the holders thereof to such relative rights and
powers, as shall be established by the General Partner in its sole discretion,
all without the approval of any Limited Partners, except as provided in Section
17.1.
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(b) Without limiting the generality of the foregoing (but subject to
the provisions of Section 17.1), the additional Partnership Securities to be
issued by the Partnership under this Section 4.3 may contain provisions with
respect to (i) the allocation of items of Partnership income, gain, loss,
deduction and credit; (ii) the right to share in Partnership distributions;
(iii) rights upon dissolution and liquidation of the Partnership; (iv) whether
any such issue of Partnership Securities may be acquired by the Partnership, by
purchase, redemption or otherwise, and if so, the price at which, and the terms
and conditions upon which, such Partnership Securities may be purchased,
redeemed or otherwise acquired by the Partnership; (v) the conversion rights
applicable to any such issue of Partnership Securities, and if so, the rate at
which, and the terms and conditions upon which, such Partnership Securities may
be converted into any other class or series of Partnership Securities; (vi) the
terms and conditions upon which any such Partnership Securities will be issued,
assigned, or transferred; and (vii) the right, if any, of the holders of any
such issue of Partnership Securities to vote on Partnership matters.
(c) The General Partner is hereby authorized and directed to do all
acts which it deems appropriate or necessary in connection with each issuance of
Units or other securities by the Partnership and to amend this Agreement in any
manner which it deems appropriate or necessary to provide for each such
issuance, to admit additional limited partners in connection therewith and to
specify the relative rights, powers and duties of the holders of the Units or
other securities being so issued, all without the approval of any Limited
Partners, except as provided in Section 17.1.
4.4 No Preemptive Rights. No Partner shall have any preemptive right with
respect to the issuance or sale of Units or other securities that may be issued
by the Partnership.
4.5 No Interest. No interest shall be paid by the Partnership on Capital
Contributions.
4.6 Loans from Partners. Loans or other advances by a Partner to or for
the account of the Partnership shall not be considered Capital Contributions.
4.7 No Withdrawal. No Partner shall be entitled to withdraw any part of
its Capital Contributions or its Capital Account or to receive any distributions
from the Partnership except as provided herein.
ARTICLE V
Capital Accounts; Distributions
5.1 Capital Accounts. (a) The Partnership shall maintain for each Partner
a separate Capital Account with respect to Units in accordance with the
regulations issued pursuant to Section 704 of the Code. The Capital Account of
any Partner shall be increased by (i) the Net Agreed Value of all Capital
Contributions made by such Partner in exchange for Units and (ii) all items of
income and gain computed in accordance with Section 5.1 (b) and allocated to
such Partner pursuant to Section 5.1(c) and reduced by (iii) the Net Agreed
Value of all distributions of cash or property made to such Partner with respect
to Units and (iv) all items of deduction and
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loss computed in accordance with Section 5.1(b) and allocated to such Partner
pursuant to Section 5.1(c).
(b) For purposes of computing the amount of each item of income,
gain, loss or deduction to be reflected in the Capital Accounts, the
determination, recognition and classification of such item shall be the same as
its determination, recognition and classification for federal income tax
purposes, provided that:
(i) Any deductions for depreciation, cost recovery or
amortization attributable to any Partnership property shall be determined as if
the adjusted basis of such property was equal to the Carrying Value of such
property. Upon an adjustment to the Carrying Value of any Partnership property
subject to depreciation, cost recovery or amortization pursuant to Section
5.1(e) or 7.8, any further deductions for such depreciation, cost recovery or
amortization attributable to such property shall be determined as if the
adjusted basis of such property was equal to the Carrying Value of such property
immediately following such adjustment.
(ii) If the Partnership's adjusted basis in property subject
to depreciation, cost recovery or amortization is reduced for federal income tax
purposes pursuant to Section 48(q) (1) of the Code, the amount of such reduction
shall be deemed to be an additional item of deduction in the year such property
is placed in service. Any restoration of such basis pursuant to Section 48(q)(2)
of the Code shall be deemed to be an additional item of income in the year of
restoration.
(iii) Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be determined by the Partnership
as if the adjusted basis of such property as of such date of disposition was
equal in amount to the Carrying Value of such property as of such date.
(iv) All fees and other expenses incurred by the Partnership
to promote the sale of (or to sell) a Partnership Interest that can neither be
deducted nor amortized under Section 709 of the Code shall be treated as items
of deduction.
(v) 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 Section 705(a)(2)(B) of the Code, without regard to the
fact that such items are not includible in gross income or are neither currently
deductible nor capitalizable for federal income tax purposes.
(c) (i) For purposes of maintaining the Capital Accounts and except
as otherwise provided in this Section 5.1 (c), each item of income, gain, loss
and deduction (computed in accordance with Section 5.1 (b)) shall be allocated
to the Partners in accordance with their respective Percentage Interests.
(ii) If any Partner unexpectedly receives any adjustment
allocation or distribution described in Treasury Regulation Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1
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(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 a deficit in its Capital Account created by such
adjustment, allocation or distribution as quickly as possible.
(ii) To preserve uniformity of Units, the General Partner
shall have sole discretion pursuant to Section 6.1(c) to make special
allocations of income or deduction that do not have a material adverse effect on
the Limited Partners and are consistent with the principles of Section 704 of
the Code.
(iii) If there is a net decrease in Partnership minimum gain,
within the meaning of Treasury Regulation Section 1.704-1(b) (4) (iv), during a
Partnership taxable year, all Partners with deficit balances in their Capital
Accounts, computed as described in Treasury Regulation Section
1.704-1(b)(4)(iv)(c) at the end of such year, will be allocated items of
Partnership income and gain for such year (and, if necessary, subsequent years)
in the amounts and in the proportions needed to eliminate such deficits as
quickly as possible, before any other allocations are made under Section 704(b)
of the Code.
(d) (i) Except as otherwise provided in this Section 5.1(d), a
transferee of LP Units shall, upon becoming a Limited Partner, succeed to the
portion of the transferor's Capital Account maintained with respect to the Units
transferred.
(ii) If a transfer of Units causes a termination of the
Partnership under Section 708(b)(1)(B) of the Code, the Partnership properties
shall be deemed to have been distributed in liquidation of the Partnership to
the Partners (including the transferee of the Units) pursuant to Sections 14.4
and 14.5 and recontributed by such Partners and transferees in reconstitution of
the Partnership. The Capital Accounts of such reconstituted Partnership shall be
maintained in accordance with this Article V.
(e) If any additional LP Units are to be issued pursuant to Section
4.3, or if any Partnership Property is to be distributed, the Capital Accounts
of the Partners (and the Carrying Values of all Partnership properties) shall,
immediately prior to such issuance or distribution, be adjusted (consistent with
the provisions hereof and of Section 704(b) of the Code) upwards or downwards to
reflect any Unrealized Gain or Unrealized Loss attributable to all Partnership
properties (as if such Unrealized Gain or Unrealized Loss had been recognized
upon an actual sale of such properties immediately prior to such issuance). In
determining such Unrealized Gain or Unrealized Loss, the fair market value of
Partnership properties, as of any date of determination, (i) shall, in the case
of the issuance of additional LP Units, be deemed to be equal to (A) the number
of Units outstanding, as of the date of determination, times the Issue Price for
which such additional LP Units are so issued, plus (B) the amount of any
Partnership indebtedness outstanding as of the date of determination, and (ii)
shall, in the case of the distribution of Partnership property, be determined in
the manner provided in Section 14.3.
5.2 Distributions in Respect of Units. (a) From time to time, not less
often than quarterly, the General Partner shall review the Partnership's
accounts to determine whether distributions are appropriate. The General Partner
may make such cash distributions as it, in its sole discretion, may determine,
without being limited to current or accumulated income or gains,
13
from any Partnership funds, including, without limitation, Partnership revenues,
Capital Contributions or borrowed funds. In its sole discretion, the General
Partner may also distribute to the Partners other Partnership property,
additional Units or other securities of the Partnership or other entities.
All distributions in respect of Units shall be made concurrently to all
Record Holders on the Record Date set for purposes of such distribution and
shall be prorated in accordance with such Record Holders' respective Percentage
Interests as of such Record Date.
(b) Amounts paid pursuant to Section 7.4, any Management Agreement,
any Operating Partnership Agreement or the Incentive Compensation Agreement
shall not be deemed to be distributions for purposes of this Agreement.
ARTICLE VI
Income Tax Matters
6.1 Tax Allocations. (a) For federal income tax purposes, each item of
income, gain, loss, deduction and credit of the Partnership shall be allocated
among the Partners in accordance with their Percentage Interests except that the
General Partner shall have the authority to make such other allocations as are
necessary and appropriate to comply with Section 704 of the Code and the
regulations issued pursuant thereto.
(b) Gain resulting from the sale or other taxable disposition of
Partnership assets and allocated to (or recognized by) a Partner (or its
successor in interest) for federal income tax purposes shall be deemed to be
Recapture Income to the extent such Partner has been allocated or has claimed
any deduction directly or indirectly giving rise to the treatment of such gain
as Recapture Income.
(c) To preserve uniformity of LP Units, the General Partner shall
have sole discretion to (i) adopt such conventions as it deems appropriate or
necessary in determining the amount of depreciation and cost recovery
deductions; (ii) make special allocations of income or deduction and (iii) amend
the provisions of this Agreement as appropriate (x) to reflect the proposal or
promulgation of regulations under Section 704(c) of the Code or (y) otherwise to
preserve the uniformity of Units issued or sold from time to time. The General
Partner may adopt such conventions and make such allocations and amendments only
if they would not have a material adverse effect on the Limited Partners and are
consistent with the principles of Section 704 of the Code.
(d) Items of Partnership income, gain, loss, deduction and credit
shall, for federal income tax purposes, be determined on a monthly basis (or
other basis, as required or permitted by Section 706 of the Code) and shall be
allocated to the Persons who are Record Holders of Units as of the close of
business on the first day of such month; provided, however, that gain or loss on
a sale or other disposition of all or a substantial portion of the assets of the
Partnership shall be allocated to the Persons who are Record Holders of Units as
of the close of business on the date of sale.
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(e) Pursuant to Section 704(c) of the Code, items of income, gain,
loss, deduction and credit attributable to Contributed Property shall be
allocated in such a manner as to take into account the variation between the
basis of such property to the Partnership and its Carrying Value.
6.2 Preparation of Tax Returns. The General Partner shall arrange for the
preparation and timely filing of all returns of Partnership income, gains,
losses, deductions, credits and other items necessary for federal and state
income tax purposes and shall use all reasonable efforts to furnish to the
Limited Partners within 90 days after the close of the taxable year the tax
information reasonably required for federal and state income tax reporting
purposes. The classification, realization and recognition of income, gains,
losses, deductions, credits and other items shall be on the accrual method of
accounting for federal income tax purposes, unless the General Partner shall
determine otherwise in its sole discretion.
6.3 Tax Elections. Except as otherwise provided herein, the General
Partner shall, in its sole discretion, determine whether to make any available
election. The General Partner shall elect under Section 754 of the Code to cause
the basis of Partnership property to be adjusted for federal income tax purposes
as provided by Sections 734 and 743 of the Code, but the General Partner may
seek to revoke this election if the General Partner determines that such
revocation is in the best interests of the Limited Partners.
6.4 Tax Controversies. Subject to the provisions hereof, the General
Partner is designated as the Tax Matters Partner (as defined in Section 6231 of
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 Limited Partner agrees to cooperate with the General
Partner and to do or refrain from doing any and all things reasonably required
by the General Partner to conduct such proceedings.
6.5 Withholding. The General Partner is authorized to take any action
necessary to comply with any withholding requirements established by applicable
law, including, without limitation, with regard to (a) the sale of United States
real property interests, (b) the distributions of cash or property to any
Partner which is a foreign Person, and (c) the transfer of Units.
ARTICLE VII
Management and Operation of Business; Indemnification
7.1 Powers of General Partner. Except as otherwise expressly provided in
this Agreement, all powers to control and manage the business and affairs of the
Partnership shall be exclusively vested in the General Partner, and no Limited
Partner shall have any power to control or manage the business and affairs of
the Partnership.
In addition to the powers now or hereafter granted a general partner of a
limited partnership under applicable law or which are granted to the General
Partner under any other
15
provisions of this Agreement, the General Partner is hereby authorized and
empowered, in the name of and on behalf of the Partnership, to do and perform
any and all acts and things which it deems appropriate or necessary in the
conduct of the business and affairs of the Partnership, including, without
limitation, the following:
(a) to lend or borrow money, to assume, guarantee or otherwise
become liable for indebtedness and other liabilities and to issue evidences of
indebtedness;
(b) to buy, lease (as lessor or lessee), sell, mortgage, encumber or
otherwise acquire or dispose of any or all of the assets of the Partnership;
(c) to own, use and invest the assets of the Partnership;
(d) to purchase or sell products, services and supplies;
(e) to make tax, regulatory and other filings, and to render
periodic and other reports, to governmental agencies or bodies having
jurisdiction over the assets or business of the Partnership;
(f) to open, maintain and close bank accounts and to draw checks and
other orders for the payment of money;
(g) to negotiate, execute and perform any contracts, conveyances or
other instruments;
(h) to distribute Partnership cash;
(i) to utilize the services of officers and employees of the General
Partner or of any other Persons and to select and dismiss employees (if any) and
outside attorneys, accountants, consultants and contractors;
(j) to maintain insurance for the benefit of the Partnership and the
Partners;
(k) to form, participate in or contribute or loan cash or property
to limited or general partnerships, joint ventures, limited liability companies,
corporations or similar arrangements;
(l) to expand the business activities in which the Partnership is
engaged or engage in new business activities by acquisition or internal
development;
(m) to conduct litigation and incur legal expenses and otherwise
deal with or settle claims or disputes; and
(n) to purchase, sell or otherwise acquire or dispose of Units;
16
in each case at such times and upon such terms and conditions as the General
Partner deems appropriate or necessary, and subject to any express restrictions
contained elsewhere in this Agreement.
7.2 Duties of General Partner. The General Partner shall manage the
business and affairs of the Partnership in the manner the General Partner deems
appropriate or necessary. Without limiting the generality of the foregoing, the
General Partner's duties shall include the following:
(a) to take possession of the assets of the Partnership;
(b) to staff and operate the business of the Partnership with the
officers and employees of the General Partner or of other Persons;
(c) to render or cause to be rendered engineering, environmental and
other technical services and perform or cause to be performed financial,
accounting, logistical and other administrative functions for the Partnership;
(d) to render such reports and make such periodic and other filings
as may be required under applicable federal, state and local laws, rules and
regulations;
(e) to provide or cause to be provided purchasing, procurement,
repair and other services for the Partnership; and
(f) to conduct the business of the Partnership in accordance with
this Agreement and all applicable laws, rules and regulations;
in each case in such a manner as the General Partner deems appropriate or
necessary.
7.3 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 has full power and authority to encumber, sell
or otherwise use in any manner any and all assets of the Partnership and to
enter into any contracts on behalf of the Partnership, and such Person shall be
entitled to deal with the General Partner as if it were the Partnership's sole
party in interest, both legally and beneficially. Each Limited Partner hereby
waives any and all defenses or other remedies which may be available against
such Person to contest, negate or disaffirm any action of the General Partner in
connection with any such dealing. In no event shall any Person dealing with the
General Partner 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 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
17
instrument was duly executed and delivered in accordance with the terms and
provisions of this Agreement and is binding upon the Partnership.
7.4 Compensation and Reimbursement of the General Partner. (a) Except as
provided in this Section 7.4 or elsewhere in this Agreement, the Management
Agreements, the Incentive Compensation Agreement or any other agreement
contemplated or permitted hereby or thereby, the General Partner shall not be
compensated for its services as General Partner to the Partnership.
(b) The General Partner shall be promptly reimbursed for all
Designated Expenses, in addition to any reimbursement as a result of
indemnification in accordance with Section 7.11. The General Partner shall
determine such Designated Expenses in any reasonable manner determined by it.
(c) The General Partner may propose and adopt without the approval
of the Limited Partners fringe benefit plans, including, without limitation,
plans comparable to those that covered employees employed by the predecessors to
the Operating Partnerships and plans involving the issuance of Units, for the
benefit of employees of the General Partner, Partnership, any of the Operating
Partnerships or any of their respective Affiliates in respect of services
performed, or obligated to be performed, directly or indirectly, for the benefit
of the Partnership or any of the Operating Partnerships.
7.5 Purchase or Sale of LP Units and Other Partnership Securities. The
General Partner may, on behalf of the Partnership, purchase or otherwise acquire
or sell or otherwise dispose of LP Units and other Partnership Securities. As
long as LP Units are held by any member of the Partnership Group, such LP Units
or other Partnership Securities shall not be considered outstanding for any
purpose. The General Partner or any of its Affiliates may also purchase or
otherwise acquire or sell or otherwise dispose of LP Units and other Partnership
Securities for its own account.
7.6 Certain Undertakings Relating to the Separateness of the Partnership.
(a) The Partnership shall conduct its business and operations separate and apart
from those of any other Person (including Holdco), except the General Partner
and other Group Members, in accordance with this Section 7.6.
(b) The Partnership shall (i) maintain its books and records and its
accounts separate from those of any other Person, (ii) maintain its financial
statements separate from those of any other Person, except its consolidated
subsidiaries, and (iii) file its own tax returns separate from those of any
other Person, except to the extent that the Partnership is treated as a
"disregarded entity" for tax purposes or is not otherwise required to file tax
returns under applicable law.
(c) The Partnership shall not commingle or pool its assets with
those of any other Person, except its consolidated subsidiaries, and shall
maintain its assets in a manner that is not costly or difficult to segregate,
ascertain or otherwise identify as separate from those of any other Person. The
funds of the Partnership shall be deposited in such account or accounts as shall
18
be designated by the General Partner, and shall not be commingled with the funds
of the General Partner or any of its Affiliates. All withdrawals from or charges
against such accounts shall be made by the General Partner or by its agents on
behalf of the Partnership. Funds of the Partnership may be invested as
determined by the General Partner.
(d) The Partnership shall (i) conduct its business in its own name
or in the names of other Group Members, (ii) use separate stationery, invoices,
and checks, (iii) correct any known misunderstanding regarding its separate
identity, and (iv) generally hold itself out as an entity separate from any
other Person (other than other Group Members).
(e) The Partnership (i) shall pay its own liabilities from its own
funds, (ii) shall maintain adequate capital in light of its contemplated
business operations, (iii) shall not guarantee or become obligated for the debts
of any other Person, except Group Members and except for the Partnership's
obligations under the Services Agreement, (iv) shall not hold out its credit as
being available to satisfy the obligations of any other Person, except Group
Members and except for the Partnership's obligations under the Services
Agreement, (v) shall not acquire obligations or debt securities of Holdco and
(vi) shall not pledge its assets to secure the obligations of any other Person
or make loans or advances to any Person, except Group Members or the General
Partner pursuant to Section 7.7(j); provided that the Partnership may engage in
any transaction described in clauses (iii)-(vi) of this Section 7.6(e) if
Special Approval has been obtained for such transaction and either (A) the Audit
Committee has determined, or has obtained reasonable written assurance from a
nationally recognized firm of independent public accountants or a nationally
recognized investment banking or valuation firm, that the borrower or recipient
of the credit extension is not then insolvent and will not be rendered insolvent
as a result of such transaction or (B) in the case of transactions described in
clause (v), such transaction is completed through a public auction or a National
Securities Exchange.
(f) The Partnership shall (i) observe all partnership formalities
and other formalities required by its organizational documents, the laws of the
jurisdiction of its formation, or other laws, rules, regulations and orders of
governmental authorities exercising jurisdiction over it, (ii) only enter into
transactions with Holdco which are consistent with an arms-length relationship,
and (iii) subject to the terms of the Exchange Agreement, promptly pay, from its
own funds, and on a current basis, its allocable share of general and
administrative expenses, capital expenditures, and costs for shared services
performed by Holdco. Each material contract between the Partnership or another
Group Member, on the one hand, and Holdco, on the other hand, shall be in
writing.
(g) Failure by the Partnership to comply with any of the obligations
set forth above shall not affect the status of the Partnership as a legal
entity, with its separate assets and separate liabilities.
7.7 Outside Activities; Contracts with Affiliates; Loans to or from
Affiliates. (a) The General Partner shall not have any business interests or
engage in any business activities except for those relating to the Partnership
and the Operating Partnerships.
19
(b) Any Affiliate of the General Partner and any director, officer,
manager, member, partner or employee of the General Partner or any of its
Affiliates 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, for their own account and for the account of others, without having or
incurring any obligation to offer any interest in such businesses or activities
to the Partnership Group or any Partner. No member of the Partnership Group nor
any of the Partners shall have any rights by virtue of this Agreement or the
partnership relationship governed hereby in any such business interests.
(c) Each of the Limited Partners hereby approves, ratifies and
confirms the execution, delivery and performance of the Operating Partnership
Agreements, the Incentive Compensation Agreement, the Management Agreements, and
the Exchange Agreement and agrees that the General Partner is authorized to
execute, deliver and perform the other agreements, acts, transactions and
matters described therein on behalf of the Partnership without the approval or
vote of any Limited Partners, notwithstanding any other provision of this
Agreement or the Operating Partnership Agreements.
(d) Subject to the provisions of Section 7.4(a), the General Partner
and its Affiliates may enter into contracts with, or render services to, any
member of the Partnership Group, provided that such contracts or services are on
terms that are fair and reasonable to the Partnership.
(e) Neither the General Partner nor any of its Affiliates shall
sell, transfer or convey property to, or purchase property from, the
Partnership, directly or indirectly, except pursuant to transactions that are
fair and reasonable to the Partnership.
(f) The General Partner or its Affiliates may, but shall be under no
obligation to, lend to any Group Member, upon the written request of any Group
Member to 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 Audit
Committee of the General Partner may determine; provided, however, that in any
such case the Audit Committee shall have first determined that the interest rate
charged the borrowing party and the terms imposed on the borrowing party are
substantially similar to those that would be charged or imposed, as applicable,
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 additional interest costs) incurred by the lending party
in connection with the borrowing of such funds.
(g) 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 Group Member's financial abilities or guarantees) by unrelated lenders on
comparable loans. The foregoing authority shall be exercised by the General
Partner
20
in its sole discretion and shall not create any right or benefit in favor of any
Group Member or any other Person.
(h) 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 7.7(h)
shall be deemed satisfied as to (i) any transaction approved by Special
Approval, or (ii) any transaction, the terms of which are objectively
demonstrable to be no less favorable to the Partnership Group than those
generally being provided to or available from unrelated third parties. The
provisions of Section 7.4 shall apply to the rendering of services described in
this Section 7.7(h).
(i) 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 written 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.
(j) Subject to the provisions of Section 7.6(e) and Section 7.9, the
Partnership may lend funds to the General Partner or any of its Affiliates for
such periods of time and in such amounts as the Audit Committee of the General
Partner may determine; provided, however, that (i) in any such case the Audit
Committee shall have first determined that the interest rate charged the
borrowing party and the terms imposed on the borrowing party are substantially
similar to those that would be charged or imposed, as applicable, 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) and (ii) the Partnership may not lend funds to the General Partner
or any of its Affiliates unless such funds consist of funds available after
provision for working capital and such reserves as the General Partner deems
appropriate.
7.8 Tax Basis and Value Determinations. To the extent that the General
Partner is required pursuant to the provisions of this Agreement to establish
fair market values or allocate amounts realized, tax basis, Agreed Values or Net
Agreed Values, the General Partner shall establish such values and make such
allocations in a manner that is reasonable and fair to the Limited Partners,
taking into account all applicable laws, governmental regulations, rulings and
decisions. The General Partner may, in its sole discretion, modify or revise
such allocations in order to comply with such laws, governmental regulations,
rulings or decisions or to the extent it otherwise deems such modification or
revision appropriate or necessary. The General Partner is authorized, to the
extent deemed by it to be appropriate or necessary, to utilize the services of
an independent appraiser in establishing such values or allocations and the
General Partner shall in such cases be entitled to rely on the values or
allocations established by such independent appraiser.
7.9 Resolution of Conflicts of Interest; Standard of Care. (a) Unless
otherwise expressly provided in this Agreement or any other agreement
contemplated hereby, whenever a
21
conflict of interest exists or arises between the General Partner or any of its
Affiliates, on the one hand, and the Partnership or any Limited Partner, on the
other hand, any resolution or course of action by the General Partner or such
Affiliate 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 or
of any agreement contemplated hereby, or of a 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; provided that
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 officers and directors of the General Partner or
such Affiliate regarding any proposed transaction were disclosed to the Audit
Committee at the time of its approval), (ii) on terms objectively demonstrable
to be 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 among the parties involved
(including other transactions that may be particularly favorable or advantageous
to the Partnership). For the avoidance of doubt, in connection with its
resolution of a conflict of interest the General Partner is authorized but not
required to seek Special Approval and may adopt a resolution or course of action
that has not received Special Approval. In connection with the determination by
the General Partner (or the Audit Committee in connection with Special Approval,
as applicable) of what is fair and reasonable to the Partnership in connection
with its resolution of a conflict of interest, the General Partner (or the Audit
Committee) shall be authorized to consider (A) the relative interests of each
party to such conflict, agreement, transaction or situation, and the benefits
and burdens relating to such interests; (B) any customary or accepted industry
practices, and any customary or historical dealings with a particular Person;
(C) any applicable generally accepted accounting or engineering practices or
principles; and (D) such additional factors as the 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 (or 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 in compliance with this Section 7.9
shall not constitute a breach of this Agreement or any other agreement
contemplated hereby or a breach of any standard of care or duty imposed hereby
or under the Delaware Act or any other applicable law, rule or regulation.
(b) Whenever a particular transaction, arrangement or resolution of
a conflict of interest is required under this Agreement or any agreement
contemplated hereby to be fair and/or reasonable to any Person, the fair and/or
reasonable nature of such transaction, arrangement or resolution shall be
considered in the context of similar or related transactions.
(c) 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 "discretion" or under a grant of
similar authority or latitude, the General Partner or such Affiliate shall be
entitled, to the extent permitted by applicable law, 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 or the
Limited Partners, or (ii)
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in its "good faith" or under another express standard, the General Partner or
such Affiliate shall act under such express standard and, except as required by
applicable law, shall not be subject to any other or different standards imposed
by this Agreement, any other agreement contemplated hereby or applicable law.
7.10 Other Matters Concerning the General Partner. (a) The General Partner
(including the Audit Committee) may rely and shall be protected in acting or
refraining from acting upon any certificate, document or other instrument
believed by it to be genuine and to have been signed or presented by the proper
party or parties.
(b) The General Partner (including the Audit Committee) may consult
with legal counsel, accountants, appraisers, management consultants, investment
bankers and other consultants and advisors selected by it and shall be fully
protected in relying on any opinion or advice of any such Person as to matters
which the General Partner (including the Audit Committee) believes to be within
such Person's professional or expert competence in connection with any action
taken or suffered or omitted by the General Partner (including the Audit
Committee) hereunder in good faith and in accordance with such opinion or
advice.
(c) The General Partner (including the Audit Committee) 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 (including the Audit Committee) shall not be responsible for any
misconduct or negligence on the part of any such agent appointed by the General
Partner in good faith.
7.11 Limited Liability; Indemnification. (a) Notwithstanding anything to
the contrary in this Agreement, and except to the extent required by applicable
law, no Indemnitee shall be liable to the Partnership or any Partner for any
action taken or omitted to be taken by such Indemnitee in its capacity as a
person of the type described in the definition of the term, "Indemnitee,"
provided that such Indemnitee acted in good faith and such action or omission
does not involve the gross negligence or willful misconduct of such Indemnitee.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere, or its equivalent,
shall not, of itself, create a presumption that an Indemnitee did not act in
good faith or that an action or omission involves gross negligence or willful
misconduct.
(b) The Partnership shall, to the extent permitted by applicable
law, indemnify each Indemnitee against expenses (including legal fees and
expenses), judgments, fines and amounts paid in settlement, actually and
reasonably incurred by such Indemnitee, in connection with any threatened,
pending or completed claim, demand, action, suit or proceeding to which such
Indemnitee was or is a party or is threatened to be made a party, by reason of
(i) such Indemnitee's status as a General Partner, any Affiliate of the General
Partner, any Person who is or was a director, officer, manager, member, employee
or agent of the General Partner or any such Affiliate, or any Person who is or
was serving at the request of the General Partner or any such Affiliate as a
director, officer, manager, member, partner, trustee, employee or agent of
another Person or (ii) any action taken or omitted to be taken by such
Indemnitee in any capacity
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referred to in clause (i) of this Section 7.11(b), relating to this Agreement or
the property, business, affairs or management of the Partnership Group (provided
that the Indemnitee acted in good faith and the act or omission which is the
basis of such claim, demand, action, suit or proceeding does not involve the
gross negligence or willful misconduct of such Indemnitee).
(c) Expenses (including legal fees and expenses) incurred in
defending any claim, demand, action, suit or proceeding subject to Section
7.11(b) shall be paid by the Partnership in advance of the final disposition of
such claim, demand, action, suit or proceeding upon receipt of an undertaking
(which need not be secured) by or on behalf of the Indemnitee to repay such
amount if it shall ultimately be determined, by a court of competent
jurisdiction, that the Indemnitee is not entitled to be indemnified by the
Partnership as authorized hereunder.
(d) The indemnification provided by Section 7.11(b) shall be in
addition to any other rights to which an Indemnitee may be entitled, and shall
continue as to an Indemnitee who has ceased to serve in a capacity for which the
Indemnitee is entitled to indemnification and shall inure to the benefit of the
heirs, successors, assigns, administrators and personal representatives of the
Indemnitee.
(e) To the extent commercially reasonable, the Partnership shall
purchase and maintain insurance on behalf of the Indemnitees against any
liability which may be asserted against or expense which may be incurred by an
Indemnitee in connection with the Partnership's activities, whether or not the
Partnership would have the power to indemnify an Indemnitee against such
liability under the provisions of this Agreement.
(f) An Indemnitee shall not be denied indemnification in whole or in
part under Section 7.11(b) because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
(g) The provisions of this Section 7.11 are for the benefit of the
Indemnitees and the heirs, successors, assigns, administrators and personal
representatives of the Indemnitees and shall not be deemed to create any rights
for the benefit of any other Persons.
(h) For purposes of this Section 7.11, the Partnership shall be
deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance of duties by such Indemnitee for the
Partnership also imposes duties on, or otherwise involves services by, such
Indemnitee 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 7.11(b); and action taken or omitted by an Indemnitee with respect to
any employee benefit plan in the performance of duties by such Indemnitee for a
purpose reasonably believed by such Indemnitee to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which does not involve gross negligence or willful misconduct.
(i) In no event may an Indemnitee subject the Limited Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.
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(j) No amendment, modification or repeal of this Section 7.11 or any
provision hereof shall in any manner terminate, reduce or impair the right of
any past, present or future Indemnitee to be indemnified by the Partnership, nor
the obligations of the Partnership to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 7.11 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 and provided that such Person became an Indemnitee hereunder prior
to such amendment, modification or repeal.
ARTICLE VIII
Rights and Obligations of Limited Partners
8.1 Limitation of Liability. The Limited Partners shall have no liability
under this Agreement (including, without limitation, liability under Section
7.11).
8.2 Management of Business. No Limited Partner shall, in its capacity as a
Limited Partner, take part in the operation, management or control (within the
meaning of the Delaware Act) of the Partnership's business, transact any
business in the Partnership's name or have the power to sign documents for or
otherwise bind the Partnership. The transaction of any such business by a
director, officer, manager, member, employee or agent of the General Partner or
an Affiliate of the General Partner in such Person's capacity as such (whether
or not such Person is also a Limited Partner) shall not affect, impair or
eliminate the limitations on the liability of the Limited Partners under this
Agreement.
8.3 Outside Activities. Limited Partners 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. No member of the Partnership
Group nor any of the other Partners shall have any rights by virtue of this
Agreement or the partnership relationship created hereby in any business
ventures of any Limited Partner.
8.4 Return of Capital. No Limited Partner 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.
8.5 Rights of Limited Partners Relating to the Partnership. In addition to
other rights provided by this Agreement or by applicable law, each Limited
Partner shall have the right for a proper purpose reasonably related to such
Limited Partner's interest in the Partnership, upon reasonable demand and at
such Limited Partner's own expense:
(a) to obtain true and full information regarding the status of the
business and financial condition of the Partnership;
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(b) promptly after becoming available, to obtain a copy of the
Partnership's federal and state income tax returns for each year;
(c) to obtain a current list of the name and address of each Partner
as set forth in the Units Register;
(d) to obtain a description and statement of the Net Agreed Value of
any Capital Contribution made or agreed to be made by each Partner, and the date
on which such Partner became a Partner;
(e) to obtain a copy of this Agreement and the Certificate of
Limited Partnership and all amendments thereto, together with executed copies of
any powers of attorney pursuant to which this Agreement, the Certificate of
Limited Partnership and all amendments thereto have been executed; and
(f) to obtain such other information regarding the affairs of the
Partnership as may be just and reasonable;
provided, however, that the General Partner may keep confidential from the
Limited Partners, for such period of time as the General Partner deems
reasonable, any information which the General Partner reasonably believes to be
in the nature of trade secrets or other information the disclosure of which the
General Partner in good faith believes could damage the Partnership or its
business or be in violation of applicable law, including, without limitation,
federal securities law, or which the Partnership is required by agreements with
third parties to keep confidential.
ARTICLE IX
Books, Records, Accounting and Reports
9.1 Books, Records and Accounting. The General Partner shall keep or cause
to be kept books and records with respect to the Partnership's business, which
books and records shall at all times be kept at the principal office of the
Partnership. Any books and records maintained by the Partnership in the regular
course of its business, including the Units Register, books of account and
records of Partnership proceedings, may be kept on, or be in the form of, punch
cards, disks, magnetic tape, photographs, micrographics or any other information
storage device, provided that the records so kept 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 the
accrual basis, or on a cash basis adjusted periodically to an accrual basis, as
the General Partner shall determine in its sole discretion, in accordance with
generally accepted accounting principles and applicable law.
9.2 Fiscal Year. The fiscal year of the Partnership for financial
reporting purposes shall be the calendar year, unless the General Partner shall
determine otherwise in its sole discretion.
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9.3 Reports. (a) As soon as practicable, but in no event later than 90
days after the close of each fiscal year, the General Partner shall cause to be
mailed to each Record Holder of LP Units as of the last day of that fiscal year
reports containing financial statements of the Partnership for the fiscal year,
presented in accordance with generally accepted accounting principles, including
a balance sheet, statement of income, statement of Partners' capital and
statement of changes in financial position, such statements to be audited by a
nationally recognized firm of independent public accountants selected by the
General Partner.
(b) As soon as practicable, but in no event later than 45 days after
the close of each calendar quarter, except the last calendar quarter of each
fiscal year, the General Partner shall cause the Partnership to electronically
file with the Securities and Exchange Commission a quarterly report for the
calendar quarter containing such financial and other information as the General
Partner deems appropriate.
(c) Such reports shall present the consolidated financial position
of the Partnership Group, but shall not consolidate the assets or liabilities of
any other Affiliates of the General Partner. Such reports shall contain notes
indicating that the assets and liabilities of the Partnership Group are separate
from the assets and liabilities of the other Affiliates of the General Partner.
ARTICLE X
Issuance of LP Certificates; Transfer and Exchange of LP Units
10.1 Initial Issuance of LP Certificates. Upon the issuance of LP Units to
any Person, the Partnership will issue one or more LP Certificates in the name
of such Person evidencing the number of such LP Units being so issued. LP
Certificates shall be executed on behalf of the Partnership by the General
Partner. No LP Certificate shall be valid for any purpose until manually
countersigned by the Transfer Agent.
10.2 Registration, Registration of Transfer and Exchange. (a) The
Partnership will cause to be kept a register (the "Units Register") in which,
subject to such reasonable regulations as it may prescribe and subject to the
provisions of Section 10.2(b), the Partnership will provide for the registration
of LP Units and of transfers of such LP Units. The Transfer Agent is hereby
appointed registrar for the purpose of registering LP Units and transfers of
such LP Units as herein provided.
Upon surrender for registration of transfer or exchange of any LP
Certificate, and subject to the provisions of Section 10.2(b), the General
Partner on behalf of the Partnership will execute, and the Transfer Agent will
countersign and deliver, in the name of the holder or the designated transferee
or transferees, as required pursuant to the holder's instructions, one or more
new LP Certificates evidencing the same aggregate number of LP Units as did the
LP Certificate so surrendered.
(b) Every LP Certificate surrendered for registration of transfer or
exchange shall be duly endorsed on the reverse side thereof, or be accompanied
by a written instrument of
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transfer in form satisfactory to the General Partner or the Transfer Agent, as
the case may be, duly executed, in either case by the holder thereof or such
holder's attorney duly authorized in writing. Every LP Certificate surrendered
for registration of transfer shall be duly accepted on the reverse side thereof,
or be accompanied by a written instrument of acceptance to the same effect in
form satisfactory to the General Partner or the Transfer Agent, as the case may
be, duly executed, in either case by the transferee or such transferee's
attorney duly authorized in writing. As a condition to the issuance of any new
LP Certificate under this Section 10.2, the General Partner may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto.
10.3 Mutilated, Destroyed, Lost or Stolen LP Certificates. (a) If any
mutilated LP Certificate is surrendered to the Transfer Agent, the General
Partner on behalf of the Partnership shall execute and the Transfer Agent shall
countersign and deliver in exchange therefor a new LP Certificate evidencing the
same number of LP Units as did the LP Certificate so surrendered.
(b) If there shall be delivered to the General Partner and the
Transfer Agent (i) evidence to their satisfaction of the destruction, loss or
theft of any LP Certificate and (ii) such security or indemnity as may be
required by them to save each of them and any of their agents harmless, then, in
the absence of notice to the General Partner or the Transfer Agent that such LP
Certificate has been acquired by a bona fide purchaser, the General Partner on
behalf of the Partnership shall execute and upon its request the Transfer Agent
shall countersign and deliver, in lieu of any such destroyed, lost or stolen
Certificate, a new LP Certificate evidencing the same number of LP Units as did
the LP Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new LP Certificate under
this Section 10.3, the General Partner 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) connected therewith.
(d) Every new LP Certificate issued pursuant to this Section 10.3 in
lieu of any destroyed, lost or stolen LP Certificate shall evidence an original
additional Partnership Interest in the Partnership, whether or not the
destroyed, lost or stolen LP Certificate shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other LP Units duly issued hereunder.
10.4 Persons Deemed Owners. Prior to due presentment of an LP Certificate
for registration of transfer and satisfaction of the requirements of Section
10.2(b) with respect thereto, (a) the Partnership, the General Partner, the
Transfer Agent and any agent of any of the foregoing may deem and treat the
Record Holder as the absolute owner thereof and of the LP Units evidenced
thereby for all purposes whatsoever and (b) a transferee shall not be entitled
to distributions or allocations or any other rights in respect of the LP Units
evidenced thereby other than the right to further transfer such LP Units.
ARTICLE XI
Transfer of GP Units
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11.1 Transfer of GP Units. The General Partner may not transfer any GP
Units unless (a) all of its GP Units are being transferred and the transferee or
transferees assume all of the rights and obligations of the General Partner
hereunder, (b) the transfer is to an Affiliate or Affiliates of the General
Partner or is in connection with the General Partner's merger or consolidation
with, or a transfer of all or substantially all of the General Partner's assets
to, another Person, or the transfer is approved by a Majority Interest, and (c)
the Partnership receives an Opinion of Counsel that such transfer would not
result in the loss of limited liability of any Limited Partner or cause the
Partnership or any of the Operating Partnerships to be treated as an association
taxable as a corporation for federal income tax purposes.
11.2 Successor General Partner. Any transferee of GP Units pursuant to
Section 11.1 shall automatically be admitted to the Partnership as the successor
General Partner, and the transferor of such GP Units shall automatically cease
to be the General Partner, effective at the time provided in Section 12.3. No
such transfer shall be deemed a withdrawal pursuant to Article XIII.
ARTICLE XII
Admission of Initial, Substituted and Additional
Limited Partners and Successor General Partner
12.1 Admission of Initial Limited Partners. At and as of the Time of
Delivery, the initial Record Holders of LP Units purchased pursuant to Section
4.2 shall automatically become Limited Partners and the Organizational Limited
Partner shall automatically cease to be a Limited Partner.
12.2 Admission of Substituted Limited Partners. A transferee of LP Units
shall automatically be admitted to the Partnership as a Limited Partner (and the
transferor of such LP Units shall, if such transferor is assigning all of such
transferor's LP Units, automatically cease to be a Limited Partner) at and as of
the time the transfer is registered on the Units Register pursuant to Section
10.2.
12.3 Admission of Successor General Partner. A successor General Partner
approved pursuant to Section 13.1 or the proviso to Section 14.1 or the
transferee of all of the GP Units pursuant to Section 11.1 shall be admitted to
the Partnership as the successor General Partner, effective as of the date an
amendment or restatement of the Certificate of Limited Partnership is filed with
the Secretary of State of the State of Delaware effecting such substitution;
provided, however, that no such successor shall be so admitted to the
Partnership until it has agreed in writing to assume the former General
Partner's obligations hereunder. This Agreement and the Certificate of Limited
Partnership shall be amended as appropriate to reflect the termination of the
former General Partner as a general partner and the admission of the successor
General Partner.
12.4 Admission of Additional Limited Partners. (a) A Person (other than
the initial Record Holders of LP Units pursuant to Section 4.2 or a transferee
of LP Units) who makes a Capital Contribution to the Partnership in accordance
with this Agreement shall be admitted to
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the Partnership as an additional Limited Partner only upon furnishing to the
General Partner (i) a written instrument of acceptance in a form satisfactory to
the General Partner of all of the terms and conditions of this Agreement,
including, without limitation, the power of attorney granted in Section 2.4
hereof, and (ii) such other documents and instruments as may be required in the
discretion of the General Partner to affect such Person's admission as an
additional Limited Partner.
(b) Notwithstanding anything to the contrary in this Section 12.4,
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 sole discretion. The admission of any Person as an additional Limited
Partner shall become effective at and as of the time the name of such Person is
recorded on the books and records of the Partnership, following the consent of
the General Partner to such admission.
12.5 Amendment of Agreement and Certificate of Limited Partnership. The
General Partner shall take all steps necessary and appropriate under the
Delaware Act to amend the records of the Partnership and, if necessary, this
Agreement and the Certificate of Limited Partnership to reflect the admission of
any Partner.
ARTICLE XIII
Withdrawal or Removal of the General Partner
13.1 Withdrawal or Removal of the General Partner. (a) Buckeye GP LLC
agrees to act as General Partner of the Partnership until the later of (i) the
date which is twenty-five years after the Time of Delivery or (ii) the date the
ESOP Loan is paid in full, subject to its right to transfer all of its GP Units
pursuant to Section 11.1. At any time after the later of (i) the date which is
twenty-five years after the Time of Delivery or (ii) the date the ESOP Loan is
paid in full, the General Partner may withdraw from the Partnership effective
upon at least 90 days' advance written notice to the Limited Partners, such
withdrawal to take effect on the date specified in such notice, provided that
such withdrawal is approved by an Eighty Percent Interest or the Partnership has
received an Opinion of Counsel that such withdrawal would not result in the loss
of limited liability of any Limited Partner or result in the Partnership or any
Operating Partnership being treated as an association taxable as a corporation
for federal income tax purposes. Any such withdrawal shall also constitute the
withdrawal of the General Partner from the Operating Partnerships, as provided
in the Operating Partnership Agreements. If the General Partner gives a notice
of withdrawal, a Majority Interest may, prior to the effective date of such
withdrawal, approve a successor General Partner. The Person so approved (or its
designated Affiliates) shall become the successor general partner or partners of
the Operating Partnerships, as provided in the Operating Partnership Agreements.
If no successor General Partner is so approved, the Partnership shall be
dissolved pursuant to Section 14.1. Buckeye GP LLC further agrees that it shall
not withdraw as general partner of any Operating Partnership, except in
connection with its withdrawal as General Partner.
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(b) The General Partner may be removed only by an Eighty Percent
Interest, and only if (i) in connection therewith, a successor General Partner
is approved by a Majority Interest, (ii) the Partnership shall have received an
Opinion of Counsel that the removal of the General Partner and the approval of a
successor General Partner will not result in the loss of limited liability of
any Limited Partner or cause the Partnership or any of the Operating
Partnerships to be treated as an association taxable as a corporation for
federal income tax purposes, (iii) the successor General Partner or an Affiliate
thereof assumes the liabilities and obligations of the General Partner and its
Affiliates under the Exchange Agreement and agrees to indemnify and hold
harmless the General Partner and its Affiliates from any liability or obligation
arising out of, or causes the General Partner and its Affiliates to be released
from, any and all liabilities and obligations (including loan guarantees) under
fringe benefit plans sponsored by the General Partner or any of its Affiliates
in connection with the business of the Partnership Group, except as otherwise
prohibited by this Agreement, and (iv) all required regulatory approvals for
removal of the General Partner shall have been obtained. Such removal shall be
effective upon the admission of the successor General Partner pursuant to
Section 12.3. The Person so approved (or its designated Affiliates) shall become
the successor general partner or partners of the Operating Partnerships, as
provided in the Operating Partnership Agreements.
13.2 Sale of Former General Partner's Interest. If a successor General
Partner is approved pursuant to Section 13.1 or 14.2 or the proviso to Section
14.1, such successor shall purchase the GP Units of the former General Partner
for an amount in cash equal to the fair market value thereof, determined as of
the date the successor General Partner is admitted pursuant to Section 12.3. The
fair market value of the GP Units shall include the value of all rights
associated with being the General Partner, including, without limitation, the
General Partner's pro rata interest in the Partnership, the right to receive
incentive compensation pursuant to the Incentive Compensation Agreement (whether
such right to receive incentive compensation is held by the General Partner or
an Affiliate of the General Partner) or compensation under any agreement between
the Partnership and the General Partner in effect on the date the successor
General Partner is so admitted, and shall be reduced by the value of the
assumption by the successor General Partner or its Affiliate of the obligations
of the General Partner and its Affiliates pursuant to Section 13.1(b)(iii). Such
fair market value shall be determined by agreement between the former General
Partner and its successor or, failing agreement within 30 days after the date
the successor General Partner is so admitted, by a firm of independent
appraisers jointly selected by the former General Partner and its successor (or,
if the former General Partner and its successor cannot agree on the selection of
such a firm within 45 days after the date the successor General Partner is so
admitted, by a firm of independent appraisers selected by two firms, one of
which will be selected by the former General Partner and the other of which will
be selected by the successor).
ARTICLE XIV
Dissolution and Liquidation
14.1 Dissolution. The Partnership shall be dissolved, and its affairs
shall be wound up, upon:
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(a) expiration of the term as provided in Section 2.5;
(b) withdrawal of the General Partner pursuant to Section 13.1
(unless a Person becomes a successor General Partner prior to or on the
effective date of such withdrawal);
(c) bankruptcy or dissolution of the General Partner, or any other
event that results in the General Partner ceasing to be a general partner in the
Partnership (other than by reason of a withdrawal or removal pursuant to Section
13.1 or a transfer pursuant to Section 11.1); or
(d) an election by the General Partner to dissolve the Partnership
which is approved by a Two-Thirds Interest;
provided, however, that the Partnership shall not be dissolved upon an event
described in Section 14.1(b) or (c) if, within 90 days of such event, all
Partners agree in writing to continue the business of the Partnership and to the
appointment of a successor General Partner.
For purposes of this Section 14.1, bankruptcy of the General Partner shall
be deemed to have occurred when (i) it commences a voluntary proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law now or hereafter in effect, (ii) it seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for it or for
all or any substantial part of its properties, (iii) it is adjudged a bankrupt
or insolvent, or has entered against it a final and nonappealable order for
relief, under any bankruptcy, insolvency or similar law now or hereafter in
effect, (iv) it executes and delivers a general assignment for the benefit of
its creditors, (v) it files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against it in any
involuntary proceeding of the nature described in clause (i) above, or (vi) (1)
any involuntary proceeding of the nature described in clause (i) above has not
been dismissed 120 days after the commencement thereof, (2) the appointment
without its consent or acquiescence of a trustee, receiver or liquidator for it
or for all or any substantial part of its properties has not been vacated or
stayed within 90 days of such appointment, or (3) such appointment has been
stayed but is not vacated within 90 days after the expiration of any such stay.
14.2 Reconstitution. Upon dissolution of the Partnership in accordance
with Section 14.1(b) or (c), and a failure of all Partners to agree to continue
the business of the Partnership and to the appointment of a successor General
Partner as provided in the proviso to Section 14.1, then within 180 days after
the event described in Section 14.1(b) or (c), a Majority Interest may elect to
reconstitute the Partnership and continue its business by forming a new
partnership on terms identical to those set forth in this Agreement and having
as a general partner a Person approved by a Majority Interest. Upon any such
election by a Majority Interest, all Partners shall be bound thereby and shall
be deemed to have consented thereto. Unless such an election is made within such
180-day period, the Partnership shall conduct only activities necessary to wind
up its affairs. If such an election is made within such 180-day period, then (a)
the reconstituted partnership shall continue until the end of the term set forth
in Section 2.5 unless earlier dissolved in accordance with this Article XIV and
(b) all necessary steps shall be taken to cancel
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this Agreement and the Certificate of Limited Partnership and to enter into 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 this Agreement; provided that the right
of a Majority Interest 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 (i) the exercise of the right would not
result in the loss of limited liability of any Limited Partner and (ii) neither
the Partnership nor the reconstituted partnership would be treated as an
association taxable as a corporation for federal income tax purposes.
14.3 Liquidation. Upon dissolution of the Partnership, unless the
Partnership is reconstituted pursuant to Section 14.2, the General Partner, or
in the event the General Partner has withdrawn from the Partnership, been
removed or dissolved or become bankrupt (as defined in Section 14.1), a
liquidator or liquidating committee approved by a Majority Interest shall be the
liquidator of the Partnership (the "Liquidator"). The Liquidator (if other than
the General Partner) shall be entitled to receive such compensation for its
services as may be approved by a Majority Interest. The Liquidator shall agree
not to resign at any time without 15 days' prior written notice and (if other
than the General Partner) may be removed at any time, with or without cause, by
notice of removal approved by a Majority Interest. Upon dissolution, resignation
or removal of the Liquidator, a successor and substitute Liquidator (who shall
have and succeed to all rights, powers and obligations of the original
Liquidator) shall, within 30 days thereafter, be approved by a Majority
Interest. Except as expressly provided in this Article XIV, the Liquidator
approved in the manner provided herein shall have and may exercise, without
further authorization or approval 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 restrictions set forth in Article
XVII) to the extent appropriate or necessary 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. The Liquidator shall liquidate the assets of
the Partnership and apply and distribute the proceeds of such liquidation in the
following order of priority, unless otherwise required by mandatory provisions
of applicable law:
(a) to creditors of the Partnership (including Partners); and
(b) to the Partners, in proportion to and to the extent of the
positive balances in their respective Capital Accounts;
provided, however, that the Liquidator may place in escrow a reserve of cash or
other assets of the Partnership for contingent liabilities in an amount
determined by the Liquidator to be appropriate for such purposes.
14.4 Distribution in Kind. Notwithstanding the provisions of Section 14.3
requiring the liquidation of the assets of the Partnership, but subject to the
order of priorities set forth therein, if on dissolution of the Partnership the
Liquidator determines that an immediate sale of
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part or all of the Partnership's assets would be impractical or would cause
undue loss to the Partners, the Liquidator may, in its sole discretion, defer
for a reasonable time the liquidation of any assets except those necessary to
satisfy liabilities of the Partnership and may, in its sole discretion,
distribute to the Partners, or to specific classes of Partners, as tenants in
common, in lieu of cash, and as their interests may appear in accordance with
the provisions of Section 14.3 (b), undivided interests in such Partnership
assets as the Liquidator deems not suitable for liquidation. Any distributions
in kind shall be subject to such conditions relating to the disposition and
management thereof as the Liquidator deems reasonable and equitable and to any
joint ownership agreements or other agreements governing the ownership and
operation of such properties at such time. The Liquidator shall determine the
fair market value of any property distributed in kind using such reasonable
method of valuation as it may adopt.
14.5 Cancellation of Certificate of Limited Partnership. Upon the
completion of the distribution of Partnership property pursuant to Sections 14.3
and 14.4, the Partnership shall be terminated, and the Liquidator (or the
Limited Partners if necessary) shall cause the cancellation of the Certificate
of Limited Partnership and all qualifications of the Partnership as a foreign
limited partnership in jurisdictions other than the State of Delaware and shall
take such other actions as may be necessary to terminate the Partnership.
14.6 Return of Capital. The General Partner shall not be personally liable
for 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.
14.7 Waiver of Partition. Each Partner hereby waives any rights to
partition of the Partnership property.
14.8 Certain Prohibited Acts. Without obtaining Special Approval, the
General Partner shall not take any action to cause the Partnership to (i) make
or consent to a general assignment for the benefit of the Partnership's
creditors; (ii) file or consent to the filing of any bankruptcy, insolvency or
reorganization petition for relief under the United States Bankruptcy Code
naming the Partnership or otherwise seek, with respect to the Partnership,
relief from debts or protection from creditors generally; (iii) file or consent
to the filing of a petition or answer seeking for the Partnership a liquidation,
dissolution, arrangement, or similar relief under any law; (iv) file an answer
or other pleading admitting or failing to contest the material allegations of a
petition filed against the Partnership in a proceeding of the type described in
clauses (i) - (iii) of this Section 14.8; (v) seek, consent to or acquiesce in
the appointment of a receiver, liquidator, conservator, assignee, trustee,
sequestrator, custodian or any similar official for the Partnership or for all
or any substantial portion of its properties; (vi) sell all or substantially all
of its assets, except in accordance with Section 17.3; (vii) dissolve or
liquidate, except in accordance with this Article XIV; or (viii) merge or
consolidate, except in accordance with Section 11.1.
ARTICLE XV
Amendment of Partnership Agreement
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15.1 Amendments Which May be Adopted Solely by the General Partner.
Subject to Section 15.3, the General Partner may amend any provision of this
Agreement without the consent of any Limited Partner, and may 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, in the location of the
principal place of business of the Partnership or in the registered office or
registered agent of the Partnership;
(b) a change that the General Partner deems appropriate or necessary
to (i) 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 jurisdiction or (ii) ensure that
neither the Partnership nor any of the Operating Partnerships will be treated as
an association taxable as a corporation for federal income tax purposes;
(c) a change to divide outstanding Units into a greater number of
Units, to combine outstanding Units into a smaller number of Units or to
reclassify Units in a manner that in the good faith opinion of the General
Partner, does not adversely affect any class of Limited Partners in any material
respect;
(d) a change that the General Partner in its sole discretion deems
appropriate or necessary to (i) satisfy any requirements, conditions or
guidelines contained in any order, rule or regulation of any federal or state
agency or contained in any federal or state statute or (ii) facilitate the
trading of any Units or comply with any rule, regulation, requirement, condition
or guideline of any National Securities Exchange on which any Units are or will
be listed or admitted to trading, or NASDAQ if any Units are or will be quoted
on NASDAQ;
(e) a change that is appropriate or necessary, as stated in an
Opinion of Counsel, to prevent the Partnership, the Operating Partnerships, the
General Partner, its Affiliates and their respective directors and officers from
in any manner being subjected to the provisions of the Investment Company Act of
1940, as amended, the Investment Advisers Act of 1940, as amended, or "plan
asset" regulations adopted under the Employee Retirement Income Security Act of
1974, as amended, whether or not substantially similar to plan asset regulations
currently applied or proposed by the United States Department of Labor;
(f) a change that is required or contemplated by any provision of
this Agreement, including, without limitation, Sections 4.3, 12.3 and 12.5;
(g) a change that in the good faith opinion of the General Partner
does not adversely affect the Limited Partners in any material respect; or
(h) any changes or events similar to the foregoing.
15.2 Other Amendments. Amendments to this Agreement may be proposed only
by the General Partner. Subject to Section 15.3, a proposed amendment (other
than amendments adopted pursuant to Section 15.1) shall be effective only when
approved by a Majority Interest.
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Notwithstanding the provisions of Sections 15.1 and 15.3, no amendment of (i)
the definitions of "Audit Committee," or "Special Approval," (ii) Section 7.6,
(iii) Section 11.1, (iv) Section 17.3, (v) Section 7.9(a), (vi) Section 14.8, or
(vii) any other provision of this Agreement requiring that Special Approval be
obtained as a condition to any action, shall be effective without first
obtaining Special Approval.
15.3 Amendment Requirements. Notwithstanding the provisions of Sections
15.1 and 15.2, (i) the approval of an Eighty Percent Interest shall be required
for any amendment unless the Partnership has received an Opinion of Counsel that
such amendment would not result in the loss of limited liability of any Limited
Partner or result in the Partnership or any Operating Partnership being treated
as an association taxable as a corporation for federal income tax purposes, (ii)
no provision of this Agreement which establishes a percentage of the Limited
Partners required to take or approve any action shall be amended in any respect
which would have the affect of reducing the voting requirement, unless such
amendment is approved by at least such percentage of Limited Partners, and (iii)
this Section 15.3 shall be amended only with the approval of an Eighty Percent
Interest.
ARTICLE XVI
Meetings
16.1 Meetings. Meetings of Limited Partners may be called by the General
Partner or by Limited Partners holding an aggregate of at least 20% of the
outstanding LP Units. Within 60 days after receipt by the General Partner of a
written proposal to call a meeting signed by Limited Partners holding the
requisite number of LP Units and indicating the purpose for which the meeting is
to be called (or such longer period as shall be reasonably required by the
General Partner in order to prepare documents required therefor), the General
Partner shall cause a notice of the meeting to be given to each Limited Partner.
A meeting shall be held at a time and place determined by the General Partner
within 60 days after the giving of notice of the meeting. A Majority Interest
represented in person or by proxy shall constitute a quorum at a meeting of the
Partners.
16.2 Record Date. For purposes of determining the Limited Partners
entitled to notice of or to vote at any meeting or to give approvals without a
meeting as provided in Section 16.4, the General Partner may set a Record Date,
which date for purposes of notice of a meeting shall not be less than 10 days
nor more than 60 days before the date of the meeting.
16.3 Conduct of Meeting. (a) The General Partner shall have full power and
authority concerning the manner of conducting any meeting of Limited Partners or
the solicitation of proxies or consents in writing, including, without
limitation, the determination of Persons entitled to vote, the existence of a
quorum, 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 an
individual to serve as chairman of any meeting and shall further designate an
individual to take the minutes of any
36
meeting, which individuals may be directors or officers of the General Partner.
All minutes shall be kept with the records of the Partnership maintained by the
General Partner.
(b) The General Partner may vote its LP Units in such manner as it
in its sole discretion may determine.
16.4 Action Without a Meeting. Any action that may be taken at a meeting
of the Limited Partners may be taken without a meeting if approvals in writing
setting forth the action so taken are signed by Limited Partners holding in the
aggregate at least the minimum number of LP Units that would be necessary to
authorize or take such action at a meeting at which all the Limited Partners
were present and voted. Prompt notice of the taking of action without a meeting
shall be given to the Limited Partners who have not approved in writing. If
approvals to 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 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 consents are deposited with the Partnership, and (c) the Partnership
receives an Opinion of Counsel that giving effect to such approvals would not
result in the loss of limited liability of any Limited Partner or cause the
Partnership or any of the Operating Partnerships to be treated as an association
taxable as a corporation for federal income tax purposes.
ARTICLE XVII
Certain Restrictions
17.1 Additional Units. (a) Without the prior approval of a Two-Thirds
Interest, the General Partner shall not cause the Partnership to issue any class
or series of LP Units having preferences or other special or senior rights over
the LP Units issued pursuant to Section 4.2.
(b) The General Partner shall not cause the Partnership to issue
Units to the General Partner or any of its Affiliates (other than pursuant to
Section 4.1) unless (i) the Units are of a class which is, prior to such
issuance, listed or admitted to trading on a National Securities Exchange or
quoted by NASDAQ and the Net Agreed Value of the Contributed Property being
contributed in exchange for such Units is at least equal to the number of Units
being so issued times the Unit Price of such Units or (ii) such issuance is
approved by a Majority Interest.
17.2 Certain Amendments. (a) Without the prior approval of a Two-Thirds
Interest, the Partnership shall not amend the Incentive Compensation Agreement
and the General Partner shall not permit the Partnership or any Operating
Partnership to amend any compensation arrangement for the General Partner,
unless, in any case, such amendment does not, in the good faith opinion of the
General Partner, in its capacity as general partner of the Partnership or
Operating Partnerships, as applicable, adversely affect the Limited Partners in
any material respect.
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(b) The General Partner shall not cause the Partnership to approve
any amendment to an Operating Partnership Agreement pursuant to Section 13.2
thereof unless such amendment is approved by a Majority Interest.
17.3 Sale of Assets. Without the prior approval of a Two-Thirds Interest,
the General Partner may not sell, exchange or otherwise dispose of all or
substantially all of the consolidated assets owned by the Partnership and the
Operating Partnerships; provided, however, that in the event that less than 80%
of the LP Units are held by the General Partner and its Affiliates, prior
Special Approval shall also be required.
ARTICLE XVIII
Right to Purchase Units
18.1 Right to Purchase Units. If fewer than 10% of the outstanding LP
Units are held by Persons other than the General Partner and its Affiliates, the
General Partner shall have the right, which it may assign to the Partnership or
any Affiliate, to purchase all, but not less than all, of the LP Units that
remain outstanding and are held by Persons other than the General Partner and
its Affiliates. Any such purchase shall be at a price per LP Unit in cash (the
"Purchase Price") equal to the greater of the Unit Price on the date of purchase
(the "Purchase Date") or the Issue Price for such LP Units, in either case
multiplied by (a) 1.2, if the Purchase Date is after December 31, 1996 and on or
prior to December 31, 2001, (b) 1.1, if the Purchase Date is after December 31,
2001 and on or prior to December 31, 2006, or (c) 1.0, if the Purchase Date is
after December 31, 2006.
18.2 Notice of Election to Purchase. In the event the General Partner, any
Affiliate of the General Partner or the Partnership elects to exercise such
right to purchase LP Units pursuant to Section 18.1, the General Partner shall
cause the Transfer Agent to give written notice of such election to purchase
(the "Notice of Election to Purchase") to the Record Holders at least 10, but
not more than 60, days prior to the Purchase Date. Such Notice of Election to
Purchase shall also be published in 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
Purchase Price and state that the General Partner, its Affiliate or the
Partnership, as the case may be, has elected to purchase such LP Units, upon
surrender thereof in exchange for payment, and at such place as specified. Any
such Notice of Election to Purchase mailed to a Record Holder of LP Units at his
address as reflected in the Units Register shall be conclusively presumed to
have been given whether or not the owner receives such notice.
18.3 Purchase and Transfer of Units. 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 equal to the amount required
to purchase all outstanding LP Units held by Persons other than the General
Partner or its Affiliates. If the Notice of Election to Purchase shall have been
duly given as aforesaid and if on or prior to the Purchase Date the cash shall
have been deposited with the Transfer Agent in trust for the benefit of the
holders of LP Units
38
subject to purchase as provided herein, then from and after the Purchase Date,
whether or not any LP Units shall have been surrendered for purchase, all rights
of the holders of such LP Units (including, without limitation, any rights
pursuant to Articles V, VI and XIV) shall thereupon cease, except the right to
receive the Purchase Price therefor, without interest, upon surrender to the
Transfer Agent of the LP Certificates representing such LP Units, and such LP
Units shall thereupon be transferred to the General Partner, its Affiliate or
the Partnership, as the case may be, on the Units Register, and the General
Partner, its Affiliate or the Partnership, as the case may be, shall be deemed
to be the owner of all such LP Units from and after the Purchase Date and shall
have all rights as the owner of such LP Units.
ARTICLE XIX
General Provisions
19.1 Opinions Regarding Taxation as a Partnership. Notwithstanding any
other provisions of this Agreement, the requirement, as a condition to any
action proposed to be taken under this Agreement, that the Partnership receive
an Opinion of Counsel that the proposed action would not result in the
Partnership or any of the Operating Partnerships being treated as an association
taxable as a corporation for federal income tax purposes (a) shall not be
applicable to the extent that the Partnership or any of the Operating
Partnerships is at such time treated in all material respects as an association
taxable as a corporation for federal income tax purposes and (b) shall be deemed
satisfied by an Opinion of Counsel containing conditions, limitations and
qualifications which are acceptable to the General Partner in its sole
discretion.
19.2 Personal Property. The Partnership Interest of any Partner shall be
personal property for all purposes.
19.3 Addresses and Notices. Any notice, demand, request, payment or report
required or permitted to be given or made to a Limited Partner under this
Agreement shall be in writing and shall be deemed given or made when delivered
in person or when sent by first class mail or by other means of written
communication to the Limited Partner at such Limited Partner's address as shown
on the Units Register. Any notice to the Partnership or the General Partner
shall be deemed given if received in writing by the General Partner at the
principal office of the Partnership designated pursuant to Section 2.3.
19.4 Headings. All article or section headings in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any of the provisions hereof.
19.5 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto (including the additional Persons that become
Limited Partners as provided herein) and their heirs, executors, administrators,
successors, legal representatives and assigns.
19.6 Integration. This Agreement constitutes the entire agreement among
the parties pertaining to the subject matter hereof and supersedes all prior
agreements and understandings pertaining thereto.
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19.7 Waiver. No failure by any party to insist upon the strict performance
of any covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon a breach thereof shall constitute a waiver
of any such breach or of any other covenant, duty, agreement or condition.
19.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which together shall constitute one agreement binding on
the parties hereto (including the additional Persons that become Limited
Partners as provided herein).
19.9 Severability. 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 hereof, or of such provision in other
respects, shall not be affected thereby.
19.10 Applicable Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware.
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In Witness Whereof, this Agreement has been duly executed by the General
Partner on behalf of itself and as agent and attorney-in-fact for the Limited
Partners, as of the date first above written.
Buckeye GP LLC,
as General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
---------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: Chairman and Chief Executive Officer
[Amended and Restated Agreement of Limited Partnership of Buckeye Partners,
L.P.]
Annex A
Specimen LP Certificate
