|
12.04
|
Effect of
Waiver or Consent
|
24
|
|
12.05
|
Amendment or
Modification
|
24
|
|
12.06
|
Binding Effect;
Joinder of Additional Parties
|
24
|
|
12.07
|
Construction
|
25
|
|
12.08
|
Further
Assurances
|
25
|
|
12.09
|
Indemnification
|
25
|
|
12.10
|
Waiver of
Certain Rights
|
25
|
|
12.11
|
Counterparts
|
25
|
|
12.12
|
Dispute
Resolution
|
25
|
|
12.13
|
No Effect on
Employment Relationship
|
28
|
|
12.14
|
Legal
Representation
|
28
|
AGREEMENT OF LIMITED
PARTNERSHIP
OF
EPCO UNIT L.P.
This Agreement of Limited Partnership (this
“ Agreement ”) of EPCO Unit L.P.,
a Delaware limited partnership (the “ Partnership
”), is made and entered into effective as of November 13,
2008 by and among the Partners (as defined below).
RECITALS
FOR AND IN CONSIDERATION OF the mutual
covenants, rights, and obligations set forth herein, the benefits
to be derived therefrom, and other good and valuable consideration,
the receipt and sufficiency of which each Partner acknowledges and
confesses, the Partners hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01
Certain
Definitions . As used in this Agreement, the
following terms have the following respective meanings:
“ Act ” means the Delaware
Revised Uniform Limited Partnership Act and any successor statute,
as amended from time to time.
“ Adjusted Capital Account ”
means, with respect to any Partner, the balance in such
Partner’s Capital Account after giving effect to the
following adjustments:
(a) Credit
to such Capital Account of any amounts that such Partner is
obligated or deemed obligated to contribute pursuant to the
penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5)
of the Regulations; and
(b) Debit
to such Capital Account the items described in Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
1.704-1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing
definition of Adjusted Capital Account is intended to comply with
the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations
and shall be interpreted consistently therewith.
“ Adjustment Date ” means (i)
the date on which any distributions are made pursuant to Section
5.03 , but no later than the fifth Business Day following the
payment date for each distribution made by EPD with respect to the
EPD Units, and (ii) as soon as practicable following the receipt of
proceeds by the Partnership from the disposition of EPD Units, but
no later than the fifth Business Day following the receipt of any
proceeds by the Partnership from the disposition of EPD
Units.
“ Affiliate ” means with
respect to any Person any other Person that directly or indirectly
through one or more intermediaries, controls or is controlled by,
or is under common control with, the Person
specified. For the purpose of this definition, “
control ” shall mean the
possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by
contract or otherwise.
“ Agreement ” has the meaning
given it in the introductory paragraph hereof.
“ Applicable Percentage ”
means with respect to a disposition of less than all the EPD Units
owned by the Partnership, the quotient (expressed as a percentage)
of the number of EPD Units held by the Partnership immediately
after such disposition divided by the number of EPD Units held by
the Partnership immediately before such disposition.
“ Bankrupt Partner ” means
any Partner (whether a General Partner or a Limited Partner) with
respect to which an event of the type described in Section
17-402(a)(4) or (5) of the Act (or any equivalent successor
provision) shall have occurred, subject to the lapsing of any
period of time therein specified.
“ Business Day ” means any
day other than a Saturday, Sunday, or day on which commercial banks
in the State of Texas are authorized or required to be closed for
business.
“ Capital Account ” means the
account maintained for each Partner pursuant to
Section 4.04 .
“ Capital Contribution ”
means any contribution by a Partner to the capital of the
Partnership.
“ Certificate ” means the
Certificate of Limited Partnership of the Partnership referred to
in Section 2.05 , as it may be amended or restated from
time to time.
“ Change of Control ” means
Duncan shall (i) cease to own, directly or indirectly, at least a
majority of the equity interests in the General Partner or the
general partners of EPD or (ii) shall cease to have the ability to
elect, directly or indirectly, at least a majority of the directors
of the general partners of EPD.
“ Class A Capital Base ”
means the amount of any contributions of cash or cash equivalents
made by the Class A Limited Partner to the Partnership, adjusted on
each Adjustment Date as follows:
(a) increased
by the Class A Preference Return that has accrued since the
previous Adjustment Date (or in the case of the first Adjustment
Date, since the Closing Date); and
(b) decreased
by all distributions made to the Class A Limited Partner since the
previous Adjustment Date (or in the case of the first Adjustment
Date, since the Closing Date).
“ Class A Limited Partner ”
means DFI Delaware Holdings L.P., a Delaware limited partnership,
and its successors and assigns.
“ Class A Preference Return ”
means the sum of the amounts determined for each day, equal to (i)
the Class A Preference Return Rate multiplied by (ii) the Class A
Capital Base plus the amount, if any, of guarantees issued by the
Class A Limited Partner or its affiliate in lieu of collateral that
would otherwise be required pursuant to margin loans or other loans
made to the Partnership.
“ Class A Preference Return Amount
” means the aggregate Class A Preference Return minus all
prior distributions to the Class A Limited Partner pursuant to
Sections 5.03(a) and 5.04(a) .
“ Class A Preference Return Rate
” means a percent per annum equal to 4.87%, divided by 365 or
366 days, as the case may be during such calendar
year.
“ Class B Limited Partner ”
means any Person executing (by power of attorney or otherwise) this
Agreement as of the date hereof as a Class B Limited Partner or
hereafter admitted to the Partnership as a Class B Limited Partner
as herein provided, but shall not include any Person who has ceased
to be a Class B Limited Partner in the Partnership.
“ Class B Percentage Interest
” means with respect to each Class B Limited Partner the
quotient (expressed as a percentage) of (i) such Class B Limited
Partner’s Sharing Points, divided by (ii) the Sharing Points
of all Class B Limited Partners. For purposes of
calculating the Class B Percentage Interest, Sharing Points
attributable to interests in the Partnership that are forfeited
pursuant to Section 3.07 shall be ignored.
“ Closing Date ” means the
date on which the Class A Limited Partner first contributes the
Initial Contribution to the Partnership.
“ Code ” means the Internal
Revenue Code of 1986, and any successor statute, as amended from
time to time.
“ Default Interest Rate ”
means a varying per annum rate equal at any given time to the
lesser of (a) four percentage points in excess of the General
Interest Rate and (b) the maximum rate permitted by applicable
law.
“ Disability ” means the
event whereby a Limited Partner becomes entitled to receive
long-term disability benefits under the long-term disability plan
of the General Partner or any of its Affiliates.
“ Dispose ,” “
Disposing ,” or “ Disposition ”
means a sale, assignment, transfer, exchange, mortgage, pledge,
grant of a security interest, or other disposition or encumbrance,
or the acts thereof, other than by divorce, legal separation or
other dissolution of a Partner’s marriage.
“ Duncan ” means,
collectively, individually or in any combination, Dan L. Duncan,
his wife, descendants, heirs and/or legatees and/or distributees of
Dan L. Duncan’s estate, and/or trusts established for the
benefit of his wife, descendants, such legatees and/or distributees
and/or their respective descendants, heirs, legatees and
distributees.
“ EPCO ” means EPCO, Inc., a
Texas corporation.
“ EPD ” means Enterprise
Products Partners LP, a Delaware limited partnership, and its
successors.
“ EPD Units ” means common
units representing limited partner interests in EPD.
“ General Interest Rate ”
means a varying per annum rate equal at any given time to the
lesser of (a) the interest rate publicly quoted by J.P. Morgan
Chase from time to time as its prime commercial or similar
reference interest rate, and (b) the maximum rate permitted by
applicable law.
“ General Partner ” means
EPCO or any Person hereafter admitted to the Partnership as a
general partner as herein provided, but shall not include any
Person who has ceased to be a general partner in the
Partnership.
“ Initial Contribution ” has
the meaning given in Section 4.01 hereof.
“ Limited Partner ” means the
Class A Limited Partner or any Class B Limited Partner.
“ Net Income ” and “
Net Loss ” mean, respectively, subject to
Section 4.04 , an amount equal to the
Partnership’s taxable income or loss determined in accordance
with Code Section 703(a) (for this purpose, all items of income,
gain, loss, or deduction required to be stated separately pursuant
to Code Section 703(a)(1) shall be included in taxable income or
loss), with the following adjustments:
(a) Any
income of the Partnership that is exempt from federal income tax
and not otherwise taken into account in computing Net Income or Net
Loss pursuant to this definition of Net Income and Net Loss shall
be added to such taxable income or loss;
(b) Any
expenditures of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures
pursuant to Section 1.704-1(b)(2)(iv)(i) of the Regulations, and
not otherwise taken into account in computing Net Income or Net
Loss pursuant to this definition of Net Income and Net Loss, shall
be subtracted from such taxable income or loss;
(c) In
the event the value of any Partnership property is adjusted
pursuant to Section 4.04 (i) such adjustment shall be
taken into account as gain or loss from the disposition of such
Partnership property for purposes of computing Net Income or Net
Loss, (ii) if such property is subject to depreciation, cost
recovery, depletion or amortization, any further deductions for
such depreciation, cost recovery, depletion or amortization
attributable to such property shall be determined taking into
account such adjustment, and (iii) in determining the amount of any
income, gain or loss attributable to the taxable disposition of
such property such adjustment (and the related adjustments for
depreciation, cost recovery, depletion or amortization) shall be
taken into account;
(d) To
the extent an adjustment to the adjusted tax basis of any
Partnership Property pursuant to Code Section 734(b) is required,
pursuant to Section 1.704-1(b)(2)(iv)(m)(4) of the Regulations, to
be taken into account in determining Capital Accounts as a result
of a Distribution other than in liquidation of a Partner’s
interest in the
Partnership, the amount of such adjustment shall
be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such
basis) from the disposition of such Partnership Property and shall
be taken into account for purposes of computing Net Income or Net
Loss; and
(e) Any
items that are allocated pursuant to Section 5.01(b)
shall not be taken into account in computing Net Income or Net
Loss.
“ Partner ” means the General
Partner, the Class A Limited Partner or any Class B Limited
Partner.
“ Partnership ” has the
meaning given it in the introductory paragraph.
“ Person ” has the meaning
given it in the Act.
“ Qualifying Termination ”
means the termination of a Class B Limited Partner’s
employment with the General Partner and its Affiliates due to (i)
death, (ii) receiving long-term disability benefits under the
long-term disability plan of the General Partner or any of its
Affiliates or (iii) retirement with the approval of the General
Partner on or after reaching age 60.
“ Regulations ” means the
regulations promulgated under Section 704 of the Code.
“ Required Interest ” means
one or more Class B Limited Partners having among them more than
50% of the Class B Percentage Interests of all Limited Partners in
its or their capacities as such.
“ Sharing Points ” means,
with respect to each Class B Limited Partner, the number of Sharing
Points granted by the General Partner to such Class B Limited
Partner (which number is set forth on the Power of Attorney
executed by the Class B Limited Partner and delivered to the
General Partner), as the same may be amended from time to time
pursuant to the terms of this Agreement.
“ Vesting Date ” means the
earliest of (i) the fifth anniversary of the date of this
Agreement, (ii) a Change of Control or (iii) dissolution of the
Partnership.
1.02
Other
Definitions . Other terms defined herein have the
meanings so given them.
ARTICLE II
ORGANIZATIONAL
MATTERS
2.01
Formation
. The Partnership has
been previously formed as a Delaware limited partnership for the
purposes hereinafter set forth under and pursuant to the provisions
of the Act.
2.02
Name
. The name of the
Partnership is “EPCO Unit L.P.” and all Partnership
business shall be conducted in such name or such other name or
names that comply with applicable law as the General Partner may
designate from time to time.
2.03
Registered Office; Registered
Agent; Other Offices . The registered office of the
Partnership in the State of Delaware shall be at such place as the
General Partner may designate from time to time. The
registered agent for service of process on the Partnership in the
State of Delaware or any other jurisdiction shall be such Person or
Persons as the General Partner may designate from time to
time. The Partnership may have such other offices as the
General Partner may designate from time to time.
2.04
Purposes
. The purposes of the
Partnership are to acquire, own, sell, exchange or otherwise
dispose of EPD Units, and to enter into, make and perform all
contracts and other undertakings and to engage in any other
business, activity or transaction that now or hereafter may be
necessary, incidental, proper, advisable, or convenient, as
determined by the General Partner, to accomplish the foregoing
purposes. For purposes of clarification and without
limiting the foregoing, the General Partner may acquire any EPD
Units and make any allocation in acquiring EPD Units in its sole
discretion, and may incur indebtedness in connection with the
acquisition of EPD Units in its sole discretion.
2.05
Certificate; Foreign
Qualification . The General Partner has previously
executed and caused to be filed with the Secretary of State of the
State of Delaware a Certificate of Limited Partnership, effective
as of September 25, 2008, containing information required by the
Act and such other information as the General Partner deemed
appropriate. Prior to conducting business in any
jurisdiction other than Delaware, the General Partner shall cause
the Partnership to comply, to the extent such matters are
reasonably within the control of the General Partner, with all
requirements necessary to qualify the Partnership as a foreign
limited partnership (or a partnership in which the Limited Partners
have limited liability) in such jurisdiction. Upon the
request of the General Partner, each Partner shall execute,
acknowledge, swear to, and deliver all certificates and other
instruments conforming with this Agreement that are necessary or
appropriate as determined by the General Partner to qualify,
continue, and terminate the Partnership as a limited partnership
under the laws of the State of Delaware and to qualify, continue,
and terminate the Partnership as a foreign limited partnership (or
a partnership in which the Limited Partners have limited liability)
in all other jurisdictions in which the Partnership may conduct
business, and to this end the General Partner may use the power of
attorney described in Section 6.04 .
2.06
Term
. The term of this
Partnership shall continue in existence until the close of
Partnership business on the earliest to occur of (i) the fiftieth
anniversary of the date of this Agreement, and (ii) such earlier
time as this Agreement may specify.
2.07
Merger or
Consolidation . The Partnership may merge or
consolidate with or into another business entity, or enter into an
agreement to do so, with the consent of the General Partner and a
Required Interest.
ARTICLE III
PARTNERS; DISPOSITIONS OF
INTERESTS
3.01
Partners
. The General Partner,
the Class A Limited Partner and the Class B Limited Partners of the
Partnership are the Persons executing (by power of attorney or
otherwise)
this Agreement as of the date hereof as the
General Partner, the Class A Limited Partner and the Class B
Limited Partners, respectively, each of which is admitted to the
Partnership as the General Partner, Class A Limited Partner or a
Class B Limited Partner, as the case may be, effective as of the
date hereof.
3.02
Representations and
Warranties . Each Partner hereby represents and
warrants to the Partnership and each other Partner that (a) if such
Partner is a corporation, it is duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified and in good standing as a
foreign corporation in the jurisdiction of its principal place of
business (if not incorporated therein), (b) if such Partner is a
trust, estate or other entity, it is duly formed, validly existing,
and (if applicable) in good standing under the laws of the
jurisdiction of its formation, and if required by law is duly
qualified to do business and (if applicable) in good standing in
the jurisdiction of its principal place of business (if not formed
therein), (c) such Partner has full corporate, trust, or other
applicable right, power and authority to enter into this Agreement
and to perform its obligations hereunder and all necessary actions
by the board of directors, trustees, beneficiaries, or other
Persons necessary for the due authorization, execution, delivery,
and performance of this Agreement by such Partner have been duly
taken, and such authorization, execution, delivery, and performance
do not conflict with any other agreement or arrangement to which
such Partner is a party or by which it is bound, and (d) such
Partner is acquiring its interest in the Partnership for investment
purposes and not with a view to distribution thereof.
3.03
Restrictions on the
Disposition of an Interest .
(a) No Class B
Limited Partner may Dispose of all or part of its interest in the
Partnership without the prior written consent (which may be given
or withheld in its sole discretion) of the General Partner, and
then only after Sections 3.03(c) , (d) and
(e) have been complied with, except that Class B Limited
Partners may Dispose of all of its interest upon the death of such
Class B Limited Partner or upon becoming a Bankrupt Partner, but in
each case only after compliance with Sections 3.03(c) ,
(d) and (e) . Neither the General Partner
nor the Class A Limited Partner may Dispose of all or a part of its
interest in the Partnership to a Person who is not an Affiliate of
Duncan without the prior written consent of a Required Interest,
and then only after Sections 3.03(c) , (d) and
(e) have been complied with.
(b) Subject to
the provisions of Sections 3.03(c) , (d) and
(e) , a permitted transferee of all or a part of a
Partner’s interest in the Partnership shall be admitted to
the Partnership as a General Partner or a Limited Partner (as
applicable) with, in the case of Class B Limited Partners, such
Sharing Points (no greater than the Sharing Points of the Class B
Limited Partners effecting such Disposition immediately prior
thereto) as the Partner effecting such Disposition and such
permitted transferee may agree.
(c) The
Partnership shall not recognize for any purpose any purported
Disposition of an interest in the Partnership or distributions
therefrom unless and until the provisions of this
Section 3.03 shall have been satisfied and there shall
have been delivered to the General Partner a document (i) executed
by both the Partner effecting such Disposition and the Person to
which such interest or interest in distributions are to be
Disposed, (ii) including the written acceptance by any Person to be
admitted to the Partnership of all the terms and
provisions of this Agreement, such
Person’s notice address, and an agreement by such Person to
perform and discharge timely all of the obligations and liabilities
in respect of the interest being obtained, (iii) setting forth, in
the case of the Class B Limited Partners, the Sharing Points of the
Class B Limited Partners effecting such Disposition and the Person
to which such interest is Disposed after such Disposition (which
together shall total the Sharing Points of the Class B Limited
Partners effecting such Disposition prior thereto), (iv) containing
a representation and warranty that such Disposition complied with
all applicable laws and regulations (including securities laws) and
a representation and warranty by such Person that the
representations and warranties in Section 3.02 are true
and correct with respect to such Person. Each such
Disposition and, if applicable, admission shall be effective as of
the first day of the calendar month immediately succeeding the
month in which the General Partner shall receive such notification
of Disposition and the other requirements of this
Section 3.03 shall have been met unless the General
Partner and the Partner affecting such Disposition agree to a
different effective date; provided , however , that
if there shall be only one General Partner and such Disposition or
admission and, as a result of such Disposition such General Partner
would cease to be a General Partner, such permitted transferee
shall be deemed admitted as a General Partner immediately prior to
such cessation.
(d)
Notwithstanding any provision of this Agreement to the
contrary, the right of any Partner to Dispose of an interest in the
Partnership or distributions therefrom or of any Person to be
admitted to the Partnership in connection therewith shall not exist
or be exercised (i) unless and until the Partnership shall
have received a favorable opinion of the Partnership’s legal
counsel or of other legal counsel acceptable to the General Partner
to the effect that such Disposition or admission is not required to
be registered under the Securities Act of 1933 or any other
applicable securities laws, and such Disposition or admission would
not cause the Partnership to become an “investment
company” required to register under the Investment Company
Act of 1940, and (ii) unless such Disposition or admission would
not result in the Partnership being treated as an association
taxable as a corporation for federal income tax purposes or as a
publicly traded partnership as defined in Section 7704 of the
Code. The General Partner, however, may waive the
requirements of Section 3.03(d)(i) .
(e) All costs
(including, without limitation, the legal fees incurred in
connection with the obtaining of the legal opinions referred to in
Section 3.03(d) ) incurred by the Partnership in connection
with any Disposition or admission of a Person to the Partnership
pursuant to this Section 3.03 shall be borne and paid
by the Partner effecting such Disposition within 10 days after the
receipt by such Person of the Partnership’s invoice for the
amount due.
(f) In the event
of a Disposition of an interest in the Partnership pursuant to the
death of a Limited Partner that would, in the opinion of the
Partnership’s legal counsel, result in the Partnership
becoming an “investment company” required to register
under the Investment Company Act of 1940, the General Partner shall
have the right to purchase such interest from the estate (or
beneficiaries) of such deceased Partner for a price equal to the
amount that the deceased Partner’s estate (or beneficiaries)
would receive if all of the EPD Units held by the Partnership were
sold at a price equal to the closing sale price per EPD Unit as
reported by the New York Stock Exchange (or such other
applicable trading market) on the day prior to the exercise of such
right by the General Partner and the proceeds from such sale were
distributed to the Partners in accordance with the provisions of
Section 5.04 . The determination by the
General
Partner of the foregoing purchase price of such
deceased Partner’s interest in the Partnership shall be
conclusive and binding on the deceased Partner’s estate and
beneficiaries.
(g) Any
attempted Disposition by a Person of an interest or right, or any
part thereof, in or in respect of the Partnership other than in
accordance with this Section 3.03 shall be, and is
hereby declared, null and void ab initio .
3.04
Additional
Partners . Subject to the provisions of
Sections 12.05 and 3.03 , additional Persons may
be admitted to the Partnership as General Partners or Limited
Partners, only to the extent that, and on such terms and conditions
as, the General Partner shall consent at the time of such admission
or issuance. Such admission or issuance shall, in the
case of a Class B Limited Partner, specify the Sharing Points
applicable thereto. Any such admission must comply with
the provisions of Section 3.03(d) and shall not be
effective until such new Partner shall have executed and delivered
to the General Partner a document including such new
Partner’s notice address, acceptance of all the terms and
provisions of this Agreement, an agreement to perform and discharge
timely all of its obligations and liabilities hereunder, and a
representation and warranty that the representations and warranties
in Section 3.02 are true and correct with respect to
such new Partner.
3.05
Interests in a
Partner . No Partner that is not a natural
person shall cause or permit an interest, direct or indirect, in
itself to be Disposed of such that, on account of such Disposition,
the Partnership would become an association taxable as a
corporation for federal income tax purposes.
3.06
Spouses of
Partners . A spouse of a Partner does not
become a Partner as a result of such marital relationship or by
reason of a divorce, legal separation or other dissolution of
marriage. If, in the event of a divorce, legal
separation or other dissolution of marriage of a Partner, a former
spouse of a Partner is awarded ownership of, or an interest in, all
or part of a Partner’s interest in the Partnership (the
“ Awarded Interest ”), the Awarded Interest
shall automatically and immediately be forfeited and cancelled
without payment on such date.
3.07
Vesting of Limited
Partners . One hundred percent (100%) of each
Class B Limited Partner’s interest in the Partnership shall
vest on the Vesting Date, but only if (i) on such date such Class B
Limited Partner continues to be an active, full-time employee of
the General Partner or any of its Affiliates or (ii) prior to the
Vesting Date, a Qualifying Termination has occurred with respect to
such Class B Limited Partner. At such time as a Class B
Limited Partner ceases, for any reason other than a Qualifying
Termination, to be an active, full-time employee of the General
Partner or any of its Affiliates prior to the Vesting Date, his
unvested interest in the Partnership shall be
forfeited. If a Class B Limited Partner ceases to be an
active, full-time employee prior to the Vesting Date, as determined
by the General Partner in its sole discretion, without regard as to
how his status is treated by the General Partner or any of its
Affiliates for any of its other compensation or benefit plans or
programs, the Class B Limited Partner will be deemed to have
terminated employment with the General Partner and its Affiliates
and forfeited his unvested interest in the Partnership for purposes
of this Agreement. The Capital Account attributable to
any Class B Limited Partner’s interest in the Partnership
that is forfeited pursuant to Section 3.06 , this
Section 3.07 or otherwise hereunder shall be
allocated
to the remaining Class B Limited Partners in
accordance with their respective Class B Participation
Interests.
3.08
Services Provided by the
Partners . The interests in the Partnership
held by the Partners are for the benefit of certain employees in
connection with services rendered or to be rendered by the
Partners. EPCO shall be an express third-party
beneficiary of the services provided by the Partners.
ARTICLE IV
CAPITAL
CONTRIBUTIONS
4.01
Initial and Additional
Capital Contributions . In connection with the formation of
the Partnership, the General Partner contributed $1,000 to the
Partnership on the Closing Date and the Class A Limited Partner has
agreed to contribute to the Partnership 779,102 EPD Units (with a
value of approximately $17,000,000, based on the closing price of
the EPD Units on the New York Stock Exchange on the day prior to
the Closing Date) (the “ Initial Contribution
”). No Class B Limited Partner is obligated to
make a contribution to the Partnership. Subject to the
provisions of applicable law or except as otherwise provided for
herein, no Partner shall be liable for or obligated to make an
additional Capital Contribution to the Partnership, whether for the
purpose of enabling the Partnership to meet its obligations under
Section 6.03 or for any other purpose. The
Class A Limited Partner, in its sole discretion and without the
consent of any of the Class B Limited Partners or the General
Partner, may make additional Capital Contributions in excess of the
Initial Contribution, provided that any such voluntary additional
Capital Contributions will not have the effect of changing the
Sharing Points of any Class B Limited Partner. The
initial Capital Account of the General Partner is $1,000, the
initial Capital Account of the Class A Limited Partner as of the
Closing Date is the fair market value of the Initial Contribution,
based upon the closing price of the EPD Units on the New York Stock
Exchange on the Closing Date, and the initial Capital Account of
each Class B Limited Partner is zero.
4.02
Return of
Contributions . No Partner shall be entitled to the
return of any part of its Capital Contributions or to be paid
interest in respect of either its Capital Account or any Capital
Contribution made by it. No unrepaid Capital
Contribution shall be deemed or considered to be a liability of the
Partnership or of any Partner. No Partner shall be
required to contribute, advance or lend any cash or property to the
Partnership to enable the Partnership to return any Partner’s
Capital Contributions to the Partnership. To the extent,
however, any Partner (by mistake, overpayment or otherwise)
advances funds to the Partnership in excess of the Capital
Contributions called for under Section 4.01 , such
excess amounts shall not be Capital Contributions and (other than
advances made by the General Partner pursuant to
Section 4.03 below) shall be promptly returned by the
Partnership to the Partner so advancing such funds.
4.03
Advances by General
Partner . At any time that the Partnership
shall not have sufficient cash to pay its obligations, the General
Partner may, but shall not be obligated to, advance such funds for
or on behalf of the Partnership. Each such advance shall
constitute a loan from the General Partner to the Partnership and
shall bear interest from the date of the advance until the date of
repayment at the General Interest Rate. Any advances
made by the General Partner pursuant to this
Section 4.03 shall not be considered to be Capital
Contributions. All
advances shall be repaid out of the next
available funds of the Partnership, including Capital Contributions
received.
4.04
Capital
Accounts . A Capital Account shall be
established and maintained for each Partner. Each
Partner’s Capital Account (a) shall be increased by (i) the
amount of money contributed by that Partner to the Partnership,
(ii) the fair market value of property, if any, contributed by that
Partner to the Partnership (net of liabilities secured by such
contributed property that the Partnership is considered to assume
or take subject to under Section 752 of the Code), and (iii)
allocations to that Partner of Partnership income and gain (or
items thereof), including income and gain exempt from tax and
income and gain described in Regulation Section
1.704-1(b)(2)(iv)(g), but excluding income and gain described in
Regulation Section 1.704-1(b)(4)(i), and (b) shall be decreased by
(i) the amount of money distributed to that Partner by the
Partnership, (ii) the fair market value of property distributed to
that Partner by the Partnership (net of liabilities secured by such
distributed property that such Partner is considered to assume or
take subject to under Section 752 of the Code), (iii) allocations
to that Partner of expenditures of the Partnership described in
Section 705(a)(2)(B) of the Code, and (iv) allocations of
Partnership loss and deduction (or items thereof), including loss
and deduction described in Regulation Section 1.704-1(b)(2)(iv)(g),
but excluding items described in clause (b)(iii) above and
loss or deduction described in Regulation Section
1.704-1(b)(4)(i). The Partners’ Capital Accounts
also shall be maintained and adjusted as permitted by the
provisions of Regulation Section 1.704-1(b)(2)(iv)(f) and as
required by the other provisions of Regulation Sections
1.704-1(b)(2)(iv) and 1.704-1(b)(4), including adjustments to
reflect the allocations to the Partners of depreciation,
amortization, and gain or loss as computed for book purposes rather
than the allocation of the corresponding items as computed for tax
purposes, as required by Regulation Section
1.704-1(b)(2)(iv)(g). A Partner that has more than one
interest in the Partnership shall have a single Capital Account
that reflects all such interests, regardless of the class of
interests owned by such Partner and regardless of the time or
manner in which such interests were acquired; provided ,
that Partners that are Affiliates but nevertheless separate legal
entities shall have separate Capital Accounts. Upon the
transfer of all or part of an interest in the Partnership, the
Capital Account of the transferor that is attributable to the
transferred interest in the Partnership shall carry over to the
transferee Partner in accordance with the provisions of Regulation
Section 1.704-1(b)(2)(iv)(l).
ARTICLE V
ALLOCATIONS AND
DISTRIBUTIONS
(a) Net
Income and Net Loss . For purposes of maintaining
the Capital Accounts, Net Income or Net Loss (and all items
included in the computation thereof) shall be allocated among the
Partners as follows:
(A) First, to
the Class A Limited Partner until the Class A Limited
Partner’s Adjusted Capital Account equals the Class A Capital
Base; and
(B) Thereafter,
to the Class B Limited Partners in accordance with their respective
Class B Percentage Interests.
(ii) Net
Loss :
(A) First, to
the Class B Limited Partners in accordance with their respective
Class B Percentage Interests until the Adjusted Capital Accounts of
the Class B Limited Partners are reduced to zero; and
(B) Thereafter,
to the Class A Limited Partner.
(b) Special
Allocations . Notwithstanding any other provision of
this Section 5.01 , the following special allocations
shall be made for such taxable period:
(i)
Partnership Minimum Gain Chargeback
. Notwithstanding any other provision of this
Section 5.01 , if there is a net decrease in
Partnership Minimum Gain during any Partnership taxable period,
each Partner shall be allocated it
