THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF BOARDWALK PIPELINE PARTNERS, LPLimited Liability Partnership LLP Agreement |
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Exhibit 3.1
THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
BOARDWALK PIPELINE PARTNERS, LP
TABLE OF CONTENTS
ARTICLE
I
DEFINITIONS
ARTICLE
II
ORGANIZATION
ARTICLE
III
RIGHTS
OF LIMITED PARTNERS
ARTICLE
IV
CERTIFICATES;
RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION
OF PARTNERSHIP INTERESTS
ARTICLE
V
CAPITAL
CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP
INTERESTS
ARTICLE
VI
ALLOCATIONS
AND DISTRIBUTIONS
ARTICLE
VII
MANAGEMENT
AND OPERATION OF BUSINESS
ARTICLE
VIII
BOOKS,
RECORDS, ACCOUNTING AND REPORTS
ARTICLE
IX
TAX
MATTERS
ARTICLE
X
ADMISSION
OF PARTNERS
ARTICLE
XI
WITHDRAWAL
OR REMOVAL OF PARTNERS
ARTICLE
XII
DISSOLUTION
AND LIQUIDATION
ARTICLE
XIII
AMENDMENT
OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
ARTICLE
XIV
MERGER
ARTICLE
XV
RIGHT
TO ACQUIRE LIMITED PARTNER INTERESTS
ARTICLE
XVI
GENERAL
PROVISIONS
THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
BOARDWALK PIPELINE PARTNERS, LP
THIS
THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
BOARDWALK PIPELINE PARTNERS, LP dated as of June 17, 2008, is
entered into by and between Boardwalk GP, LP, a Delaware
limited partnership, as the General Partner together with the
other Persons who are or become Partners in the Partnership or
parties hereto as provided herein.
WHEREAS,
the General Partner and the other parties thereto entered into
that certain First Amended and Restated Agreement of Limited
Partnership of the Partnership dated as of November 15, 2005
(the “ 2005 Agreement
”);
WHEREAS,
the General Partner effected an amendment and restatement of
the 2005 Agreement on September 19, 2006 (the “
2006
Agreement ”);
WHEREAS,
the General Partner effected an amendment of the 2006
Agreement on April 9, 2008 (“ Amendment No. 1
”);
WHEREAS,
Section 5.6 of the 2006 Agreement, as amended, provides that
the Partnership, without the approval of any Limited Partners,
may issue additional Partnership Securities, or classes or
series thereof, for any Partnership purpose at any time and
from time to time, and may issue such Partnership Securities
to such Persons, for such consideration and on such terms and
conditions as shall be established by the General
Partner;
WHEREAS,
Section 13.1(g) of the 2006 Agreement, as amended, provides
that the General Partner, without the approval of any Partner,
may amend any provision of the Partnership Agreement necessary
or appropriate in connection with the authorization of
issuance of any class or series of Partnership Securities
pursuant to Section 5.6 of the Partnership
Agreement;
WHEREAS,
Section 13.1(d)(i) of the 2006 Agreement, as amended, provides
that the General Partner, without the approval of any Limited
Partner, may amend any provision of the 2006 Agreement to
reflect a change that the General Partner determines does not
adversely affect the Limited Partners (including any
particular class of Partnership Interests as compared to other
classes of Partnership Interests) in any material
respect;
WHEREAS,
the Partnership has entered into a Class B Unit Purchase
Agreement, dated as of April 24, 2008 (the “ Purchase
Agreement ”), with Boardwalk Pipelines Holding
Corp., a Delaware corporation (“ BPHC
”);
WHEREAS,
the Purchase Agreement obligates the Partnership to issue
limited partner interests to be designated as Class B Units
having the terms set forth herein; and
WHEREAS,
the General Partner deems it in the best interest of the
Partnership to effect an amendment to the 2006 Agreement in
order to provide for (i) the authorization of a class of
Limited Partner Units designated as “Class B
Units,” (ii) the issuance of Class B Units to BPHC
pursuant to the Purchase Agreement and (iii) such other
matters as are provided herein.
NOW,
THEREFORE, the General Partner does hereby amend and restate
the 2006 Agreement, as amended by Amendment No. 1, to provide,
in its entirety, as follows:
ARTICLE
I
DEFINITIONS
The
following definitions shall be for all purposes, unless
otherwise clearly indicated to the contrary, applied to the
terms used in this Agreement.
“
Acquisition
” means any transaction in which any Group Member
acquires (through an asset acquisition, merger, stock
acquisition or other form of investment) control over all or a
portion of the assets, properties or business of another
Person for the purpose of increasing the operating capacity or
revenues of the Partnership Group from the operating capacity
or revenues of the Partnership Group existing immediately
prior to such transaction.
“
Additional
Book Basis ” means the portion of any remaining
Carrying Value of an Adjusted Property that is attributable to
positive adjustments made to such Carrying Value as a result
of Book-Up Events. For purposes of determining the extent that
Carrying Value constitutes Additional Book Basis:
(a)
Any
negative adjustment made to the Carrying Value of an Adjusted
Property as a result of either a Book-Down Event or a Book-Up Event
shall first be deemed to offset or decrease that portion of the
Carrying Value of such Adjusted Property that is attributable to
any prior positive adjustments made thereto pursuant to a Book-Up
Event or Book-Down Event.
(b)
If
Carrying Value that constitutes Additional Book Basis is reduced as
a result of a Book-Down Event and the Carrying Value of other
property is increased as a result of such Book-Down Event, an
allocable portion of any such increase in Carrying Value shall be
treated as Additional Book Basis; provided , that the
amount treated as Additional Book Basis pursuant hereto as a result
of such Book-Down Event shall not exceed the amount by which the
Aggregate Remaining Net Positive Adjustments after such Book-Down
Event exceeds the remaining Additional Book Basis attributable to
all of the Partnership’s Adjusted Property after such
Book-Down Event (determined without regard to the application of
this clause (b) to such Book-Down Event).
“
Additional
Book Basis Derivative Items ” means any Book
Basis Derivative Items that are computed with reference to
Additional Book Basis. To the extent that the Additional Book
Basis attributable to all of the Partnership’s Adjusted
Property as of the beginning of any taxable period exceeds the
Aggregate Remaining Net Positive Adjustments as of the
beginning of such period (the “Excess Additional Book
Basis”), the Additional Book Basis Derivative Items for
such period shall be reduced by the amount that bears the same
ratio to the amount of Additional Book Basis Derivative Items
determined without regard to this sentence as the Excess
Additional Book Basis bears to the Additional Book Basis as of
the beginning of such period.
“
Additional
Limited Partner ” means a Person admitted to the
Partnership as a Limited Partner pursuant to Section 10.4 and
who is shown as such on the books and records of the
Partnership.
“
Adjusted
Capital Account ” means the Capital Account
maintained for each Partner as of the end of each fiscal year
of the Partnership, (a) increased by any amounts that such
Partner is obligated to restore under the standards set by
Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed
obligated to restore under Treasury Regulation Sections
1.704-2(g) and 1.704-2(i)(5)) and (b) decreased by (i) the
amount of all losses and deductions that, as of the end of
such fiscal year, are reasonably expected to be allocated to
such Partner in subsequent years under Sections 704(e)(2) and
706(d) of the Code and Treasury Regulation Section
1.751-1(b)(2)(ii), and (ii) the amount of all distributions
that, as of the end of such fiscal year, are reasonably
expected to be made to such Partner in subsequent years in
accordance with the terms of this Agreement or otherwise to
the extent they exceed offsetting increases to such
Partner’s Capital Account that are reasonably expected
to occur during (or prior to) the year in which such
distributions are reasonably expected to be made (other than
increases as a result of a minimum gain chargeback pursuant to
Section 6.1(d)(i) or 6.1(d)(ii)). The foregoing definition of
Adjusted Capital Account is intended to comply with the
provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d)
and shall be interpreted consistently therewith. The
“Adjusted Capital Account” of a Partner in respect
of a Partnership Interest shall be the amount that such
Adjusted Capital Account would be if such Partnership Interest
were the only interest in the Partnership held by such Partner
from and after the date on which such Partnership Interest was
first issued.
“
Adjusted
Operating Surplus ” means, with respect to any
period, Operating Surplus generated with respect to such
period (a) less (i) any net increase in Working Capital
Borrowings with respect to such period and (ii) any net
decrease in cash reserves for Operating Expenditures with
respect to such period not relating to an Operating
Expenditure made with respect to such period, and (b) plus (i)
any net decrease in Working Capital Borrowings with respect to
such period, and (ii) any net increase in cash reserves for
Operating Expenditures with respect to such period required by
any debt instrument for the repayment of principal, interest
or premium. Adjusted Operating Surplus does not include that
portion of Operating Surplus included in clauses (a)(i) and
(a)(ii) of the definition of Operating Surplus.
“
Adjusted
Property ” means any property the Carrying Value
of which has been adjusted pursuant to Section 5.5(d)(i) or
5.5(d)(ii).
“
Affiliate ”
means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with,
the Person in question. As used herein, the term
“control” means the possession, direct or
indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
“
Aggregate
Remaining Net Positive Adjustments ” means, as of
the end of any taxable period, the sum of the Remaining Net
Positive Adjustments of all the Partners.
“
Agreed
Allocation ” means any allocation, other than a
Required Allocation, of an item of income, gain, loss or
deduction pursuant to the provisions of Section 6.1, including
a Curative Allocation (if appropriate to the context in which
the term “Agreed Allocation” is
used).
“
Agreed
Value ” of any Contributed Property means the
fair market value of such property or other consideration at
the time of contribution as determined by the General Partner.
The General Partner shall use such method as it determines to
be appropriate to allocate the aggregate Agreed Value of
Contributed Properties contributed to the Partnership in a
single or integrated transaction among each separate property
on a basis proportional to the fair market value of each
Contributed Property.
“
Agreement ”
means this Third Amended and Restated Agreement of Limited
Partnership of Boardwalk Pipeline Partners, LP, as it may be
amended, supplemented or restated from time to
time.
“
Assignee ”
means a Person to whom one or more Limited Partner Interests
have been transferred in a manner permitted under this
Agreement and who has executed and delivered a Transfer
Application, including a Taxation Certification, as required
by this Agreement, but who has not been admitted as a
Substituted Limited Partner.
“
Associate ”
means, when used to indicate a relationship with any Person,
(a) any corporation or organization of which such Person is a
director, officer or partner or is, directly or indirectly,
the owner of 20% or more of any class of voting stock or other
voting interest; (b) any trust or other estate in which such
Person has at least a 20% beneficial interest or as to which
such Person serves as trustee or in a similar fiduciary
capacity; and (c) any relative or spouse of such Person, or
any relative of such spouse, who has the same principal
residence as such Person.
“
Available
Cash ” means, with respect to any Quarter ending
prior to the Liquidation Date:
(a)
the
sum of (i) all cash and cash equivalents of the Partnership Group
(or the Partnership’s proportionate share of cash and cash
equivalents in the case of Subsidiaries that are not wholly owned)
on hand at the end of such Quarter, and (ii) all additional cash
and cash equivalents of the Partnership Group (or the
Partnership’s proportionate share of cash and cash
equivalents in the case of Subsidiaries that are not wholly owned)
on hand on the date of determination of Available Cash with respect
to such Quarter resulting from Working Capital Borrowings made
subsequent to the end of such Quarter, less
(b)
the
amount of any cash reserves (or the Partnership’s
proportionate share of cash reserves in the case of Subsidiaries
that are not wholly owned) established by the General Partner to
(i) provide for the proper conduct of the business of the
Partnership Group (including reserves for future capital
expenditures, for anticipated future credit needs of the
Partnership Group and for refunds of collected rates reasonably
likely to be refunded as a result of a settlement or hearing
relating to FERC rate proceedings) subsequent to such Quarter, (ii)
comply with applicable law or any loan agreement, security
agreement, mortgage, debt instrument or other agreement or
obligation to which any Group Member is a party or by which it is
bound or its assets are subject or (iii) provide funds for
distributions under Section 6.4 or 6.5 in respect of any one or
more of the next four Quarters; provided ,
however ,
that the General Partner may not establish cash reserves pursuant
to (iii) above if the effect of such reserves would be that the
Partnership is unable to distribute the Minimum Quarterly
Distribution on all Common Units, plus any Cumulative Common Unit
Arrearage on all Common Units, with respect to such Quarter; and,
provided further, that disbursements made by a Group Member or cash
reserves established, increased or reduced after the end of such
Quarter but on or before the date of determination of Available
Cash with respect to such Quarter shall be deemed to have been
made, established, increased or reduced, for purposes of
determining Available Cash, within such Quarter if the General
Partner so determines.
Notwithstanding
the foregoing, “ Available Cash
” with respect to the Quarter in which the Liquidation
Date occurs and any subsequent Quarter shall equal
zero.
“
Board of
Directors ” means, with respect to the Board of
Directors of the General Partner, its board of directors or
managers, as applicable, if a corporation or limited liability
company, or if a limited partnership, the board of directors
or board of managers of the general partner of the General
Partner.
“
Book Basis
Derivative Items ” means any item of income,
deduction, gain or loss included in the determination of Net
Income or Net Loss that is computed with reference to the
Carrying Value of an Adjusted Property (e.g., depreciation,
depletion, or gain or loss with respect to an Adjusted
Property).
“
Book-Down
Event ” means an event that triggers a negative
adjustment to the Capital Accounts of the Partners pursuant to
Section 5.5(d).
“
Book-Tax
Disparity ” means with respect to any item of
Contributed Property or Adjusted Property, as of the date of
any determination, the difference between the Carrying Value
of such Contributed Property or Adjusted Property and the
adjusted basis thereof for federal income tax purposes as of
such date. A Partner’s share of the Partnership’s
Book-Tax Disparities in all of its Contributed Property and
Adjusted Property will be reflected by the difference between
such Partner’s Capital Account balance as maintained
pursuant to Section 5.5 and the hypothetical balance of such
Partner’s Capital Account computed as if it had been
maintained strictly in accordance with federal income tax
accounting principles.
“
Book-Up
Event ” means an event that triggers a positive
adjustment to the Capital Accounts of the Partners pursuant to
Section 5.5(d).
“
Business
Day ” means Monday through Friday of each week,
except that a legal holiday recognized as such by the
government of the United States of America or the State of
Texas shall not be regarded as a Business Day.
“
Capital
Account ” means the capital account maintained
for a Partner pursuant to Section 5.5. The “ Capital Account
” of a Partner in respect of a Partnership Interest
shall be the amount that such Capital Account would be if such
Partnership Interest were the only interest in the Partnership
held by such Partner from and after the date on which such
Partnership Interest was first issued.
“
Capital
Contribution ” means any cash, cash equivalents
or the Net Agreed Value of Contributed Property that a Partner
contributes to the Partnership.
“
Capital
Improvement ” means any (a) addition or
improvement to the capital assets owned by any Group Member,
(b) acquisition of existing, or the construction of new,
capital assets (including pipelines, terminals, tankage and
other storage, gathering and distribution facilities and
related assets) or (c) capital contribution by a Group member
to a Person that is not a Subsidiary in which a Group Member
has an equity interest, to fund the Group Member’s pro
rata share of the cost of the acquisition of existing, or the
construction of new, capital assets (including pipelines,
terminals, tankage and other storage, gathering and
distribution facilities and related assets), in each case if
such addition, improvement, acquisition or construction is
made to increase operating capacity, revenues or cash flow of
the Partnership Group, in the case of clauses (a) and (b), or
such Person, in the case of clause (c), from the operating
capacity, revenues or cash flow of the Partnership Group or
such Person, as the case may be, immediately prior to such
addition, improvement, acquisition or
construction.
“
Capital
Surplus ” has the meaning assigned to such term
in Section 6.3(a).
“
Carrying
Value ” means (a) with respect to a Contributed
Property, the Agreed Value of such property reduced (but not
below zero) by all depreciation, amortization and cost
recovery deductions charged to the Partners’ and
Assignees’ Capital Accounts in respect of such
Contributed Property, and (b) with respect to any other
Partnership property, the adjusted basis of such property for
federal income tax purposes, all as of the time of
determination. The Carrying Value of any property shall be
adjusted from time to time in accordance with Sections
5.5(d)(i) and 5.5(d)(ii) and to reflect changes, additions or
other adjustments to the Carrying Value for dispositions and
acquisitions of Partnership properties, as deemed appropriate
by the General Partner.
“
Cause
” means a court of competent jurisdiction has entered a
final, non-appealable judgment finding the General Partner
liable for actual fraud or willful misconduct in its capacity
as a general partner of the Partnership.
“
Certificate
” means (a) a certificate (i) substantially in the form
of Exhibit A to this Agreement, (ii) issued in global form in
accordance with the rules and regulations of the Depositary or
(iii) in such other form as may be adopted by the General
Partner, issued by the Partnership evidencing ownership of one
or more Common Units or (b) a certificate, in such form as may
be adopted by the General Partner, issued by the Partnership
evidencing ownership of one or more other Partnership
Securities.
“
Certificate
of Limited Partnership ” means the Certificate of
Limited Partnership of the Partnership filed with the
Secretary of State of the State of Delaware as referenced in
Section 7.2, as such Certificate of Limited Partnership may be
amended, supplemented or restated from time to
time.
“
claim
” has the meaning assigned to such term in Section
7.12(d).
“
Class B
Unit ” means a Unit representing a fractional
part of the Partnership Interests of all Limited Partners and
Assignees and having the rights and obligations specified with
respect to the Class B Units in this Agreement. The
term “Class B Unit” as used herein does not
include a Common Unit or Subordinated Unit. A Class
B Unit that is convertible into a Common Unit shall not
constitute a Common Unit until such conversion
occurs.
“
Class B Unit
Arrearage ” means, with respect to any Class B
Unit, whenever issued, as to any Quarter within the
Subordination Period, the excess, if any, of (a) the Class B
Unit Quarterly Distribution with respect to a Class B Unit in
respect of such Quarter over (b) the sum of all cash
distributed with respect to a Class B Unit in respect of such
Quarter pursuant to Section 6.4(a)(i).
“
Class B Unit
Quarterly Distribution ” means $0.30 per Class B
Unit per Quarter, subject to adjustment in accordance with
Sections 6.6 and 6.9.
“
Class B Unit
Return ” means with respect to any Class B Unit,
whenever issued, and as of the end of any taxable period, an
amount equal to the product of (A) the Class B Unit Quarterly
Distribution multiplied by (B) the number of Quarters (or
portions thereof) having occurred in the current taxable
period and all prior taxable periods beginning on or after
July 1, 2008.
“
Closing
Date ” means the first date on which Common Units
are sold by the Partnership to the Underwriters pursuant to
the provisions of the Underwriting Agreement.
“
Closing
Price ” means, in respect of any class of Limited
Partner Interests, as of the date of determination, the last
sale price on such day, regular way, or in case no such sale
takes place on such day, the average of the closing bid and
asked prices on such day, regular way, as reported in the
principal consolidated transaction reporting system with
respect to securities listed on the principal National
Securities Exchange (other than the Nasdaq National Market) on
which the respective Limited Partner Interests are listed or
admitted to trading or, if such Limited Partner Interests are
not listed or admitted to trading on any National Securities
Exchange (other than the Nasdaq National Market), the last
quoted price on such day or, if not so quoted, the average of
the high bid and low asked prices on such day in the
over-the-counter market, as reported by the Nasdaq National
Market or such other system then in use, or, if on any such
day such Limited Partner Interests of such class are not
quoted by any such organization, the average of the closing
bid and asked prices on such day as furnished by a
professional market maker making a market in such Limited
Partner Interests of such class selected by the General
Partner, or if on any such day no market maker is making a
market in such Limited Partner Interests of such class, the
fair value of such Limited Partner Interests on such day as
determined by the General Partner.
“
Code
” means the Internal Revenue Code of 1986, as amended
and in effect from time to time. Any reference herein to a
specific section or sections of the Code shall be deemed to
include a reference to any corresponding provision of any
successor law.
“
Conversion
Date ” means, with respect any Class B Unit, the
time immediately prior to the close of business on the date of
which a Certificate representing such Class B Unit and a duly
signed Conversion Notice have been received by the
Partnership.
“
Combined
Interest ” has the meaning assigned to such term
in Section 11.3(a).
“
Commences
Commercial Service ,” “ Commenced Commercial
Service ” and “ Commencement of
Commercial Service ” shall mean the date a
Capital Improvement is first put into service by a Group
Member following, if applicable, completion of
construction and testing.
“
Commission
” means the United States Securities and Exchange
Commission.
“
Common
Unit ” means a Unit representing a fractional
part of the Partnership Interests of all Limited Partners and
Assignees, and having the rights and obligations specified
with respect to Common Units in this Agreement. The term
“Common Unit” does not refer to a Subordinated
Unit or a Class B Unit, in each case, prior to its conversion
into a Common Unit pursuant to the terms hereof.
“
Common Unit
Arrearage ” means, with respect to any Common
Unit, whenever issued, as to any Quarter within the
Subordination Period, the excess, if any, of (a) the Minimum
Quarterly Distribution with respect to a Common Unit in
respect of such Quarter over (b) the sum of all Available Cash
distributed with respect to a Common Unit in respect of such
Quarter pursuant to Sections 6.4(a)(i) and (ii) and
6.4(b)(i).
“
Conflicts
Committee ” means a committee of the Board of
Directors of the General Partner composed entirely of two or
more directors who are not (a) security holders, officers or
employees of the General Partner, (b) officers, directors or
employees of any Affiliate of the General Partner (other than,
if the General Partner is a limited partnership, directors or
managers of the general partner of the General Partner who
otherwise satisfy the requirements of this definition) or (c)
holders of any ownership interest in the Partnership Group
other than Common Units and who also meet the independence
standards required of directors who serve on an audit
committee of a board of directors established by the
Securities Exchange Act and the rules and regulations of the
Commission thereunder and by the National Securities Exchange
on which the Common Units are listed or admitted to
trading.
“
Contributed
Property ” means each property or other asset, in
such form as may be permitted by the Delaware Act, but
excluding cash, contributed to the Partnership. Once the
Carrying Value of a Contributed Property is adjusted pursuant
to Section 5.5(d), such property shall no longer constitute a
Contributed Property, but shall be deemed an Adjusted
Property.
“
Contribution
Agreement ” means that certain Contribution and
Conveyance Agreement, dated as of the Closing Date, among the
General Partner, the Partnership, the Operating Partnership
and certain other parties, together with the additional
conveyance documents and instruments contemplated or
referenced thereunder, as such may be amended, supplemented or
restated from time to time.
“
Conversion
Date ” means, with respect any Class B Unit, the
time immediately prior to the close of business on the date of
which a Certificate representing such Class B Unit and a duly
signed Conversion Notice have been received by the
Partnership.
“
Conversion
Notice ” means notice of conversion of Class B
Units substantially in the form of Exhibit B to this
Agreement.
“
Cumulative
Class B Unit Arrearage ” means, with respect to
any Class B Unit, whenever issued, and as of the end of any
Quarter, the excess, if any, of (a) the sum resulting from
adding together the Class B Unit Arrearage as to an Initial
Class B Unit for each of the Quarters within the Subordination
Period ending on or before the last day of such Quarter over
(b) the sum of any distributions theretofore made pursuant to
Sections 6.4(a)(iii) and 6.5(a) with respect to an Initial
Class B Unit (including any distributions to be made in
respect of the last of such Quarters).
“
Cumulative
Common Unit Arrearage ” means, with respect to
any Common Unit, whenever issued, and as of the end of any
Quarter, the excess, if any, of (a) the sum resulting from
adding together the Common Unit Arrearage as to an Initial
Common Unit for each of the Quarters within the Subordination
Period ending on or before the last day of such Quarter over
(b) the sum of any distributions theretofore made pursuant to
Sections 6.5(a) and (b), 6.4(a)(iii) and (iv) and 6.4(b)(ii)
with respect to an Initial Common Unit (including any
distributions to be made in respect of the last of such
Quarters).
“
Curative
Allocation ” means any allocation of an item of
income, gain, deduction, loss or credit pursuant to the
provisions of Section 6.1(d)(xi).
“
Current
Market Price ” means, in respect of any class of
Limited Partner Interests, as of the date of determination,
the average of the daily Closing Prices per Limited Partner
Interest of such class for the 20 consecutive Trading Days
immediately prior to such date.
“
Delaware
Act ” means the Delaware Revised Uniform Limited
Partnership Act, 6 Del C. Section 17-101, et seq., as amended,
supplemented or restated from time to time, and any successor
to such statute.
“
Departing
General Partner ” means a former General Partner
from and after the effective date of any withdrawal or removal
of such former General Partner pursuant to Section 11.1 or
11.2.
“
Disposed of
Adjusted Property ” has the meaning assigned to
such term in Section
6.1(d)(xii)(B) .
“
Depositary
” means, with respect to any Units issued in global
form, The Depository Trust Company and its successors and
permitted assigns.
“
Economic
Risk of Loss ” has the meaning set forth in
Treasury Regulation Section 1.752-2(a).
“
Eligible
Holder ” means a Person either (a) subject to
United States federal income taxation on the income generated
by the Partnership or (b) in the case of entities that are
pass-through entities for United States federal income
taxation, all of whose beneficial owners are subject to United
States federal income taxation on the income generated by the
Partnership. Schedule I to the Transfer Application provides
examples of Persons that are and Persons that are not Eligible
Holders.
“
Estimated
Incremental Quarterly Tax Amount ” has the
meaning assigned to such term in Section 6.9.
“
Event of
Withdrawal ” has the meaning assigned to such
term in Section 11.1(a).
“
Expansion
Capital Expenditures ” means cash expenditures
for Acquisitions or Capital Improvements. Expansion
Capital Expenditures shall include interest (and related fees)
on debt incurred and distributions on equity incurred, in each
case, to finance the construction of a Capital Improvement and
paid during the period beginning on the date that the
Partnership enters into a Capital Improvement and ending on
the earlier to occur of the date that such Capital Improvement
Commences Commercial Service or the date that such Capital
Improvement is abandoned or disposed of. Debt
incurred or equity issued to fund such construction period
interest payments, or such construction period distributions
on equity paid during such period, shall also be deemed to be
debt or equity, as the case may be, incurred to finance the
construction of a Capital Improvement.
“
FERC
” means the Federal Energy Regulatory
Commission.
“
Final
Subordinated Units ” has the meaning assigned to
such term in Section 6.1(d)(x).
“
First
Liquidation Target Amount ” has the meaning
assigned to such term in Section 6.1(c)(i)(D).
“
First Target
Distribution ” means $0.4025 per Unit per Quarter
(or, with respect to the period commencing on the Closing Date
and ending on December 31, 2005, it means the product of $0.
4025 multiplied by a fraction of which the numerator is the
number of days in such period, and of which the denominator is
92), subject to adjustment in accordance with Sections 6.6 and
6.9.
“
Fully
Diluted Basis ” means, when calculating the
number of Outstanding Units for any period, a basis that
includes, in addition to the Outstanding Units, all
Partnership Securities and options, rights, warrants and
appreciation rights relating to an equity interest in the
Partnership (a) that are convertible into or exercisable
or exchangeable for Units that are senior to or pari passu
with the Subordinated Units, (b) whose conversion,
exercise or exchange price is less than the Current Market
Price on the date of such calculation, (c) that may be
converted into or exercised or exchanged for such Units prior
to or during the Quarter immediately following the end of the
period for which the calculation is being made without the
satisfaction of any contingency beyond the control of the
holder other than the payment of consideration and the
compliance with administrative mechanics applicable to such
conversion, exercise or exchange and (d) that were not
converted into or exercised or exchanged for such Units during
the period for which the calculation is being made;
provided ,
however, that for
purposes of determining the number of Outstanding Units on a
Fully Diluted Basis when calculating whether the Subordination
Period has ended or the Subordinated Units are entitled to
convert into Common Units pursuant to Section 5.7, such
Partnership Securities, options, rights, warrants and
appreciation rights shall be deemed to have been Outstanding
Units only for the four Quarters that comprise the last four
Quarters of the measurement period; provided ,
further, that if consideration will be paid to any Group
Member in connection with such conversion, exercise or
exchange, the number of Units to be included in such
calculation shall be that number equal to the difference
between (i) the number of Units issuable upon such
conversion, exercise or exchange and (ii) the number of Units
that such consideration would purchase at the Current Market
Price.
“
General
Partner ” means Boardwalk GP, LP, a Delaware
limited partnership, and its successors and permitted assigns
that are admitted to the Partnership as general partner of the
Partnership, in its capacity as general partner of the
Partnership (except as the context otherwise
requires).
“
General
Partner Interest ” means the ownership interest
of the General Partner in the Partnership (in its capacity as
a general partner without reference to any Limited Partner
Interest held by it), which is evidenced by General Partner
Units, and includes any and all benefits to which the General
Partner is entitled as provided in this Agreement, together
with all obligations of the General Partner to comply with the
terms and provisions of this Agreement.
“
General
Partner Unit ” means a fractional part of the
General Partner Interest having the rights and obligations
specified with respect to the General Partner
Interest. General Partner Units are equivalents of
other “Units” for the allocation and distribution
purposes of Article VI only, and shall be “Units”
only for such purpose and for the purpose of other defined
terms when used in Article VI.
“
Group
” means a Person that with or through any of its
Affiliates or Associates has any agreement, contract,
arrangement, understanding or relationship for the purpose of
acquiring, holding, voting (except voting pursuant to a
revocable proxy or consent given to such Person in response to
a proxy or consent solicitation made to 10 or more Persons),
exercising investment power or disposing of any Partnership
Interests with any other Person that beneficially owns, or
whose Affiliates or Associates beneficially own, directly or
indirectly, Partnership Interests.
“
Group
Member ” means a member of the Partnership
Group.
“
Group Member
Agreement ” means the partnership agreement of
any Group Member, other than the Partnership, that is a
limited or general partnership, the limited liability company
agreement of any Group Member that is a limited liability
company, the certificate of incorporation and bylaws or
similar organizational documents of any Group Member that is a
corporation, the joint venture agreement or similar governing
document of any Group Member that is a joint venture and the
governing or organizational or similar documents of any other
Group Member that is a Person other than a limited or general
partnership, limited liability company, corporation or joint
venture, as such may be amended, supplemented or restated from
time to time.
“
Holder ” as
used in Section 7.12, has the meaning assigned to such term in
Section 7.12(a).
“
Incentive
Distribution Right ” means a non-voting Limited
Partner Interest issued to the General Partner in connection
with the transfer of all of its interests in Boardwalk
Pipelines, LP to the Partnership pursuant to the Contribution
Agreement, which Limited Partner Interest will confer upon the
holder thereof only the rights and obligations specifically
provided in this Agreement with respect to Incentive
Distribution Rights (and no other rights otherwise available
to or other obligations of a holder of a Partnership
Interest). Notwithstanding anything in this Agreement to the
contrary, the holder of an Incentive Distribution Right shall
not be entitled to vote such Incentive Distribution Right on
any Partnership matter except as may otherwise be required by
law.
“
Incentive
Distributions ” means any amount of cash
distributed to the holders of the Incentive Distribution
Rights pursuant to Section 6.4.
“
Indemnified
Persons ” has the meaning assigned to such term
in Section 7.12(d).
“
Indemnitee
” means (a) the General Partner, (b) any Departing
General Partner, (c) any Person who is or was an Affiliate of
the General Partner or any Departing General Partner, (d) any
Person who is or was a member, partner, director, officer,
fiduciary or trustee of any Group Member, the General Partner
or any Departing General Partner or any Affiliate of any Group
Member, the General Partner or any Departing General Partner,
(e) any Person who is or was serving at the request of
the General Partner or any Departing General Partner or any
Affiliate of the General Partner or any Departing General
Partner as an officer, director, member, partner, fiduciary or
trustee of another Person; provided that a Person shall not be
an Indemnitee by reason of providing, on a fee-for-services
basis, trustee, fiduciary or custodial services, and (f) any
Person the General Partner designates as an
“Indemnitee” for purposes of this
Agreement.
“
Ineligible
Assignee ” means a Person whom the General
Partner has determined is not an Eligible Holder.
“
Initial
Class B Unit ” means the Class B Units issued
pursuant to the Purchase Agreement.
“
Initial
Common Units ” means the Common Units sold in the
Initial Offering.
“
Initial
Limited Partners ” means Boardwalk Pipelines
Holding Corp., the General Partner (with respect to the Common
Units, Subordinated Units and Incentive Distribution Rights
received by it pursuant to Section 5.2), and the Underwriters,
in each case upon being admitted to the Partnership in
accordance with Section 10.1.
“
Initial
Offering ” means the initial offering and sale of
Common Units to the public, as described in the Registration
Statement.
“
Initial Unit
Price ” means (a) with respect to the Common
Units and the Subordinated Units, the initial public offering
price per Common Unit at which the Underwriters offered the
Common Units to the public for sale as set forth on the cover
page of the prospectus included as part of the Registration
Statement and first issued at or after the time the
Registration Statement first became effective or (b) with
respect to any other class or series of Units, the price per
Unit at which such class or series of Units is initially sold
by the Partnership, as determined by the General Partner, in
each case adjusted as the General Partner determines to be
appropriate to give effect to any distribution, subdivision or
combination of Units.
“
Interim
Capital Transactions ” means the following
transactions if they occur prior to the Liquidation Date: (a)
borrowings, refinancings or refundings of indebtedness (other
than Working Capital Borrowings and other than for items
purchased on open account in the ordinary course of business)
by any Group Member and sales of debt securities of any Group
Member; (b) sales of equity interests of any Group Member
(including the Common Units sold to the Underwriters pursuant
to the exercise of the Over-Allotment Option); (c) sales or
other voluntary or involuntary dispositions of any assets of
any Group Member other than (i) sales or other dispositions of
inventory, accounts receivable and other assets in the
ordinary course of business, and (ii) sales or other
dispositions of assets as part of normal retirements or
replacements; (d) the termination of interest rate swap
agreements; (e) capital contributions received; and (f)
corporate reorganizations or restructurings.
“
Issue
Price ” means the price at which a Unit is
purchased from the Partnership, after taking into account any
sales commission or underwriting discount charged to the
Partnership.
“
Limited
Partner ” means, unless the context otherwise
requires, (a) the Organizational Limited Partner prior to its
withdrawal from the Partnership, each Initial Limited Partner,
each Substituted Limited Partner, each Additional Limited
Partner and any Departing General Partner upon the change of
its status from General Partner to Limited Partner pursuant to
Section 11.3, in each case, in such Person’s capacity as
a limited partner of the Partnership or (b) solely for
purposes of Articles V, VI, VII, IX and XII, each Assignee;
provided ,
however , that
when the term “Limited Partner” is used herein in
the context of any vote or other approval, including Articles
XIII and XIV, such term shall not, solely for such purpose,
include any holder of an Incentive Distribution Right (solely
with respect to its Incentive Distribution Rights and not with
respect to any other Limited Partner Interest held by such
Person) except as may otherwise be required by
law.
“
Limited
Partner Interest ” means the ownership interest
of a Limited Partner or Assignee in the Partnership, which may
be evidenced by Common Units, Subordinated Units, Incentive
Distribution Rights, Class B Units or other Partnership
Securities or a combination thereof or interest therein, and
includes any and all benefits to which such Limited Partner or
Assignee is entitled as provided in this Agreement, together
with all obligations of such Limited Partner or Assignee to
comply with the terms and provisions of this Agreement;
provided ,
however , that
when the term “Limited Partner Interest” is used
herein in the context of any vote or other approval, including
Articles XIII and XIV, such term shall not, solely for such
purpose, include any Incentive Distribution Right except as
may be required by law.
“
Limited
Partner Unit ” means each of the Common Units,
Class B Units, Subordinated Units and other Units representing
fractional parts of the Partnership Interests of all Limited
Partners and Assignees.
“
Liquidation
Date ” means (a) in the case of an event giving
rise to the dissolution of the Partnership of the type
described in clauses (a) and (b) of the first sentence of
Section 12.2, the date on which the applicable time period
during which the holders of Outstanding Units have the right
to elect to continue the business of the Partnership has
expired without such an election being made, and (b) in the
case of any other event giving rise to the dissolution of the
Partnership, the date on which such event occurs.
“
Liquidator
” means one or more Persons selected by the General
Partner to perform the functions described in Section 12.4 as
liquidating trustee of the Partnership within the meaning of
the Delaware Act.
“
Merger
Agreement ” has the meaning assigned to such term
in Section 14.1.
“
Minimum
Quarterly Distribution ” means $0.35 per Unit per
Quarter (or with respect to the period commencing on the
Closing Date and ending on December 31, 2005, it means the
product of $0.35 multiplied by a fraction of which the
numerator is the number of days in such period and of which
the denominator is 92), subject to adjustment in accordance
with Sections 6.6 and 6.9.
“
National
Securities Exchange ” means an exchange
registered with the Commission under Section 6(a) of the
Securities Exchange Act, and any successor to such statute, or
the Nasdaq National Market or any successor
thereto.
“
Net Agreed
Value ” means, (a) in the case of any Contributed
Property, the Agreed Value of such property reduced by any
liabilities either assumed by the Partnership upon such
contribution or to which such property is subject when
contributed, and (b) in the case of any property distributed
to a Partner or Assignee by the Partnership, the
Partnership’s Carrying Value of such property (as
adjusted pursuant to Section 5.5(d)(ii)) at the time such
property is distributed, reduced by any indebtedness either
assumed by such Partner or Assignee upon such distribution or
to which such property is subject at the time of distribution,
in either case, as determined under Section 752 of the
Code.
“
Net
Income ” means, for any taxable year, the excess,
if any, of the Partnership’s items of income and gain
(other than those items taken into account in the computation
of Net Termination Gain or Net Termination Loss) for such
taxable year over the Partnership’s items of loss and
deduction (other than those items taken into account in the
computation of Net Termination Gain or Net Termination Loss)
for such taxable year. The items included in the calculation
of Net Income shall be determined in accordance with Section
5.5(b) and shall not include any items specially allocated
under Section 6.1(d); provided , that
the determination of the items that have been specially
allocated under Section 6.1(d) shall be made as if Section
6.1(d)(xii) were not in this Agreement.
“
Net
Loss ” means, for any taxable year, the excess,
if any, of the Partnership’s items of loss and deduction
(other than those items taken into account in the computation
of Net Termination Gain or Net Termination Loss) for such
taxable year over the Partnership’s items of income and
gain (other than those items taken into account in the
computation of Net Termination Gain or Net Termination Loss)
for such taxable year. The items included in the calculation
of Net Loss shall be determined in accordance with Section
5.5(b) and shall not include any items specially allocated
under Section 6.1(d); provided , that
the determination of the items that have been specially
allocated under Section 6.1(d) shall be made as if Section
6.1(d)(xii) were not in this Agreement.
“
Net Positive
Adjustments ” means, with respect to any Partner,
the excess, if any, of the total positive adjustments over the
total negative adjustments made to the Capital Account of such
Partner pursuant to Book-Up Events and Book-Down
Events.
“
Net
Termination Gain ” means, for any taxable year,
the sum, if positive, of all items of income, gain, loss or
deduction recognized by the Partnership (a) after the
Liquidation Date or (b) upon the sale, exchange or other
disposition of all or substantially all of the assets of the
Partnership Group, taken as a whole, in a single transaction
or a series of related transactions (excluding any disposition
to a member of the Partnership Group). The items
included in the determination of Net Termination Gain shall be
determined in accordance with Section
5.5(b) and shall not include any items of income, gain or
loss specially allocated under Section 6.1(d) .
“
Net
Termination Loss ” means, for any taxable year,
the sum, if negative, of all items of income, gain, loss or
deduction recognized by the Partnership (a) after the
Liquidation Date or (b) upon the sale, exchange or other
disposition of all or substantially all of the assets of the
Partnership Group, taken as a whole, in a single transaction
or a series of related transactions (excluding any disposition
to a member of the Partnership Group). The items
included in the determination of Net Termination Loss shall be
determined in accordance with Section
5.5(b) and shall not include any items of income, gain or
loss specially allocated under Section 6.1(d) .
“
Nonrecourse
Built-in Gain ” means with respect to any
Contributed Properties or Adjusted Properties that are subject
to a mortgage or pledge securing a Nonrecourse Liability, the
amount of any taxable gain that would be allocated to the
Partners pursuant to Sections 6.2(b)(i)(A), 6.2(b)(ii)(A) and
6.2(b)(iii) if such properties were disposed of in a taxable
transaction in full satisfaction of such liabilities and for
no other consideration.
“
Nonrecourse
Deductions ” means any and all items of loss,
deduction or expenditure (including any expenditure described
in Section 705(a)(2)(B) of the Code) that, in accordance with
the principles of Treasury Regulation Section 1.704-2(b), are
attributable to a Nonrecourse Liability.
“
Nonrecourse
Liability ” has the meaning set forth in Treasury
Regulation Section 1.752-1(a)(2).
“
Notice of
Election to Purchase ” has the meaning assigned
to such term in Section 15.1(b).
“
Operating
Expenditures ” means all Partnership Group
expenditures (or the Partnership’s proportionate share
of expenditures in the case of Subsidiaries that are not
wholly owned), including, but not limited to, taxes,
reimbursements of the General Partner, non-Pro Rata
repurchases of Units, repayment of Working Capital Borrowings,
debt service payments and capital expenditures, subject to the
following:
(a)
repayment
of Working Capital Borrowings deducted from Operating Surplus
pursuant to clause (b)(iii) of the definition of Operating Surplus
shall not constitute Operating Expenditures when actually
repaid;
(b)
payments
(including prepayments) of principal of and premium on indebtedness
other than Working Capital Borrowings shall not constitute
Operating Expenditures; and
(c)
Operating
Expenditures shall not include (i) Expansion Capital Expenditures,
(ii) payment of transaction expenses (including taxes) relating to
Interim Capital Transactions or (iii) distributions to
Partners. Where capital expenditures are made in part
for Expansion Capital Expenditures and in part for other purposes,
the General Partner, with the concurrence of the Conflicts
Committee, shall determine the allocation between the amounts paid
for each.
“
Operating
Partnership ” means Boardwalk Pipelines, LP, a
Delaware limited partnership, and any successors
thereto.
“
Operating
Surplus ” means, with respect to any period
ending prior to the Liquidation Date, on a cumulative basis
and without duplication,
(a)
the
sum of (i) $75 million, (ii) all cash and cash equivalents of the
Partnership Group (or the Partnership’s proportionate share
of cash and cash equivalents in the case of Subsidiaries that are
not wholly owned) on hand as of the close of business on the
Closing Date, (iii) all cash receipts of the Partnership Group (or
the Partnership’s proportionate share of cash receipts in the
case of Subsidiaries that are not wholly owned) for the period
beginning on the Closing Date and ending on the last day of such
period, but excluding cash receipts from Interim Capital
Transactions (except to the extent specified in Section 6.5), (iv)
all cash receipts of the Partnership Group (or the
Partnership’s proportionate share of cash receipts in the
case of Subsidiaries that are not wholly owned) after the end of
such period but on or before the date of determination of Operating
Surplus with respect to such period resulting from Working Capital
Borrowings and (v) the amount of distributions paid on equity
issued in connection with the construction of a Capital Improvement
or replacement asset and paid during the period beginning on the
date that the Partnership enters into a binding obligation to
commence construction of such Capital Improvement or replacement
asset and ending on the earlier to occur of the date that such
Capital Improvement or replacement asset Commences Commercial
Service or the date that it is abandoned or disposed of (equity
issued to fund the construction period interest payments on debt
incurred (including periodic net payments under related interest
rate swap agreements), or construction period distributions on
equity issued, to finance the construction of a Capital Improvement
or replacement asset shall also be deemed to be equity issued to
finance the construction of a Capital Improvement or replacement
asset for purposes of this clause (v)), less
(b)
the
sum of (i) Operating Expenditures for the period beginning on the
Closing Date and ending on the last day of such period, (ii) the
amount of cash reserves (or the Partnership’s proportionate
share of cash reserves in the case of Subsidiaries that are not
wholly owned) established by the General Partner to provide funds
for future Operating Expenditures and (iii) all Working
Capital Borrowings not repaid within twelve months after having
been incurred; provided ,
however ,
that disbursements made (including contributions to a Group Member
or disbursements on behalf of a Group Member) or cash reserves
established, increased or reduced after the end of such period but
on or before the date of determination of Available Cash with
respect to such period shall be deemed to have been made,
established, increased or reduced, for purposes of determining
Operating Surplus, within such period if the General Partner so
determines.
Notwithstanding
the foregoing, “ Operating Surplus
” with respect to the Quarter in which the Liquidation
Date occurs and any subsequent Quarter shall equal
zero.
“
Opinion of
Counsel ” means a written opinion of counsel (who
may be regular counsel to the Partnership or the General
Partner or any of its Affiliates) acceptable to the General
Partner.
“
Option
Closing Date ” means the date or dates on which
any Common Units are sold by the Partnership to the
Underwriters upon exercise of the Over-Allotment
Option.
“
Organizational Limited
Partner ” means Boardwalk Pipelines Holding Corp.
in its capacity as the organizational limited partner of the
Partnership pursuant to this Agreement.
“
Outstanding
” means, with respect to Partnership Securities, all
Partnership Securities that are issued by the Partnership and
reflected as outstanding on the Partnership’s books and
records as of the date of determination; provided ,
however , that if
at any time any Person or Group (other than the General
Partner or its Affiliates) beneficially owns 20% or more of
the Outstanding Partnership Securities of any class then
Outstanding, all Partnership Securities owned by such Person
or Group shall not be voted on any matter and shall not be
considered to be Outstanding when sending notices of a meeting
of Limited Partners to vote on any matter (unless otherwise
required by law), calculating required votes, determining the
presence of a quorum or for other similar purposes under this
Agreement, except that Units so owned shall be considered to
be Outstanding for purposes of Section 11.1(b)(iv) (such Units
shall not, however, be treated as a separate class of
Partnership Securities for purposes of this Agreement);
provided ,
further, that the foregoing limitation shall not apply to (i)
any Person or Group who acquired 20% or more of the
Outstanding Partnership Securities of any class then
Outstanding directly from the General Partner or its
Affiliates, (ii) any Person or Group who acquired 20% or more
of the Outstanding Partnership Securities of any class then
Outstanding directly or indirectly from a Person or Group
described in clause (i) provided that the General Partner
shall have notified such Person or Group in writing that such
limitation shall not apply, or (iii) any Person or Group who
acquired 20% or more of any Partnership Securities issued by
the Partnership with the prior approval of the Board of
Directors. Class B Units will be deemed not to be
Outstanding for the purpose of the definition of
“Subordination Period” or the application of
Section 5.7(a) for any Quarter ending on or prior to June 30,
2008.
“
Over-Allotment
Option ” means the over-allotment option granted
to the Underwriters by the Partnership pursuant to the
Underwriting Agreement.
“
Partner
Nonrecourse Debt ” has the meaning set forth in
Treasury Regulation Section 1.704-2(b)(4).
“
Partner
Nonrecourse Debt Minimum Gain ” has the meaning
set forth in Treasury Regulation Section
1.704-2(i)(2).
“
Partner
Nonrecourse Deductions ” means any and all items
of loss, deduction or expenditure (including any expenditure
described in Section 705(a)(2)(B) of the Code) that, in
accordance with the principles of Treasury Regulation Section
1.704-2(i), are attributable to a Partner Nonrecourse
Debt.
“
Partners ”
means the General Partner and the Limited
Partners.
“
Partnership
” means Boardwalk Pipeline Partners, LP, a Delaware
limited partnership.
“
Partnership
Group ” means the Partnership and its
Subsidiaries treated as a single entity.
“
Partnership
Interest ” means an interest in the Partnership,
which shall include the General Partner Interest and Limited
Partner Interests.
“
Partnership
Minimum Gain ” means that amount determined in
accordance with the principles of Treasury Regulation Section
1.704-2(d).
“
Partnership
Security ” means any class or series of equity
interest in the Partnership (but excluding any options,
rights, warrants and appreciation rights relating to an equity
interest in the Partnership), including Common Units, Class B
Units, Subordinated Units, General Partner Units and Incentive
Distribution Rights.
“
Percentage
Interest ” means as of any date of determination
(a) as to any Unitholder or Assignee holding Units, the
product obtained by multiplying (i) 100% less the percentage
applicable to clause (b) below by (ii) the quotient obtained
by dividing (A) the number of Units held by such Unitholder or
Assignee by (B) the total number of all Outstanding Units and
(b) as to the holders of other Partnership Securities issued
by the Partnership in accordance with Section 5.6, the
percentage established as a part of such issuance. The
Percentage Interest with respect to an Incentive Distribution
Right shall at all times be zero.
“
Person ”
means an individual or a corporation, limited liability
company, partnership, joint venture, trust, unincorporated
organization, association, government agency or political
subdivision thereof or other entity.
“
Per Unit
Capital Amount ” means, as of any date of
determination, the Capital Account with respect to any class
of Units, stated on a per Unit basis, underlying any Unit held
by a Person; provided that in
respect of the Common Units, the Per Unit Capital Amount means
the Capital Account, stated on a per Unit basis, underlying
any Common Unit held by a Person other than the General
Partner or any Affiliate of the General Partner who holds
Common Units.
“
Pro
Rata ” means (a) when used with respect to Units
or any class thereof, apportioned equally among all designated
Units in accordance with their relative Percentage Interests,
(b) when used with respect to Partners and Assignees or Record
Holders, apportioned among all Partners and Assignees or
Record Holders in accordance with their relative Percentage
Interests and (c) when used with respect to holders of
Incentive Distribution Rights, apportioned equally among all
holders of Incentive Distribution Rights in accordance with
the relative number or percentage of Incentive Distribution
Rights held by each such holder.
“
Purchase
Agreement ” means the Class B Unit Purchase
Agreement, dated as of April 24, 2008, between the Partnership
and Boardwalk Pipelines Holding Corp.
“
Purchase
Date ” means the date determined by the General
Partner as the date for purchase of all Outstanding Limited
Partner Interests of a certain class (other than Limited
Partner Interests owned by the General Partner and its
Affiliates) pursuant to Article XV.
“
Quarter ”
means, unless the context requires otherwise, a fiscal quarter
of the Partnership, or, with respect to the first fiscal
quarter of the Partnership after the Closing Date, the portion
of such fiscal quarter after the Closing Date.
“
Recapture
Income ” means any gain recognized by the
Partnership (computed without regard to any adjustment
required by Section 734 or Section 743 of the Code) upon the
disposition of any property or asset of the Partnership, which
gain is characterized as ordinary income because it represents
the recapture of deductions previously taken with respect to
such property or asset.
“
Record
Date ” means the date established by the General
Partner or otherwise in accordance with this Agreement for
determining (a) the identity of the Record Holders entitled to
notice of, or to vote at, any meeting of Limited Partners or
entitled to vote by ballot or give approval of Partnership
action in writing without a meeting or entitled to exercise
rights in respect of any lawful action of Limited Partners or
(b) the identity of Record Holders entitled to receive any
report or distribution or to participate in any
offer.
“
Record
Holder ” means the Person in whose name a Common
Unit is registered on the books of the Transfer Agent as of
the opening of business on a particular Business Day, or with
respect to other Partnership Interests, the Person in whose
name any such other Partnership Interest is registered on the
books that the General Partner has caused to be kept as of the
opening of business on such Business Day.
“
Redeemable
Interests ” means any Partnership Interests for
which a redemption notice has been given, and has not been
withdrawn, pursuant to Section 4.10.
“
Registration
Statement ” means the Registration Statement on
Form S-1 (File No. 333-127578) as it has been or as it may be
amended or supplemented from time to time, filed by the
Partnership with the Commission under the Securities Act to
register the offering and sale of the Common Units in the
Initial Offering.
“
Remaining
Net Positive Adjustments ” means as of the end of
any taxable period, (i) with respect to the Unitholders
holding Limited Partner Units, the excess of (a) the Net
Positive Adjustments of the Unitholders holding Limited
Partner Units as of the end of such period over (b) the sum of
those Partners’ Share of Additional Book Basis
Derivative Items for each prior taxable period, (ii) with
respect to the General Partner (as holder of the General
Partner Units), the excess of (a) the Net Positive Adjustments
of the General Partner as of the end of such period over (b)
the sum of the General Partner’s Share of Additional
Book Basis Derivative Items with respect to the General
Partner Units for each prior taxable period, and (iii) with
respect to the holders of Incentive Distribution Rights, the
excess of (a) the Net Positive Adjustments of the holders of
Incentive Distribution Rights as of the end of such period
over (b) the sum of the Share of Additional Book Basis
Derivative Items of the holders of the Incentive Distribution
Rights for each prior taxable period.
“
Required
Allocations ” means (a) any limitation imposed on
any allocation of Net Losses or Net Termination Losses under
Section 6.1(b) or 6.1(c)(ii) and (b) any allocation of an item
of income, gain, loss or deduction pursuant to Section
6.1(d)(i), 6.1(d)(ii), 6.1(d)(iv), 6.1(d)(vii) or
6.1(d)(ix).
“
Residual
Gain” or “Residual Loss ” means any
item of gain or loss, as the case may be, of the Partnership
recognized for federal income tax purposes resulting from a
sale, exchange or other disposition of a Contributed Property
or Adjusted Property, to the extent such item of gain or loss
is not allocated pursuant to Section 6.2(b)(i)(A) or
6.2(b)(ii)(A), respectively, to eliminate Book-Tax
Disparities.
“
Retained
Converted Class B Unit ” has the meaning assigned
to such term in Section 5.5(c)(iii).
“
Retained
Converted Subordinated Unit ” has the meaning
assigned to such term in Section 5.5(c)(ii).
“
Second
Liquidation Target Amount ” has the meaning
assigned to such term in Section 6.1(c)(i)(E).
“
Second
Target Distribution ” means $0.4375 per Unit per
Quarter (or, with respect to the period commencing on the
Closing Date and ending on December 31, 2005, it means the
product of $0.4375 multiplied by a fraction of which the
numerator is equal to the number of days in such period and of
which the denominator is 92), subject to adjustment in
accordance with Sections 6.6 and 6.9.
“
Securities
Act ” means the Securities Act of 1933, as
amended, supplemented or restated from time to time and any
successor to such statute.
“
Securities
Exchange Act ” means the Securities Exchange Act
of 1934, as amended, supplemented or restated from time to
time and any successor to such statute.
“
Share of
Additional Book Basis Derivative Items ” means in
connection with any allocation of Additional Book Basis
Derivative Items for any taxable period, (i) with respect to
the Unitholders holding Limited Partner Units, the amount that
bears the same ratio to such Additional Book Basis Derivative
Items as the Unitholders’ Remaining Net Positive
Adjustments as of the end of such period bears to the
Aggregate Remaining Net Positive Adjustments as of that time,
(ii) with respect to the General Partner (as holder of the
General Partner Units), the amount that bears the same ratio
to such Additional Book Basis Derivative Items as the General
Partner’s Remaining Net Positive Adjustments as of the
end of such period bears to the Aggregate Remaining Net
Positive Adjustment as of that time, and (iii) with respect to
the Partners holding Incentive Distribution Rights, the amount
that bears the same ratio to such Additional Book Basis
Derivative Items as the Remaining Net Positive Adjustments of
the Partners holding the Incentive Distribution Rights as of
the end of such period bears to the Aggregate Remaining Net
Positive Adjustments as of that time.
“
Special
Approval ” means approval by a majority of the
members of the Conflicts Committee.
“
Subordinated
Unit ” means a Unit representing a fractional
part of the Partnership Interests of all Limited Partners and
Assignees and having the rights and obligations specified with
respect to Subordinated Units in this Agreement. The term
“Subordinated Unit” does not include a Common
Unit. A Subordinated Unit that is convertible into
a Common Unit shall not constitute a Common Unit until such
conversion occurs.
“
Subordination
Period ” means the period commencing on the
Closing Date and ending on the first to occur of the following
dates:
(a)
the
second Business Day following the distribution of Available Cash to
Partners pursuant to Section 6.3(a) in respect of any Quarter, in
respect of which (A) distributions of Available Cash from Operating
Surplus on each of the Outstanding Common Units, Class B Units,
Subordinated Units, General Partner Units and any other Outstanding
Units that are senior or equal in right of distribution to the
Subordinated Units with respect to each of the three consecutive,
non-overlapping four-Quarter periods immediately preceding such
date equaled or exceeded the sum of the Minimum Quarterly
Distribution (treating the Class B Unit Quarterly Distribution as
the Minimum Quarterly Distribution with respect to the Class B
Units for this purpose) on all Outstanding Common Units, Class B
Units and Subordinated Units and any other Outstanding Units that
are senior or equal in right of distribution to the Subordinated
Units and the General Partner Units during such periods and (B) the
Adjusted Operating Surplus for each of the three consecutive,
non-overlapping four-Quarter periods immediately preceding such
date equaled or exceeded the sum of the Minimum Quarterly
Distribution (treating the Class B Unit Quarterly Distribution as
the Minimum Quarterly Distribution with respect to the Class B
Units for this purpose) on all of the Common Units, Class B Units,
Subordinated Units and any other Units that are senior or equal in
right of distribution to the Subordinated Units that were
Outstanding during such periods on a Fully Diluted Basis, plus the
related distribution on the General Partner Units and (ii) there
are no Cumulative Common Unit Arrearages; and
(b)
the
date on which the General Partner is removed as general partner of
the Partnership upon the requisite vote by holders of Outstanding
Units under circumstances where Cause does not exist and no Units
held by the General Partner and its Affiliates are voted in favor
of such removal.
“
Subsidiary
” means, with respect to any Person, (a) a corporation
of which more than 50% of the voting power of shares entitled
(without regard to the occurrence of any contingency) to vote
in the election of directors or other governing body of such
corporation is owned, directly or indirectly, at the date of
determination, by such Person, by one or more Subsidiaries of
such Person or a combination thereof, (b) a partnership
(whether general or limited) in which such Person or a
Subsidiary of such Person is, at the date of determination, a
general or limited partner of such partnership, but only if
more than 50% of the partnership interests of such partnership
(considering all of the partnership interests of the
partnership as a single class) is owned, directly or
indirectly, at the date of determination, by such Person, by
one or more Subsidiaries of such Person, or a combination
thereof, or (c) any other Person (other than a corporation or
a partnership) in which such Person, one or more Subsidiaries
of such Person, or a combination thereof, directly or
indirectly, at the date of determination, has (i) at least a
majority ownership interest or (ii) the power to elect or
direct the election of a majority of the directors or other
governing body of such Person.
“
Substituted
Limited Partner ” means a Person who is admitted
as a Limited Partner to the Partnership pursuant to Section
10.2 in place of and with all the rights of a Limited Partner
and who is shown as a Limited Partner on the books and records
of the Partnership.
“
Surviving
Business Entity ” has the meaning assigned to
such term in Section 14.2(b).
“
Taxation
Certification ” means a properly completed
certificate in such form or forms as may be specified by the
General Partner by which a Limited Partner certifies that he
(and if he is a nominee holding for the account of another
Person, that to the best of his knowledge such other Person)
is an Eligible Holder and includes a Transfer Application
containing such a certification.
“
Third
Liquidation Target Amount ” has the meaning
assigned to such term in Section 6.1(c)(i)(F).
“
Third Target
Distribution ” means $0.525 per Unit per Quarter
(or, with respect to the period commencing on the Closing Date
and ending on December 31, 2005, it means the product of
$0.525 multiplied by a fraction of which the numerator is
equal to the number of days in such period and of which the
denominator is 92), subject to adjustment in accordance with
Sections 6.6 and 6.9.
“
Trading
Day ” means, for the purpose of determining the
Current Market Price of any class of Limited Partner
Interests, a day on which the principal National Securities
Exchange on which such class of Limited Partner Interests are
listed is open for the transaction of business or, if Limited
Partner Interests of a class are not listed on any National
Securities Exchange, a day on which banking institutions in
New York City generally are open.
“
transfer ”
has the meaning assigned to such term in Section
4.4(a).
“
Transfer
Agent ” means such bank, trust company or other
Person (including the General Partner or one of its
Affiliates) as shall be appointed from time to time by the
General Partner to act as registrar and transfer agent for the
Common Units; provided , that
if no Transfer Agent is specifically designated for any other
Partnership Securities, the General Partner shall act in such
capacity.
“
Transfer
Application ” means an application and agreement
for transfer of Units in the form set forth on the back of a
Certificate or in a form substantially to the same effect in a
separate instrument.
“
Underwriter
” means each Person named as an underwriter in Schedule
I to the Underwriting Agreement who purchases Common Units
pursuant thereto.
“
Underwriting
Agreement ” means that certain Underwriting
Agreement dated as of November 8, 2005 among the Underwriters,
the Partnership, the General Partner and the other parties
thereto, providing for the purchase of Common Units by the
Underwriters.
“
Unit
” means a Partnership Security that is designated as a
“Unit” and shall include Common Units, Class B
Units and Subordinated Units and, for the purpose
of the definition of “Percentage
Interest,” Article VI and defined terms when used in
Article VI, General Partner Units, but shall for no purposes
include Incentive Distribution Rights.
“
Unitholders
” means the holders of Units.
“
Unit
Majority ” means, (i) during the Subordination
Period, at least a majority of the Outstanding Common Units
and Class B Units (excluding Common Units and Class B Units
owned by the General Partner and its Affiliates) voting as a
single class, and at least a majority of the Outstanding
Subordinated Units voting as a class, and (ii) after the end
of the Subordination Period, at least a majority of the
Outstanding Units voting as a single class.
“
Unpaid
MQD ” has the meaning assigned to such term in
Section 6.1(c)(i)(B).
“
Unrealized
Gain ” attributable to any item of Partnership
property means, as of any date of determination, the excess,
if any, of (a) the fair market value of such property as of
such date (as determined under Section 5.5(d)) over (b) the
Carrying Value of such property as of such date (prior to any
adjustment to be made pursuant to Section 5.5(d) as of such
date).
“
Unrealized
Loss ” attributable to any item of Partnership
property means, as of any date of determination, the excess,
if any, of (a) the Carrying Value of such property as of such
date (prior to any adjustment to be made pursuant to Section
5.5(d) as of such date) over (b) the fair market value of such
property as of such date (as determined under Section
5.5(d)).
“
Unrecovered
Initial Unit Price ” means at any time, (a) with
respect to a Common Unit or Subordinated Unit, the Initial
Unit Price of such Common Unit or Subordinated Unit less the
sum of all distributions constituting Capital Surplus
theretofore made in respect of an Initial Common Unit and any
distributions of cash (or the Net Agreed Value of any
distributions in kind) in connection with the dissolution and
liquidation of the Partnership theretofore made in respect of
an Initial Common Unit and (b) with respect to a Class B Unit,
the Initial Unit Price of such Class B Unit less the sum of
all distributions constituting Capital Surplus theretofore
made in respect of an Initial Class B Unit and any
distributions of cash (or the Net Agreed Value of any
distributions in kind) in connection with the dissolution and
liquidation of the Partnership theretofore made in respect of
an Initial Class B Unit, in each case adjusted as the General
Partner determines to be appropriate to give effect to any
distribution, subdivision or combination of such
Units.
“
U.S.
GAAP ” means United States generally accepted
accounting principles consistently applied.
“
Withdrawal
Opinion of Counsel ” has the meaning assigned to
such term in Section 11.1(b).
“
Working
Capital Borrowings ” means borrowings used solely
for working capital purposes or to pay distributions to
Partners, made pursuant to a credit facility, commercial paper
facility or similar financing arrangement; provided that when
incurred it is the intent of the borrower to repay such
borrowings within 12 months from other than additional Working
Capital Borrowings.
Unless
the context requires otherwise: (a) any pronoun used in this
Agreement shall include the corresponding masculine, feminine
or neuter forms, and the singular form of nouns, pronouns and
verbs shall include the plural and vice versa; (b) references
to Articles and Sections refer to Articles and Sections of
this Agreement; (c) the terms “include”,
“includes”, “including” and words of
like import shall be deemed to be followed by the words
“without limitation”; and (d) the terms
“hereof”, “herein” and
“hereunder” refer to this Agreement as a whole and
not to any particular provision of this
Agreement. The table of contents and headings
contained in this Agreement are for reference purposes only,
and shall not affect in any way the meaning or interpretation
of this Agreement.
ARTICLE
II
ORGANIZATION
The
General Partner and the Organizational Limited Partner have
previously formed the Partnership as a limited partnership
pursuant to the provisions of the Delaware Act and hereby
amend and restate the original Agreement of Limited
Partnership of Boardwalk Pipeline Partners, LP, as amended
prior to the date hereof, in its entirety. This amendment and
restatement shall become effective on the date of this
Agreement. Except as expressly provided to the
contrary in this Agreement, the rights, duties (including
fiduciary duties), liabilities and obligations of the Partners
and the administration, dissolution and termination of the
Partnership shall be governed by the Delaware Act. All
Partnership Interests shall constitute personal property of
the owner thereof for all purposes.
The
name of the Partnership shall be “Boardwalk Pipeline
Partners, LP”. The Partnership’s
business may be conducted under any other name or names as
determined by the General Partner, including the name of the
General Partner. The words “Limited Partnership,”
“L.P.,” “Ltd.” or similar words or
letters shall be included in the Partnership’s name
where necessary for the purpose of complying with the laws of
any jurisdiction that so requires. The General Partner may
change the name of the Partnership at any time and from time
to time and shall notify the Limited Partners of such change
in the next regular communication to the Limited
Partners.
Unless
and until changed by the General Partner, the registered
office of the Partnership in the State of Delaware shall be
located at 2711 Centerville Road, Suite 400, Wilmington,
Delaware 19808-1645, and the registered agent for service of
process on the Partnership in the State of Delaware at such
registered office shall be Corporation Service Company. The
principal office of the Partnership shall be located at 9
Greenway Plaza, Suite 2800, Houston, Texas 77046 or such other
place as the General Partner may from time to time designate
by notice to the Limited Partners. The Partnership may
maintain offices at such other place or places within or
outside the State of Delaware as the General Partner shall
determine necessary or appropriate. The address of the General
Partner shall be 9 Greenway Plaza, Suite 2800, Houston, Texas
77046 or such other place as the General Partner may from time
to time designate by notice to the Limited
Partners.
The
purpose and nature of the business to be conducted by the
Partnership shall be to engage directly in, or enter into or
form, hold and dispose of any corporation, partnership, joint
venture, limited liability company or other arrangement to
engage indirectly in, any business activities that relate to
the business of gathering, transmitting by pipeline,
processing or storing natural gas (either in gaseous or liquid
form) or activities now or hereafter customarily conducted in
conjunction with gathering, transmitting by pipeline,
processing or storing natural gas (either in gaseous or liquid
form), that is approved by the General Partner, in its sole
discretion, and any other business that is approved by the
General Partner, in its sole discretion, and in any event that
lawfully may be conducted by a limited partnership organized
pursuant to the Delaware Act and, in connection therewith, to
exercise all of the rights and powers conferred upon the
Partnership pursuant to the agreements relating to such
business activity, and do anything necessary or appropriate to
the foregoing, including the making of capital contributions
or loans to a Group Member; provided, however
, that the General Partner shall not cause the Partnership to
engage, directly or indirectly, in any business activity that
the General Partner determines would cause the Partnership to
be treated as an association taxable as a corporation or
otherwise taxable as an entity for federal income tax
purposes. To the fullest extent permitted by law,
the General Partner shall have no duty or obligation to
propose or approve, and may, in its individual capacity,
decline to propose or approve, the conduct by the Partnership
of any business free of any fiduciary duty or obligation
whatsoever to the Partnership, any Limited Partner or Assignee
and, in declining to so propose or approve, shall not be
required to act in good faith or pursuant to any other
standard imposed by this Agreement, any Group Member
Agreement, any other agreement contemplated hereby or under
the Delaware Act or any other law, rule or regulation or at
equity.
The
Partnership shall be empowered to do any and all acts and
things necessary or appropriate for the furtherance and
accomplishment of the purposes and business described in
Section 2.4 and for the protection and benefit of the
Partnership.
(a)
Each
Limited Partner and each Assignee hereby constitutes and appoints
the General Partner and, if a Liquidator shall have been selected
pursuant to Section 12.3, the Liquidator (and any successor to the
Liquidator by merger, transfer, assignment, election or otherwise)
and each of their authorized officers and attorneys-in-fact, as the
case may be, with full power of substitution, as his true and
lawful agent and attorney-in-fact, with full power and authority in
his name, place and stead, to:
(i)
execute,
swear to, acknowledge, deliver, file and record in the appropriate
public offices (A) all certificates, documents and other
instruments (including this Agreement and the Certificate of
Limited Partnership and all amendments or restatements hereof or
thereof) that the General Partner or the Liquidator determines to
be necessary or appropriate to form, qualify or continue the
existence or qualification of the Partnership as a limited
partnership (or a partnership in which the limited partners have
limited liability) in the State of Delaware and in all other
jurisdictions in which the Partnership may conduct business or own
property; (B) all certificates, documents and other instruments
that the General Partner or the Liquidator determines to be
necessary or appropriate to reflect, in accordance with its terms,
any amendment, change, modification or restatement of this
Agreement; (C) all certificates, documents and other instruments
(including conveyances and a certificate of cancellation) that the
General Partner or the Liquidator determines to be necessary or
appropriate to reflect the dissolution and liquidation of the
Partnership pursuant to the terms of this Agreement; (D) all
certificates, documents and other instruments relating to the
admission, withdrawal, removal or substitution of any Partner
pursuant to, or other events described in, Article IV, X, XI or
XII; (E) all certificates, documents and other instruments relating
to the determination of the rights, preferences and privileges of
any class or series of Partnership Securities issued pursuant to
Section 5.6; and (F) all certificates, documents and other
instruments (including agreements and a certificate of merger)
relating to a merger, consolidation or conversion of the
Partnership pursuant to Article XIV; and
(ii)
execute,
swear to, acknowledge, deliver, file and record all ballots,
consents, approvals, waivers, certificates, documents and other
instruments that the General Partner or the Liquidator determines
to be necessary or appropriate to (A) make, evidence, give, confirm
or ratify any vote, consent, approval, agreement or other action
that is made or given by the Partners hereunder or is consistent
with the terms of this Agreement or (B) effectuate the terms or
intent of this Agreement; provided , that when
required by Section 13.3 or any other provision of this Agreement
that establishes a percentage of the Limited Partners or of the
Limited Partners of any class or series required to take any
action, the General Partner and the Liquidator may exercise the
power of attorney made in this Section 2.6(a)(ii) only after the
necessary vote, consent or approval of the Limited Partners or of
the Limited Partners of such class or series, as
applicable.
Nothing
contained in this Section 2.6(a) shall be construed as
authorizing the General Partner to amend this Agreement except
in accordance with Article XIII or as may be otherwise
expressly provided for in this Agreement.
(b)
The
foregoing power of attorney is hereby declared to be irrevocable
and a power coupled with an interest, and it shall survive and, to
the maximum extent permitted by law, not be affected by the
subsequent death, incompetency, disability, incapacity,
dissolution, bankruptcy or termination of any Limited Partner or
Assignee and the transfer of all or any portion of such Limited
Partner’s or Assignee’s Partnership Interest and shall
extend to such Limited Partner’s or Assignee’s heirs,
successors, assigns and personal representatives. Each such Limited
Partner or Assignee hereby agrees to be bound by any representation
made by the General Partner or the Liquidator acting in good faith
pursuant to such power of attorney; and each such Limited Partner
or Assignee, to the maximum extent permitted by law, hereby waives
any and all defenses that may be available to contest, negate or
disaffirm the action of the General Partner or the Liquidator taken
in good faith under such power of attorney. Each Limited Partner or
Assignee shall execute and deliver to the General Partner or the
Liquidator, within 15 days after receipt of the request therefor,
such further designation, powers of attorney and other instruments
as the General Partner or the Liquidator may request in order to
effectuate this Agreement and the purposes of the
Partnership.
The
term of the Partnership commenced upon the filing of the
Certificate of Limited Partnership in accordance with the
Delaware Act and shall continue in existence until the
dissolution of the Partnership in accordance with the
provisions of Article XII. The existence of the Partnership as
a separate legal entity shall continue until the cancellation
of the Certificate of Limited Partnership as provided in the
Delaware Act.
Title
to Partnership assets, whether real, personal or mixed and
whether tangible or intangible, shall be deemed to be owned by
the Partnership as an entity, and no Partner or Assignee,
individually or collectively, shall have any ownership
interest in such Partnership assets or any portion thereof.
Title to any or all of the Partnership assets may be held in
the name of the Partnership, the General Partner, one or more
of its Affiliates or one or more nominees, as the General
Partner may determine. The General Partner hereby declares and
warrants that any Partnership assets for which record title is
held in the name of the General Partner or one or more of its
Affiliates or one or more nominees shall be held by the
General Partner or such Affiliate or nominee for the use and
benefit of the Partnership in accordance with the provisions
of this Agreement; provided ,
however , that
the General Partner shall use reasonable efforts to cause
record title to such assets (other than those assets in
respect of which the General Partner determines that the
expense and difficulty of conveyancing makes transfer of
record title to the Partnership impracticable) to be vested in
the Partnership as soon as reasonably practicable; provided ,
further, that, prior to the withdrawal or removal of the
General Partner or as soon thereafter as practicable, the
General Partner shall use reasonable efforts to effect the
transfer of record title to the Partnership and, prior to any
such transfer, will provide for the use of such assets in a
manner satisfactory to the General Partner. All Partnership
assets shall be recorded as the property of the Partnership in
its books and records, irrespective of the name in which
record title to such Partnership assets is held.
ARTICLE
III
RIGHTS
OF LIMITED PARTNERS
The
Limited Partners and the Assignees shall have no liability
under this Agreement except as expressly provided in this
Agreement or the Delaware Act.
No
Limited Partner or Assignee, in its capacity as such, shall
participate in the operation, management or control (within
the meaning of the Delaware Act) of the Partnership’s
business, transact any business in the Partnership’s
name or have the power to sign documents for or otherwise bind
the Partnership. Any action taken by any Affiliate of the
General Partner or any officer, director, employee, manager,
member, general partner, agent or trustee of the General
Partner or any of its Affiliates, or any officer, director,
employee, manager, member, general partner, agent or trustee
of a Group Member, in its capacity as such, shall not be
deemed to be participation in the control of the business of
the Partnership by a limited partner of the Partnership
(within the meaning of Section 17-303(a) of the Delaware Act)
and shall not affect, impair or eliminate the limitations on
the liability of the Limited Partners or Assignees under this
Agreement.
Subject
to the provisions of Section 7.5, any Limited Partner or
Assignee shall be entitled to and may have business interests
and engage in business activities in addition to those
relating to the Partnership, including business interests and
activities in direct competition with the Partnership Group.
Neither the Partnership nor any of the other Partners or
Assignees shall have any rights by virtue of this Agreement in
any business ventures of any Limited Partner or
Assignee.
(a)
In
addition to other rights provided by this Agreement or by
applicable law, and except as limited by Section 3.4(b), each
Limited Partner shall have the right, for a purpose reasonably
related to such Limited Partner’s interest as a Limited
Partner in the Partnership, upon reasonable written demand stating
the purpose of such demand, and at such Limited Partner’s own
expense:
(i)
to
obtain true and full information regarding the status of the
business and financial condition of the Partnership;
(ii)
promptly
after its becoming available, to obtain a copy of the
Partnership’s federal, state and local income tax returns for
each year;
(iii)
to
obtain a current list of the name and last known business,
residence or mailing address of each Partner;
(iv)
to
obtain a copy of this Agreement and the Certificate of Limited
Partnership and all amendments thereto, together with copies of the
executed copies of all powers of attorney pursuant to which this
Agreement, the Certificate of Limited Partnership and all
amendments thereto have been executed;
(v)
to
obtain true and full information regarding the amount of cash and a
description and statement of the Net Agreed Value of any other
Capital Contribution by each Partner and that each Partner has
agreed to contribute in the future, and the date on which each
became a Partner; and
(vi)
to
obtain such other information regarding the affairs of the
Partnership as is just and reasonable.
(b)
The
General Partner may keep confidential from the Limited Partners and
Assignees, for such period of time as the General Partner deems
reasonable, (i) any information that the General Partner reasonably
believes to be in the nature of trade secrets or (ii) other
information the disclosure of which the General Partner in good
faith believes (A) is not in the best interests of the Partnership
Group, (B) could damage the Partnership Group or its business or
(C) that any Group Member is required by law or by agreement with
any third party to keep confidential (other than agreements with
Affiliates of the Partnership the primary purpose of which is to
circumvent the obligations set forth in this Section
3.4).
ARTICLE
IV
CERTIFICATES;
RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION
OF PARTNERSHIP INTERESTS
Upon
the Partnership’s issuance of Common Units or
Subordinated Units to any Person, the Partnership shall issue,
upon the request of such Person, one or more Certificates in
the name of such Person evidencing the number of such Units
being so issued. In addition, (a) upon the General
Partner’s request, the Partnership shall issue to it one
or more Certificates in the name of the General Partner
evidencing its General Partner Units and (b) upon the request
of any Person owning Incentive Distribution Rights or any
other Partnership Securities other than Common Units or
Subordinated Units, the Partnership shall issue to such Person
one or more certificates evidencing such Incentive
Distribution Rights or other Partnership Securities other than
Common Units or Subordinated Units. Certificates shall be
executed on behalf of the Partnership by the President or any
Executive Vice President, Senior Vice President or Vice
President and the Chief Financial Officer or the Secretary or
any Assistant Secretary of the General Partner. No Common Unit
Certificate shall be valid for any purpose until it has been
countersigned by the Transfer Agent; provided ,
however , that if
the General Partner elects to issue Common Units in global
form, the Common Unit Certificates shall be valid upon receipt
of a certificate from the Transfer Agent certifying that the
Common Units have been duly registered in accordance with the
directions of the Partnership. Subject to the requirements of
Section 6.7(b), the Partners holding Certificates evidencing
Subordinated Units may exchange such Certificates for
Certificates evidencing Common Units on or after the date on
which such Subordinated Units are converted into Common Units
pursuant to the terms of Section 5.7.
(a)
If
any mutilated Certificate is surrendered to the Transfer Agent, the
appropriate officers of the General Partner on behalf of the
Partnership shall execute, and the Transfer Agent shall countersign
and deliver in exchange therefor, a new Certificate evidencing the
same number and type of Partnership Securities as the Certificate
so surrendered.
(b)
The
appropriate officers of the General Partner on behalf of the
Partnership shall execute and deliver, and the Transfer Agent shall
countersign, a new Certificate in place of any Certificate
previously issued if the Record Holder of the
Certificate:
(i)
makes
proof by affidavit, in form and substance satisfactory to the
General Partner, that a previously issued Certificate has been
lost, destroyed or stolen;
(ii)
requests
the issuance of a new Certificate before the General Partner has
notice that the Certificate has been acquired by a purchaser for
value in good faith and without notice of an adverse
claim;
(iii)
if
requested by the General Partner, delivers to the General Partner a
bond, in form and substance satisfactory to the General Partner,
with surety or sureties and with fixed or open penalty as the
General Partner may direct to indemnify the Partnership, the
Partners, the General Partner and the Transfer Agent against any
claim that may be made on account of the alleged loss, destruction
or theft of the Certificate; and
(iv)
satisfies
any other reasonable requirements imposed by the General
Partner.
If
a Limited Partner or Assignee fails to notify the General
Partner within a reasonable period of time after he has notice
of the loss, destruction or theft of a Certificate, and a
transfer of the Limited Partner Interests represented by the
Certificate is registered before the Partnership, the General
Partner or the Transfer Agent receives such notification, the
Limited Partner or Assignee shall be precluded from making any
claim against the Partnership, the General Partner or the
Transfer Agent for such transfer or for a new
Certificate.
(c)
As
a condition to the issuance of any new Certificate under this
Section 4.2, the 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) reasonably connected
therewith.
The
Partnership shall be entitled to recognize the Record Holder
as the Partner or Assignee with respect to any Partnership
Interest and, accordingly, shall not be bound to recognize any
equitable or other claim to, or interest in, such Partnership
Interest on the part of any other Person, regardless of
whether the Partnership shall have actual or other notice
thereof, except as otherwise provided by law or any applicable
rule, regulation, guideline or requirement of any National
Securities Exchange on which such Partnership Interests are
listed or admitted to trading. Without limiting the foregoing,
when a Person (such as a broker, dealer, bank, trust company
or clearing corporation or an agent of any of the foregoing)
is acting as nominee, agent or in some other representative
capacity for another Person in acquiring and/or holding
Partnership Interests, as between the Partnership on the one
hand, and such other Persons on the other, such representative
Person (a) shall be the Partner or Assignee (as the case may
be) of record and beneficially, and (b) shall be bound by this
Agreement and shall have the rights and obligations of a
Partner or Assignee (as the case may be) hereunder and as, and
to the extent, provided for herein.
(a)
The
term “transfer,” when used in this Agreement with
respect to a Partnership Interest, shall be deemed to refer to a
transaction (i) by which the General Partner assigns its General
Partner Units to another Person or by which a holder of Incentive
Distribution Rights assigns its Incentive Distribution Rights to
another Person, and includes a sale, assignment, gift, pledge,
encumbrance, hypothecation, mortgage, exchange or any other
disposition by law or otherwise or (ii) by which the holder of a
Limited Partner Interest (other than an Incentive Distribution
Right) assigns such Limited Partner Interest to another Person who
is or becomes a Limited Partner or an Assignee, and includes a
sale, assignment, gift, exchange or any other disposition by law or
otherwise, including any transfer upon foreclosure of any pledge,
encumbrance, hypothecation or mortgage.
(b)
No
Partnership Interest shall be transferred, in whole or in part,
except in accordance with the terms and conditions set forth in
this Article IV. Any transfer or purported transfer of a
Partnership Interest not made in accordance with this Article IV
shall be null and void.
(c)
Nothing
contained in this Agreement shall be construed to prevent a
disposition by any stockholder, member, partner or other owner of
the General Partner of any or all of the shares of stock,
membership interests, partnership interests or other ownership
interests in the General Partner.
(a)
The
General Partner shall keep or cause to be kept on behalf of the
Partnership a register in which, subject to such reasonable
regulations as it may prescribe and subject to the provisions of
Section 4.5(b), the Partnership will provide for the registration
and transfer of Limited Partner Interests. The Transfer Agent is
hereby appointed registrar and transfer agent for the purpose of
registering Common Units and transfers of such Common Units as
herein provided. The Partnership shall not recognize transfers of
Certificates evidencing Limited Partner Interests unless such
transfers are effected in the manner described in this Section 4.5.
Upon surrender of a Certificate for registration of transfer of any
Limited Partner Interests evidenced by a Certificate, and subject
to the provisions of Section 4.5(b), the appropriate officers of
the General Partner on behalf of the Partnership shall execute and
deliver, and in the case of Common Units, the Transfer Agent shall
countersign 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 Certificates
evidencing the same aggregate number and type of Limited Partner
Interests as was evidenced by the Certificate so
surrendered.
(b)
Except
as otherwise provided in Section 4.9, the General Partner shall not
recognize any transfer of Limited Partner Interests until the
Certificates evidencing such Limited Partner Interests are
surrendered for registration of transfer and such Certificates are
accompanied by a Transfer Application, properly completed and
including a Taxation Certification, duly executed by the transferee
(or the transferee’s attorney-in-fact duly authorized in
writing). No charge shall be imposed by the General Partner for
such transfer; provided , that as a
condition to the issuance of any new Certificate under this Section
4.5, the General Partner may require the payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed with respect thereto. No distributions or
allocations will be made in respect of the Limited Partner
Interests until a properly completed Transfer Application has been
delivered.
(c)
Limited
Partner Interests may be transferred only in the manner described
in this Section 4.5. The transfer of any Limited Partner Interests
and the admission of any new Limited Partner shall not constitute
an amendment to this Agreement.
(d)
Until
admitted as a Substituted Limited Partner pursuant to Section 10.2,
the Record Holder of a Limited Partner Interest shall be an
Assignee in respect of such Limited Partner Interest. Limited
Partners may include custodians, nominees or any other individual
or entity in its own or any representative capacity.
(e)
A
transferee of a Limited Partner Interest who has completed and
delivered a Transfer Application shall be deemed to have (i)
requested admission as a Substituted Limited Partner, (ii) agreed
to comply with and be bound by and to have executed this Agreement,
(iii) represented and warranted that such transferee has the right,
power and authority and, if an individual, the capacity to enter
into this Agreement, (iv) granted the powers of attorney set forth
in this Agreement, and (v) given the consents and approvals and
made the waivers contained in this Agreement.
(f)
The
General Partner and its Affiliates shall have the right at any time
to transfer their Subordinated Units and Common Units (whether
issued upon conversion of the Subordinated Units or otherwise) to
one or more Persons.
(a)
Subject
to Section 4.6(c) below, prior to September 30, 2015, the General
Partner shall not transfer all or any part of its General Partner
Interest to a Person unless such transfer (i) has been approved by
the prior written consent or vote of the holders of at least a
majority of the Outstanding Common Units (excluding Common Units
held by the General Partner and its Affiliates) or (ii) is of all,
but not less than all, of its General Partner Interest to (A) an
Affiliate of the General Partner (other than an individual) or (B)
another Person (other than an individual) in connection with the
merger or consolidation of the General Partner with or into such
other Person or the transfer by the General Partner of all or
substantially all of its assets to such other Person.
(b)
Subject
to Section 4.6(c) below, on or after September 30, 2015, the
General Partner may transfer all or any of its General Partner
Interest without Unitholder approval.
(c)
Notwithstanding
anything herein to the contrary, no transfer by the General Partner
of all or any part of its General Partner Interest to another
Person shall be permitted unless (i) the transferee agrees to
assume the rights and duties of the General Partner under this
Agreement and to be bound by the provisions of this Agreement, (ii)
the Partnership receives an Opinion of Counsel that such transfer
would not result in the loss of limited liability under Delaware
law
of any Limited Partner or cause the Partnership to be treated as an
association taxable as a corporation or otherwise to be taxed as an
entity for federal income tax purposes (to the extent not already
so treated or taxed) and (iii) such transferee also agrees to
purchase all (or the appropriate portion thereof, if applicable) of
the partnership or membership interest of the General Partner as
the general partner or managing member, if any, of each other Group
Member. In the case of a transfer pursuant to and in
compliance with this Section 4.6, the transferee or successor (as
the case may be) shall, subject to compliance with the terms of
Section 10.3, be admitted to the Partnership as the General Partner
immediately prior to the transfer of the General Partner Interest,
and the business of the Partnership shall continue without
dissolution.
Prior
to September 30, 2015, a holder of Incentive Distribution
Rights may transfer any or all of the Incentive Distribution
Rights held by such holder without any consent of the
Unitholders to (a) an Affiliate of such holder (other than an
individual) or (b) another Person (other than an individual)
in connection with (i) the merger or consolidation of such
holder of Incentive Distribution Rights with or into such
other Person, (ii) the transfer by such holder of all or
substantially all of its assets to such other Person or (iii)
the sale of all the ownership interests in such holder. Any
other transfer of the Incentive Distribution Rights prior to
September 30, 2015 shall require the prior approval of holders
of at least a majority of the Outstanding Common Units
(excluding Common Units held by the General Partner and its
Affiliates). On or after September 30, 2015, the
General Partner or any other holder of Incentive Distribution
Rights may transfer any or all of its Incentive Distribution
Rights without Unitholder approval. Notwithstanding anything
herein to the contrary, no transfer of Incentive Distribution
Rights to another Person shall be permitted unless the
transferee agrees to be bound by the provisions of this
Agreement. The General Partner and any transferee
or transferees of the Incentive Distribution Rights may agree
in a separate instrument as to the General Partner’s
exercise of its rights with respect to the Incentive
Distribution Rights under Section 11.3 hereof.
(a)
Except
as provided in Section 4.8(d) below, but notwithstanding the other
provisions of this Article IV, no transfer of any Partnership
Interests shall be made if such transfer would (i) violate the then
applicable federal or state securities laws or rules and
regulations of the Commission, any state securities commission or
any other governmental authority with jurisdiction over such
transfer, (ii) terminate the existence or qualification of the
Partnership under the laws of the jurisdiction of its formation, or
(iii) cause the Partnership to be treated as an association
taxable as a corporation or otherwise to be taxed as an entity for
federal income tax purposes (to the extent not already so treated
or taxed).
(b)
The
General Partner may impose restrictions on the transfer of
Partnership Interests if it receives an Opinion of Counsel that
such restrictions are necessary to avoid a significant risk of the
Partnership becoming taxable as a corporation or otherwise becoming
taxable as an entity for federal income tax purposes. The General
Partner may impose such restrictions by amending this Agreement;
provided ,
however ,
that any amendment that would result in the delisting or suspension
of trading of any class of Limited Partner Interests on the
principal National Securities Exchange on which such class of
Limited Partner Interests is then listed or admitted to trading
must be approved, prior to such amendment being effected, by the
holders of at least a majority of the Outstanding Limited Partner
Interests of such class.
(c)
The
transfer of a Subordinated Unit that has converted into a Common
Unit shall be subject to the restrictions imposed by Section
6.7(b).
(d)
Nothing
contained in this Article IV, or elsewhere in this Agreement, shall
preclude the settlement of any transactions involving Partnership
Interests entered into through the facilities of any National
Securities Exchange on which such Partnership Interests are listed
or admitted to trading.
(e)
Each
certificate evidencing Partnership Interests shall bear a
conspicuous legend in substantially the following
form:
THE
HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF
BOARDWALK PIPELINE PARTNERS, LP THAT THIS SECURITY MAY NOT BE
SOLD, OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IF
SUCH TRANSFER WOULD (A) VIOLATE THE THEN APPLICABLE FEDERAL OR
STATE SECURITIES LAWS OR RULES AND REGULATIONS OF THE
SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION OR ANY OTHER GOVERNMENTAL AUTHORITY WITH
JURISDICTION OVER SUCH TRANSFER, (B) TERMINATE THE EXISTENCE
OR QUALIFICATION OF BOARDWALK PIPELINE PARTNERS, LP UNDER THE
LAWS OF THE STATE OF DELAWARE, OR (C) CAUSE BOARDWALK PIPELINE
PARTNERS, LP TO BE TREATED AS AN ASSOCIATION TAXABLE AS A
CORPORATION OR OTHERWISE TO BE TAXED AS AN ENTITY FOR FEDERAL
INCOME TAX PURPOSES (TO THE EXTENT NOT ALREADY SO TREATED OR
TAXED). BOARDWALK GP, LP, THE GENERAL PARTNER OF
BOARDWALK PIPELINE PARTNERS, LP, MAY IMPOSE ADDITIONAL
RESTRICTIONS ON THE TRANSFER OF THIS SECURITY IF IT RECEIVES
AN OPINION OF COUNSEL THAT SUCH RESTRICTIONS ARE NECESSARY TO
AVOID A SIGNIFICANT RISK OF BOARDWALK PIPELINE PARTNERS, LP
BECOMING TAXABLE AS A CORPORATION OR OTHERWISE BECOMING
TAXABLE AS AN ENTITY FOR FEDERAL INCOME TAX PURPOSES. THE
RESTRICTIONS SET FORTH ABOVE SHALL NOT PRECLUDE THE SETTLEMENT
OF ANY TRANSACTIONS INVOLVING THIS SECURITY ENTERED INTO
THROUGH THE FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE ON
WHICH THIS SECURITY IS LISTED OR ADMITTED TO
TRADING.
(a)
If
a transferee of a Limited Partner Interest fails to furnish a
properly completed Taxation Certification in a Transfer Application
or if, upon receipt of such Taxation Certification or otherwise,
the General Partner determines that such transferee is not an
Eligible Holder, the Limited Partner Interests owned by such
transferee shall be subject to redemption in accordance with the
provisions of Section 4.10.
(b)
The
General Partner may request any Limited Partner or Assignee to
furnish to the General Partner, within 30 days after receipt of
such request, an executed Taxation Certification or such other
information concerning his federal income tax status with respect
to the income and loss generated by the Partnership (or, if the
Limited Partner or Assignee is a nominee holding for the account of
another Person, the federal income tax status of such Person) as
the General Partner may request. If a Limited Partner or
Assignee fails to furnish to the General Partner within the
aforementioned 30-day period such Taxation Certification or other
requested information or if upon receipt of such Taxation
Certification or other requested information the General Partner
determines that a Limited Partner or Assignee is not an Eligible
Holder, the Limited Partner Interests owned by such Limited Partner
or Assignee shall be subject to redemption in accordance with the
provisions of Section 4.10. In addition, the General Partner may
require that the status of any such Limited Partner or Assignee be
changed to that of an Ineligible Assignee and, thereupon, the
General Partner shall be substituted for such Ineligible Assignee
as the Limited Partner in respect of the Ineligible
Assignee’s Limited Partner Interests.
(c)
The
General Partner shall, in exercising voting rights in respect of
Limited Partner Interests held by it on behalf of Ineligible
Assignee, distribute the votes in the same ratios as the votes of
Partners (including the General Partner) in respect of Limited
Partner Interests other than those of Ineligible Assignee are cast,
either for, against or abstaining as to the matter.
(d)
At
any time after an Ineligible Assignee can and does certify that it
has become an Eligible Holder, such Ineligible Assignee may, upon
application to the General Partner, request admission as a
Substituted Limited Partner with respect to any Limited Partner
Interests of such Ineligible Assignee not redeemed pursuant to
Section 4.10, and upon admission of such Ineligible Assignee
pursuant to Section 10.2, the General Partner shall cease to be
deemed to be the Limited Partner in respect of such Ineligible
Assignee’s Limited Partner Interests.
(a)
If
at any time a Limited Partner, Assignee or transferee fails to
furnish a Taxation Certification or other information requested
within the 30-day period specified in Section 4.9(b) or in a Transfer Application,
or if upon receipt of such Taxation Certification or other
information the General Partner determines, with the advice of
counsel, that a Limited Partner, Assignee or transferee is not an
Eligible Holder, the Partnership may, unless the Limited Partner,
Assignee or transferee establishes to the satisfaction of the
General Partner that such Limited Partner, Assignee or transferee
is an Eligible Holder or has transferred his Partnership Interests
to a Person who is an Eligible Holder and who furnishes a Taxation
Certification to the General Partner prior to the date fixed for
redemption as provided below, redeem the Limited Partner Interest
of such Limited Partner, Assignee or transferee as
follows:
(i)
The
General Partner shall, not later than the 30th day before the date
fixed for redemption, give notice of redemption to the Limited
Partner, Assignee or transferee, at his last address designated on
the records of the Partnership or the Transfer Agent, by registered
or certified mail, postage prepaid. The notice shall be
deemed to have been given when so mailed. The notice
shall specify the Redeemable Interests, the date fixed for
redemption, the place of payment, that payment of the redemption
price will be made upon surrender of the Certificate evidencing the
Redeemable Interests and that by virtue of the Limited Partner,
Assignee or transferee’s status as an Ineligible Assignee, no
further allocations or distributions to which such Person would
otherwise be entitled in respect of the Redeemable Interests will
accrue or be made.
(ii)
The
aggregate redemption price for Redeemable Interests shall be an
amount equal to the lesser of (i) the Current Market Price (the
date of determination of which shall be the date fixed for
redemption) of Limited Partner Interests of the class to be so
redeemed and (ii) the price paid for such Limited
Partner Interests by the Limited Partner, Assignee or transferee.
The redemption price shall be paid, as determined by the General
Partner, in cash or by delivery of a promissory note of the
Partnership in the principal amount of the redemption price,
bearing interest at the rate of 5% annually and payable in three
equal annual installments of principal together with accrued
interest, commencing one year after the redemption
date.
(iii)
Upon
surrender by or on behalf of the Limited Partner, Assignee or
transferee, at the place specified in the notice of redemption, of
the Certificate evidencing the Redeemable Interests, duly endorsed
in blank or accompanied by an assignment duly executed in blank,
the Limited Partner, Assignee or transferee or his duly authorized
representative shall be entitled to receive the payment
therefor.
(iv)
After
the redemption date, Redeemable Interests shall no longer
constitute issued and Outstanding Limited Partner
Interests.
(b)
The
provisions of this Section 4.10 shall also be applicable to Limited
Partner Interests held by a Limited Partner or Assignee as nominee
of a Person determined to be other than an Eligible
Holder.
(c)
Nothing
in this Section 4.10 shall prevent the recipient of a notice of
redemption from transferring his Limited Partner Interest before
the redemption date if such transfer is otherwise permitted under
this Agreement. Upon receipt of notice of such a transfer, the
General Partner shall withdraw the notice of redemption, provided
the transferee of such Limited Partner Interest certifies to the
satisfaction of the General Partner in a Transfer Application that
he is an Eligible Holder. If the transferee fails to make such
certification, such redemption shall be effected from the
transferee on the original redemption date.
ARTICLE
V
CAPITAL
CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP
INTERESTS
In
connection with the formation of the Partnership under the
Delaware Act, the General Partner made an initial Capital
Contribution to the Partnership in the amount of $20.00, for a
2% General Partner Interest in the Partnership and has been
admitted as the General Partner of the Partnership, and the
Organizational Limited Partner made an initial Capital
Contribution to the Partnership in the amount of $980.00 for a
98% Limited Partner Interest in the Partnership and has been
admitted as a Limited Partner of the
Partnership. As of the Closing Date, the interest
of the Organizational Limited Partner shall be redeemed as
provided in the Contribution Agreement; and the initial
Capital Contribution of the Organizational Limited Partner
shall thereupon be refunded. Ninety-eight percent of any
interest or other profit that may have resulted from the
investment or other use of such initial Capital Contributions
shall be allocated and distributed to the Organizational
Limited Partner, and the balance thereof shall be allocated
and distributed to the General Partner.
(a)
On
the Closing Date and pursuant to the Contribution Agreement:
(i) the General Partner shall contribute to the Partnership,
as a Capital Contribution, all of its ownership interests in
Boardwalk Pipelines, LP in exchange for (A) 2,068,367 General
Partner Units representing the 2% General Partner Interest, subject
to all of the rights, privileges and duties of the General Partner
under this Agreement and (B) the Incentive Distribution Rights; and
(ii) Boardwalk Pipelines Holding Corp. shall contribute to the
Partnership, as a Capital Contribution, all of its ownership
interests in Boardwalk Operating GP, LLC and Boardwalk Pipelines,
LP in exchange for (A) 53,256,122 Common Units and (B) 33,093,878
Subordinated Units.
(b)
Upon
the issuance of any additional Limited Partner Interests by the
Partnership (other than the Common Units issued in the Initial
Offering), the General Partner may, in exchange for a proportionate
number of General Partner Units, make additional Capital
Contributions in an amount equal to the product obtained by
multiplying (i) the quotient determined by dividing (A) the General
Partner’s Percentage Interest by (B) 100 less the General
Partner’s Percentage Interest times (ii) the amount
contributed to the Partnership by the Limited Partners in exchange
for such additional Limited Partner Interests. Except as
set forth in Article XII, the General Partner shall not be
obligated to make any additional Capital Contributions to the
Partnership.
(a)
On
the Closing Date and pursuant to the Underwriting Agreement, each
Underwriter shall contribute to the Partnership cash in an amount
equal to the Issue Price per Initial Common Unit, multiplied by the
number of Common Units specified in the Underwriting Agreement to
be purchased by such Underwriter at the Closing Date. In exchange
for such Capital Contributions by the Underwriters, the Partnership
shall issue Common Units to each Underwriter on whose behalf such
Capital Contribution is made in an amount equal to the quotient
obtained by dividing (i) the cash contribution to the Partnership
by or on behalf of such Underwriter by (ii) the Issue Price per
Initial Common Unit.
(b)
Upon
the exercise of the Over-Allotment Option, each Underwriter shall
contribute to the Partnership cash in an amount equal to the Issue
Price per Initial Common Unit, multiplied by the number of Common
Units to be purchased by such Underwriter at the Option Closing
Date. In exchange for such Capital Contributions by the
Underwriters, the Partnership shall issue Common Units to each
Underwriter on whose behalf such Capital Contribution is made in an
amount equal to the quotient obtained by dividing (i) the cash
contributions to the Partnership by or on behalf of such
Underwriter by (ii) the Issue Price per Initial Common
Unit.
(c)
No
Limited Partner Interests will be issued or issuable as of or at
the Closing Date other than (i) the Common Units issuable pursuant
to subparagraph (a) hereof in aggregate number equal to 15,000,000,
(ii) the “Option Units” as such term is used in the
Underwriting Agreement in an aggregate number up to 2,250,000
issuable upon exercise of the Over-Allotment Option pursuant to
subparagraph (b) hereof, (iii) the 33,093,878 Subordinated Units
issuable pursuant to Section 5.2 hereof, (iv) the 53,256,122 Common
Units issuable pursuant to Section 5.2 hereof, and (v) the
Incentive Distribution Rights.
No
interest shall be paid by the Partnership on Capital
Contributions. No Partner or Assignee shall be entitled to the
withdrawal or return of its Capital Contribution, except to
the extent, if any, that distributions made pursuant to this
Agreement or upon termination of the Partnership may be
considered as such by law and then only to the extent provided
for in this Agreement. Except to the extent expressly provided
in this Agreement, no Partner or Assignee shall have priority
over any other Partner or Assignee either as to the return of
Capital Contributions or as to profits, losses or
distributions. Any such return shall be a compromise to which
all Partners and Assignees agree within the meaning of Section
17-502(b) of the Delaware Act.
(a)
The
Partnership shall maintain for each Partner (or a beneficial owner
of Partnership Interests held by a nominee in any case in which the
nominee has furnished the identity of such owner to the Partnership
in accordance with Section 6031(c) of the Code or any other method
acceptable to the General Partner) owning a Partnership Interest a
separate Capital Account with respect to such Partnership Interest
in accordance with the rules of Treasury Regulation Section
1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i)
the amount of all Capital Contributions made to the Partnership
with respect to such Partnership Interest and (ii) all items of
Partnership income and gain (including income and gain exempt from
tax) computed in accordance with Section 5.5(b) and allocated with
respect to such Partnership Interest pursuant to Section 6.1, and
decreased by (x) the amount of cash or Net Agreed Value of all
actual and deemed distributions of cash or property made with
respect to such Partnership Interest and (y) all items of
Partnership deduction and loss computed in accordance with Section
5.5(b) and allocated with respect to such Partnership Interest
pursuant to Section 6.1.
(b)
For
purposes of computing the amount of any item of income, gain, loss
or deduction which is to be allocated pursuant to Article VI and is
to be reflected in the Partners’ Capital Accounts, the
determination, recognition and classification of any such item
shall be the same as its determination, recognition and
classification for federal income tax purposes (including any
method of depreciation, cost recovery or amortization used for that
purpose), provided, that:
(i)
Solely
for purposes of this Section 5.5, the Partnership shall be treated
as owning directly its proportionate share (as determined by the
General Partner based upon the provisions of the applicable Group
Member Agreement) of all property owned by any other Group Member
that is classified as a partnership for federal income tax
purposes.
(ii)
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, if any,
shall, for purposes of Capital Account maintenance, be treated as
an item of deduction at the time such fees and other expenses are
incurred and shall be allocated among the Partners pursuant to
Section 6.1.
(iii)
Except
as otherwise provided in Treasury Regulation Section
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain,
loss and deduction shall be made without regard to any election
under Section 754 of the Code which may be made by the Partnership
and, as to those items described in Section 705(a)(1)(B) or
705(a)(2)(B) of the Code, without regard to the fact that such
items are not includable in gross income or are neither currently
deductible nor capitalized for federal income tax purposes. To the
extent an adjustment to the adjusted tax basis of any Partnership
asset pursuant to Section 734(b) or 743(b) of the Code is required,
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be
taken into account in determining Capital Accounts, the amount of
such adjustment in the Capital Accounts shall be treated as an item
of gain or loss.
(iv)
Any
income, gain or loss attributable to the taxable disposition of any
Partnership property shall be determined as if the adjusted basis
of such property as of such date of disposition were equal in
amount to the Partnership’s Carrying Value with respect to
such property as of such date.
(v)
In
accordance with the requirements of Section 704(b) of the Code, any
deductions for depreciation, cost recovery or amortization
attributable to any Contributed Property shall be determined as if
the adjusted basis of such property on the date it was acquired by
the Partnership were equal to the Agreed Value of such property.
Upon an adjustment pursuant to Section 5.5(d) to the Carrying Value
of any Partnership property subject to depreciation, cost recovery
or amortization, any further deductions for such depreciation, cost
recovery or amortization attributable to such property shall be
determined (A) as if the adjusted basis of such property were equal
to the Carrying Value of such property immediately following such
adjustment and (B) using a rate of depreciation, cost recovery or
amortization derived from the same method and useful life (or, if
applicable, the remaining useful life) as is applied for federal
income tax purposes; provided ,
however ,
that, if the asset has a zero adjusted basis for federal income tax
purposes, depreciation, cost recovery or amortization deductions
shall be determined using any method that the General Partner may
adopt.
(vi)
If
the Partnership’s adjusted basis in a depreciable or cost
recovery property is reduced for federal income tax purposes
pursuant to Section 48(q)(1) or 48(q)(3) of the Code, the amount of
such reduction shall, solely for purposes hereof, be deemed to be
an additional depreciation or cost recovery deduction in the year
such property is placed in service and shall be allocated among the
Partners pursuant to Section 6.1. Any restoration of such basis
pursuant to Section 48(q)(2) of the Code shall, to the extent
possible, be allocated in the same manner to the Partners to whom
such deemed deduction was allocated.
(c)
(i) A
transferee of a Partnership Interest shall succeed to a pro rata
portion of the Capital Account of the transferor relating to the
Partnership Interest so transferred.
(ii) Subject
to Section 6.7(c), immediately prior to the transfer of a
Subordinated Unit or of a Subordinated Unit that has converted
into a Common Unit pursuant to Section 5.7 by a holder thereof
(other than a transfer to an Affiliate unless the General
Partner elects to have this subparagraph 5.5(c)(ii) apply),
the Capital Account maintained for such Person with respect to
its Subordinated Units or converted Subordinated Units will
(A) first, be allocated to the Subordinated Units or converted
Subordinated Units to be transferred in an amount equal to the
product of (x) the number of such Subordinated Units or
converted Subordinated Units to be transferred and (y) the Per
Unit Capital Amount for a Common Unit, and (B) second, any
remaining balance in such Capital Account will be retained by
the transferor, regardless of whether it has retained any
Subordinated Units or converted Subordinated Units
(“Retained Converted Subordinated Units”).
Following any such allocation, the transferor’s Capital
Account, if any, maintained with respect to the retained
Subordinated Units or Retained Converted Subordinated Units,
if any, will have a balance equal to the amount allocated
under clause (B) hereinabove, and the transferee’s
Capital Account established with respect to the transferred
Subordinated Units or converted Subordinated Units will have a
balance equal to the amount allocated under clause (A)
hereinabove.
(iii) Immediately
prior to the transfer of a Class B Unit or of a Class B Unit
that has converted into a Common Unit pursuant to Section
5.11(c) by a holder thereof (other than a transfer to an
Affiliate unless the General Partner elects to have this
subparagraph 5.5(c)(iii) apply), the Capital Account
maintained for such Person with respect to its Class B Units
or converted Class B Units will (A) first, be allocated to the
Class B Units or converted Class B Units to be transferred in
an amount equal to the product of (x) the number of such Class
B Units or converted Class B Units to be transferred and (y)
the Per Unit Capital Amount for a Common Unit, and (B) second,
any remaining balance in such Capital Account will be retained
by the transferor, regardless of whether it has retained any
Class B Units or converted Class B Units (“Retained
Converted Class B Units”). Following any such
allocation, the transferor’s Capital Account, if any,
maintained with respect to the retained Class B Units or
converted Class B Units, if any, will have a balance equal to
the amount allocated under clause (B) above, and the
transferee’s Capital Account established with respect to
the transferred Class B Units or converted Class B Units will
have a balance equal to the amount allocated under clause (A)
hereinabove.
(d)
(i) In
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f),
on an issuance of additional Partnership Interests for cash or
Contributed Property, the issuance of Partnership Interests as
consideration for the provision of services or the conversion of
the General Partner’s Combined Interest to Common Units
pursuant to Section 11.3(b) , the
Capital Accounts of all Partners and the Carrying Value of each
Partnership property immediately prior to such issuance shall be
adjusted upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to such Partnership property, as if
such Unrealized Gain or Unrealized Loss had been recognized on an
actual sale of each such property for an amount equal to its fair
market value immediately prior to such issuance and had been
allocated to the Partners at such time pursuant to Section 6.1(b)(i) in the same manner as any
item of gain or loss actually recognized following an event giving
rise to the dissolution of the Partnership would have been
allocated. In determining such Unrealized Gain or Unrealized Loss,
the aggregate cash amount and fair market value of all Partnership
assets (including cash or cash equivalents) immediately prior to
the issuance of additional Partnership Interests shall be
determined by the General Partner using such method of valuation as
it may adopt; provided, however ,
that the General Partner, in arriving at such valuation, must take
fully into account the fair market value of the Partnership
Interests of all Partners at such time. The General Partner shall
allocate such aggregate value among the assets of the Partnership
(in such manner as it determines) to arrive at a fair market value
for individual properties.
(ii) In
accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f), immediately prior to any actual or
deemed distribution to a Partner of any Partnership property
(other than a distribution of cash that is not in redemption
or retirement of a Partnership Interest), the Capital Accounts
of all Partners and the Carrying Value of all Partnership
property shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such
Partnership property, as if such Unrealized Gain or Unrealized
Loss had been recognized on an actual sale of each such
property immediately prior to such distribution for an amount
equal to its fair market value, and had been allocated to the
Partners, at such time, pursuant to Section 6.1(b)(i) in the same manner as
any item of gain or loss actually recognized following an
event giving rise to the dissolution of the Partnership would
have been allocated. In determining such Unrealized Gain or
Unrealized Loss the aggregate cash amount and fair market
value of all Partnership assets (including cash or cash
equivalents) immediately prior to a distribution shall (A) in
the case of an actual distribution that is not made pursuant
to Section 12.4 or in the case of
a deemed distribution, be determined and allocated in the same
manner as that provided in Section
5.5(d) (i) or (B) in the case of a liquidating
distribution pursuant to Section
12.4 , be determined and allocated by the Liquidator using
such method of valuation as it may adopt.
(a)
The
Partnership may issue additional Partnership Securities and
options, rights, warrants and appreciation rights relating to the
Partnership Securities for any Partnership purpose at any time and
from time to time to such Persons for such consideration and on
such terms and conditions as the General Partner shall determine,
all without the approval of any Limited Partners.
(b)
Each
additional Partnership Security authorized to be issued by the
Partnership pursuant to Section 5.6(a) may be issued in one or more
classes, or one or more series of any such classes, with such
designations, preferences, rights, powers and duties (which may be
senior to existing classes and series of Partnership Securities),
as shall be fixed by the General Partner, including (i) the right
to share in Partnership profits and losses or items thereof; (ii)
the right to share in Partnership distributions; (iii) the rights
upon dissolution and liquidation of the Partnership; (iv) whether,
and the terms and conditions upon which, the Partnership may or
shall be required to redeem the Partnership Security (including
sinking fund provisions); (v) whether such Partnership Security is
issued with the privilege of conversion or exchange and, if so, the
terms and conditions of such conversion or exchange; (vi) the terms
and conditions upon which each Partnership Security will be issued,
evidenced by certificates and assigned or transferred; (vii) the
method for determining the Percentage Interest as to such
Partnership Security; and (viii) the right, if any, of each such
Partnership Security to vote on Partnership matters, including
matters relating to the relative rights, preferences and privileges
of such Partnership Security.
(c)
The
General Partner shall take all actions that it determines to be
necessary or appropriate in connection with (i) each issuance of
Partnership Securities and options, rights, warrants and
appreciation rights relating to Partnership Securities pursuant to
this Section 5.6, (ii) the conversion of the General Partner
Interest or any Incentive Distribution Rights into Units pursuant
to the terms of this Agreement, (iii) the admission of Additional
Limited Partners and (iv) all additional issuances of Partnership
Securities. The General Partner shall determine the relative
rights, powers and duties of the holders of the Units or other
Partnership Securities being so issued. The General Partner shall
do all things necessary to comply with the Delaware Act and is
authorized and directed to do all things that it determines to be
necessary or appropriate in connection with any future issuance of
Partnership Securities or in connection with the conversion of the
General Partner Interest or any Incentive Distribution Rights into
Units pursuant to the terms of this Agreement, including compliance
with any statute, rule, regulation or guideline of any federal,
state or other governmental agency or any National Securities
Exchange on which the Units or other Partnership Securities are
listed or admitted to trading.
(a)
All
of the Subordinated Units will convert into Common Units on a
one-for-one basis on the second Business Day following the
distribution of Available Cash to Partners pursuant to Section
6.3(a) in respect of any Quarter ending on or after December 31,
2006, in respect of which:
(i)
distributions
of Available Cash from Operating Surplus under Section 6.4 on each
of the Outstanding Common Units, Class B Units, Subordinated Units
and any other Outstanding Units that are senior or equal in right
of distribution to the Subordinated Units with respect to the
four-Quarter period immediately preceding such date equaled or
exceeded the sum of the Third Target Distribution (treating the
Class B Unit Quarterly Distribution as the Third Target
Distribution with respect to the Class B Units for this purpose) on
all of the Outstanding Common Units, Class B Units, Subordinated
Units and any other Outstanding Units that are senior or equal in
right of distribution to the Subordinated Units during
such period;
(ii)
the
Adjusted Operating Surplus for the four-Quarter period immediately
preceding such date equaled or exceeded the sum of the Third Target
Distribution (treating the Class B Unit Quarterly Distribution as
the Third Target Distribution with respect to the Class B Units for
this purpose) on all of the Common Units, Class B Units,
Subordinated Units and any other Units that are senior or equal in
right of distribution to the Subordinated Units that were
Outstanding during such period on a Fully Diluted Basis, plus the
related distribution on the General Partner Units during such
period; and
(iii)
there
are no Cumulative Common Unit Arrearages.
(b)
If
the Subordinated Units are not converted into Common Units pursuant
to Section 5.7(a), the Subordinated Units shall convert into Common
Units on a one-for-one basis upon the expiration of the
Subordination Period.
(c)
Notwithstanding
any other provision of this Agreement, all the Subordinated Units
will automatically convert into Common Units on a one-for-one basis
as set forth in, and pursuant to the terms of, Section
11.4.
(d)
A
Subordinated Unit that has converted into a Common Unit shall be
subject to the provisions of Section 6.7.
Except
as provided in this Section 5.8 and in Section 5.2, no Person
shall have any preemptive, preferential or other similar right
with respect to the issuance of any Partnership Security,
whether unissued, held in the treasury or hereafter created.
The General Partner shall have the right, which it may from
time to time assign in whole or in part to any of its
Affiliates, to purchase Partnership Securities from the
Partnership whenever, and on the same terms that, the
Partnership issues Partnership Securities to Persons other
than the General Partner and its Affiliates, to the extent
necessary to maintain the Percentage Interests of the General
Partner and its Affiliates equal to that which existed
immediately prior to the issuance of such Partnership
Securities.
(a)
Subject
to Sections 5.9(d), 6.6 and 6.9 (dealing with adjustments of
distribution levels), the Partnership may make a Pro Rata
distribution of Partnership Securities to all Record Holders or may
effect a subdivision or combination of Partnership Securities so
long as, after any such event, each Partner shall have the same
Percentage Interest in the Partnership as before such event, and
any amounts calculated on a per Unit basis are proportionately
adjusted. For the avoidance of doubt, upon any Pro Rata
distribution of Partnership Securities to all Record Holders of
Common Units or any subdivision or combination (or reclassified
into a greater or smaller number) of Common Units, the Partnership
will proportionately adjust the number of Class B Units as
follows: (a) if the Partnership issues Partnership
Securities as a distribution on its Common Units or subdivides the
Common Units (or reclassifies them into a greater number of Common
Units) then the Class B Units shall be subdivided into a number of
Class B Units equal to the result of multiplying the number of
Class B Units by a fraction, (A) the numerator of which shall be
the sum of the number of Common Units outstanding immediately prior
to such distribution or subdivision plus the total number of
Partnership Securities constituting such distribution or newly
created by such subdivision; and (B) the denominator of which shall
be the number of Common Units outstanding immediately prior to such
distribution or subdivision; and (b) if the Partnership combines
the Common Units (or reclassifies them into a smaller number of
Common Units) then the Class B Units shall be combined into a
number of Class B Units equal to the result of multiplying the
number of Class B Units by a fraction, (A) the numerator of which
shall be the sum of the number of Common Units outstanding
immediately following to such combination; and (B) the denominator
of which shall be the number of Common Units outstanding
immediately prior to such combination.
(b)
Whenever
such a distribution, subdivision or combination of Partnership
Securities is declared, the General Partner shall select a Record
Date as of which the distribution, subdivision or combination shall
be effective and shall send notice thereof at least 20 days prior
to such Record Date to each Record Holder as of a date not less
than 10 days prior to the date of such notice. The General Partner
also may cause a firm of independent public accountants selected by
it to calculate the number of Partnership Securities to be held by
each Record Holder after giving effect to such distribution,
subdivision or combination. The General Partner shall be entitled
to rely on any certificate provided by such firm as conclusive
evidence of the accuracy of such calculation.
(c)
Promptly
following any such distribution, subdivision or combination, the
Partnership may issue Certificates to the Record Holders of
Partnership Securities as of the applicable Record Date
representing the new number of Partnership Securities held by such
Record Holders, or the General Partner may adopt such other
procedures that it determines to be necessary or appropriate to
reflect such changes. If any such combination results in a smaller
total number of Partnership Securities Outstanding, the Partnership
shall require, as a condition to the delivery to a Record Holder of
such new Certificate, the surrender of any Certificate held by such
Record Holder immediately prior to such Record Date.
(d)
The
Partnership shall not issue fractional Units upon any distribution,
subdivision or combination of Units. If a distribution, subdivision
or combination of Units would result in the issuance of fractional
Units but for the provisions of this Section 5.9(d), each
fractional Unit shall be rounded to the nearest whole Unit (and a
0.5 Unit shall be rounded to the next higher Unit).
All
Limited Partner Interests issued pursuant to, and in
accordance with the requirements of, this Article V shall be
fully paid and non-assessable Limited Partner Interests in the
Partnership, except as such non-assessability may be affected
by Section 17-607 of the Delaware Act.
(a)
There
is hereby created a series of Limited Partner Units to be
designated as “Class B Units,” consisting of a total of
22,866,667 Class B Units and having the terms and conditions set
forth herein.
(b)
The
holders of the Class B Units shall have rights upon dissolution and
liquidation of the Partnership, including the right to share in any
liquidating distributions pursuant to Section 12.4, in accordance
with Article XII of the Partnership Agreement.
(c)
(i) Subject
to and upon compliance with this Section 5.11(c), at the option of
the holders of Class B Units, any and all Class B Units may be
converted into fully paid and nonassessable Common Units
(calculated in Common Units as to each conversion to seven decimal
places and rounded down to six decimal places) as hereinafter
provided (the “ Conversion ”);
provided,
however , such conversion right (the “ Conversion Right
”)
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