FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
RIO VISTA ENERGY PARTNERS L.P.
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ARTICLE I DEFINITIONS
1
SECTION 1.1
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
SECTION 1.2
Construction. . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
ARTICLE II ORGANIZATION. . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.1
Formation
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
SECTION 2.2
Name. . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
SECTION 2.3
Registered
Office; Registered Agent; Principal Office; Other
Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
SECTION 2.4
Purpose
and Business . . . . .
. . . . . . . . . . . . . . . . . . 20
SECTION 2.5
Powers. .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21
SECTION 2.6
Power of
Attorney . . . . . . . . . . . . . . . . . . . . . . . . .
21
SECTION 2.7
Term. . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
SECTION 2.8
Title to
Partnership Assets . . . . . . . . . . . . . . . . . . . .
23
ARTICLE III RIGHTS OF LIMITED PARTNERS
. . . . . . . . . . .
. . . . . . . . . . . . 24
SECTION 3.1
Limitation
of Liability . . . . . . . . . . . . . . . . . . . . . .
24
SECTION 3.2
Management
of Business. . . . . . . . . . . . . . . . . . . . . . .
24
SECTION 3.3
Outside
Activities of the Limited Partners . . . . . . . . . . . .
24
SECTION 3.4
Rights of
Limited Partners. . . . . . . . . . . . . . . . . . . . .
24
ARTICLE IV CERTIFICATES; RECORD
HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;
REDEMPTION OF PARTNERSHIP INTERESTS . . . . . . . . . . . . . . . .
. . . 25
SECTION 4.1
Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
SECTION 4.2
Mutilated,
Destroyed, Lost or Stolen Certificates . . . . . . . . .
25
SECTION 4.3
Record
Holders. . . . . . . . . . . . . . . . . . . . . . . . . . .
26
SECTION 4.4
Transfer
Generally . . . . . .
. . . . . . . . . . . . . . . . . . 27
SECTION 4.5
Registration and Transfer of Limited Partner Interests. . . . . . .
27
SECTION 4.6
Transfer
of the General Partner's General Partner Interest. . . . .
28
SECTION 4.7
Transfer
of Incentive Distribution Rights . . . . . . . . . . . . .
29
SECTION 4.8
Restrictions on Transfers . . . . . . . . . . . . . . . . . . . . .
29
SECTION 4.9
Citizenship Certificates; Non-citizen Assignees . . . . . . . . . .
30
SECTION 4.10
Redemption of
Partnership Interests of Non-citizen Assignees. . . . 31
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ARTICLE V CAPITAL
CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP
INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 32
SECTION 5.1
Organizational Contributions. . . . . . . . . . . . . . . . . . . .
32
SECTION 5.2
Contributions by the General Partner and its Affiliates . . . . . .
32
SECTION 5.3
Contributions by Initial Limited Partners and Distributions to
the
General Partner . . . . . . . . . . . . . . . . . . . . . . . . . .
32
SECTION 5.4
Interest
and Withdrawal . . . . . . . . . . . . . . . . . . . . . .
33
SECTION 5.5
Capital
Accounts. . . . . . . . . . . . . . . . . . . . . . . . . .
33
SECTION 5.6
Issuances
of Additional Partnership Securities. . . . . . . . . . .
36
SECTION 5.7
Limitations on Issuance of Additional Partnership Securities. . . .
36
SECTION 5.8
[Reserved]. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
37
SECTION 5.9
Limited
Preemptive Right. . . . . . . . . . . . . . . . . . . . . .
37
SECTION 5.10
Splits and
Combinations . . . . . . . . . . . . . . . . . . . . . .
37
SECTION 5.11
Fully Paid and
Non-Assessable Nature of Limited Partner
Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
38
ARTICLE VI ALLOCATIONS AND
DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . .
38
SECTION 6.1
Allocations for Capital Account Purposes. . . . . . . . . . . . . .
38
SECTION 6.2
Allocations for Tax Purposes. . . . . . . . . . . . . . . . . . . .
45
SECTION 6.3
Requirement and Characterization of Distributions; Distributions
to
Record Holders. . . . . . . . . . . . . . . . . . . . . . . . . . .
47
SECTION 6.4
Distributions of Available Cash from Operating Surplus. . . . . . .
48
SECTION 6.5
Distributions of Available Cash from Capital Surplus. . . . . . . .
49
SECTION 6.6
Adjustment
of Minimum Quarterly Distribution and Target Distribution
Levels. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
SECTION 6.7
[Reserved]
. . . . . . . . . . .
. . . . . . . . . . . . . . . . . 49
SECTION 6.8
Special
Provisions Relating to the Holders of Incentive Distribution
Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
SECTION 6.9
Entity-Level Taxation . . . . . . . . . . . . . . . . . . . . . . .
50
ARTICLE VII MANAGEMENT AND OPERATION OF
BUSINESS . . . . . . .
. . . . . . . . . . . 50
SECTION 7.1
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
SECTION 7.2
Certificate of Limited Partnership. . . . . . . . . . . . . . . . .
52
SECTION 7.3
Restrictions on the General Partner's Authority . . . . . . . . . .
53
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TABLE OF CONTENTS
(continued)
Page
SECTION 7.4
Reimbursement of the General Partner . . . . . . . . . . . . . . .
53
SECTION 7.5
Outside
Activities. . . . . . . . . . . . . . . . . . . . . . . . .
54
SECTION 7.6
Loans from
the General Partner; Loans or Contributions from the
Partnership; Contracts with Affiliates; Certain Restrictions on
the
General Partner . . . . . . . . . . . . . . . . . . . . . . . . . .
55
SECTION 7.7
Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . .
57
SECTION 7.8
Liability
of Indemnitees. . . . . . . . . . . . . . . . . . . . . .
59
SECTION 7.9
Resolution
of Conflicts of Interest . . . . . . . . . . . . . . . .
59
SECTION 7.10
Other Matters
Concerning the General Partner. . . . . . . . . . . . 61
SECTION 7.11
Purchase or Sale
of Partnership Securities. . . . . . . . . . . . . 62
SECTION 7.12
Registration
Rights of the General Partner and its Affiliates . . . 62
SECTION 7.13
Reliance by
Third Parties . . . . . . . . . . . . . . . . . . . . .
64
ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND
REPORTS. . . . . . . . . . . . . . . . . . 65
SECTION 8.1
Records
and Accounting. . . . . . . . . . . . . . . . . . . . . . .
65
SECTION 8.2
Fiscal
Year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65
SECTION 8.3
Reports .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65
ARTICLE IX TAX MATTERS . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 9.1
Tax
Returns and Information . . . . . . . . . . . . . . . . . . . .
65
SECTION 9.2
Tax
Elections . . . . . . . . . . . . . . . . . . . . . . . . . . .
66
SECTION 9.3
Tax
Controversies . . . . . . . . . . . . . . . . . . . . . . . . .
66
SECTION 9.4
Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . .
66
ARTICLE X ADMISSION OF
PARTNERS . . . . . . . . . . . . . . . . . . . . . . . . . .
67
SECTION 10.1
Admission of
Initial Limited Partners . . . . . . . . . . . . . . . 67
SECTION 10.2
Admission of
Substituted Limited Partner. . . . . . . . . . . . . . 67
SECTION 10.3
Admission of
Successor General Partner. . . . . . . . . . . . . . . 67
SECTION 10.4
Admission of
Additional Limited Partners. . . . . . . . . . . . . . 68
SECTION 10.5
Amendment of
Agreement and Certificate of Limited Partnership . . . 68
ARTICLE XI WITHDRAWAL OR REMOVAL
OF PARTNERS . . . . . . . . . . . . . . . . . . . . 68
SECTION 11.1
Withdrawal of
the General Partner . . . . . . . . . . . . . . . . . 68
SECTION 11.2
Removal of the
General Partner. . . . . . . . . . . . . . . . . . . 70
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TABLE OF CONTENTS
(continued)
Page
SECTION 11.3
Interest of
Departing Partner and Successor General Partner . . . .
71
SECTION 11.4
Withdrawal of
Limited Partners. . . . . . . . . . . . . . . . . . . 72
ARTICLE XII DISSOLUTION AND LIQUIDATION
. . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 12.1
Dissolution . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 12.2
Continuation of
the Business of the Partnership After
Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73
SECTION 12.3
Liquidator. . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 12.4
Liquidation . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 12.5
Cancellation of
Certificate of Limited Partnership . . . . . . . . 75
SECTION 12.6
Return of
Contributions . . . . . . . . . . . . . . . . . . . . . .
75
SECTION 12.7
Waiver of
Partition . . . . . . . . . . . . . . . . . . . . . . . .
75
SECTION 12.8
Capital Account
Restoration . . . . . . . . . . . . . . . . . . . . 75
ARTICLE XIII AMENDMENT OF PARTNERSHIP
AGREEMENT; MEETINGS;
RECORD DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 75
SECTION 13.1
Amendment to be
Adopted Solely by the General Partner . . . . . . . 75
SECTION 13.2
Amendment
Procedures. . . . . . . . . . . . . . . . . . . . . . . .
77
SECTION 13.3
Amendment
Requirements . . . . .
. . . . . . . . . . . . . . . . . 78
SECTION 13.4
Special
Meetings. . . . . . . . . . . . . . . . . . . . . . . . . .
78
SECTION 13.5
Notice of a
Meeting . . . . . . . . . . . . . . . . . . . . . . . .
79
SECTION 13.6
Record Date . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 13.7
Adjournment . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 13.8
Waiver of
Notice; Approval of Meeting; Approval of Minutes . . . . 79
SECTION 13.9
Quorum. . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 13.10
Conduct of a Meeting.
. . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 13.11
Action Without a
Meeting. . . . . . . . . . . . . . . . . . . . . . 80
SECTION 13.12
Voting and Other
Rights . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE XIV MERGER. . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 14.1
Authority . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 14.2
Procedure for
Merger or Consolidation . . . . . . . . . . . . . . . 82
SECTION 14.3
Approval by
Limited Partners of Merger or Consolidation. . . . . . .
83
SECTION 14.4
Certificate of
Merger . . . . . . . . . . . . . . . . . . . . . . . 84
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TABLE OF CONTENTS
(continued)
Page
SECTION 14.5
Effect of
Merger. . . . . . . . . . . . . . . . . . . . . . . . . .
84
ARTICLE XV GENERAL PROVISIONS. .
. . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 15.1
Addresses and
Notices . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 15.2
Further Action.
. . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 15.3
Binding Effect.
. . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 15.4
Integration . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 15.5
Creditors . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 15.6
Waiver. . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 15.7
Counterparts. .
. . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 15.8
Applicable Law
. . . . . . . . . . .
. . . . . . . . . . . . . . . 86
SECTION 15.9
Invalidity of
Provisions. . . . . . . . . . . . . . . . . . . . . . 86
SECTION 15.10
Consent of Partners .
. . . . . . . . . . . . . . . . . . . . . . . 86
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<PAGE>
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
RIO VISTA
ENERGY PARTNERS L.P.
THIS
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF RIO
VISTA ENERGY PARTNERS L.P., dated as of
September 16, 2004, is entered into by
and among Rio Vista GP LLC, a Delaware
limited liability company, as the General
Partner, and Penn Octane Corporation, a Delaware corporation, 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:
ARTICLE I
DEFINITIONS
SECTION
1.1 Definitions.
The following definitions shall be for all
-----------
purposes, unless otherwise clearly indicated to the contrary, applied
to the
terms used in this Agreement.
"Acquisition"
means any transaction in which any Group Member
acquires
(through an asset acquisition, merger, stock acquisition or other form of
investment) control over all or a portion of
the assets, properties or business
of another Person for the purpose of increasing the operating capacity
or
revenues of the Partnership Group from the
operating capacity or revenues of the
Partnership Group existing immediately prior to such transaction.
"Additional
Book Basis" means the portion of any
remaining Carrying Value
of an Adjusted Property that is attributable to positive
adjustments made to
such Carrying Value as a result of Book-Up
Events. For purposes of determining
the extent that Carrying Value constitutes Additional Book Basis:
(a) Any negative adjustment made to the Carrying Value of an
Adjusted
Property as
a result of either a Book-Down Event
or a Book-Up Event
shall first
be deemed to offset or decrease that portion of the
Carrying Value
of such Adjusted
Property that is attributable to any
prior positive adjustments made thereto pursuant to a Book-Up Event
or
Book-Down Event.
(b) If Carrying Value that constitutes
Additional Book Basis is reduced as
a result of a Book-Down Event and the Carrying Value of other
property
is increased as a result of such Book-Down Event, an allocable
portion
of any such increase
in Carrying Value shall be treated as Additional
Book Basis; provided
that the amount treated as Additional Book Basis
pursuant hereto
as a result of such
Book-Down Event shall not exceed
the amount
by which the Aggregate
Remaining Net Positive Adjustments
after such Book-Down Event exceeds the remaining Additional Book
Basis
attributable to all of
the Partnership's Adjusted Property after such
Book-Down Event
(determined without regard to the application of this
clause (b)
to such Book-Down Event).
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<PAGE>
"Additional
Book Basis Derivative Items" means any Book
Basis Derivative
Items that are computed with reference to
Additional Book Basis. To the extent
that the Additional Book Basis attributable
to all of the Partnership's Adjusted
Property as of the beginning of any taxable period exceeds the Aggregate
Remaining Net Positive Adjustments as of the beginning of such period
(the
"Excess Additional Book Basis"), the
Additional Book Basis Derivative Items for
such period shall be reduced by the amount that bears the same
ratio to the
amount of Additional Book Basis Derivative Items
determined without regard to
this sentence as the Excess Additional Book
Basis bears to the Additional Book
Basis as of the beginning of such period.
"Additional
Limited Partner" means
a Person admitted to the Partnership as
a Limited Partner pursuant to Section 10.4
and who is shown as such on the books
and records of the Partnership.
"Adjusted Capital Account" means the Capital Account
maintained for each
Partner as of the end of each fiscal year of
the Partnership, (a) increased by
any amounts that such Partner is obligated
to restore under the standards set by
Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to
restore under Treasury Regulation Sections
1.704-2(g) and 1.704-2(i)(5)) and (b)
decreased by (i) the amount of all losses
and deductions that, as of the end of
such fiscal year, are reasonably expected to be
allocated to such Partner in
subsequent years under Sections 704(e)(2) and 706(d) of
the Code and Treasury
Regulation Section 1.751-1(b)(2)(ii), and (ii) the
amount of all distributions
that, as of the end of such fiscal year,
are reasonably expected to be made to
such Partner in subsequent years in
accordance with the terms of this Agreement
or otherwise to the extent they exceed offsetting
increases to such Partner's
Capital Account that are reasonably expected to
occur during (or prior to) the
year in which such distributions are
reasonably expected to be made (other than
increases as a result of a minimum gain
chargeback pursuant to Section 6.1(d)(i)
or 6.1(d)(ii)). The foregoing definition of
Adjusted Capital Account is intended
to comply with the provisions of Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. The
"Adjusted Capital Account" of a Partner in respect of a General Partner
Interest, a Common Unit or an Incentive Distribution Right or any other
specified interest in the Partnership shall be the
amount which such Adjusted
Capital Account would be if such General Partner Interest, Common Unit,
Incentive Distribution Right or other
interest in the Partnership were the only
interest in the Partnership held by such Partner from and after the
date on
which such General Partner Interest, Common
Unit, Incentive Distribution Right
or other interest was first issued.
"Adjusted
Operating Surplus" means, with respect to
any period, Operating
Surplus generated during 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 not
relating to an Operating Expenditure made
during such period, and (b) plus (i)
any net decrease in Working Capital
Borrowings with respect to such period, and
(ii) any net increase in cash reserves for
Operating Expenditures with respect
to such period required by any debt
instrument for the repayment of principal,
interest or premium. Adjusted Operating
Surplus does not include that portion of
Operating Surplus included in clause (a)(i) of the definition of Operating
Surplus.
2
<PAGE>
"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 using such reasonable method of valuation as
it may
adopt. The General Partner shall, in its
discretion, use such method as it deems
reasonable and 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. With respect to the Contributed Property
deemed
contributed to the Partnership by an Initial Limited
Partner (as described in
the definition of Contributed Property), the Agreed Value shall
be the value
assigned for federal income tax purposes by the General Partner (in its
reasonable discretion) to such Contributed Property.
"Agreement"
means this First Amended and Restated Agreement of
Limited
Partnership of Rio Vista Energy 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:
3
<PAGE>
(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
(b) the amount of any cash reserves that are
necessary or appropriate in
the reasonable
discretion
of 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.
"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 which 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.
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<PAGE>
"Book-Up
Event" means an event
which triggers a positive adjustment to the
Capital Accounts of the Partners pursuant to Section 5.5(d).
"Business"
has the meaning
assigned to such term in the Omnibus Agreement.
"Business
Day" means Monday through Friday of each week, except that
a
legal holiday recognized as such by the government of the United
States of
America or the State of Texas shall not be regarded as a Business Day.
"Capital
Account" means the capital account maintained for a Partner
pursuant to Section 5.5. The "Capital Account" of a Partner in
respect of a
General Partner Interest, a Common 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, 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, 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
pursuant to this Agreement or the Contribution Agreement.
"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, LPG
transportation, storage facilities and
logistics assets, 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
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<PAGE>
Depositary or (iii) in such other form as may
be adopted by the General Partner
in its discretion, 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 in its discretion, 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 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 a Limited Partner or an
Assignee 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"
has the meaning assigned to such term in Section 7.12(c).
"Closing
Date" means the date of the Distribution.
"Closing
Price" means the last sale price on such
day, regular way, or in
case no such sale takes place on such day, the
average of the closing bid and
asked prices on such day, regular way, in either case as reported in the
principal consolidated transaction reporting system with
respect to securities
listed or admitted for trading on the principal National
Securities Exchange
(other than the Nasdaq Stock Market) on
which such Limited Partner Interests of
such class are listed or admitted to trading or, if such Limited Partner
Interests of such class are not listed or admitted
to trading on any National
Securities Exchange (other than the Nasdaq
Stock Market), the last quoted price
on such day or, if not so quoted, the average of the
high bid and low asked
prices on such day in the over-the-counter market, as
reported by the Nasdaq
Stock Market or such other system then in use, or, if on any such
day such
Limited Partner Interests of such class are
not quoted by any such organization,
the average of the closing bid and asked prices
on such day as furnished by a
professional market maker making a market in such
Limited Partner Interests of
such class selected by the General Partner, or if on any such
day no market
maker is making a market in such Limited Partner
Interests of such class, the
fair value of such Limited Partner Interests on such day as determined
reasonably and in good faith by the General Partner.
"Code"
means the Internal Revenue Code of 1986, as
amended and in effect
from time to time. Any reference herein to
a specific section or sections of the
Code shall be deemed to include a reference to
any corresponding provision of
any successor law.
"Combined
Interest" has the meaning assigned to such term in Section
11.3(a).
"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 of the
General Partner, and having the rights and
obligations specified with respect to
Common Units in this Agreement.
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<PAGE>
"Common
Unit Arrearage" means, with respect to any Common
Unit, whenever
issued, 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).
"Conflicts
Committee"
means a committee of the Board of Managers
of the
General Partner composed entirely of three or more managers 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 to serve on an audit committee of
a board of directors by the National Securities
Exchange on which the Common
Units are listed for trading.
"Contributed
Property" means each
property or other asset, in such form as
may be permitted by the Delaware Act, but excluding
cash, contributed to the
Partnership. Once the Carrying Value of a Contributed Property is
adjusted
pursuant to Section 5.5(d), such property shall no longer constitute a
Contributed Property, but shall be deemed
an Adjusted Property.
For purposes of
this definition, each Limited Partner who receives
Initial Common Units in the
Distribution shall be treated as having
received a distribution of an undivided
interest in the assets contributed pursuant to the
Contribution Agreement by
Penn Octane Corporation to the Partnership, subject to
applicable liabilities
described in the Contribution Agreement, followed
immediately thereafter by a
contribution of the Partner's undivided interest in such assets subject to
applicable liabilities, to the Partnership
in exchange for the Partner's Initial
Common Units received in the Distribution. For this purpose, each Limited
Partner's undivided interest in the assets expressed as a
percentage shall be
the same percentage as the Limited Partner's Percentage
Interest determined
immediately following the Distribution.
"Contribution
Agreement"
means that certain Contribution,
Conveyance and
Assumption Agreement, dated as of September
16, 2004, among the General Partner,
the Partnership, the Operating
Partnership, Penn Octane Corporation and certain
other Affiliates of Penn Octane Corporation, together with the additional
conveyance documents and instruments contemplated or referenced thereunder.
"Controlled
Person" means any corporation or partnership of which the
Partnership or any Subsidiary owns or controls an interest in
excess of 25%.
"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 Quarter 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)(x).
7
<PAGE>
"Current
Market Price" as of any date of any class of Limited
Partner
Interests means the average of the daily Closing Prices per
Limited Partner
Interest of such class for the 20
consecutive Trading Days immediately prior to
such date.
"Delaware
Act" means the
Delaware Revised Uniform Limited Partnership Act,
6 Del. C. Section 17-101, et seq., as amended,
supplemented or restated from
time to time, and any successor to such statute.
"Departing
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.
"Distribution"
means the pro rata distribution by Penn
Octane Corporation
of its 98% Limited Partner Interest
representing 98% of the Common Units to the
stockholders of Penn Octane Corporation, as described in the Registration
Statement.
"Economic
Risk of Loss" has the meaning set forth in
Treasury Regulation
Section 1.752-2(a).
"Eligible
Citizen" means a
Person who is (i) 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 Group
Member to a significant
risk of cancellation or forfeiture of any of its properties or any
interest
therein and (ii) is not a Non-citizen.
"Event
of Withdrawal" has the meaning assigned to such term in
Section
11.1(a).
"First
Liquidation Target
Amount" has the meaning assigned to such term in
Section 6.1(c)(i)(C).
"First
Target Distribution" means $0.292 per Unit per Quarter (or,
with
respect to the period commencing on the
Closing Date and ending on the last day
of the calendar quarter that includes
the Closing Date, it means the product of
$0.292 multiplied by a fraction of which
the numerator is the number of days in
such period, and of which the denominator is 91), subject to
adjustment in
accordance with Sections 6.6 and 6.9.
"Fully
Diluted Basis" means, when calculating the number of
Outstanding
Units for any period, a basis that includes, in addition
to the Outstanding
Units, all Partnership Securities and
options, rights, warrants and appreciation
rights relating to an equity interest in the Partnership (a) that are
convertible into or exercisable or
exchangeable for Units that are senior to or
pari passu with the Common 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 following the end of the
last Quarter contained in 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
8
<PAGE>
compliance with administrative mechanics
applicable to such conversion, exercise
or exchange, and (d) were not
converted into or exercised or exchanged for such
Units prior to the end of the last quarter referred to in
clause (c) above.
"General
Partner" means Rio Vista GP LLC 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.
"Holder"
as used in Section
7.12, has the meaning assigned to such term in
Section 7.12(a).
"Incentive
Distribution Right"
means a non-voting Limited Partner Interest
issued to the General Partner in exchange for the conveyance by
the General
Partner of $1,000 to the Partnership
pursuant to Section 5.2, 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)(iv),
(v), and (vi).
"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,
officer, director,
employee, manager, agent or trustee of any
Group Member, the General Partner or
any Departing Partner or any Affiliate
of any Group Member, the General Partner
or any Departing Partner, and (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,
employee,
member, manager, partner, agent,
9
<PAGE>
fiduciary or trustee of another Person;
provided, that a Person shall not be an
Indemnitee by reason of providing, on a fee-for-services basis, trustee,
fiduciary or custodial services.
"Initial
Common Units" means the Common Units distributed in the
Distribution.
"Initial
Limited Partners" means the General
Partner and the stockholders
of Penn Octane Corporation that receive Initial Common Units in the
Distribution, in each case upon being admitted
to the Partnership in accordance
with Section 10.1.
"Initial
Unit Capital Account" means (a) with respect to each Initial
Limited Partner, the value assigned for federal income tax purposes by
the
General Partner (in its reasonable discretion) to the Contributed Property
contributed by an Initial Limited Partner to the
Partnership (as described in
the definition of Contributed Property) in exchange for the Initial
Common
Units, reduced by the amount of liabilities
to which such property is subject as
determined by the General Partner in its reasonable discretion or (b)
with
respect to any other class or series of
Units, the price per Unit at which such
class or series of Units is initially
sold by the Partnership, as determined by
the General Partner, in each case
adjusted as the General Partner determines to
be appropriate to give effect to any
distribution, subdivision or combination of
Units.
"Interim
Capital Transactions" means the following transactions if
they
occur prior to the Liquidation Date: (a)
borrowings, refinancings or refundings
of indebtedness and sales of debt securities (other than Working Capital
Borrowings and other than for items purchased on open
account in the ordinary
course of business) by any Group Member; (b) sales of
equity interests by any
Group Member; 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, after taking into account any sales commission or
underwriting
discount charged to the Partnership.
"Limited
Partner" means, unless the context otherwise requires,
(a) the
Organizational Limited Partner prior to the Distribution,
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,
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
10
<PAGE>
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 12.3 as
liquidating trustee of the
Partnership within the meaning of the Delaware Act.
"Minimum
Quarterly
Distribution" means $0.25 per Unit per Quarter (or with
respect to the period commencing on the
Closing Date and ending on the last day
of the calendar quarter that includes
the Closing Date, it means the product of
$0.25 multiplied by a fraction of which the
numerator is the number of days in
such period and of which the denominator is 91), 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)(xi) were not in this
Agreement.
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<PAGE>
"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)(xi) 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"
means (1) any person (including any individual, a
partnership, a corporation or an association) who is not a United States
citizen, within the meaning of Section 2 of the
Shipping Act, 1916, as amended
or as it may hereafter be amended;
(2) any foreign government or representative
thereof; (3) any corporation, the
president, chief executive officer or chairman
of the board of directors of which is a
Non-citizen, or of which more than a
minority or the number of its directors necessary to
constitute a quorum are
Non-citizens; (4) any corporation organized under the laws of any foreign
government; (5) any corporation of which 25% or greater interest is owned
beneficially or of record, or may be voted
by, a Non-citizen or Non-citizens, or
which by any other means whatsoever is controlled by or in
which control is
permitted to be exercised by a Non-citizen
or Non-citizens (the General Partner
being authorized to determine reasonably the meaning of "control" for this
purpose); (6) any partnership or association which is controlled by a
Non-citizen or Non-citizens; or (7) any person (including an individual,
partnership, corporation or association) who acts as representative of or
fiduciary for any person described in clauses (1) through (6) above.
"Non-citizen
Assignee" means a Person whom the General Partner has
determined in its discretion 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.
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<PAGE>
"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).
"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 Penn Octane Corporation, the General
Partner, the Partnership and
the Operating Partnership.
"Operating
Expenditures"
means all Partnership Group expenditures,
including, but not limited to, taxes, reimbursements of the
General Partner,
repayment of Working Capital Borrowings, 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
(b) Operating Expenditures shall not
include (i) capital expenditures made
for Acquisitions
or for Capital Improvements, (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's good faith allocation between the
amounts paid
for each shall be conclusive.
"Operating
Partnership"
means Rio Vista Operating Partnership L.P., a
Delaware limited partnership, and any successors thereto.
"Operating
Partnership
Agreement"
means the Partnership
Agreement of the
Operating Partnership, as it may be amended,
supplemented or restated from time
to time.
"Operating
Surplus" means, with respect to any period
ending prior to the
Liquidation Date, on a cumulative basis and without duplication,
(a) the sum of (i) all cash and cash
equivalents of the Partnership Group
on hand as of the close of business on the Closing Date, (ii) all
cash
receipts of
the Partnership Group for the period beginning on
the
Closing Date
and ending with the last day
13
<PAGE>
of
such period, other than cash receipts from Interim Capital
Transactions (except to the extent specified in Section 6.5) and
(iii)
all cash receipts of the Partnership Group after the end of such
period but on or before the date of determination of Operating
Surplus
with respect to such period resulting from Working Capital
Borrowings,
less
(b) the sum of (i) Operating Expenditures
for the period beginning on the
Closing Date and
ending with the last day of such period and (ii) the
amount of cash reserves that is necessary or advisable in the
reasonable discretion
of 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 period shall be
deemed to have been made, established, increased or reduced, for
purposes of
determining Operating
Surplus, within such period if the
General Partner
so determines.
Notwithstanding
the foregoing, "Operating Surplus" with respect to the
Quarter in which the Liquidation Date occurs and
any subsequent Quarter shall
equal zero.
"Opinion of
Counsel" means a written opinion of counsel (who may be regular
counsel to the Partnership or the General Partner or any of its
Affiliates)
acceptable to the General Partner in its reasonable discretion.
"Organizational
Limited Partner" means Penn Octane Corporation in its
capacity as the organizational limited partner of
the Partnership pursuant to
this Agreement.
"Outstanding"
means, with respect to Partnership Securities, all
Partnership Securities that are issued by the Partnership and reflected
as
outstanding on the Partnership's books and records as of the date of
determination; provided, however, that if
at any time any Person or Group (other
than the General Partner or its Affiliates)
beneficially owns 20% or more of 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,
including any Person or
Group who acquired 20% or more of any
Outstanding Partnership Securities in the
Distribution, (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
14
<PAGE>
Partnership Securities issued by the
Partnership with the prior approval of the
Board of Managers of the General
Partner; provided further, that the provisions
contained herein may be amended by the General Partner
as provided in Section
13.1 hereof.
"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.
"Partnership"
means Rio Vista Energy Partners L.P., a Delaware
limited
partnership, and any successors thereto.
"Partnership
Group" means the Partnership, the Operating
Partnership and
any Subsidiary of any such entity, 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 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.
"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.
15
<PAGE>
"Person"
means an individual or a corporation,
limited liability company,
partnership, joint venture, trust, unincorporated organization,
association,
government agency or political subdivision thereof or other entity.
"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 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.
"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 which
the General Partner has caused to be
kept as of the opening of business on such
Business Day.
"Redeemable
Interests"
means any Partnership Interests for which a
redemption notice has been given, and has not been withdrawn, pursuant
to
Section 4.10.
"Registration
Statement" means the
Registration Statement on Form 10 (File
No. 0-50394) 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 Common Units distributed in the Distribution.
"Remaining
Net Positive Adjustments" means as of the end of any
taxable
period, (i) with respect to the
Unitholders holding Common Units, the excess of
(a) the Net Positive
16
<PAGE>
Adjustments of the Unitholders holding
Common 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) and (b) any
allocation of an item of income, gain, loss or deduction
pursuant to Section
6.1(d)(i), 6.1(d)(ii), 6.1(d)(iv), 6.1(d)(vii), 6.1(d)(ix) or 6.1(d)(x).
"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.
"Second
Liquidation Target Amount" has the meaning assigned to such term
in
Section 6.1(c)(i)(D).
"Second
Target Distribution" means $0.362 per Unit per Quarter
(or, with
respect to the period commencing on the
Closing Date and ending on the last day
of the calendar quarter that includes
the Closing Date, it means the product of
$0.362 multiplied by a fraction of which
the numerator is equal to the number of
days in such period and of which the
denominator is 91), 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, 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
17
<PAGE>
Incentive Distribution Rights as of the end of such period bears to the
Aggregate Remaining Net Positive Adjustments as of that time.
"Special
Approval" means approval by a majority of the members of the
Conflicts Committee.
"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).
"Third
Liquidation Target
Amount" has the meaning assigned to such term in
Section 6.1(c)(i)(E).
"Third
Target Distribution" means $0.462 per Unit per Quarter (or,
with
respect to the period commencing on the
Closing Date and ending on the last day
of the calendar quarter that includes
the Closing Date, it means the product of
$0.462 multiplied by a fraction of which
the numerator is equal to the number of
days in such period and of which the
denominator is 91), subject to adjustment
in accordance with Sections 6.6 and 6.9.
"Trading
Day" means a day on which the principal National
Securities
Exchange on which such Limited Partner Interests of any class are
listed or
admitted to trading is open for the transaction of business or, if
Limited
Partner Interests of a class are not listed or admitted to trading on
any
National Securities Exchange, a day on which banking
institutions in New York
City generally are open.
"transfer"
has the meaning assigned to such term in Section 4.4(a).
"Transfer
Agent" means such
bank, trust company or other Person (including
the General Partner or one of its
Affiliates) as shall be appointed from time to
time by the Partnership to act as registrar
and transfer agent for the Common
Units; provided that if no Transfer Agent is
18
<PAGE>
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.
"Unit"
means a Partnership Security that is designated as a "Unit"
and
shall include Common Units but shall not
include (i) a General Partner Interest
or (ii) Incentive Distribution Rights.
"Unit
Majority" means at
least a majority of the Outstanding Common Units.
"Unitholders"
means the holders of Units.
"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 Capital Account 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.
GAAP" means United States Generally Accepted
Accounting Principles
consistently applied.
"Withdrawal
Opinion of Counsel" has the meaning assigned
to such term in
Section 11.1(b).
"Working
Capital Borrowings" means borrowings used solely for working
capital purposes or to pay distributions to
Partners made pursuant to a credit
facility 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.
19
<PAGE>
SECTION
1.2 Construction.
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.
ARTICLE II
ORGANIZATION
SECTION
2.1 Formation.
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 Rio
Vista Energy 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.
SECTION
2.2 Name. The name of the Partnership shall be "Rio
Vista
----
Energy Partners L.P." The Partnership's business may be conducted under
any
other name or names deemed necessary or
appropriate by the General Partner in
its sole discretion, 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 in its
discretion 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 615 South
DuPont Highway, City of Dover, County of Kent, Delaware 19901, and the
registered agent for service of process on the Partnership in the State
of
Delaware at such registered office shall be Capitol Services, Inc. The
principal office of the Partnership shall be
located at 820 Gessner Road, Suite
1285, Houston, Texas 77024 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 deems
necessary or appropriate. The address of
the General Partner shall be 820
Gessner Road, Suite 1285, Houston, Texas 77024
or such other place as the General Partner may
from time to time designate by
notice to the Limited Partners.
SECTION
2.4 Purpose
and Business. The purpose and nature of the
----------------------
business to be conducted by the Partnership shall
be to (a) own the equity of
the general partner of the Operating Partnership and to serve as a
limited
partner of the Operating Partnership and, in
connection therewith, to exercise
all the rights and powers conferred upon the Partnership as a
20
<PAGE>
partner of the Operating Partnership pursuant to the Operating Partnership
Agreement or otherwise, (b) 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 the Operating
Partnership is permitted to engage in by the
Operating Partnership Agreement or
that its subsidiaries are permitted to engage in by their limited
liability
company or partnership agreements 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, (c) 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 which 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;
provided, however, that the General Partner reasonably
determines, as of the
date of the acquisition or commencement of
such activity, that such activity (i)
generates "qualifying income" (as such term
is defined pursuant to Section 7704
of the Code) or a Subsidiary or a
Partnership activity that generates qualifying
income or (ii) enhances the operations of an activity of the Operating
Partnership, and (d) do anything necessary or appropriate to the
foregoing,
including the making of capital contributions or loans
to a Group Member. The
General Partner has no obligation or duty to the Partnership, the
Limited
Partners or the Assignees to propose or approve, and in its discretion
may
decline to propose or approve, the conduct by
the Partnership of any business.
SECTION
2.5 Powers.
The Partnership shall be empowered to
do any and
------
all acts and things necessary,
appropriate, proper, advisable, incidental to or
convenient for the furtherance and accomplishment
of the purposes and business
described in Section 2.4 and for the
protection and benefit of the Partnership.
SECTION
2.6 Power of
Attorney. Each Limited
Partner and each Assignee
-----------------
hereby constitutes and appoints the General Partner
and, if a Liquidator shall
have been selected pursuant to Section 12.3,
the Liquidator (and any successor
to the Liquidator by merger, transfer, assignment,
election or otherwise) and
each of their authorized officers and attorneys-in-fact, as
the case may be,
with full power of substitution, as his true and lawful agent and
attorney-in-fact, with full power and authority in his name,
place and stead,
to:
(i) execute, swear to, acknowledge, deliver, file and record in the
appropriate public
offices (A) all
certificates, documents and other
instruments (including
this Agreement and the
Certificate of Limited
Partnership and all amendments or restatements hereof or thereof)
that
the General
Partner or the
Liquidator deems 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 deems
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
21
<PAGE>
certificate of
cancellation)
that the General Partner or the
Liquidator deems
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 or consolidation 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 necessary or appropriate, in the discretion of the
General
Partner or the
Liquidator, to 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 is necessary or appropriate, in
the discretion of
the General
Partner or the Liquidator, to 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 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 Limited Partner or Assignee
hereby waives, to
the maximum extent
permitted by law, any and all defenses that may be
available to
contest, negate or disaffirm the action of
the General
Partner
or the Liquidator taken in good faith under such power
of
attorney. Each
Limited Partner or
Assignee shall execute and deliver
to the General Partner or the Liquidator, within 15 days after
receipt
of the request
therefor, such further designation, powers of attorney
and other instruments as the General Partner
or the Liquidator deems
necessary to
effectuate
this Agreement and the purposes of the
Partnership.
22
<PAGE>
SECTION
2.7 Term.
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.
23
<PAGE>
ARTICLE III
RIGHTS OF LIMITED PARTNERS
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.
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, manager, member, general partner, agent
or
trustee of a Group Member, in its capacity as
such, shall not be deemed to be
participation in the control of the business of the Partnership
by a limited
partner of the Partnership (within the meaning of Section 17-303(a) of
the
Delaware Act) and shall not affect, impair or
eliminate the limitations on the
liability of the Limited Partners or Assignees under this Agreement.
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) to obtain true and full information
regarding the status of the
business and
financial condition of the Partnership;
(ii) promptly after
becoming available, to obtain a copy of the
Partnership's federal,
state and local income tax returns for
each year;
(iii) to have
furnished to him a current list of the name
and last
known business,
residence or mailing address of each
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
24
<PAGE>
the executed
copies of all powers
of attorney pursuant to which
this Agreement,
the Certificate of Limited Partnership
and all
amendments thereto
have been executed;
(v) to obtain true and full information
regarding the amount of cash
and a description and statement of the Net Agreed
Value of any
other Capital Contribution by each Partner and which each
Partner
has agreed
to contribute in the future, and the date on
which
each became a Partner; and
(vi) to obtain
such other information regarding the affairs
of the
Partnership as
is just and reasonable.
(b) The General Partner
may keep confidential from the Limited
Partners
and Assignees, for such period of time
as the General Partner deems reasonable,
(i) any information that the General Partner
reasonably believes to be in the
nature of trade secrets or (ii) other information
the disclosure of which the
General Partner in good faith believes (A) is not
in the best interests of the
Partnership Group, (B) could damage the
Partnership Group or (C) that any Group
Member is required by law or by agreement with any third party to keep
confidential (other than agreements with Affiliates of the Partnership the
primary purpose of which is to circumvent the obligations set
forth in this
Section 3.4).
ARTICLE IV
CERTIFICATES; RECORD HOLDERS;
TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION OF
PARTNERSHIP INTERESTS
SECTION
4.1 Certificates.
Upon the Partnership's issuance of
Common
------------
Units to any Person, the Partnership shall
issue 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, the Partnership shall issue to such Person one or more
certificates evidencing such Incentive
Distribution Rights or other Partnership
Securities other than Common Units.
Certificates shall be
executed on behalf of
the Partnership by the Chairman of the Board,
President or any Vice President
and 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.
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
25
<PAGE>
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 reasonably direct, in its sole
discretion, 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.
SECTION
4.3 Record
Holders. 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 for trading. Without limiting the
foregoing, when a Person (such as a broker, dealer, bank,
26
<PAGE>
trust company or clearing corporation or an agent
of any of the foregoing) is
acting as nominee, agent or in some other
representative capacity for another
Person in acquiring and/or holding Partnership Interests, as between the
Partnership on the one hand, and such other Persons on the other, such
representative Person (a) shall be the Partner or
Assignee (as the case may be)
of record and beneficially, (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.
SECTION
4.4 Transfer Generally.
-------------------
(a) The term "transfer," when used in this
Agreement with respect to a
Partnership Interest, shall be deemed to refer to a transaction
by which the
General Partner assigns its General Partner Interest to another Person who
becomes the general partner of the
Partnership, by which the holder of a Limited
Partner Interest assigns such Limited
Partner Interest to another Person who is
or becomes a Limited Partner or an Assignee,
and includes a sale, assignment,
gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other
disposition by law or otherwise.
(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 member of the General Partner of
any or all of the limited
liability company interests of the General
Partner. At any time,
any member of
the General Partner may sell or transfer all or part
of such member's limited
liability company interests in the General
Partner without Unitholder approval.
SECTION
4.5 Registration
and Transfer of Limited Partner Interests.
---------------------------------------------------------
(a) The Partnership 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.
27
<PAGE>
(b) Except
as otherwise provided
in Section 4.9, the Partnership 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 duly
executed by the transferee (or the
transferee's attorney-in-fact duly authorized
in writing). No charge shall be imposed by the
Partnership for such transfer;
provided, that as a condition to the
issuance of any new Certificate under this
Section 4.5, the Partnership 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) A transferee of a Limited Partner Interest who has
completed and
delivered a Transfer Application shall be
deemed to have (i) requested admission
as a Substituted Limited Partner, (ii)
agreed to comply with and be bound by and
to have executed this Agreement, (iii) represented and warranted that
such
transferee has the right, power and authority and, if an individual, the
capacity to enter into this Agreement, (iv)
granted the powers of attorney set
forth in this Agreement and (v) given the
consents and approvals and made the
waivers contained in this Agreement.
(f) The General Partner and its Affiliates
shall have the right at any
time to transfer their Common Units, if any, to one or more Persons.
SECTION 4.6
Transfer of the General Partner's General Partner Interest.
----------------------------------------------------------
(a) Subject
to Section 4.6(c) below, prior to October 31, 2008,
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 another Person (other than
an individual) or the transfer by the General
Partner of all or substantially
all of its assets to another Person (other than an individual).
(b) Subject to Section 4.6(c) below, on or
after October 31, 2008, the
General Partner may transfer all or any of
its General Partner Interest without
Unitholder approval.
(c) Notwithstanding
anything herein to the contrary, no transfer by the
General Partner of all or any part of its General
Partner Interest to another
Person shall be permitted unless (i) the
transferee agrees to assume the rights
and duties of the General Partner under this
28
<PAGE>
Agreement and to be bound by the provisions of this Agreement, (ii) the
Partnership receives an Opinion of Counsel that such
transfer would not result
in the loss of limited liability of any Limited Partner or of any
limited
partner of the Operating Partnership or cause
the Partnership or the Operating
Partnership to be treated as an association taxable as a corporation or
otherwise to be taxed as an entity for federal income tax
purposes (to the
extent not already so treated or taxed) and
(iii) such transferee also agrees to
purchase all (or the appropriate portion thereof, if applicable) of the
partnership or membership interest of the
General Partner as the general partner
or managing member, if any, of each other Group Member. In the case of a
transfer pursuant to and in compliance with
this Section 4.6, the transferee or
successor (as the case may be) shall, subject to
compliance with the terms of
Section 10.3, be admitted to the
Partnership as the General Partner immediately
prior to the transfer of the Partnership Interest, and the
business of the
Partnership shall continue without dissolution.
SECTION
4.7 Transfer
of Incentive Distribution Rights. Prior to
---------------------------------------------
October 31, 2008, 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 (a) to an Affiliate of
such holder (other than an individual)
or (b) to 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 or (iii) the sale of all or
substantially all of the equity interests of such
holder to such other Person.
Any other transfer of the Incentive Distribution Rights
prior to October 31,
2008, 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 October 31, 2008, any 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 the Operating Partnership under the laws of the jurisdiction of its
formation, or (iii) cause the Partnership or the Operating
Partnership to be
treated as an association taxable as a
corporation or otherwise to be taxed as
an entity for federal income tax
purposes (to the extent not already so treated
or taxed).
(b) The General Partner may impose restrictions on the transfer
of
Partnership Interests if a subsequent Opinion of Counsel
determines that such
restrictions are necessary to avoid a
significant risk of the Partnership or the
Operating Partnership becoming an association taxable as a corporation or
otherwise to be taxed as an entity for federal income tax purposes. The
restrictions may be imposed by making such
amendments to this Agreement as the
General Partner may determine to be necessary or appropriate to
impose such
restrictions; provided,
29
<PAGE>
however, that any amendment that the General
Partner believes, in the exercise
of its reasonable discretion, could 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
traded 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) [RESERVED]
(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 Citizenship
Certificates;
Non-citizen
Assignees.
--------------------------------------------------
(a) If any Group Member is or becomes
subject to any federal, state or
local law or regulation that, in the reasonable
determination of the General
Partner, creates 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,
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, with the advice of
counsel, 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 4.10. 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 his 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 thereof, and the
Partnership shall
provide cash in exchange for an assignment of
the Non-citizen Assignee's share
of the 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).
30
<PAGE>
(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 4.10, 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.
SECTION
4.10 Redemption
of Partnership Interests of Non-citizen
-------------------------------------------------------
Assignees.
----------
(a) 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, in the
discretion of
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 blank, the Limited
Partner or
Assignee or his duly authorized representative
shall be
entitled to
receive the payment therefor.
31
<PAGE>
(iv) After the redemption date, Redeemable Interests shall no longer
constitute issued
and Outstanding Limited Partner Interests.
(b) The provisions of this Section 4.10 shall also be
applicable to
Limited Partner Interests held by a
Limited Partner or Assignee as nominee of a
Person determined to be other than an Eligible Citizen.
(c) Nothing
in this Section 4.10 shall prevent the recipient of a
notice of redemption from transferring his
Limited Partner Interest before the
redemption date if such transfer is otherwise
permitted under this Agreement.
Upon receipt of notice of such a transfer, the
General Partner shall withdraw
the notice of redemption, provided the transferee of such Limited Partner
Interest certifies to the satisfaction of the General
Partner in a 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.
ARTICLE V
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
purchased a 2% General Partner Interest in the
Partnership for $20.00 and has
been admitted as a General Partner of the
Partnership, and the Organizational
Limited Partner purchased Common Units representing a 98% Limited Partner
Interest in the Partnership for $980.00 and has been admitted as a
Limited
Partner of the Partnership. As of the Closing Date, the
Organizational Limited
Partner shall cease to be a Limited Partner of the Partnership.
SECTION
5.2 Contributions
by the General Partner and its
Affiliates.
---------------------------------------------------------
(a) On or prior to the Closing Date and pursuant
to the Contribution
Agreement, (i) the General Partner shall
convey to the Partnership, $1,000.00 in
exchange for the Incentive Distribution Rights, and (ii) the
Organizational
Limited Partner shall contribute to the
Partnership its limited partner interest
in the Operating Partnership as a Capital Contribution.
(b) Upon
the issuance of any additional Limited Partner
Interests by
the Partnership, the General Partner shall be required to make additional
Capital Contributions equal to 2/98ths of any amount contributed to the
Partnership by the Limited Partners in exchange for such additional
Limited
Partner Interests. 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.
-------------------------
(a) [RESERVED]
32
<PAGE>
(b) [RESERVED]
(c) [RESERVED]
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.
SECTION
5.5 Capital
Accounts.
-----------------
(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 in its sole discretion) 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 pursuant to this
Agreement 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 pursuant to this
Agreement and (y) all items of Partnership
deduction and loss computed in accordance
with Section 5.5(b) and allocated with
respect to such Partnership Interest pursuant to Section 6.1.
(b) For purposes of computing the amount of any
item of income, gain,
loss or deduction which is to be allocated
pursuant to Article VI and is to be
reflected in the Partners' Capital Accounts,
the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for federal income tax purposes (including,
without limitation, any method of depreciation, cost
recovery or amortization
