Exhibit 3.2
Execution Copy
AMENDED
AND RESTATED
AGREEMENT
OF LIMITED PARTNERSHIP
OF
U.S.
SHIPPING PARTNERS L.P.
TABLE OF
CONTENTS
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AMENDED AND RESTATED AGREEMENT OF
LIMITED
PARTNERSHIP OF U.S. SHIPPING PARTNERS L.P.
THIS AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP OF U.S. SHIPPING PARTNERS L.P. dated as of
November 3, 2004, is entered into by and between US Shipping
General Partner LLC, a Delaware limited liability company, as the
General Partner, and United States Shipping Master LLC, a Delaware
limited liability company, as the Organizational Limited Partner,
together with any other Persons who become Partners in the
Partnership or parties hereto as provided herein. In consideration
of the covenants, conditions and agreements contained herein, the
parties hereto hereby agree as follows:
The following definitions shall be
for all purposes, unless otherwise clearly indicated to the
contrary, applied to the terms used in this Agreement.
“ Accretion Test
” has the meaning assigned to such term in Section
5.7(f).
“ Acquisition ”
means any transaction in which any Group Member acquires (through
an asset acquisition, merger, stock acquisition or other form of
investment) control over all or a portion of the assets, properties
or business of another Person for the purpose of increasing the
operating capacity or revenues of the Partnership Group from the
operating capacity or revenues of the Partnership Group existing
immediately prior to such transaction.
“ Additional Book Basis
” means the portion of any remaining Carrying Value of an
Adjusted Property that is attributable to positive adjustments made
to such Carrying Value as a result of Book-Up Events. For purposes
of determining the extent that Carrying Value constitutes
Additional Book Basis:
(i)
Any negative
adjustment made to the Carrying Value of an Adjusted Property as a
result of either a Book-Down Event or a Book-Up Event shall first
be deemed to offset or decrease that portion of the Carrying Value
of such Adjusted Property that is attributable to any prior
positive adjustments made thereto pursuant to a Book-Up Event or
Book-Down Event.
(ii)
If Carrying Value
that constitutes Additional Book Basis is reduced as a result of a
Book-Down Event and the Carrying Value of other property is
increased as a result of such Book-Down Event, an allocable portion
of any such increase in Carrying Value shall be treated as
Additional Book Basis; provided , that the amount treated as
Additional Book Basis pursuant hereto as a result of such Book-Down
Event shall not exceed the amount by which the Aggregate Remaining
Net Positive Adjustments after such Book-Down Event exceeds the
remaining Additional Book Basis attributable to all of the
Partnership’s Adjusted Property after such Book-Down Event
(determined without regard to the application of this clause (ii)
to such Book-Down Event).
“ Additional Book Basis
Derivative Items ” means any Book Basis Derivative Items
that are computed with reference to Additional Book Basis. To the
extent that the Additional Book Basis attributable to all of the
Partnership’s Adjusted Property as of the beginning of any
taxable period exceeds the Aggregate Remaining Net Positive
Adjustments as of the beginning of such period (the “Excess
Additional Book Basis”), the Additional Book Basis Derivative
Items for such period shall be reduced by the amount that bears the
same ratio to the amount of Additional Book Basis Derivative Items
determined without regard to this sentence as the Excess Additional
Book Basis bears to the Additional Book Basis as of the beginning
of such period.
“ Additional Limited
Partner ” means a Person admitted to the Partnership as a
Limited Partner pursuant to Section 10.4 and who is shown as such
on the books and records of the Partnership.
“ Adjusted Basic
Surplus ” means, with respect to any period, Basic
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 reduction in cash reserves for Operating
Expenditures with respect to such period to the extent such
reduction does not relate 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 to the extent such reserve is required by
any debt instrument for the repayment of principal, interest or
premium. Adjusted Basic Surplus does not include that portion of
Basic Surplus included in clauses (a)(i) and (a)(ii) of the
definition of Basic Surplus.
“ Adjusted Capital
Account ” means the Capital Account maintained for each
Partner as of the end of each fiscal year of the Partnership, (a)
increased by any amounts that such Partner is obligated to restore
under the standards set by Treasury Regulation Section
1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under
Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b)
decreased by (i) the amount of all losses and deductions that, as
of the end of such fiscal year, are reasonably expected to be
allocated to such Partner in subsequent years under Sections
704(e)(2) and 706(d) of the Code and Treasury Regulation Section
1.751-1(b)(2)(ii), and (ii) the amount of all distributions that,
as of the end of such fiscal year, are reasonably expected to be
made to such Partner in subsequent years in accordance with the
terms of this Agreement or otherwise to the extent they exceed
offsetting increases to such Partner’s Capital Account that
are reasonably expected to occur during (or prior to) the year in
which such distributions are reasonably expected to be made (other
than increases as a result of a minimum gain chargeback pursuant to
Section 6.1(d)(i) or 6.1(d)(ii)). The foregoing definition of
Adjusted Capital Account is intended to comply with the provisions
of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith. The “Adjusted Capital
Account” of a Partner in respect of a General Partner
Interest, a Common Unit, a Class A Subordinated Unit, a Class B
Subordinated Unit or an Incentive Distribution Right or any other
Partnership Interest shall be the amount which such Adjusted
Capital Account would be if such General Partner Interest, Common
Unit, Class A Subordinated Unit, Class B Subordinated Unit,
Incentive Distribution Right or other Partnership Interest were the
only interest in the Partnership held by such Partner from and
after the date on which such General Partner Interest, Common Unit,
Class A Subordinated Unit, Class B Subordinated Unit, Incentive
Distribution Right or other Partnership Interest was first
issued.
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“ 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, without limitation, 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 Amended and Restated Agreement of Limited Partnership of
U.S. Shipping Partners L.P., as it may be amended, supplemented or
restated from time to time.
“ Assignee ”
means a Non-citizen Assignee or a Person to whom one or more
Limited Partner Interests have been transferred in a manner
permitted under this Agreement and who has executed and delivered a
Transfer Application as required by this Agreement, but who has not
been admitted as a Substituted Limited Partner.
“ Associate ”
means, when used to indicate a relationship with any Person, (a)
any corporation or organization of which such Person is a director,
officer or partner or is, directly or indirectly, the owner of 20%
or more of any class of voting stock or other voting interest; (b)
any trust or other estate in which such Person has at least a 20%
beneficial interest or as to which such Person serves as trustee or
in a similar fiduciary capacity; and (c) any relative or spouse of
such Person, or any relative of such spouse, who has the same
principal residence as such Person.
“ 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 on hand at the end of such
Quarter, and (ii) all additional cash and cash equivalents of the
Partnership Group 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
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(b)
the amount of any cash reserves
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 and for anticipated future
credit needs of the Partnership Group) 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.
“ Basic 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) $10 million, (ii) all
cash and cash equivalents of the Partnership Group on hand as of
the close of business on the Closing Date, (iii) all cash receipts
of the Partnership Group for the period beginning on the Closing
Date and ending on the last day of such period, other than cash
receipts from Interim Capital Transactions (except to the extent
specified in Section 6.5), (iv) all cash receipts of the
Partnership Group after the end of such period but on or before the
date of determination of Basic 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, 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 and (ii) the amount of cash
reserves established by the General Partner to provide funds for
future Operating Expenditures; provided , however ,
that disbursements made (including contributions to a Group Member
or disbursements on behalf of a Group Member) or cash reserves
established, increased or reduced after the end of such period but
on or before the date of determination of Available Cash with
respect to such
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period shall be deemed to have been made,
established, increased or reduced, for purposes of determining
Basic Surplus, within such period if the General Partner so
determines.
Notwithstanding the foregoing,
“ Basic Surplus ” with respect to the Quarter in
which the Liquidation Date occurs and any subsequent Quarter shall
equal zero.
“ Board of Directors
” means the board of directors or managers of a corporation
or limited liability company, as applicable, or if a limited
partnership, the board of directors or board of managers of the
general partner of such limited partnership.
“ 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 New York 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 General Partner Interest, a Common Unit,
a Class A Subordinated Unit, a Class B Subordinated Unit, an
Incentive Distribution Right or any other Partnership Interest
shall be the amount which such Capital Account would be if such
General Partner Interest, Common Unit, Class A Subordinated Unit,
Class B Subordinated Unit, Incentive Distribution Right or other
Partnership Interest were the only interest in the Partnership held
by such Partner from and after the date on which such General
Partner Interest, Common Unit, Class A Subordinated Unit, Class B
Subordinated Unit, Incentive Distribution Right or other
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.
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“ Capital Improvement
” means any (a) addition or improvement to the capital assets
owned by any Group Member or (b) acquisition of existing, or the
construction of new, capital assets (including, without limitation,
tank barges, tugs, tankers, and related assets), in each case if
such addition, improvement, acquisition or construction is made to
increase the operating capacity or revenues of the Partnership
Group from the operating capacity or revenues of the Partnership
Group existing immediately prior to such addition, improvement,
acquisition or construction.
“ Capital Surplus
” has the meaning assigned to such term in Section
6.3(a).
“ Carrying Value
” means (a) with respect to a Contributed Property, the
Agreed Value of such property reduced (but not below zero) by all
depreciation, amortization and cost recovery deductions charged to
the Partners’ and Assignees’ Capital Accounts in
respect of such Contributed Property, and (b) with respect to any
other Partnership property, the adjusted basis of such property for
federal income tax purposes, all as of the time of determination.
The Carrying Value of any property shall be adjusted from time to
time in accordance with Sections 5.5(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, gross
negligence or willful or wanton misconduct in its capacity as a
general partner of the Partnership.
“ Certificate ”
means 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 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.
“ Citizenship
Certification ” means a properly completed certificate in
such form as may be specified by the General Partner by which an
Assignee or a Limited Partner certifies that he (and if he is a
nominee holding for the account of another Person, that to the best
of his knowledge such other Person) is an Eligible
Citizen.
“ Claim ” (as
used in Section 7.12(c)) has the meaning assigned to such term in
Section 7.12(c).
“ Class A Subordinated
Units ” means a Unit representing a fractional part of
the Partnership Interests of all Limited Partners and Assignees,
and having rights and obligations specified with respect to the
Class A Subordinated Units.
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“Class A Subordination
Period” means the
period commencing on the Closing Date and ending on the first to
occur of the following dates:
(a)
the first day of any Quarter
beginning after December 31, 2009 in respect of which (i) (A)
distributions of Available Cash from Basic Surplus on each of the
Outstanding Common Units and Subordinated 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 on all Outstanding Common Units and
Subordinated Units and any other Outstanding Units that are senior
or equal in right of distribution to the Subordinated Units during
such periods and (B) the Adjusted Basic Surplus generated during
each of the three consecutive, non-overlapping four-Quarter periods
immediately preceding such date equaled or exceeded the sum of the
Minimum Quarterly Distribution on all of the Common Units and
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 Interest, during such
periods 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 Units held by the General Partner
and its Affiliates are not voted in favor of such
removal.
For purposes of determining whether
the test in subclause (a)(i)(B) above has been satisfied, Adjusted
Basic Surplus will be adjusted upwards or downwards if the
Conflicts Committee determines in good faith that the amount of
estimated maintenance capital expenditures used in the
determination of Adjusted Basic Surplus in subclause (a)(i)(B) was
materially incorrect, based on circumstances prevailing at the time
of original determination of estimated maintenance capital
expenditures, for any one or more of the preceding three
four-Quarter periods.
“ Class B Subordinated
Units ” means a Unit representing a fractional part of
the Partnership Interests of all Limited Partners and Assignees,
and having rights and obligations specified with respect to the
Class B Subordinated Units.
“Class B Subordination
Period” means the
period commencing on the Closing Date and ending on the first to
occur of the following dates:
(a)
the first day of any Quarter
beginning after December 31, 2010 in respect of which (i) (A)
distributions of Available Cash from Basic Surplus on each of the
Outstanding Common Units and Subordinated 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 on all Outstanding Common Units and
Subordinated Units and any other Outstanding Units that are senior
or equal in right of distribution to the Subordinated Units during
such periods and (B) the Adjusted Basic Surplus generated during
each of the three consecutive, non-overlapping four-Quarter periods
immediately preceding such
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date equaled or exceeded the sum of the Minimum
Quarterly Distribution on all of the Common Units and 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 Interest, during such periods
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 Units held by the General Partner
and its Affiliates are not voted in favor of such
removal.
For purposes of determining whether
the test in subclause (a)(i)(B) above has been satisfied, Adjusted
Basic Surplus will be adjusted upwards or downwards if the
Conflicts Committee determines in good faith that the amount of
estimated maintenance capital expenditures used in the
determination of Adjusted Basic Surplus in subclause (a)(i)(B) was
materially incorrect, based on circumstances prevailing at the time
of original determination of estimated maintenance capital
expenditures, for any one or more of the preceding three
four-Quarter periods.
“ 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 ”
has the meaning assigned to such term in Section
15.1(a).
“ Code ” means
the Internal Revenue Code of 1986, as amended and in effect from
time to time. Any reference herein to a specific section or
sections of the Code shall be deemed to include a reference to any
corresponding provision of any successor law.
“ Combined Interest
” has the meaning assigned to such term in Section
11.3(a).
“ Commences Commercial
Service ” and “ Commenced of Commercial
Service ” shall mean the date a Capital Improvement is
first put into service following completion of construction and
testing.
“ Commission ”
means the United States Securities and Exchange
Commission.
“ Common Unit ”
means a Partnership Security representing a fractional part of the
Partnership Interests of all Limited Partners and Assignees, and
having the rights and obligations specified with respect to Common
Units in this Agreement. The term “Common Unit” does
not refer to a Class A Subordinated Unit or a Class B Subordinated
Unit 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 Periods, 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 Section 6.4(a)(i).
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“ 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 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 of
1934, as amended, and the rules and regulations of the Commission
thereunder and by the National Securities Exchange on which the
Common Units are listed.
“ 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, Conveyance
and Assumption Agreement, dated as of the Closing Date, among the
General Partner, the Partnership, the Operating Company, Shipping
Master and the other parties named therein, together with the
additional conveyance documents and instruments contemplated or
referenced thereunder.
“ 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 Periods ending on or before the last day
of such Quarter over (b) the sum of any distributions theretofore
made pursuant to Section 6.4(a)(ii) and the second sentence of
Section 6.5 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
” has the meaning assigned to such term in Section
15.1(a).
“ Delaware Act ”
means the Delaware Revised Uniform Limited Partnership Act, 6 Del
C. Section 17-101, et seq., as amended, supplemented or restated
from time to time, and any successor to such statute.
“ Departing Partner
” means a former General Partner from and after the effective
date of any withdrawal or removal of such former General Partner
pursuant to Section 11.1 or 11.2.
“ Depositary ”
means, with respect to any Units issued in global form, The
Depository Trust Company and its successors and permitted
assigns.
“ Economic Risk of Loss
” has the meaning set forth in Treasury Regulation Section
1.752-2(a).
“ Eligible Citizen
” means a Person qualified to own interests in real property
in jurisdictions in which any Group Member does business or
proposes to do business from time to time, and whose status as a
Limited Partner or Assignee does not or would not subject
such
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Group Member to a significant risk of
cancellation or forfeiture of any of its properties or any interest
therein.
“ Estimated Incremental
Quarterly Tax Amount ” has the meaning assigned to such
term in Section 6.9.
“ Estimated Maintenance
Capital Expenditures ” means an estimate made in good
faith by the Board of Directors of the General Partner (with the
concurrence of the Conflicts Committee) of the average quarterly
Maintenance Capital Expenditures that the Partnership will incur
over the long term. The Board of Directors of the General
Partner (with the concurrence of the Conflicts Committee) will be
permitted to make such estimate in any manner it determines
reasonable. The estimate will be made at least annually and
whenever an event occurs that is likely to result in a material
adjustment to the amount of Maintenance Capital Expenditures on a
long-term basis. The Partnership shall disclose to its
Partners any change in the amount of Estimated Maintenance Capital
Expenditures in its reports made in accordance with Section 8.3 to
the extent not previously disclosed. Except as provided in
the definitions of Class A Subordination Period and Class B
Subordination Period, any adjustments to Estimated Maintenance
Capital Expenditures shall be prospective only.
“ Excess Units ”
has the meaning assigned to such term in Section
4.10(d).
“ Expansion Capital
Expenditures ” means cash expenditures for Acquisitions
or Capital Improvements. Expansion Capital Expenditures shall
not include Maintenance Capital Expenditures. 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.
“ Event of Withdrawal
” has the meaning assigned to such term in Section
11.1(a).
“ 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 $0.50 per Unit per Quarter (or, with
respect to the period commencing on the Closing Date and ending on
December 31, 2004, it means the product of $0.50 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
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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 , that for purposes
of determining the number of Outstanding Units on a Fully Diluted
Basis when calculating whether the Class A Subordination Period or
Class B Subordination Period has ended or the Class A Subordinated
Units or Class B Subordinated Units are entitled to convert into
Common Units pursuant to Section 5.8, 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 US Shipping General Partner LLC, a Delaware limited
liability company, and its successors and permitted assigns as
general partner of the Partnership.
“ General Partner
Interest ” means the ownership interest of the General
Partner in the Partnership (in its capacity as a general partner
without reference to any Limited Partner Interest held by it) which
may be evidenced by Partnership Securities or a combination thereof
or interest therein, and includes any and all benefits to which the
General Partner is entitled as provided in this Agreement, together
with all obligations of the General Partner to comply with the
terms and provisions of this Agreement.
“ Group ” means a
Person that with or through any of its Affiliates or Associates has
any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting (except voting pursuant to a revocable
proxy or consent given to such Person in response to a proxy or
consent solicitation made to 10 or more Persons) or disposing of
any Partnership Securities with any other Person that beneficially
owns, or whose Affiliates or Associates beneficially own, directly
or indirectly, Partnership Securities.
“ Group Member ”
means a member of the Partnership Group.
“ 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
11
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, which Partnership 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
Sections 6.4(a)(v), (vi) and (vii) and 6.4(b)(iii), (iv) and
(v).
“ Indemnified Persons
” has the meaning assigned to such term in Section
7.12(c).
“ Indemnitee ”
means (a) the General Partner, (b) any Departing Partner, (c) any
Person who is or was an Affiliate of the General Partner or any
Departing Partner, (d) any Person who is or was a member, partner,
director, officer, fiduciary or trustee of any Person which any of
the preceding clauses of this definition describes, (e) any Person
who is or was serving at the request of the General Partner or any
Departing Partner or any Affiliate of the General Partner or any
Departing Partner as an officer, director, member, partner,
fiduciary or trustee of another Person, provided that that 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.
“ Initial Common Units
” means the Common Units sold in the Initial
Offering.
“ Initial Limited
Partners ” means Shipping Master and the General Partner
(with respect to the 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, the Class A
Subordinated Units and the Class B 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.
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“ 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, the Tax Payment Loan 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); and (c) sales or other voluntary or
involuntary dispositions of any assets of any Group Member other
than (i) sales or other dispositions of inventory, 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.
“ Issue Price ”
means the price at which a Unit is purchased from the Partnership,
excluding 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 Partner
upon the change of its status from General Partner to Limited
Partner pursuant to Section 11.3 or (b) solely for purposes of
Articles V, VI, VII and IX, each Assignee; provided ,
however , that when the term “Limited Partner”
is used herein in the context of any vote or other approval,
including without limitation Articles XIII and XIV, such term shall
not, solely for such purpose, include any holder of an Incentive
Distribution Right except as may otherwise be required by
law.
“ Limited Partner
Interest ” means the ownership interest of a Limited
Partner or Assignee in the Partnership, which may be evidenced by
Common Units, Class A Subordinated Units, Class B Subordinated
Units, Incentive Distribution Rights 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 without limitation Articles XIII and XIV, such
term shall not, solely for such purpose, include any holder of an
Incentive Distribution Right except as may otherwise be required by
law.
“ Liquidation Date
” means (a) in the case of an event giving rise to the
dissolution of the Partnership of the type described in clauses (a)
and (b) of the first sentence of Section 12.2, the date on which
the applicable time period during which the holders of Outstanding
Units have the right to elect to reconstitute the Partnership and
continue its business has expired without such an election being
made, and (b) in the case of any other event giving rise to the
dissolution of the Partnership, the date on which such event
occurs.
“ Liquidator ”
means one or more Persons selected by the General Partner to
perform the functions described in Section 12.4 as liquidating
trustee of the Partnership within the meaning of the Delaware
Act.
“ Maritime Laws ”
has the meaning assigned to such term in Section
4.10(a).
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“ Maintenance Capital
Expenditures ” means cash expenditures (including
expenditures for the addition or improvement to the capital assets
owned by any Group Member or for the acquisition of existing, or
the construction of new, capital assets) if such expenditure is
made to maintain, including over the long term, the operating
capacity of the capital assets of the Partnership Group, as such
assets existed at the time of the expenditure. Maintenance
Capital Expenditures shall not include Expansion Capital
Expenditures. Maintenance 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
replacement asset and paid during the period beginning on the date
that the Partnership enters into a binding obligation to commence
constructing a replacement asset and ending on the earlier to occur
of the date that such replacement asset Commences Commercial
Service or the date that such replacement asset is abandoned or
disposed of. Debt incurred to pay or equity issued to fund
construction period interest payments, or such construction period
distributions on equity, shall also be deemed to be debt or equity,
as the case may be, incurred to finance the construction of a
replacement asset.
“ Merger Agreement
” has the meaning assigned to such term in Section
14.1.
“ Minimum Quarterly
Distribution ” means $0.45 per Unit per Quarter (or with
respect to the period commencing on the Closing Date and ending on
December 31, 2004, it means the product of $0.45 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 of
1934, as amended, supplemented or restated from time to time, and
any successor to such statute, or the Nasdaq Stock Market or any
successor thereto.
“ Net Agreed Value
” means, (a) in the case of any Contributed Property, the
Agreed Value of such property reduced by any liabilities either
assumed by the Partnership upon such contribution or to which such
property is subject when contributed, and (b) in the case of any
property distributed to a Partner or Assignee by the Partnership,
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.
14
“ 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 after the Liquidation Date. 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 after the Liquidation Date. 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).
“ Non-citizen Assignee
” means a Person whom the General Partner has determined does
not constitute an Eligible Citizen and as to whose Partnership
Interest the General Partner has become the Substituted Limited
Partner, pursuant to Section 4.9.
“ 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, without limitation, 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).
“ Non-U.S. Citizen
” has the meaning assigned to such term in Section
4.10(h)(iii) for the purposes stated in Section 4.10(h).
15
“ Non-U.S. Citizen
Redemption Price ” has the meaning assigned to such term
in Section 4.10(e).
“ Notice of Election to
Purchase ” has the meaning assigned to such term in
Section 15.1(b).
“ Omnibus Agreement
” means that Omnibus Agreement, dated as of the Closing Date,
among Shipping Master, the General Partner, the Partnership, and
the Operating Company.
“ Operating Company
” means U.S. Shipping Operating LLC, a Delaware limited
liability company, and any successors thereto.
“ Operating Company
Agreement ” means the Limited Liability Company Agreement
of the Operating Company, as it may be amended, supplemented or
restated from time to time.
“ Operating
Expenditures ” means all Partnership Group expenditures,
including, but not limited to, taxes, reimbursements of the General
Partner, repayment of Working Capital Borrowings and the Tax
Payment Loan, debt service payments and capital expenditures,
subject to the following:
(a)
Payments (including prepayments) of
principal of and premium on indebtedness other than Working Capital
Borrowings shall not constitute Operating Expenditures;
and
(b)
Operating Expenditures shall not
include (i) Expansion Capital Expenditures or actual Maintenance
Expenditures, but shall include Estimated Maintenance Capital
Expenditures, (ii) payment of transaction expenses relating to
Interim Capital Transactions or (iii) distributions to
Partners.
Where capital expenditures are made
in part for Acquisitions or for Capital Improvements and in part
for other purposes, the General Partner, with the concurrence of
the Conflicts Committee, shall determine the allocation between the
amounts paid for each and, with respect to the part of such capital
expenditures made for other purposes, the period over which the
capital expenditures made for other purposes will be deducted as an
Operating Expenditure in calculating Basic Surplus.
“ 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 Shipping Master 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
16
Group (other than the General Partner or its
Affiliates) beneficially owns 20% or more of any Outstanding
Partnership Securities of any class then Outstanding, all
Partnership Securities owned by such Person or Group shall not be
voted on any matter and shall not be considered to be Outstanding
when sending notices of a meeting of Limited Partners to vote on
any matter (unless otherwise required by law), calculating required
votes, determining the presence of a quorum or for other similar
purposes under this Agreement, except that Common Units so owned
shall be considered to be Outstanding for purposes of Section
11.1(b)(iv) (such Common 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 (i) to any Person or Group who acquired
20% or more of any Outstanding Partnership Securities of any class
then Outstanding directly from the General Partner or its
Affiliates, (ii) to any Person or Group who acquired 20% or more of
any 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) to 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 of the General
Partner.
“ Over-Allotment Option
” means the over-allotment option granted to the Underwriters
by the Partnership pursuant to the Underwriting
Agreement.
“ Own ” and
“ Owner ” have the meanings assigned to such
terms in Section 4.10(h)(i) for the purposes stated in Section
4.10(h).
“ Parity Units ”
means Common Units and all other Units of any other class or series
that have the right (i) to receive distributions of Available
Cash from Basic Surplus pursuant to each of subclauses (a)(i)
and (a)(ii) of Section 6.4 in the same order of priority with
respect to the participation of Common Units in such distributions
or (ii) to participate in allocations of Net Termination Gain
pursuant to Section 6.1(c)(i)(B) in the same order of priority with
the Common Units, in each case regardless of whether the amounts or
value so distributed or allocated on each Parity Unit equals the
amount or value so distributed or allocated on each Common
Unit. Units whose participation in such
(i) distributions of Available Cash from Basic Surplus and
(ii) allocations of Net Termination Gain are subordinate in
order of priority to such distributions and allocations on Common
Units shall not constitute Parity Units even if such Units are
convertible under certain circumstances into Common Units or Parity
Units.
“ 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, without limitation, 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.
17
“ Partnership ”
means U.S. Shipping Partners L.P., a Delaware limited partnership,
and any successors thereto.
“ Partnership Group
” means the Partnership and its Subsidiaries treated as a
single consolidated entity.
“ Partnership Interest
” means an 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 without limitation, Common Units, Class A
Subordinated Units, Class B Subordinated Units and Incentive
Distribution Rights.
“ Percentage Interest
” means as of any date of determination (a) as to the General
Partner (in its capacity as General Partner without reference to
any Limited Partner Interests held by it), 2.0%, (b) as to any
Unitholder or Assignee holding Units, the product obtained by
multiplying (i) 98% less the percentage applicable to paragraph (c)
by (ii) the quotient obtained by dividing (A) the number of Units
held by such Unitholder or Assignee by (B) the total number of all
Outstanding Units, and (c) as to the holders of additional
Partnership Securities issued by the Partnership in accordance with
Section 5.6, 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.
“ Permitted Percentage
” has the meaning assigned to such term in Section
4.10(h)(iv) for the purposes stated in Section 4.10(h).
“ Person ” means
an individual or a corporation, firm, limited liability company,
partnership, joint venture, trust, unincorporated organization,
association, governmental agency or political subdivision thereof
or other entity.
“ Per Unit Capital
Amount ” means, as of any date of determination, the
Capital Account, stated on a per Unit basis, underlying any Unit
held by a Person other than the General Partner or any Affiliate of
the General Partner who holds Units.
“ Pro Rata ”
means (a) when modifying Units or any class thereof, apportioned
equally among all designated Units in accordance with their
relative Percentage Interests, (b) when modifying Partners and
Assignees, apportioned among all Partners and Assignees in
accordance with their relative Percentage Interests and (c) when
modifying holders of Incentive Distribution Rights, apportioned
equally among all holders of Incentive Distribution Rights in
accordance with the relative number or percentage of Incentive
Distribution Rights held by each such holder.
“ Purchase Date ”
means the date determined by the General Partner as the date for
purchase of all Outstanding Units of a certain class (other than
Units owned by the General Partner and its Affiliates) pursuant to
Article XV.
18
“ Quarter ”
means, unless the context requires otherwise, a fiscal quarter, or,
with respect to the first fiscal quarter after the Closing Date,
the portion of such fiscal quarter after the Closing Date, of the
Partnership.
“ Recapture Income
” means any gain recognized by the Partnership (computed
without regard to any adjustment required by Section 734 or Section
743 of the Code) upon the disposition of any property or asset of
the Partnership, which gain is characterized as ordinary income
because it represents the recapture of deductions previously taken
with respect to such property or asset.
“ Record Date ”
means the date established by the General Partner for determining
(a) the identity of the Record Holders entitled to notice of, or to
vote at, any meeting of Limited Partners or entitled to vote by
ballot or give approval of Partnership action in writing without a
meeting or entitled to exercise rights in respect of any lawful
action of Limited Partners or (b) the identity of Record Holders
entitled to receive any report or distribution or 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
Securities, the Person in whose name any such other Partnership
Security is registered on the books that the General Partner has
caused to be kept as of the opening of business on such Business
Day.
“ Redeemable Interests
” means any Partnership Interests for which a redemption
notice has been given, and has not been withdrawn, pursuant to
Section 4.9.
“ Registration
Statement ” means the Registration Statement on Form S-1
(Registration No. 333-118141) 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 Basket
Amount ” has the meaning assigned to such term in Section
5.7(f).
“ Remaining Net Positive
Adjustments ” means as of the end of any taxable period,
(i) with respect to the Unitholders holding Common Units, Class A
Subordinated Units or Class B Subordinated Units, the excess of (a)
the Net Positive Adjustments of the Unitholders holding Common
Units, Class A Subordinated Units or Class B Subordinated Units as
of the end of such period over (b) the sum of those Partners’
Share of Additional Book Basis Derivative Items for each prior
taxable period, (ii) with respect to the General Partner (as holder
of the General Partner Interest), the excess of (a) the Net
Positive Adjustments of the General Partner as of the end of such
period over (b) the sum of the General Partner’s Share of
Additional Book Basis Derivative Items with respect to the General
Partner Interest for each prior taxable period, and (iii) with
respect to the holders of Incentive Distribution Rights, the excess
of (a) the Net Positive Adjustments of the holders of Incentive
Distribution Rights as of the end of such period over (b) the sum
of the Share of Additional Book Basis Derivative Items of the
holders of the Incentive Distribution Rights for each prior taxable
period.
“ Required Allocations
” means (a) any limitation imposed on any allocation of Net
Losses or Net Termination Losses under Section 6.1(b) or 6.1(c)(ii)
and (b) any allocation of an item of
19
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.
“ Restricted Business
” has the meaning assigned to such term in the Omnibus
Agreement.
“ Second Liquidation Target
Amount ” has the meaning assigned to such term in Section
6.1(c)(i)(E).
“ Second Target
Distribution ” means $0.575 per Unit per Quarter (or,
with respect to the period commencing on the Closing Date and
ending on December 31, 2004, it means the product of $0.575
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.
“ Share of Additional Book
Basis Derivative Items ” means in connection with any
allocation of Additional Book Basis Derivative Items for any
taxable period, (i) with respect to the Unitholders holding Common
Units, Class A Subordinated Units or Class B Subordinated Units,
the amount that bears the same ratio to such Additional Book Basis
Derivative Items as the Unitholders’ Remaining Net Positive
Adjustments as of the end of such period bears to the Aggregate
Remaining Net Positive Adjustments as of that time, (ii) with
respect to the General Partner (as holder of the General Partner
Interest), the amount that bears the same ratio to such additional
Book Basis Derivative Items as the General Partner’s
Remaining Net Positive Adjustments as of the end of such period
bears to the Aggregate Remaining Net Positive Adjustment as of that
time, and (iii) with respect to the Partners holding Incentive
Distribution Rights, the amount that bears the same ratio to such
Additional Book Basis Derivative Items as the Remaining Net
Positive Adjustments of the Partners holding the Incentive
Distribution Rights as of the end of such period bears to the
Aggregate Remaining Net Positive Adjustments as of that
time.
“ Shipping Master
” means United States Shipping Master LLC, a Delaware limited
liability company, and any successors thereto.
“ Special Approval
” means approval by a majority of the members of the
Conflicts Committee.
“ Subordinated Unit
” means a Class A Subordinated Unit or a Class B Subordinated
Unit. The term “Subordinated Unit” as used herein
does not include a Common Unit or Parity Unit. A Subordinated
Unit that is convertible into a Common Unit or a Parity Unit shall
not constitute a Common Unit or Parity Unit until such conversion
occurs.
20
“ Subordination Period
” means the Class A Subordination Period or the Class B
Subordination Period, as applicable.
“ 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).
“Tax Payment
Loan” has the
meaning assigned to such term in the Omnibus Agreement.
“ Third Liquidation Target
Amount ” has the meaning assigned to such term in Section
6.1(c)(i)(F).
“ Third Target
Distribution ” means $0.70 per Unit per Quarter (or, with
respect to the period commencing on the Closing Date and ending on
December 31, 2004, it means the product of $0.70 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 ”
has the meaning assigned to such term in Section
15.1(a).
“ Transfer ” has
the meaning assigned to such term in Section 4.4(a).
“ Transfer Agent
” means such bank, trust company or other Person (including
the General Partner or one of its Affiliates) as shall be appointed
from time to time by the Partnership to act as registrar and
transfer agent for the Common Units; 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.
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“ Underwriter ”
means each Person named as an underwriter in Schedule I to the
Underwriting Agreement who purchases Common Units pursuant
thereto.
“ Underwriting
Agreement ” means the Underwriting Agreement dated
October 28, 2004 among the Underwriters, the Partnership, the
General Partner, the Operating Company and Shipping Master,
providing for the purchase of Common Units by such
Underwriters.
“ Unit ” means a
Partnership Security that is designated as a “Unit” and
shall include Common Units and Subordinated Units but shall not
include (i) a General Partner Interest or (ii) Incentive
Distribution Rights.
“ Unitholders ”
means the holders of Common Units and Subordinated
Units.
“ Unit Majority ”
means, during the Class A Subordination Period, at least a majority
of the Outstanding Common Units (excluding Common Units owned by
the General Partner and its Affiliates) voting as a class and at
least a majority of the Outstanding Class A Subordinated Units and
Class B Subordinated Units voting as a single class, and after the
end of the Class A Subordination Period, at least a majority of the
Outstanding Units.
“ Unit Register ”
means the register of the Partnership for the registration and
transfer of Limited Partnership Interests as provided in Section
4.5.
“ 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 Capital
” means at any time, with respect to a Unit, the Initial Unit
Price 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, adjusted as the General Partner determines to
be appropriate to give effect to any distribution, subdivision or
combination of such Units.
“ U.S. Citizen ”
has the meaning assigned to such term in Section 4.10(h)(ii) for
the purposes stated in Section 4.10(h).
“ U.S. GAAP ”
means United States generally accepted accounting principles
consistently applied.
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“ 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 or other arrangement to the extent such
borrowings are required to be reduced to a relatively small amount
each year (or for the year in which the Initial Offering is
consummated, the 12-month period beginning on the Closing Date) for
an economically meaningful period of time.
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; and (c) the term
“include” or “includes” means includes,
without limitation, and “including” means including,
without limitation.
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 U.S. Shipping Partners L.P. 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 and a Partner has no interest in specific Partnership
property.
The name of the Partnership shall be
“U.S. Shipping Partners L.P.” 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.
Section 2.3
Registered
Office; Registered Agent; Principal Office; Other
Offices
Unless and until changed by the
General Partner, the registered office of the Partnership in the
State of Delaware shall be located at 2711 Centerville Rd., Suite
400, Wilmington,
23
Delaware 19808, 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 399
Thornall Street, 8th Floor, Edison, New Jersey 08837 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 determines to be necessary or
appropriate. The address of the General Partner shall be 399
Thornall Street, 8th Floor, Edison, New Jersey 08837 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 (a) engage
directly in, or enter into or form any corporation, partnership,
joint venture, limited liability company or other arrangement to
engage indirectly in, any business activity that is approved by the
General Partner and 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 (b) 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. The General
Partner shall have no duty or obligation to propose or approve, and
may 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.
The Partnership shall be empowered
to do any and all acts and things necessary and 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
24
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
25
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
determines to be necessary or appropriate 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.
Section 2.8
Title to
Partnership Assets.
Title to Partnership assets, whether
real, personal or mixed and whether tangible or intangible, shall
be deemed to be owned by the Partnership as an entity, and no
Partner or Assignee, individually or collectively, shall have any
ownership interest in such Partnership assets or any portion
thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner, one or more of
its Affiliates or one or more nominees, as the General Partner may
determine. The General Partner hereby declares and warrants that
any Partnership assets for which record title is held in the name
of the General Partner or one or more of its Affiliates or one or
more nominees shall be held by the General Partner or such
Affiliate or nominee for the use and benefit of the Partnership in
accordance with the provisions of this Agreement; provided ,
however , that the General Partner shall use reasonable
efforts to cause record title to such assets (other than those
assets in respect of which the General Partner determines that the
expense and difficulty of conveyancing makes transfer of record
title to the Partnership impracticable) to be vested in the
Partnership as soon as reasonably practicable; provided ,
further, that, prior to the withdrawal or removal of the General
Partner or as soon thereafter as practicable, the General Partner
shall use reasonable efforts to effect the transfer of record title
to the Partnership and, prior to any such transfer, will provide
for the use of such assets in a manner satisfactory to the General
Partner. All Partnership assets shall be recorded as the property
of the Partnership in its books and records, irrespective of the
name in which record title to such Partnership assets is
held.
Section 3.1
Limitation of
Liability.
The Limited Partners and the
Assignees shall have no liability under this Agreement except as
expressly provided in this Agreement or the Delaware
Act.
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Section 3.2
Management of
Business.
No Limited Partner or Assignee, in
its capacity as such, shall participate in the operation,
management or control (within the meaning of the Delaware Act) of
the Partnership’s business, transact any business in the
Partnership’s name or have the power to sign documents for or
otherwise bind the Partnership. Any action taken by any Affiliate
of the General Partner or any officer, director, employee, manager,
member, general partner, agent or trustee of the General Partner or
any of its Affiliates, or any officer, director, employee, member,
general partner, agent or trustee of a Group Member, in its
capacity as such, shall not be deemed to be participation in the
control of the business of the Partnership by a limited partner of
the Partnership (within the meaning of Section 17-303(a) of the
Delaware Act) and shall not affect, impair or eliminate the
limitations on the liability of the Limited Partners or Assignees
under this Agreement.
Section 3.3
Outside
Activities of the Limited Partners.
Subject to the provisions of Section
7.5 and the Omnibus Agreement, which shall continue to be
applicable to the Persons referred to therein, regardless of
whether such Persons shall also be Limited Partners or Assignees,
any Limited Partner or Assignee shall be entitled to and may have
business interests and engage in business activities in addition to
those relating to the Partnership, including business interests and
activities in direct competition with the Partnership Group.
Neither the Partnership nor any of the other Partners or Assignees
shall have any rights by virtue of this Agreement in any business
ventures of any Limited Partner or Assignee.
Section 3.4
Rights of
Limited Partners.
(a)
In addition to other rights provided by this Agreement or by
applicable law, and except as limited by Section 3.4(b), each
Limited Partner shall have the right, for a purpose reasonably
related to such Limited Partner’s interest as a Limited
Partner in the Partnership, upon reasonable written demand and at
such Limited Partner’s own expense:
(i)
promptly after becoming available, to obtain a copy of the
Partnership’s federal, state and local income tax returns for
each year;
(ii)
to have furnished to him a current list of the name and last known
business, residence or mailing address of each Partner;
(iii)
to obtain true and full information regarding the amount of cash
and a description and statement of the Net Agreed Value of any
other Capital Contribution by each Partner and which each Partner
has agreed to contribute in the future, and the date on which each
became a Partner;
(iv)
to have furnished to him a copy of this Agreement and the
Certificate of Limited Partnership and all amendments thereto,
together with a copy of the executed copies of all powers of
attorney pursuant to which this Agreement, the Certificate of
Limited Partnership and all amendments thereto have been
executed;
27
(v)
to obtain true and full information regarding the status of the
business and financial condition of the Partnership Group;
and
(vi)
to obtain such other information regarding the affairs of the
Partnership as is just and reasonable.
(b)
The General Partner may keep confidential from the Limited Partners
and Assignees, for such period of time as the General Partner deems
reasonable, (i) any information that the General Partner reasonably
believes to be in the nature of trade secrets or (ii) other
information the disclosure of which the General Partner in good
faith believes (A) is not in the best interests of the Partnership
Group, (B) could damage the Partnership Group or (C) that any Group
Member is required by law or by agreement with any third party to
keep confidential (other than agreements with Affiliates of the
Partnership the primary purpose of which is to circumvent the
obligations set forth in this Section 3.4).
CERTIFICATES; RECORD HOLDERS; TRANSFER OF
PARTNERSHIP
INTERESTS; REDEMPTION OF PARTNERSHIP INTERESTS
Upon the Partnership’s
issuance of Common Units, Class A Subordinated Units or Class B
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 interests in the Partnership
and (b) upon the request of any Person owning Incentive
Distribution Rights or any other Partnership Securities other than
Common Units, Class A Subordinated Units or Class B 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, Class A
Subordinated Units or Class B Subordinated Units.
Certificates shall be executed on behalf of the Partnership by the
Chairman of the Board, President or any Executive 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 Class
A Subordinated Units or Class B Subordinated Units may exchange
such Certificates for Certificates evidencing Common Units on or
after the date on which such Class A Subordinated Units or Class B
Subordinated Units are converted into Common Units pursuant to the
terms of Section 5.8.
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Section 4.2
Mutilated,
Destroyed, Lost or Stolen Certificates.
(a)
If any mutilated Certificate is surrendered to the Transfer Agent,
the appropriate officers of the General Partner on behalf of the
Partnership shall execute, and 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 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. Without
limiting the foregoing, when a Person (such as a broker, dealer,
bank, trust company or clearing
29
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, (b) must execute and deliver a Transfer Application
and (c) shall be bound by this Agreement and shall have the rights
and obligations of a Partner or Assignee (as the case may be)
hereunder and as, and to the extent, provided for
herein.
(a)
The term “transfer,” when used in this Agreement with
respect to a Partnership Interest, shall be deemed to refer to a
transaction (i) by which the General Partner assigns its General
Partner Interest to another Person or by which 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.
Section 4.5
Registration
and Transfer of Limited Partner Interests.
(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.
30
(b)
Except as otherwise provided in Section 4.9 and subject to Section
4.10, 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 and citizenship 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.
(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)
Subject to Section 4.10, a transferee of a Limited Partner Interest
who has completed and delivered a Transfer Application and
citizenship certification 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)
Subject to Section 4.10, the General Partner and its Affiliates
shall have the right at any time to transfer their Class A
Subordinated Units, Class B Subordinated Units and Common Units
(whether issued upon conversion of the Subordinated Units or
otherwise) to one or more Persons who are U.S.
Citizens.
Section 4.6
Transfer of
the General Partner’s General Partner
Interest.
(a)
Subject to Section 4.6(c) below, prior to December 31, 2014, 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 December 31, 2014, the
General Partner may transfer all or any of its General Partner
Interest without Unitholder approval.
31
(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 is a
U.S. Citizen, (ii) 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, (iii) the Partnership receives
an Opinion of Counsel that such transfer would not result in the
loss of limited liability of any Limited Partner or of any limited
partner or member of any other Group Member or cause the
Partnership or any other Group Member 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 (iv) 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.
Section 4.7
Transfer of
Incentive Distribution Rights.
Prior to December 31, 2014, 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 or (ii) the transfer by such holder of all or
substantially all of its assets to such other Person. Any other
transfer of the Incentive Distribution Rights prior to December 31,
2014 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
December 31, 2014, 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.
Section 4.8
Restrictions
on Transfers.
(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 or any Group Member under the laws of the jurisdiction
of its formation, (iii) cause the Partnership or any Group
Member 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) or (iv) cause the
Partnership to violate the provisions of Section 4.10.
(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
32
significant risk of any Group Member 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 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 for trading.
Section 4.9
Cancellation
or Forfeiture of Property Under Non-Maritime Law; Redemption of
Non-citizen Assignees.
(a)
If any Group Member is or becomes subject to any federal, state or
local law or regulation (other than Maritime Law) that the General
Partner determines would create a substantial risk of cancellation
or forfeiture of any property in which the Group Member has an
interest based on the nationality, citizenship or other related
status of a Limited Partner or Assignee (other than under any
Maritime Law), the General Partner may request any Limited Partner
or Assignee to furnish to the General Partner, within 30 days after
receipt of such request, an executed Citizenship Certification or
such other information concerning his nationality, citizenship or
other related status (or, if the Limited Partner or Assignee is a
nominee holding for the account of another Person, the nationality,
citizenship or other related status of such Person) as the General
Partner may request. If a Limited Partner or Assignee fails to
furnish to the General Partner within the aforementioned 30-day
period such Citizenship Certification or other requested
information or if upon receipt of such Citizenship Certification or
other requested information the General Partner determines that a
Limited Partner or Assignee is not an Eligible Citizen, the
Partnership Interests owned by such Limited Partner or Assignee
shall be subject to redemption in accordance with the provisions of
Section 4.9(e). In addition, the General Partner may require that
the status of any such Partner or Assignee be changed to that of a
Non-citizen Assignee and, thereupon, the General Partner shall be
substituted for such Non-citizen Assignee as the Limited Partner in
respect of the Non-citizen Assignee’s Limited Partner
Interests.
(b)
The General Partner shall, in exercising voting rights in respect
of Limited Partner Interests held by it on behalf of Non-citizen
Assignees, distribute the votes in the same ratios as the votes of
Partners (including without limitation the General Partner) in
respect of Limited Partner Interests other than those of
Non-citizen Assignees are cast, either for, against or abstaining
as to the matter.
(c)
Upon dissolution of the Partnership, a Non-citizen Assignee shall
have no right to receive a distribution in kind pursuant to Section
12.4 but shall be entitled to the cash equivalent
33
thereof, and the Partnership shall provide cash
in exchange for an assignment of the Non-citizen Assignee’s
share of any distribution in kind. Such payment and assignment
shall be treated for Partnership purposes as a purchase by the
Partnership from the Non-citizen Assignee of his Limited Partner
Interest (representing his right to receive his share of such
distribution in kind).
(d)
At any time after he can and does certify that he has become an
Eligible Citizen, a Non-citizen Assignee may, upon application to
the General Partner, request admission as a Substituted Limited
Partner with respect to any Limited Partner Interests of such
Non-citizen Assignee not redeemed pursuant to Section 4.9(e), and
upon his admission pursuant to Section 10.2, the General Partner
shall cease to be deemed to be the Limited Partner in respect of
the Non-citizen Assignee’s Limited Partner
Interests.
(e)
If at any time a Limited Partner or Assignee fails to furnish a
Citizenship Certification or other information requested within the
30-day period specified in Section 4.9(a), or if upon receipt of
such Citizenship Certification or other information the General
Partner determines, with the advice of counsel, that a Limited
Partner or Assignee is not an Eligible Citizen, the Partnership
may, unless the Limited Partner or Assignee establishes to the
satisfaction of the General Partner that such Limited Partner or
Assignee is an Eligible Citizen or has transferred his Partnership
Interests to a Person who is an Eligible Citizen and who furnishes
a Citizenship Certification to the General Partner prior to the
date fixed for redemption as provided below, redeem the Partnership
Interest of such Limited Partner or Assignee as
follows:
(i)
The General Partner shall, not later than the 30th day before the
date fixed for redemption, give notice of redemption to the Limited
Partner or Assignee, at his last address designated on the records
of the Partnership or the Transfer Agent, by registered or
certified mail, postage prepaid. The notice shall be deemed to have
been given when so mailed. The notice shall specify the Redeemable
Interests, the date fixed for redemption, the place of payment,
that payment of the redemption price will be made upon surrender of
the Certificate evidencing the Redeemable Interests and that on and
after the date fixed for redemption no further allocations or
distributions to which the Limited Partner or Assignee would
otherwise be entitled in respect of the Redeemable Interests will
accrue or be made.
(ii)
The aggregate redemption price for Redeemable Interests shall be an
amount equal to the Current Market Price (the date of determination
of which shall be the date fixed for redemption) of Limited Partner
Interests of the class to be so redeemed multiplied by the number
of Limited Partner Interests of each such class included among the
Redeemable Interests. The redemption price shall be paid, 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 10% annually and
payable in three equal annual installments of principal together
with accrued interest, commencing one year after the redemption
date.
(iii)
Upon surrender by or on behalf of the Limited Partner or Assignee,
at the place specified in the notice of redemption, of the
Certificate evidencing the Redeemable Interests, duly endorsed in
blank or accompanied by an assignment duly executed in
34
blank, the
Limited Partner or Assignee or his duly authorized representative
shall be entitled to receive the payment therefor.
(iv)
After the redemption date, Redeemable Interests shall no longer
constitute issued and Outstanding Limited Partner
Interests.
(f)
The provisions of Sections 4.9(e) through (h) shall also be
applicable to Limited Partner Interests held by a Limited Partner
or Assignee as nominee of a Person determined to be other than an
Eligible Citizen.
(g)
Nothing in Sections 4.9(e) or 4.9(f) or this Section 4.9(g) 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 Citizenship Certification delivered in connection with
the Transfer Application that he is an Eligible Citizen. If the
transferee fails to make such certification, such redemption shall
be effected from the transferee on the original redemption
date.
(h)
This Section 4.9 shall not apply to the determination of whether a
Person is a U.S. Citizen under applicable Maritime Law or to the
treatment of any such Person under this Agreement in the event that
it is determined that such Person is a Non-U.S. Citizen under
applicable Maritime Law. Section 4.10 shall control for
purposes of any such determination or treatment.
Section 4.10
Foreign
Ownership of Units .
(a)
In General . It is the policy of the Partnership that
Non-U.S. Citizens should Own, individually or in the aggregate, no
more than the Permitted Percentage of the Units. If at any time
Non-U.S. Citizens, individually or in the aggregate, become the
Owners of more than the Permitted Percentage of the Units, then the
Partnership shall have the power to take the actions prescribed in
subparagraphs (c), (d) and (e) of this Section
4.10. The provisions of this Section 4.10 are intended to
assure that the Partnership remains in continuous compliance with
the citizenship requirements of the Merchant Marine Act of 1936, as
amended, and the Shipping Act of 1916, as amended, for purposes of
owning and operating the vessels in the U.S. coastwise trade
(collectively, the “Maritime Laws”) and the regulations
promulgated thereunder. Any amendments to the Maritime Laws or the
regulations relating to the citizenship of U.S. vessel owners or
operators of coastwise trade vessels are deemed to be incorporated
herein by reference.
(b)
Dual Unit Certificate System . To implement the policy
set forth in subparagraph (a) hereof, the Partnership may
institute a Dual Unit Certificate System such that (i) each
Unit Certificate representing Units that are Owned by a U.S.
Citizen shall be marked “U.S. Citizen” and each Unit
Certificate representing Units that are Owned by a Non-U.S. Citizen
shall be marked “Non-U.S. Citizen,” but with all such
Unit Certificates to be identical in all other respects and to
comply with all provisions of the Delaware Act; (ii) to the
extent necessary to enable the Partnership to submit any proof of
citizenship required by law or by contract with the
35
United States government (or any agency
thereof), the Partnership may require the Record Holders and the
Owners of such Units to confirm their citizenship status from time
to time, and voting rights and distributions payable with respect
to Units held by such Record Holder or Owned by such Owner may, in
the discretion of the General Partner, be withheld until
confirmation of such citizenship status is received; and
(iii) the Unit Register of the Partnership shall be maintained
in such manner as to enable the percentage of Units that is Owned
by Non-U.S. Citizens and by U.S. Citizens to be confirmed. The
General Partner is authorized to take such other ministerial
actions or make such interpretations as it may deem necessary or
advisable in order to implement the policy set forth in
subparagraph (a) hereof.
(c)
Restrictions on Transfer; Change of Status .
(i)
Any transfer, or attempted transfer, of any Units, the effect of
which would be to cause one or more Non-U.S. Citizens to Own Units
in excess of the Permitted Percentage, shall be ineffective as
against the Partnership, and neither the Partnership nor its
Transfer Agent shall register such transfer or purported transfer
on the Unit Register of the Partnership and neither the Partnership
nor its Transfer Agent shall be required to recognize the
transferee or purported transferee thereof as a Unitholder of the
Partnership for any purpose whatsoever except to the extent
necessary to effect any remedy available to the Partnership under
this Section 4.10. A citizenship certificate may be required
from all transferees (and from any recipient upon original
issuance) of Units of the Partnership and, if such transferee (or
recipient) is acting as a fiduciary or nominee for an Owner, such
Owner, and registration of transfer (or original issuance) shall be
denied upon refusal to furnish such certificate.
(ii)
Each Record Holder and Owner shall advise the Partnership in
writing of any change in such Record Holder’s or
Owner’s citizenship status.
(d)
No Voting Rights; Temporary Withholding of Distributions
. If on any date (including any record date) the number of
Units that is Owned by Non-U.S. Citizens is in excess of the
Permitted Percentage (such Units herein referred to as the
“Excess Units”), the General Partner shall determine
those Units Owned by Non-U.S. Citizens that constitute such Excess
Units. The determination of those Units that constitute
Excess Units shall be made by reference to the date or dates Units
were acquired by Non-U.S. Citizens, starting with the most recent
acquisition of Units by a Non-U.S. Citizen and including, in
reverse chronological order of acquisition, all other acquisitions
of Units by Non-U.S. Citizens from and after the acquisition of
those Units by a Non-U.S. Citizen that first caused the Permitted
Percentage to be exceeded. The determination of the General
Partner as to those Units that constitute the Excess Units shall be
conclusive. Units deemed to constitute such Excess Units
shall (so long as such excess exists) not be accorded any voting
rights and shall not be deemed to be outstanding for purposes of
determining the vote required on any matter properly brought before
the Unitholders of the Partnership for a vote thereon. The
Partnership shall (so long as such excess exists) withhold the
payment of regular distributions, if any, and the sharing in any
other distribution (upon liquidation or otherwise) in respect of
the Excess Units. At such time as the Permitted Percentage is
no longer exceeded, full voting rights shall be restored to any
Units previously deemed to be Excess Units and any distribution
with respect thereto that has been withheld shall
36
be due and paid solely to the Record Holders of
such Units at the time the Permitted Percentage is no longer
exceeded.
(e)
Redemption of Excess Units . The Partnership shall
have the power, but not the obligation, to redeem Excess Units
subject to the following terms and conditions:
(i)
the per Unit redemption price (the “Non-U.S. Citizen
Redemption Price”) to be paid for the Excess Units to be
redeemed shall be the sum of (A) the Current Market Price of
the Units and (B) any distribution declared with respect to
such Units prior to the date such Units are called for redemption
hereunder but which has been withheld by the Partnership pursuant
to subparagraph (d);
(ii)
the Non-U.S. Citizen Redemption Price shall be paid in
cash;
(iii)
a notice of redemption shall be given by first class mail, postage
prepaid, mailed not less than ten (10) days prior to the
redemption date to each holder of record of the Units to be
redeemed, at such holder’s address as the same appears on the
Unit Register of the Partnership. Each such notice shall
state (A) the redemption date, (B) the number of Units to
be redeemed from such holder, (C) the Non-U.S. Citizen
Redemption Price, and the manner of payment thereof, (D) the
place where certificates for such Units are to be surrendered for
payment of the Non-U.S. Citizen Redemption Price, and (E) that
distributions on the Units to be redeemed will cease to accrue on
such redemption date;
(iv)
from and after the redemption date, distributions on the Units
called for redemption shall cease to accrue and such Units shall no
longer be deemed to be outstanding and all rights of the holders
thereof as Unitholders of the Partnership (except the right to
receive from the Partnership the Non-U.S. Citizen Redemption Price)
shall cease. Upon surrender of the certificates for any Units
so redeemed in accordance with the requirements of the notice of
redemption (properly endorsed or assigned for transfer if the
General Partner shall so require and the notice shall so state),
such Units shall be redeemed by the Partnership at the Non-U.S.
Citizen Redemption Price. In case fewer than all the Units
represented by any such certificate are redeemed, a new certificate
shall be issued representing the Units not redeemed without cost to
the holder thereof; and
(v)
such other terms and conditions as the General Partner may
reasonably determine.
(f)
Determination of Citizenship . In determining the
citizenship of the Owners or their transferees of Units, the
General Partner may rely on the Unit Register of the Partnership
and the citizenship certificates given by the Owners or their
transferees or any recipients (in the case of original issuance)
(in each case whether such certificates have been given on their
own behalf or on behalf of others) to establish the citizenship of
such Owners, transferees or recipients of the Units. The
determination of the citizenship of Owners and their transferees of
the Units may also be subject to proof in such other way or ways as
the General Partner may deem reasonable. The General Partner
may at any time require proof, in addition to the citizenship
certificates, of any Owner or proposed transferee of Units, and the
payment of distributions may be withheld, and any application for
transfer of ownership on the Unit Register
37
of the Partnership may be refused, until such
additional proof is submitted. The determination of the
General Partner as to the citizenship of the Owners or their
transferees in accordance with this subparagraph (f) shall be
conclusive.
(g)
Severability . Each provision of subparagraphs
(a) through (f) of this Section 4.10 is intended to be
severable from every other provision. If any one or more of
the provisions contained in such subparagraphs of this Section 4.10
is held to be invalid, illegal or unenforceable, the validity,
legality or enforceability of any other provision of subparagraphs
(a) through (f) of this Section 4.10 shall not be
affected, and such subparagraphs of this Section 4.10 shall be
construed as if the provisions held to be invalid, illegal or
unenforceable had been reformed to the extent required to be valid,
legal and enforceable.
(h)
For purposes of this Section 4.10 :
(i)
A Person shall be deemed the “Owner” of, or to
“Own” Units or other ownership interests to the extent
such Units or other ownership interests are (a) owned
beneficially by, held of record by (with the power to act on behalf
of the beneficial owner) or vested in, with respect to any class of
stock, by such Person; (b) may be voted by such Person;
(c) entitled to distributions in respect of such Units by such
Person; or (d) which by any other means whatsoever controlled
by such Person, or in which control is permitted to be exercised by
such Person, with the General Partner being authorized to determine
reasonably the meaning of such control for this purpose under the
guidelines set forth in Subpart C (Sections 67.30-67.47) of
Title 46 of the Code of Federal Regulations, as amended, modified
or supplemented.
(ii)
“ U.S. Citizen ” shall mean, at all tiers of
ownership and in both form and substance at each tier of
ownership:
(a)
any individual who is a citizen of
the United States, by birth, naturalization, as a derivative
citizen or as otherwise authorized by law and who is (x) free and
clear of any trust or fiduciary obligation in favor of, or control,
directly or indirectly, by, Non-U.S. Citizens and (y) not employed
by or financially dependent on a Non-U.S. Citizen which is
affiliated or associated in any manner with the Partnership or any
partner thereof;
(b)
any corporation
(i)
that is organized or incorporated
under the laws of the United States, or of a state of the United
States or a political subdivision thereof, Guam, Puerto Rico, the
Virgin Islands, American Samoa, the District of Columbia, the
Northern Mariana Islands, or any other territory or possession of
the United States (each a “State”),
(ii)
of which title to not less than 75%
of its stock interest is beneficially owned by and vested in
Persons who are U.S. Citizens, as defined under the relevant clause
(a)–(g) of this
38
definition of “U.S.
Citizen,” free and clear of any trust or fiduciary obligation
of any Non-U.S. Citizens,
(iii)
of which not less than 75% of the
voting power of the stock of such corporation entitled to vote is
beneficially owned by and vested in U.S. Citizens, as defined under
the relevant clause (a)–(g) of this definition of “U.S.
Citizen,” free from any contract or understanding through
which it is arranged that such voting power may be exercised
directly or indirectly on behalf of Non-U.S. Citizens,
(iv)
of which there are no other means by
which direct or indirect control is conferred upon or permitted to
be exercised by Non-U.S. Citizens,
(v)
whose chief executive officer (by
whatever title), chairman of the board of directors and all
officers authorized to act in the absence or disability of such
Persons or otherwise dispose of or control any vessel are U.S.
Citizens, and
(vi)
of which not more than a minority of
the number of directors (or equivalent Persons) necessary to
constitute a quorum are Non-U.S. Citizens;
(c)
any partnership
(i)
that is organized under the laws of
the United States or of a State,
(ii)
all general partners of which are
U.S. Citizens, as defined under the relevant clause (a)-(g) of this
definition of “U.S. Citizen,”
(iii)
of which not less than a 75% equity
interest and voting power is beneficially owned by and vested in,
Persons who are U.S. Citizens, as defined under the relevant clause
(a)–(g) of this definition of “U.S. Citizen,”
free and clear of any trust or fiduciary obligation in favor of any
Non-U.S. Citizens and free from any contract or understanding
through which it is arranged that such voting power may be
exercised directly or indirectly on behalf of Non-U.S. Citizens,
and
(iv)
of which there are no other means by
which direct or indirect control is conferred upon or permitted to
be exercised by Non-U.S. Citizens;
39
(d)
any association
(i)
that is organized under the laws of
the United States or of a State,
(ii)
of which 100% of the members are
U.S. Citizens, as defined under the relevant clause (a)-(g) of this
definition of “U.S. Citizen,”
(iii)
whose chief executive officer (by
whatever title), chairman of the board of directors (or equivalent
committee or body) and all Persons authorized to act in the absence
or disability of such Persons or otherwise dispose of or control
any vessel are citizens of the United States,
(iv)
of which not less than 75% of the
interest and voting power of such association is owned by and
vested in U.S. Citizens, free and clear of any trust or fiduciary
obligation in favor of any Non-U.S. Citizens, and free from any
contract or understanding through which it is arranged that such
voting power may be exercised directly or indirectly on behalf of
Non-U.S. Citizens,
(v)
of which not more than a minority of
the number of directors (or equivalent Persons) necessary to
constitute a quorum are Non-U.S. Citizens, and
(vi)
of which there are no other means by
which direct or indirect control is conferred upon or permitted to
be exercised by Non-U.S. Citizens;
(e)
any limited liability
company
(i)
that is organized under the laws of
the United States or of a State,
(ii)
of which 75% of the members are U.S.
Citizens,
(iii)
of which not less than 75% of the
membership interest is beneficially owned by, and vested in Persons
who are U.S. Citizens, as defined under the relevant clause (a)-(g)
of this definition of “U.S. Citizen,”
(iv)
whose chief executive officer (by
whatever title), chairman of the board of directors (or equivalent
committee or body) and all Persons authorized to act in the absence
or disability of such Persons or otherwise dispose of or control
any vessel are citizens of the United States,
40
(v)
of which not less than 75% of the
voting power of such company entitled to vote is vested in U.S.
Citizens, free and clear of any trust or fiduciary obligation, in
favor of or on behalf of any Non-U.S. Citizens, and free from any
contract or understanding through which it is arranged that such
voting power may be exercised directly or indirectly on behalf of
Non-U.S. Citizens,
(vi)
of which the managing member or
manager (or equivalent Person), if such company’s management
is delegated to a single manager or managing member pursuant to its
organizational agreement, is a citizen of the United States, or, if
such company’s management is conferred by its organizational
agreement on several managers, a management committee or board of
directors (or equivalent governing body), each manager having
general management authority is a citizen of the United States and
not more than a minority of the number of management committee
members or directors (or equivalent Persons) necessary to
constitute a quorum of such governing body are Non-U.S. Citizens,
and
(vii)
of which there are no other means by
which direct or indirect control is conferred upon or permitted to
be exercised by Non-U.S. Citizens;
(viii)
of which Non-U.S. Citizens do not
have authority within a management group, whether through veto
power, combined voting, or otherwise, to exercise control over the
limited liability company;
(f)
any joint venture (if not an
association or a partnership)
(i)
that is organized under the laws of
the United States or of a State,
(ii)
of which 100% of the members are, or
100% of the equity is beneficially owned by and vested in, U.S.
Citizens, as defined under the relevant clause (a)-(g) of this
definition of “U.S. Citizen,” free and clear of any
trust or fiduciary obligation in favor of any Non-U.S. Citizens,
and
(iii)
of which there are no other means by
which direct or indirect control is conferred upon or permitted to
be exercised by Non-U.S. Citizens;
41
(g)
any trust
(i)
that is domiciled in and existing
under the laws of the United States or a State,
(ii)
all of the trustees of which are
Citizens, as defined under the relevant clause (a)-(g) of this
definition of “U.S. Citizen,”
(iii)
of which not less than 75% of the
equity interest is owned by U.S. Citizens, as defined under the
relevant clause (a)-(g) of this definition of “U.S.
Citizen,”
(iv)
of which each beneficiary with an
enforceable interest in the trust is a U.S. Citizen, as defined
under the relevant clause (a)-(g) of this definition of “U.S.
Citizen,”
(v)
of which there are no other means by
which direct or indirect control is conferred upon or permitted to
be exercised by Non-U.S. Citizens;
all as further defined in Subpart C
(Sections 67.30-67.47) of Title 46 of the Code of Federal
Regulations, as amended, modified or supplemented.
(iii)
The term “Non-U.S. Citizen” shall mean any Person other
than a U.S. Citizen.
(iv)
The term “Permitted Percentage” shall mean a percentage
equal to not more than 24.0% as determined from time to time by the
General Partner, it being understood that the initial percentage is
15%.
CAPITAL CONTRIBUTIONS AND ISSUANCE OF
PARTNERSHIP INTERESTS
Section 5.1
Organizational
Contributions.
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 $40.00, 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 $1,960 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; 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.
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Section 5.2
Contributions
by the General Partner and its Affiliates.
(a)
On the Closing Date and pursuant to the Contribution Agreement:
(i) the General Partner shall agree to convey all of its
ownership interest in USS Chartering LLC to the Partnership, as a
Capital Contribution, in exchange for (A) a continuation of
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) Shipping
Master shall agree to convey all of its ownership interest in ITB
Baltimore LLC, ITB Groton LLC, ITB Jacksonville LLC, ITB Mobile
LLC, ITB New York LLC, ITB Philadelphia LLC, USS Chartering LLC,
USCS Chemical Chartering LLC, USCS Charleston Chartering LLC, USCS
Chemical Pioneer LLC, USCS Charleston LLC and USCS ATB LLC to the
Partnership, as a Capital Contribution, in exchange for (A) 899,968
Common Units, (B) 5,272,341 Class A Subordinated Units, (C)
1,627,627 Class B Subordinated Units, and (D) the assumption of
approximately $193.8 million of debt of Shipping Master and its
subsidiaries (“Debt”).
(b)
Upon the issuance of any additional Limited Partner Interests by
the Partnership (other than the issuance of the Common Units issued
in the Initial Offering and other than the issuance of the Common
Units issued pursuant to the Over-Allotment Option), the General
Partner shall be required to make additional Capital Contributions
equal to (i) 2/98ths of any amount contributed to the Partnership
by the Limited Partners in exchange for the additional Limited
Partner Interests issued to such Limited Partners less (ii) 2/98ths
of any amount so contributed by such Limited Partners that is used
by the Partnership concurrently with such contribution to redeem or
repurchase from any Person outstanding Limited Partner Interests of
the same class as the Limited Partner Interests issued to such
Limited Partners (including Parity Units if the Limited Partner
Interests are Common Units) at a price per Limited Partner Interest
equal to the net proceeds per Limited Partner Interest, before
expenses, that the Partnership receives from such issuances.
Except as set forth in the immediately preceding sentence and
Article XII, the General Partner shall not be obligated to make any
additional Capital Contributions to the Partnership.
Section 5.3
Contributions
by Initial Limited Partners and Distributions to the General
Partner and its Affiliates.
(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 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
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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. Upon receipt by the Partnership of the Capital
Contributions from the Underwriters as provided in this Section
5.3(b), the Partnership shall use such cash to redeem from Shipping
Master that number of Common Units held by the Shipping Master
equal to the number of Common Units issued to the Underwriters as
provided in this Section 5.3(b).
(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 6,000,000,
(ii) the “Option Units” as such term is used in the
Underwriting Agreement in an aggregate number up to 899,968
issuable upon exercise of the Over-Allotment Option pursuant to
subparagraph (c) hereof, (iii) the 899,968 Common Units, 5,272,341
Class A Subordinated Units and 1,627,627 Class B Subordinated Units
issuable pursuant to Section 5.2 hereof and (iv) the Incentive
Distribution Rights.
Section 5.4
Interest and
Withdrawal.
No interest shall be paid by the
Partnership on Capital Contributions. No Partner or Assignee shall
be entitled to the withdrawal or return of its Capital
Contribution, except to the extent, if any, that distributions made
pursuant to this Agreement or upon termination of the Partnership
may be considered as such by law and then only to the extent
provided for in this Agreement. Except to the extent expressly
provided in this Agreement, no Partner or Assignee shall have
priority over any other Partner or Assignee either as to the return
of Capital Contributions or as to profits, losses or distributions.
Any such return shall be a compromise to which all Partners and
Assignees agree within the meaning of Section 17-502(b) of the
Delaware Act.
(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,
without limitation, 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
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same as its determination, recognition and
classification for federal income tax purposes (including, without
limitation, any method of depreciation, cost recovery or
amortization used for that purpose), provided, that:
(i)
Solely for purposes of this Section 5.5, 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 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.
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(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)
Immediately prior to the transfer of
a Subordinated Unit or of a Subordinated Unit that has converted
into a Common Unit pursuant to Section 5.8 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.
Following any such allocation, the transferor’s Capital
Account, if any, maintained with respect to the retained
Subordinated Units or 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.
(d)
(i)
In accordance
with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an
issuance of additional Partnership Interests for cash or
Contributed Property or the conversion of the General
Partner’s Combined Interest to Common Units pursuant to
Section 11.3(b), the Capital Account of all Partners and the
Carrying Value of each Partnership property immediately prior to
such issuance shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Partnership
property, as if such Unrealized Gain or Unrealized Loss had been
recognized on an actual sale of each such property immediately
prior to such issuance and had been allocated to the Partners at
such time pursuant to Section 6.1 in the same manner as any item of
gain or loss actually recognized during such period would have been
allocated. In determining such Unrealized Gain or Unrealized Loss,
the aggregate cash amount and fair market value of all Partnership
assets (including, without limitation, 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
46
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 in a sale of such property immediately prior to such
distribution for an amount equal to its fair market value, and had
been allo
