FIFTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF SABINE PASS LNG, L.P

Exhibit 3.2

 

FIFTH AMENDED AND RESTATED

AGREEMENT

OF

LIMITED PARTNERSHIP

OF

SABINE PASS LNG, L.P.

 

 

TABLE OF CONTENTS

 

 

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THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED AT ANY TIME WHATSOEVER, EXCEPT UPON DELIVERY TO THE PARTNERSHIP OF AN OPINION OF COUNSEL SATISFACTORY TO THE GENERAL PARTNER OF THE PARTNERSHIP THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE GENERAL PARTNER OF THE PARTNERSHIP OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE GENERAL PARTNER TO THE EFFECT THAT ANY SUCH TRANSFER OR SALE WILL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.

FIFTH AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

SABINE PASS LNG, L.P.

The original Agreement of Limited Partnership of Sabine Pass LNG, L.P. (the “ Partnership ”) was entered into as of October 20, 2003 (the “ Effective Date ”), by and between Sabine Pass LNG-GP, Inc., a Delaware corporation, as the General Partner, and Cheniere LNG, Inc., a Delaware corporation, as a Limited Partner (the “ Original Limited Partner ”). Effective as of February 18, 2004, the General Partner and the Original Limited Partner adopted the Amended and Restated Agreement of Limited Partnership. Effective as of October 26, 2004, (a) the Original Limited Partner, with the consent of the General Partner, transferred all of its Units (as hereafter defined) to Sabine Pass LNG-LP Interests, LLC (the “ First Successor Limited Partner ”), and (b) the General Partner and the First Successor Limited Partner adopted the Second Amended and Restated Agreement of Limited Partnership (the “ Second Amended Agreement ”), which was also executed by the Original Limited Partner. Effective as of November 15, 2004, the First Successor Limited Partner merged with and into Cheniere LNG-LP Interests, LLC, a Delaware limited liability company (the “ Second Successor Limited Partner ”), pursuant to which the Second Successor Limited Partner succeeded to all of the First Successor Limited Partner’s rights and obligations, and the General Partner and the Second Successor Limited Partner adopted the Third Amended and Restated Agreement of Limited Partnership (the “ Third Amended Agreement ”). Effective as of February 24, 2005, (x) the Second Successor Limited Partner, with the consent of the General Partner, transferred all of its Units to Sabine Pass LNG-LP, LLC, a Delaware limited liability company (the “ Current Limited Partner ”), (y) the Current Limited Partner was admitted as a Limited Partner of the Partnership, and (z) the General Partner and the Current Limited Partner adopted the Fourth Amended and Restated Agreement of Limited Partnership (the “ Fourth Amended Agreement ”). The General Partner and the Current Limited Partner adopted this Fifth Amended and Restated Agreement of Limited Partnership, which amends and restates in its entirety the Agreement effective on November 9, 2006 concurrently with the execution and delivery of the Indenture and following

 

the payment in full of all indebtedness outstanding under (i) that certain Credit Agreement, dated August 31, 2005, among Cheniere LNG Holdings, LLC, the initial lenders named therein, and Credit Suisse, Cayman Islands Branch and (ii) that certain First Amended and Restated Credit Agreement, dated July 21, 2006, among the Partnership, Société Générale, HSBC Bank USA, National Association and the lenders named therein (the “ Effective Time ”).

ARTICLE I

Organization Matters

1.1 Formation of the Partnership . The Partners desire to form and have formed a limited partnership pursuant to the provisions of the Partnership Act. This Agreement constitutes the partnership agreement of such Partnership, effective upon the date of filing of the Partnership’s Certificate of Limited Partnership with the office of the Secretary of State of the State of Delaware. Except as expressly provided herein to the contrary, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Partnership Act.

1.2 Single Purpose Entity Requirements . Notwithstanding any other provision contained in this Agreement, the Partners shall comply with the following single purpose entity requirements (“ Single Purpose Entity Requirements ”) in order to maintain the Partnership’s status as a separate entity and to avoid any confusion or potential consolidation with any Affiliate.

(a) Limited Purpose . So long as any obligation under the Note Documents is outstanding, the sole purpose of the Partnership shall be limited to developing, building, owning and operating a liquified natural gas receiving and regasification facility in Cameron Parish, Louisiana (the “ Project ”), and in connection therewith, all activities ancillary, incidental and related thereto that may be performed by a limited partnership organized under the Partnership Act including, without limitation:

(i) entering into and performing the Partnership’s obligations under the Note Documents;

(ii) assuming and adopting all of the obligations required to be adopted by the Partnership with respect to Cheniere and CXY Corporation (n/k/a Cheniere FLNG, L.P.) under the Crest Settlement Agreement (the “ Crest Obligation ”);

(iii) entering into, or acquiring rights under, agreements in connection with any of the foregoing activities, including without limitation the Partnership Documents and any and all other agreements for the construction, commissioning and operation of the Project;

(iv) all activities required or permitted by the Indenture and the Note Documents; and

(v) to engage in any lawful act or activity and to exercise any powers permitted to limited partnerships organized under the laws of the State of

 

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Delaware that are related or incidental to and necessary, convenient or advisable for the accomplishment of the above-mentioned purposes.

(b) Limitations on Indebtedness, Actions . Notwithstanding anything to the contrary in this Agreement or in any other document governing the formation, management or operation of the Partnership, so long as any obligation under the Note Documents is outstanding the Partnership shall not :

(i) guarantee any obligation of any Person, including any Affiliate, or become obligated for the debts of any other Person or hold out its credit as being available to pay the obligations of any other Person (other than the Crest Obligation);

(ii) engage, directly or indirectly, in any business other than as required or permitted to be performed under Section 1.2 of this Agreement;

(iii) incur, create or assume any indebtedness or liabilities other than (A) the Obligations, (B) the Crest Obligation and (C) indebtedness and liabilities incurred by the Partnership that are permitted under the Note Documents;

(iv) make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any Person, except that the Partnership may invest in those investments permitted under the Note Documents;

(v) to the fullest extent permitted by law, engage in any dissolution or liquidation, or (except as permitted under the Note Documents) any consolidation, merger, sale or other transfer of any of its assets outside the ordinary course of the Partnership’s business;

(vi) buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities or as otherwise permitted under the Note Documents);

(vii) own any asset or property other than the Project and incidental personal and real property necessary for the ownership or operation of the Project and interests in any subsidiaries permitted under the Note Documents;

(viii) take any Material Action without the unanimous written approval of the entire board of directors of the General Partner, including the Independent Director; or

(ix) amend, modify or otherwise change this Agreement with respect to the Single Purpose Entity Requirements or Sections 1.9 or 1.10 hereof.

(c) Separateness Covenants . In the conduct of the Partnership’s operations since its organization and so long as any obligation under the Note Documents is outstanding, the Partnership (and the General Partner on behalf of the Partnership) has observed and will continue to observe the following covenants:

 

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(i) maintain books and records and bank accounts separate from those of any other Person;

(ii) maintain its assets in such a manner that it is not costly or difficult to segregate, identify or ascertain such assets;

(iii) comply with all organizational formalities necessary to maintain its separate existence;

(iv) hold itself out to creditors and the public as a legal entity separate and distinct from any other entity;

(v) maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person and not have its assets listed on any financial statement of any other Person; except that the Partnership’s assets may be included in consolidated financial statements of its Affiliates so long as appropriate notation is made on such consolidated financial statements to indicate the separateness of the Partnership from such Affiliate and to disclose the separate nature of the Partnership’s indebtedness;

(vi) prepare and file its own tax returns separate from those of any Person to the extent required by applicable law, and pay any taxes required to be paid by applicable law;

(vii) allocate and charge fairly and reasonably any common employee or overhead shared with Affiliates;

(viii) except as permitted by the Note Documents, not enter into any transaction with Affiliates except on an arm’s-length basis on terms which are no less favorable than would be available in comparable transactions with unaffiliated third parties (or, if no comparable transactions with unaffiliated third parties would be available, then on terms that are determined by the board of directors of the General Partner to be fair in light of all factors considered by such board of directors to be pertinent to the Partnership), and pursuant to written, enforceable agreements;

(ix) conduct its own business in its own name, and use separate stationery, invoices and checks;

(x) not commingle its assets or funds with those of any other Person;

(xi) not assume, guarantee or pay the debts or obligations of any other Person (other than the Crest Obligation);

(xii) correct any known misunderstanding as to its separate identity;

(xiii) not permit any Affiliate to guarantee or pay its obligations (other than (i) pledges by its Partners of their interests in the Partnership and other

 

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guarantees and indemnities set forth in the Note Documents and (ii) with respect to the Crest Obligation);

(xiv) pay its liabilities and expenses out of and to the extent of its own funds;

(xv) maintain a sufficient number of employees or engaged independent contractors in light of its contemplated business purpose and pay the salaries of its own employees, if any, only from the Partnership’s own funds;

(xvi) maintain adequate capital in light of its contemplated business purpose, transactions and liabilities; provided , however , that the foregoing shall not require any Partner to make additional capital contributions to the Partnership; and

(xvii) cause the officers, directors, employees, agents and other representatives of the General Partner or the Partnership to act at all times with respect to the Partnership consistently and in furtherance of the foregoing and in the best interests of the Partnership except to the extent required or permitted by the Note Documents.

Failure of the Partnership, or the General Partner on behalf of the Partnership, to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the status of the Partnership as a separate legal entity.

(d) Independent Director . As long as any obligation under the Note Documents is outstanding, the General Partner at all times shall have at least one Independent Director. To the fullest extent permitted by law, the Independent Director shall consider only the interests of the Partnership and its creditors in acting or otherwise voting on any Material Action. No resignation or removal of an Independent Director, and no appointment of a successor Independent Director, shall be effective until such successor shall have accepted his or her appointment as an Independent Director by a written instrument. In the event of a vacancy in the position of Independent Director, the General Partner shall, as soon as practicable, appoint a successor Independent Director.

1.3 Name . The name of the Partnership is “Sabine Pass LNG, L.P.” The General Partner will comply or cause the Partnership to comply with all applicable laws and other requirements relating to fictitious or assumed names.

1.4 Principal Place of Business . The principal office and place of business of the Partnership and the General Partner’s offices shall be 717 Texas Avenue, Suite 3100, Houston, Texas 77002, or such other place within or outside the State of Delaware, as the General Partner may from time to time determine. If the General Partner moves the Partnership’s offices, it shall file any certificates required under the Partnership Act and notify all other Partners of such change.

1.5 Filings . The General Partner shall, or shall cause the Partnership to, execute, swear to, acknowledge, deliver, file or record in public offices and publish all such certificates,

 

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notices, statements or other instruments, and take all such other actions, as may be required by law for the formation, reformation, qualification, registration, operation or continuation of the Partnership in any jurisdiction, to maintain the limited liability of the Limited Partners, to preserve the Partnership’s status as a partnership for tax purposes or otherwise to comply with applicable law. Upon request of the General Partner, each of the Limited Partners shall promptly execute all such certificates and other documents as may be necessary, in the judgment of the General Partner, in order for the General Partner to accomplish all such executions, swearings to, acknowledgments, deliveries, filings, recordings in public offices, publishings and other acts.

1.6 Power of Attorney . Each Limited Partner hereby irrevocably makes, constitutes and appoints the General Partner, with full power of substitution and resubstitution, as the true and lawful agent and attorney-in-fact of such Limited Partner, with full power and authority in the name, place and stead of such Limited Partner to execute, swear to, acknowledge, deliver, file or record in public offices and publish: (a) all certificates and other instruments (including counterparts thereof) that the General Partner deems necessary or appropriate to reflect any amendment, change or modification of or supplement to this Agreement in accordance with the terms of this Agreement; (b) all certificates and other instruments and all amendments thereto that the General Partner deems appropriate or necessary to form, qualify or continue the Partnership in the State of Delaware or any jurisdiction, to maintain the limited liability of the Limited Partners, to preserve the Partnership’s status as a partnership for tax purposes or otherwise to comply with applicable law; (c) all conveyances and other instruments or documents that the General Partner deems appropriate or necessary to reflect: (i) the transfers or assignments of interests in, to or under this Agreement or the Partnership; (ii) the dissolution, liquidation and termination of the Partnership, or (iii) the distribution of assets of the Partnership pursuant to the terms of this Agreement; and (d) any other instruments required by law or as may be deemed necessary or appropriate by the General Partner to carry out the provisions of this Agreement.

The power of attorney granted herein is hereby declared irrevocable and a power coupled with an interest, shall survive the death, disability, bankruptcy, dissolution or other termination of each Limited Partner and shall extend to and be binding upon each Limited Partner’s heirs, beneficiaries, executors, administrators, legal representatives, successors, assigns and vendees. Each Limited Partner hereby agrees to be bound by any representations made by the agent and attorney-in-fact acting in good faith pursuant to such power of attorney, and each Limited Partner hereby waives any and all defenses that may be available to contest, negate, or disaffirm any action of the agent and attorney-in-fact taken under such power of attorney.

1.7 Term . The term for which the Partnership is to exist as a limited partnership is from the date of first filing of the Certificate of Limited Partnership with the office of the Secretary of State of the State of Delaware through and until the termination of the Partnership in accordance with any provision of Article X .

1.8 Partner Information . The General Partner shall cause to be attached hereto as Exhibit C and updated from time to time a list showing the then current names and addresses of the Partners and the numbers of Units held by each.

 

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1.9 Property; Partition; Nature of Interest .

(a) All property owned by the Partnership shall be owned by the Partnership as an entity and, insofar as permitted by applicable law, no Partner shall have any ownership interest in any Partnership property in its individual name or right, and each Partner’s ownership interest in the Partnership shall be personal property for all purposes.

(b) To the fullest extent permitted by law, each Partner and any additional Partner admitted to the Partnership hereby irrevocably waives any right or power that such Person might have to cause the Partnership or any of its assets to be partitioned, to cause the appointment of a receiver for all or any portion of the assets of the Partnership, to compel any sale of all or any portion of the assets of the Partnership pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in equity to cause the dissolution, liquidation, winding up or termination of the Partnership. The Partners shall not have any interest in any specific assets of the Partnership, and the Partners shall not have the status of a creditor with respect to any distribution pursuant to this Agreement. The interest of the Partners in the Partnership is personal property.

1.10 Effect of Bankruptcy, Death or Incompetency of a Partner . The bankruptcy, death, dissolution, liquidation, termination or adjudication of incompetency of a Partner shall not cause the termination or dissolution of the Partnership and the business of the Partnership shall continue. Upon any such occurrence, the trustee, receiver, personal representative, executor, administrator, committee, guardian or conservator of such Partner shall have all the rights of such Partner for the purpose of settling or managing its estate or property, subject to satisfying conditions precedent to the admission of such assignee as a substitute Partner. The transfer by such trustee, receiver, executor, administrator, committee, guardian or conservator of any interest in the Partnership shall be subject to all of the restrictions, hereunder to which such transfer would have been subject if such transfer had been made by such bankrupt, deceased, dissolved, liquidated, terminated or incompetent Partner.

ARTICLE II

Definitions

Whenever used in this Agreement, the following terms shall have the meanings assigned to them herein:

Acceptance Notice . See Section 8.3(a) .

Affiliate . When used with reference to a specific Person: (i) any Person directly or indirectly owning, controlling or holding the power to vote ten percent (10%) or more of any class of the voting securities of the specified Person; (ii) any Person that directly or indirectly through one or more intermediaries controls or is controlled by or is under common control with the specified Person; or (iii) any person that is an officer or director of, general partner in, or manager or trustee of, or serves in a similar capacity with respect to, the specified Person or of which the specified Person is an officer or director, general partner, manager or trustee, or with respect to which the specified Person serves in a similar capacity.

 

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Agreement . This Agreement of Limited Partnership of Sabine Pass LNG, L.P., as originally executed and as amended, supplemented, modified or further restated from time to time, as the context requires.

Assignee . A Person to whom Units have been transferred by a Limited Partner in a manner expressly permitted under this Agreement, and who thereby shall have an interest in the Partnership equivalent to that of a Limited Partner, but (i) limited to the rights and obligations appurtenant to such Units to share in the allocations and distributions, including liquidating distributions, of the Partnership, and (ii) otherwise subject to the limitations under this Agreement and the Partnership Act on the rights of an Assignee who has not been admitted as a Limited Partner.

Capital Account . See Section 3.6 .

Capital Contribution . The total amount or assets contributed to the Partnership by all Partners or any class of Partners or any one Partner, as the case may be.

Carrying Value . (a) With respect to property contributed to the Partnership, the fair market value of such property at the time of contribution reduced (but not below zero) by all depreciation, depletion (computed as a separate item of deduction), amortization and cost recovery deductions charged to the Partners’ Capital Accounts, (b) with respect to any property whose value is adjusted pursuant to Section 3.6, the adjusted value of such property reduced (but not below zero) by all depreciation and cost recovery deductions charged to the Partners’ Capital Accounts and (c) 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.

Cash Available for Distribution . With respect to any calendar quarter, all Partnership cash, demand deposits and short-term marketable securities on hand as of the last day of such calendar quarter, after payment of all fees, debt service, and operating costs of the Partnership, and less such reserves as the General Partner, in its sole discretion, shall deem reasonable to retain in order to provide for the operation of the Partnership’s business.

Certificate of Limited Partnership . The Certificate of Limited Partnership filed by the Partnership with the Secretary of State of the State of Delaware as originally executed and as amended or further restated from time to time, as the context requires.

Cheniere . Cheniere Energy, Inc., a Delaware corporation.

Code . The Internal Revenue Code of 1986, as amended and in effect from time to time.

Crest Obligation . See Section 1.2(a) .

Crest Settlement Agreement . The Settlement and Purchase Agreement, dated as of June 14, 2001, by and among Cheniere, CXY Corporation, Crest Energy, L.L.C., Crest Investment Company and Freeport LNG Terminal, LLC.

Effective Date . The date as of which this Agreement was first entered into.

 

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FERC . The Federal Energy Regulatory Commission.

General Partner . Sabine Pass LNG-GP, Inc., a Delaware corporation and any successor thereto selected pursuant to Section 9.2 .

Governmental Entity . Any United States (federal, state or local) or foreign government, governmental authority, regulatory or administrative agency, governmental commission, court or tribunal (or any department, bureau or division thereof).

Governmental Permits . All franchises, approvals, authorizations, permits, licenses, easements, registrations, qualifications, leases, variances and similar rights required by the Partnership, as the case may be, from any Governmental Entity for the Project.

Guarantors . Has the meaning ascribed to such term in the Indenture.

Indenture . The Indenture, dated as of November 9, 2006, between the Partnership and The Bank of New York, as trustee, as amended, supplemented or modified from time to time.

Independent Director . Has the meaning ascribed to such term in the General Partner’s organizational documents.

Initial Notice . See Section 8.3(a) .

Interest Rate . The rate per annum equal to the lesser of (i) the prime rate as quoted in the money rates section of The Wall Street Journal, plus two percent (2%) and (ii) the maximum rate permitted by applicable law.

Limited Partner . Each Person who acquires Limited Partner Units and is admitted to the Partnership as a Limited Partner pursuant to this Agreement. All references in this Agreement to a majority or specified percentage of the Limited Partners shall mean Limited Partners holding more than fifty percent (50%) or such specified percentage, respectively, of the aggregate number of Units then held by Limited Partners.

Material Action . To file any insolvency or reorganization case or proceeding, to institute proceedings to have the Partnership be adjudicated bankrupt or insolvent, to institute proceedings under any applicable insolvency law, to seek any relief under any law relating to relief from debts or the protection of debtors, to consent to the filing or institution of bankruptcy or insolvency proceedings against the Partnership, to file a petition seeking, or consent to, reorganization or relief with respect to the Partnership under any applicable federal or state law relating to bankruptcy or insolvency, to seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official of or for the Partnership or a substantial part of its property, to make any assignment for the benefit of creditors of the Partnership, to admit in writing the Partnership’s inability to pay its debts generally as they become due, or to take action in furtherance of any of the foregoing.

Note Documents . Has the meaning ascribed to such term in the Indenture.

Notice to Partners . See Section 8.3(a) .

 

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Obligations . Has the meaning ascribed to such term in the Indenture.

Partner . Each of the General Partner and the Limited Partners.

Partnership . Sabine Pass LNG, L.P.

Partnership Act . The Delaware Revised Uniform Limited Partnership Act, as amended and in effect from time to time.

Partnership Documents . The Assumption Agreement, J&S Cheniere Potential TUA Letter, J&S Cheniere Terminal Use Agreement, State Tax Sharing Agreement and Material Project Agreements, each as defined in the Indenture.

Person . Any individual, general or limited partnership, corporation, limited liability company, executor, administrator or estate, association, trustee or trust, or other entity.

Project . See Section 1.2(a) .

Regulations . The final, temporary or proposed income tax regulations promulgated by the United States Department of the Treasury, as amended and in effect from time to time.

Securities Act . The Securities Act of 1933, as amended and in effect from time to time.

Selling Limited Partner . See Section 8.3(a) .

Sharing Ratio . The aggregate number of Units held by a Partner divided by the aggregate number of Units held by all the Partners.

Substituted Limited Partner . A Person who is admitted as a Limited Partner to the Partnership in place of and with all the rights of a Limited Partner pursuant to Section 8.3(a) , in such Person’s capacity as a Limited Partner of the Partnership.

Tax Distribution . See Section 4.3 .

Taxable Income . The net income of the Partnership for federal income tax purposes.

Taxable Loss . The net loss of the Partnership for federal income tax purposes.

Unit . A unit of interest of a Partner in the Partnership with a Sharing Ratio of one percent (1%).

 

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ARTICLE III

Capital Contributions

3.1 General Partner’s Capital Contribution . As of the Effective Date, the General Partner contributed to the Partnership the assets set forth on Exhibit A and received the number of Units set forth next to its name on Exhibit C .

3.2 Limited Partners’ Capital Contributions . As of the Effective Date, the Original Limited Partner contributed to the Partnership the assets set forth on Exhibit B and received 100 Units, which were transferred to the First Successor Limited Partner (as set forth in the Second Amended Agreement); thereafter such Units were succeeded to by the Second Successor Limited Partner (as set forth in the Third Amended Agreement); and thereafter such Units were transferred to the Current Limited Partner (as set forth in the Fourth Amended Agreement and on Exhibit C hereto).

3.3 Loans by Partners . No Partner has any obligation to lend or advance any funds to the Partnership under any circumstances. Notwithstanding anything contained in this Agreement to the contrary, loans made by any Partner to the Partnership and any repayment thereof shall only be permitted to the extent provided under the Indenture. If any Partner shall advance funds to the Partnership, such Partner shall receive interest in an amount equal to the Interest Rate on the balance of such loan outstanding from time to time. Notwithstanding anything contained in this Agreement to the contrary, all loans made by a Partner to the Partnership, together with accrued interest thereon, shall be paid in full before any distributions are made to the Partners.

3.4 No Other Contributions . No Partner shall have any obligation or right to make any contribution to the Partnership except as provided in Sections 3.1 and 3.2 unless all Partners otherwise agree.

3.5 Return of Capital Contributions . No Partner shall be entitled to have its Capital Contribution returned except in accordance with the express provisions of this Agreement.

3.6 Capital Accounts . A separate Capital Account will be established for each Partner. Each Partner’s Capital Account shall be determined and maintained in accordance with Regulation § 1.704-1(b)(2)(iv) as interpreted by the General Partner. The General Partner shall have complete discretion to make those determinations, valuations, adjustments and allocations with respect to each Partner’s Capital Account as it deems appropriate so that the allocations made pursuant to this Agreement will have substantial economic effect as such term is used in Regulation § 1.704-1(b).

3.7 Interest . No interest shall be paid by the Partners or the Partnership on any capital contributed to the Partnership by the Partners. As provided in Section 3.3 , interest will be paid on any loan from any Partner to the Partnership.

 

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