<PAGE>
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
ATLAS PIPELINE PARTNERS, L.P.
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TABLE OF CONTENTS
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ARTICLE
I.........................................................................................................1
---------
DEFINITIONS.......................................................................................................1
-----------
SECTION 1.1
Definitions........................................................................................1
-----------------------
SECTION 1.2
Construction......................................................................................20
------------------------
ARTICLE
II.......................................................................................................20
----------
ORGANIZATION.....................................................................................................20
------------
SECTION 2.1
Formation.........................................................................................20
---------------------
SECTION 2.2
Name..............................................................................................21
----------------
SECTION 2.3
Registered Office; Registered Agent; Principal Office; Other
Offices..............................21
--------------------------------------------------------------------------------
SECTION 2.4
Purpose and
Business..............................................................................21
--------------------------------
SECTION 2.5
Powers............................................................................................22
------------------
SECTION 2.6
Power of
Attorney.................................................................................22
-----------------------------
SECTION 2.7
Term..............................................................................................23
----------------
SECTION 2.8
Title to Partnership
Assets.......................................................................24
---------------------------------------
ARTICLE
III......................................................................................................24
-----------
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 Limited
Partners............................................................24
--------------------------------------------------
SECTION 3.4
Rights of Limited
Partners........................................................................25
--------------------------------------
ARTICLE
IV.......................................................................................................25
----------
CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;
REDEMPTION OF PARTNERSHIP INTERESTS.............26
----------------------------------------------------------------------------------------------------
SECTION 4.1
Certificates......................................................................................26
------------------------
SECTION 4.2
Mutilated, Destroyed, Lost or Stolen
Certificates.................................................26
-------------------------------------------------------------
SECTION 4.3
Record
Holders....................................................................................27
--------------------------
SECTION 4.4
Transfer
Generally................................................................................27
------------------------------
SECTION 4.5
Registration and Transfer of Limited Partner
Interests............................................28
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SECTION 4.6
Transfer of the General Partner's General Partner
Interest........................................29
----------------------------------------------------------------------
SECTION 4.7
Transfer of Incentive Distribution
Rights.........................................................29
-----------------------------------------------------
SECTION 4.8
Restrictions on
Transfers.........................................................................30
-------------------------------------
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........................................................................................................33
---------
CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP
INTERESTS......................................................33
-----------------------------------------------------------
SECTION 5.1
Organizational
Contributions......................................................................33
----------------------------------------
SECTION 5.2
Contributions by the General Partner and Its
Affiliates...........................................33
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SECTION 5.3
Contributions by Initial Limited Partners and Reimbursement of the
General Partner................33
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SECTION 5.4
Interest and
Withdrawal...........................................................................34
-----------------------------------
SECTION 5.5
Capital
Accounts..................................................................................34
----------------------------
SECTION 5.6
Issuances of Additional Partnership
Securities....................................................37
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SECTION 5.7
Limitations on Issuance of Additional Partnership
Securities......................................38
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SECTION 5.8
Conversion of Subordinated
Units..................................................................38
--------------------------------------------
SECTION 5.9
Limited Preemptive
Right..........................................................................39
------------------------------------
SECTION 5.10
Splits and
Combinations..........................................................................39
------------------------------------
SECTION 5.11
Fully Paid and Non-Assessable Nature of Limited Partner
Interests................................40
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ARTICLE
VI.......................................................................................................40
----------
ALLOCATIONS AND
DISTRIBUTIONS....................................................................................40
-----------------------------
SECTION 6.1
Allocations for Capital Account
Purposes..........................................................40
----------------------------------------------------
SECTION 6.2
Allocations for Tax
Purposes......................................................................48
----------------------------------------
SECTION 6.3
Requirement and Characterization of Distributions; Distributions to
Record Holders................50
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SECTION 6.4
Distributions of Available Cash from Operating
Surplus............................................50
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SECTION 6.5
Distributions of Available Cash from Capital
Surplus..............................................52
----------------------------------------------------------------
SECTION 6.6
Adjustment of Minimum Quarterly Distribution and Target
Distribution Levels.......................53
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SECTION 6.7
Special Provisions Relating to the Holders of Subordinated
Units..................................53
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SECTION 6.8
Special Provisions Relating to the Holders of Incentive
Distribution Rights.......................54
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SECTION 6.9
Entity-Level
Taxation.............................................................................54
---------------------------------
ARTICLE
VII......................................................................................................54
-----------
MANAGEMENT AND OPERATION OF
BUSINESS.............................................................................54
------------------------------------
SECTION 7.1
Management........................................................................................54
----------------------
SECTION 7.2
Certificate of Limited
Partnership................................................................56
----------------------------------------------
SECTION 7.3
Restrictions on General Partner's
Authority.......................................................57
-------------------------------------------------------
SECTION 7.4
Reimbursement of the General
Partner..............................................................58
------------------------------------------------
SECTION 7.5
Outside
Activities................................................................................58
------------------------------
SECTION 7.6
Loans from the General Partner; Loans or Contributions from the
Partnership; Contracts with
--------------------------------------------------------------------------------------------------------
Affiliates;
Certain Restrictions on the General
Partner.......................................................59
-------------------------------------------------------
SECTION 7.7
RESERVED..........................................................................................61
--------------------
SECTION 7.8
Indemnification...................................................................................61
---------------------------
SECTION 7.9
Liability of
Indemnitees..........................................................................62
------------------------------------
SECTION 7.10
Resolution of Conflicts of
Interest..............................................................63
------------------------------------------------
SECTION 7.11
Other Matters Concerning the General
Partner.....................................................65
---------------------------------------------------------
SECTION 7.12
Purchase or Sale of Partnership
Securities.......................................................65
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SECTION 7.13
Registration Rights of the General Partner and Its
Affiliates....................................65
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SECTION 7.14
Reliance by Third
Parties........................................................................68
--------------------------------------
ARTICLE
VIII.....................................................................................................68
------------
BOOKS, RECORDS, ACCOUNTING AND
REPORTS...........................................................................68
--------------------------------------
SECTION 8.1
Records and
Accounting............................................................................68
----------------------------------
SECTION 8.2
Fiscal
Year.......................................................................................68
-----------------------
SECTION 8.3
Reports...........................................................................................69
-------------------
ARTICLE
IX.......................................................................................................69
----------
TAX
MATTERS......................................................................................................69
-----------
SECTION 9.1 Tax
Returns and
Information.......................................................................69
---------------------------------------
SECTION 9.2 Tax
Elections.....................................................................................69
-------------------------
SECTION 9.3 Tax
Controversies.................................................................................70
-----------------------------
SECTION 9.4
Withholding.......................................................................................70
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ARTICLE
X........................................................................................................70
---------
ADMISSION OF
PARTNERS............................................................................................70
---------------------
SECTION 10.1
Admission of Initial Limited
Partners............................................................70
-------------------------------------------------
SECTION 10.2
Admission of Substituted Limited
Partner.........................................................70
-----------------------------------------------------
SECTION 10.3
Admission of Successor General
Partner...........................................................71
---------------------------------------------------
SECTION 10.4
Admission of Additional Limited
Partners.........................................................71
-----------------------------------------------------
SECTION 10.5
Amendment of Agreement and Certificate of Limited
Partnership....................................72
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ARTICLE
XI.......................................................................................................72
----------
WITHDRAWAL OR REMOVAL OF
PARTNERS................................................................................72
---------------------------------
SECTION 11.1
Withdrawal of the General
Partner................................................................72
---------------------------------------------
SECTION 11.2
Removal of the General
Partner...................................................................74
-------------------------------------------
SECTION 11.3
Interest of Departing Partner and Successor General
Partner......................................74
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SECTION 11.4
Termination of Subordination Period, Conversion of Subordinated
Units and Extinguishment of
---------------------------------------------------------------------------------------------------------
Cumulative
Common Unit
Arrearages.............................................................................75
---------------------------------
SECTION 11.5
Withdrawal of Limited
Partners...................................................................76
-------------------------------------------
ARTICLE
XII......................................................................................................76
-----------
DISSOLUTION AND
LIQUIDATION......................................................................................76
---------------------------
SECTION 12.1
Dissolution......................................................................................76
------------------------
SECTION 12.2
Continuation of the Business of the Partnership After
Dissolution................................76
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SECTION 12.3
Liquidator.......................................................................................77
-----------------------
SECTION 12.4
Liquidation......................................................................................78
------------------------
SECTION 12.5
Cancellation of Certificate of Limited
Partnership...............................................79
---------------------------------------------------------------
SECTION 12.6
Return of
Contributions..........................................................................79
------------------------------------
SECTION 12.7
Waiver of
Partition..............................................................................79
--------------------------------
SECTION 12.8
Capital Account
Restoration......................................................................79
----------------------------------------
ARTICLE
XIII.....................................................................................................79
------------
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD
DATE........................................................79
---------------------------------------------------------
SECTION 13.1
Amendment to Be Adopted Solely by the General
Partner............................................79
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SECTION 13.2
Amendment
Procedures.............................................................................81
---------------------------------
SECTION 13.3
Amendment
Requirements...........................................................................81
-----------------------------------
SECTION 13.4
Special
Meetings.................................................................................82
-----------------------------
SECTION 13.5
Notice of a
Meeting..............................................................................82
--------------------------------
SECTION 13.6
Record
Date......................................................................................82
------------------------
SECTION 13.7
Adjournment......................................................................................83
------------------------
SECTION 13.8
Waiver of Notice; Approval of Meeting; Approval of
Minutes.......................................83
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SECTION 13.9
Quorum...........................................................................................83
-------------------
SECTION 13.10
Conduct of a
Meeting............................................................................84
----------------------------------
SECTION 13.11
Action Without a
Meeting........................................................................84
--------------------------------------
SECTION 13.12
Voting and Other
Rights.........................................................................85
-------------------------------------
ARTICLE
XIV......................................................................................................85
-----------
MERGER...........................................................................................................85
------
SECTION 14.1
Authority........................................................................................85
----------------------
SECTION 14.2
Procedure for Merger or
Consolidation............................................................85
--------------------------------------------------
SECTION 14.3
Approval by Limited Partners of Merger or
Consolidation..........................................86
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SECTION 14.4
Certificate of
Merger............................................................................87
----------------------------------
SECTION 14.5
Effect of
Merger.................................................................................87
-----------------------------
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ARTICLE
XV.......................................................................................................88
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RIGHT TO ACQUIRE LIMITED PARTNER
INTERESTS.......................................................................88
------------------------------------------
SECTION 15.1
Right to Acquire Limited Partner
Interests.......................................................88
-------------------------------------------------------
ARTICLE
XVI......................................................................................................90
-----------
GENERAL
PROVISIONS...............................................................................................90
------------------
SECTION 16.1
Addresses and
Notices............................................................................90
----------------------------------
SECTION 16.2
Further
Action...................................................................................90
---------------------------
SECTION 16.3
Binding
Effect...................................................................................90
---------------------------
SECTION 16.4
Integration......................................................................................91
------------------------
SECTION 16.5
Creditors........................................................................................91
----------------------
SECTION 16.6
Waiver...........................................................................................91
-------------------
SECTION 16.7
Counterparts.....................................................................................91
-------------------------
SECTION 16.8
Applicable
Law...................................................................................91
---------------------------
SECTION 16.9
Invalidity of
Provisions.........................................................................91
-------------------------------------
SECTION 16.10
Consent of
Partners.............................................................................91
---------------------------------
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<PAGE>
SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
ATLAS PIPELINE PARTNERS, L.P.
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
ATLAS PIPELINE PARTNERS, L.P. dated as of March 9, 2004, is entered
into by and
among Atlas Pipeline Partners GP, LLC a Delaware limited liability
company, as
the General Partner and the Persons who are Limited Partners in the
Partnership
as of the date hereof, 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:
RECITALS
WHEREAS, the General Partner and the Organizational Limited
Partner
organized the Partnership as a Delaware limited partnership on May
6, 1999;
WHEREAS, the General Partner and the Organizational Limited
Partner
executed and entered into the First Amended and Restated Agreement
of Limited
Partnership of the Partnership dated February 2, 2000; and
WHEREAS, effective today a Unit Majority has approved the
amendments
evidenced by this Second Amended and Restated Agreement of Limited
Partnership.
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, over the long
term, the
operating capacity of the Partnership Group from the operating
capacity of the
Partnership Group existing immediately prior to such
transaction.
"Additional Book Basis" means the portion of any remaining
Carrying
Value of an Adjusted Property that is attributable to positive
adjustments made
to such Carrying Value as a result of Book-Up Events. For purposes
of
determining the extent that Carrying Value constitutes Additional
Book Basis:
(i) Any negative adjustment made to the Carrying Value of an
Adjusted Property as a result of either a Book-Down Event or a
Book-Up
Event shall first be deemed to offset or decrease that portion of
the
Carrying Value of such Adjusted Property that is attributable to
any
prior positive adjustments made thereto pursuant to a Book-Up Event
or
Book-Down Event.
1
<PAGE>
(ii) If Carrying Value that constitutes Additional Book Basis
is reduced as a result of a Book-Down Event and the Carrying Value
of
other property is increased as a result of such Book-Down Event,
an
allocable portion of any such increase in Carrying Value shall
be
treated as Additional Book Basis; provided that the amount treated
as
Additional Book Basis pursuant hereto as a result of such
Book-Down
Event shall not exceed the amount by which the Aggregate Remaining
Net
Positive Adjustments after such Book-Down Event exceeds the
remaining
Additional Book Basis attributable to all of the Partnership's
Adjusted
Property after such Book-Down Event (determined without regard to
the
application of this clause (ii) to such Book-Down Event).
"Additional Book Basis Derivative Items" means any Book Basis
Derivative Items that are computed with reference to Additional
Book Basis. To
the extent that the Additional Book Basis attributable to all of
the
Partnership's Adjusted Property as of the beginning of any taxable
period
exceeds the Aggregate Remaining Net Positive Adjustments as of the
beginning of
such period (the "Excess Additional Book Basis"), the Additional
Book Basis
Derivative Items for such period shall be reduced by the amount
that bears the
same ratio to the amount of Additional Book Basis Derivative Items
determined
without regard to this sentence as the Excess Additional Book Basis
bears to the
Additional Book Basis as of the beginning of such period.
"Additional Limited Partner" means a Person admitted to the
Partnership
as a Limited Partner pursuant to Section 10.4 and who is shown as
such on the
books and records of the Partnership.
"Adjusted 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(b)(2) and 706(d) of the Code
and Treasury
Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all
distributions
that, as of the end of such fiscal year, are reasonably expected to
be made to
such Partner in subsequent years in accordance with the terms of
this Agreement
or otherwise to the extent they exceed offsetting increases to such
Partner's
Capital Account that are reasonably expected to occur during (or
prior to) the
year in which such distributions are reasonably expected to be made
(other than
increases as a result of a minimum gain chargeback pursuant to
Section 6.1(d)(i)
or 6.1(d)(ii)). The foregoing definition of Adjusted Capital
Account is intended
to comply with the provisions of Treasury Regulation Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith. The
"Adjusted Capital Account" of a Partner in respect of a General
Partner
Interest, a Common Unit, a Subordinated 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, Subordinated Unit, Incentive Distribution Right or other
interest in the
Partnership were the only interest in the Partnership held by a
Partner from and
after the date on which such General Partner Interest, Common Unit,
Subordinated
Unit, Incentive Distribution Right or other interest was first
issued.
2
<PAGE>
"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 during such period and (ii) any net
reduction in cash
reserves for Operating Expenditures during such period not relating
to an
Operating Expenditure made during such period, and (b) plus (i) any
net decrease
in Working Capital Borrowings during such period, and (ii) any net
increase in
cash reserves for Operating Expenditures during 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.
"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.
"Agreement" means this Second Amended and Restated Agreement of
Limited
Partnership of Atlas Pipeline 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.
3
<PAGE>
"Associate" means, when used to indicate a relationship with
any
Person, (a) any corporation or organization of which such Person is
a director,
officer or partner or is, directly or indirectly, the owner of 20%
or more of
any class of voting stock or other voting interest; (b) any trust
or other
estate in which such Person has at least a 20% beneficial interest
or as to
which such Person serves as trustee or in a similar fiduciary
capacity; and (c)
any relative or spouse of such Person, or any relative of such
spouse, who has
the same principal residence as such Person.
"Available Cash" means, with respect to any Quarter ending prior to
the
Liquidation Date,
(a) the sum of (i) all cash and cash equivalents of the
Partnership Group on hand at the end of such Quarter, and (ii)
all
additional cash and cash equivalents of the Partnership Group on
hand
on the date of determination of Available Cash with respect to
such
Quarter resulting from Working Capital Borrowings made subsequent
to
the end of such Quarter, less
(b) the amount of any cash reserves that is 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).
4
<PAGE>
"Book-Tax Disparity" means with respect to any item of
Contributed
Property or Adjusted Property, as of the date of any determination,
the
difference between the Carrying Value of such Contributed Property
or Adjusted
Property and the adjusted basis thereof for federal income tax
purposes as of
such date. A Partner's share of the Partnership's Book-Tax
Disparities in all of
its Contributed Property and Adjusted Property will be reflected by
the
difference between such Partner's Capital Account balance as
maintained pursuant
to Section 5.5 and the hypothetical balance of such Partner's
Capital Account
computed as if it had been maintained strictly in accordance with
federal income
tax accounting principles.
"Book-Up Event" means an event which triggers a positive adjustment
to
the Capital Accounts of the Partners pursuant to Section
5.5(d).
"Business Day" means Monday through Friday of each week, except
that a
legal holiday recognized as such by the government of the United
States of
America or the states of New York or Pennsylvania shall not be
regarded as a
Business Day.
"Capital Account" means the capital account maintained for a
Partner
pursuant to Section 5.5. The "Capital Account" of a Partner in
respect of a
General Partner Interest, a Common Unit, a Subordinated Unit, an
Incentive
Distribution Right or any other Partnership Interest shall be the
amount which
such Capital Account would be if such General Partner Interest,
Common Unit,
Subordinated Unit, Incentive Distribution Right or other
Partnership Interest
were the only interest in the Partnership held by a Partner from
and after the
date on which such General Partner Interest, Common Unit,
Subordinated Unit,
Incentive Distribution Right or other Partnership Interest was
first issued.
"Capital Contribution" means any cash, cash equivalents or the
Net
Agreed Value of Contributed Property that a Partner contributes to
the
Partnership pursuant to this Agreement or the Contribution and
Conveyance
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,
coal mines,
preparation plants and related assets), in each case if such
addition,
improvement, acquisition or construction is made to increase over
the long term
the operating capacity or revenues of the Partnership Group from
the operating
capacity 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.
5
<PAGE>
"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
general
partner of the Partnership.
"Certificate" means a certificate (i) substantially in the form
of
Exhibit A to this Agreement, (ii) issued in global form in
accordance with the
rules and regulations of the Depositary or (iii) in such other form
as may be
adopted by the General Partner 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 referenced in Section 2.7, as such Certificate of
Limited
Partnership may be amended, supplemented or restated from time to
time.
"Citizenship Certification" means a properly completed certificate
in
such form as may be specified by the General Partner by which an
Assignee or a
Limited Partner certifies that he (and if he is a nominee holding
for the
account of another Person, that to the best of his knowledge such
other Person)
is an Eligible Citizen.
"Claim" has the meaning assigned to such term in Section
7.13(c).
"Closing Price" has the meaning assigned to such term in
Section
15.1(a).
"Code" means the Internal Revenue Code of 1986, as amended and
in
effect from time to time. Any reference herein to a specific
section or sections
of the Code shall be deemed to include a reference to any
corresponding
provision of 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 (exclusive of its interest as a holder of the
General
Partner Interest and Incentive Distribution Rights) and having the
rights and
obligations specified with respect to Common Units in this
Agreement. The term
"Common Unit" does not refer to a Subordinated Unit prior to its
conversion into
a Common Unit pursuant to the terms hereof.
"Common Unit Arrearage" means, with respect to any Common Unit,
whenever issued, as to any Quarter within the Subordination Period,
the excess,
if any, of (a) the Minimum Quarterly Distribution with respect to a
Common Unit
in respect of such Quarter over (b) the sum of all Available Cash
distributed
with respect to a Common Unit in respect of such Quarter pursuant
to Section
6.4(a)(i).
6
<PAGE>
"Conflicts Committee" means a committee of the Board of Directors
of
the General Partner composed entirely of two or more directors who
are neither
security holders, officers nor employees of the General Partner nor
officers,
directors or employees of any Affiliate of the General Partner.
"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 (or deemed contributed to a new partnership on
termination of the
Partnership pursuant to Section 708 of the Code). Once the Carrying
Value of a
Contributed Property is adjusted pursuant to Section 5.5(d), such
property shall
no longer constitute a Contributed Property, but shall be deemed an
Adjusted
Property.
"Contribution and Conveyance Agreement" means that certain
Contribution, Conveyance and Assumption Agreement, dated as of the
Initial
Closing Date, among the General Partner, the Partnership, the
Operating
Partnership together with certain other instruments contemplated or
referenced
thereunder.
"Cumulative Common Unit Arrearage" means, with respect to any
Common
Unit, whenever issued, and as of the end of any Quarter, the
excess, if any, of
(a) the sum resulting from adding together the Common Unit
Arrearage as to a
Common Unit for each of the Quarters within the Subordination
Period ending on
or before the last day of such Quarter over (b) the sum of any
distributions
theretofore made pursuant to Section 6.4(a)(ii) and the second
sentence of
Section 6.5 with respect to a Common Unit (including any
distributions to be
made in respect of the last of such Quarters).
"Curative Allocation" means any allocation of an item of income,
gain,
deduction, loss or credit pursuant to the provisions of Section
6.1(d)(xi).
"Current Market Price" has the meaning assigned to such term in
Section
15.1(a).
"Delaware Act" means the Delaware Revised Uniform Limited
Partnership
Act, 6 Del. C. Sections 17-101, et seq., as amended, supplemented
or restated
from time to time, and any successor to such statute.
"Departing Partner" means a former General Partner from and after
the
effective date of any withdrawal or removal of such former General
Partner
pursuant to Section 11.1 or 11.2.
"Depositary" means, with respect to any Units issued in global
form,
The Depository Trust Company and its successors and permitted
assigns.
"Economic Risk of Loss" has the meaning set forth in Treasury
Regulation Section 1.752-2(a).
7
<PAGE>
"Eligible Citizen" means a Person qualified to own interests in
real
property in jurisdictions in which any Group Member does business
or proposes to
do business from time to time, and whose status as a Limited
Partner or Assignee
does not or would not subject such Group Member to a significant
risk of
cancellation or forfeiture of any of its properties or any interest
therein.
"Estimated Maintenance Capital Expenditures" means an estimate made
in
good faith by the board of directors of the General Partner (with
the
concurrence of the Conflicts Committee) of the average quarterly
Maintenance
Capital Expenditures that the Partnership will incur over the long
term. The
board of directors of the General Partner will be permitted to make
such
estimate in any manner it determines reasonable in its sole
discretion. The
estimate will be made annually and whenever an event occurs that is
likely to
result in a material adjustment to the amount of Maintenance
Capital
Expenditures on a long term basis. The Partnership shall disclose
to its
Partners the amount of Estimated Maintenance Capital Expenditures.
Except as
provided in the definition of Subordination Period, any adjustments
to Estimated
Maintenance Capital Expenditures shall be prospective only.
"Event of Withdrawal" has the meaning assigned to such term in
Section
11.1(a).
"Expansion Capital Expenditures" means cash capital expenditures
for
Acquisitions or Capital Improvements. Expansion Capital
Expenditures shall not
include Maintenance Capital Expenditures.
"Final Subordinated Units" has the meaning assigned to such term
in
Section 6.1(d)(x).
"First Liquidation Target Amount" has the meaning assigned to such
term
in Section 6.1(c)(i)(D).
"First Target Distribution" means $0.52 per Unit per Quarter (or,
with
respect to the period commencing on the Initial Closing Date and
ending on March
31, 2000, it means the product of $0.52 multiplied by a fraction of
which the
numerator is the number of days in such period, and of which the
denominator is
92), subject to adjustment in accordance with Sections 6.6 and
6.9.
"General Partner" means Atlas Pipeline Partners 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.
8
<PAGE>
"Group Member" means a member of the Partnership Group.
"Holder" as used in Section 7.13, has the meaning assigned to such
term
in Section 7.13(a).
"Incentive Distribution Right" means a non-voting Limited
Partner
Interest issued to the General Partner in connection with the
transfer of
substantially all of its general partner interest in the Operating
Partnership
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
holder of the Incentive Distribution Rights pursuant to Sections
6.4(a)(iv), (v)
and (vi) and 6.4(b)(iii), (iv) and (v).
"Indemnified Persons" has the meaning assigned to such term in
Section
7.13(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, 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, (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,
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
(f) 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, partner, agent,
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 Closing Date" means February 2, 2000.
"Initial Common Units" means the Common Units sold in the
Initial
Offering.
"Initial Limited Partners" means the General Partner (with respect
to
the Common Units, Subordinated Units and the Incentive Distribution
Rights
received by it pursuant to Section 5.2) and the Underwriters, in
each case upon
being admitted to the Partnership in accordance with Section
10.1.
9
<PAGE>
"Initial Offering" means the initial offering and sale of Common
Units
to the public, as described in the Registration Statement.
"Initial Unit Price" means (a) with respect to the Common Units and
the
Subordinated Units, the initial public offering price per Common
Unit at which
the Underwriters offered the Common Units to the public for sale as
set forth on
the cover page of the prospectus included as part of the
Registration Statement
and first issued at or after the time the Registration Statement
first became
effective or (b) with respect to any other class or series of
Units, the price
per Unit at which such class or series of Units is initially sold
by the
Partnership, as determined by the General Partner, in each case
adjusted as the
General Partner determines to be appropriate to give effect to any
distribution,
subdivision or combination of Units.
"Interim Capital Transactions" means the following transactions if
they
occur prior to the Liquidation Date: (a) borrowings, refinancings
or refundings
of indebtedness 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 its withdrawal from the
Partnership,
each Initial Limited Partner, each Substituted Limited Partner,
each Additional
Limited Partner and any 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 and Sections 12.3 and 12.4, 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,
Subordinated Units, Incentive Distribution Rights or other
Partnership
Securities or a combination thereof or interest therein, and
includes any and
all benefits to which such Limited Partner or Assignee is entitled
as provided
in this Agreement, together with all obligations of such Limited
Partner or
Assignee to comply with the terms and provisions of this Agreement;
provided,
however, that when the term "Limited Partner Interest" is used
herein in the
context of any vote or other approval, including without limitation
Articles
XIII and XIV, such term shall not, solely for such purpose, include
any holder
of an Incentive Distribution Right except as may otherwise be
required by law.
10
<PAGE>
"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.
"Maintenance Capital Expenditures" means cash capital
expenditures
(including expenditures for the addition or improvement to the
capital assets
owned by any Group Member or for the acquisition of existing, or
the
construction of new, capital assets (including, without limitation,
pipelines,
compressor stations and related assets) if such expenditure is made
to maintain
over the long term the operating capacity of the capital assets of
the
Partnership Group, as such assets existed at the time of such
expenditure.
Maintenance Capital Expenditures shall not include Expansion
Capital
Expenditures.
"Master Natural Gas Gathering Agreement" means that Master Natural
Gas
Gathering Agreement, dated as of the Initial Closing Date, among
the Sponsor,
Resource Energy, Viking Resources, the Partnership and the
Operating
Partnership.
"Merger Agreement" has the meaning assigned to such term in
Section
14.1.
"Minimum Quarterly Distribution" means $0.42 per Unit per Quarter
(or
with respect to the period commencing on the Initial Closing Date
and ending on
March 31, 2000, it means the product of $0.42 multiplied by a
fraction of which
the numerator is the number of days in such period and of which the
denominator
is 92), subject to adjustment in accordance with Sections 6.6 and
6.9.
"National Securities Exchange" means an exchange registered with
the
Commission under Section 6(a) of the Securities Exchange Act of
1934, as
amended, supplemented or restated from time to time, and any
successor to such
statute, or the Nasdaq Stock Market or any successor thereto.
"Net Agreed Value" means, (a) in the case of any Contributed
Property,
the Agreed Value of such property reduced by any liabilities either
assumed by
the Partnership upon such contribution or to which such property is
subject when
contributed, and (b) in the case of any property distributed to a
Partner or
Assignee by the Partnership, the Partnership's Carrying Value of
such property
(as adjusted pursuant to Section 5.5(d)(ii)) at the time such
property is
distributed, reduced by any indebtedness either assumed by such
Partner or
Assignee upon such distribution or to which such property is
subject at the time
of distribution, in either case, as determined under Section 752 of
the Code.
11
<PAGE>
"Net Income" means, for any taxable year, the excess, if any, of
the
Partnership's items of income and gain (other than those items
taken into
account in the computation of Net Termination Gain or Net
Termination Loss) for
such taxable year over the Partnership's items of loss and
deduction (other than
those items taken into account in the computation of Net
Termination Gain or Net
Termination Loss) for such taxable year. The items included in the
calculation
of Net Income shall be determined in accordance with Section 5.5(b)
and shall
not include any items specially allocated under Section 6.1(d);
provided that
the determination of the items that have been specially allocated
under Section
6.1(d) shall be made as if Section 6.1(d)(xii) were not in this
Agreement.
"Net Loss" means, for any taxable year, the excess, if any, of
the
Partnership's items of loss and deduction (other than those items
taken into
account in the computation of Net Termination Gain or Net
Termination Loss) for
such taxable year over the Partnership's items of income and gain
(other than
those items taken into account in the computation of Net
Termination Gain or Net
Termination Loss) for such taxable year. The items included in the
calculation
of Net Loss shall be determined in accordance with Section 5.5(b)
and shall not
include any items specially allocated under Section 6.1(d);
provided that the
determination of the items that have been specially allocated under
Section
6.1(d) shall be made as if Section 6.1(d)(xii) were not in this
Agreement.
"Net Positive Adjustments" means, with respect to any Partner,
the
excess, if any, of the total positive adjustments over the total
negative
adjustments made to the Capital Account of such Partner pursuant to
Book-Up
Events and Book-Down Events.
"Net Termination Gain" means, for any taxable year, the sum, if
positive, of all items of income, gain, loss or deduction
recognized by the
Partnership after the Liquidation Date. The items included in the
determination
of Net Termination Gain shall be determined in accordance with
Section 5.5(b)
and shall not include any items of income, gain or loss specially
allocated
under Section 6.1(d).
"Net Termination Loss" means, for any taxable year, the sum, if
negative, of all items of income, gain, loss or deduction
recognized by the
Partnership after the Liquidation Date. The items included in the
determination
of Net Termination Loss shall be determined in accordance with
Section 5.5(b)
and shall not include any items of income, gain or loss specially
allocated
under Section 6.1(d).
"Non-citizen Assignee" means a Person whom the General Partner
has
determined 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.
"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.
12
<PAGE>
"Nonrecourse Deductions" means any and all items of loss, deduction
or
expenditures (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
Initial Closing Date, among the Sponsor, Resource Energy, Viking
Resources, 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 Expenditures; and
(b) Operating Expenditures shall include Maintenance Capital
Expenditures and Estimated Maintenance Capital Expenditures but
shall
not include Expansion Capital Expenditures. Where capital
expenditures
are made in part to maintain the long-term operating capacity of
the
assets of the Partnership Group and in part to increase the
long-term
operating capacity of the assets of the Partnership Group, the
good
faith allocation by the Board of Directors of the General Partner
(with
the concurrence of its Conflicts Committee) between Maintenance
Capital
Expenditures and Expansion Capital Expenditures shall be
conclusive.
(c) Operating Expenditures shall not include (i) payment of
transaction expenses relating to Interim Capital Transactions or
(ii)
distribution to partners.
"Operating Partnership" means Atlas Pipeline Operating
Partnership,
L.P., a Delaware limited partnership, and any successors
thereto.
"Operating Partnership Agreement" means the Limited 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
Initial
Closing Date, (ii) all cash receipts of the Partnership Group for
the
period beginning on the Initial Closing Date and ending with the
last
day 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
13
<PAGE>
(b) the sum of (i) Operating Expenditures for the period
beginning on the Initial 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.
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 Resource Energy 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 or (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.
"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.
14
<PAGE>
"Partners" means the General Partner and the Limited Partners.
"Partnership" means Atlas Pipeline 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, Subordinated Units and Incentive
Distribution Rights.
"Percentage Interest" means as of any date of determination (a) as
to
the General Partner (with respect to its General Partner Interest),
an aggregate
1.0101%, (b) as to any Unitholder or Assignee holding Units, the
product
obtained by multiplying (i) 98.9899% less the percentage applicable
to clause
(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.
"Person" means an individual or a corporation, limited
liability
company, partnership, joint venture, trust, unincorporated
organization,
association, government agency or political subdivision thereof or
other entity.
"Per Unit Capital Amount" means, as of any date of determination,
the
Capital Account, stated on a per Unit basis, underlying any Unit
held by a
Person other than the General Partner or any Affiliate of the
General Partner
who holds Units.
"Pro Rata" means (a) when modifying Units or any class thereof,
apportioned equally among all designated Units in accordance with
their relative
Percentage Interests, (b) when modifying Partners and Assignees,
apportioned
among all Partners and Assignees in accordance with their relative
Percentage
Interests and (c) when modifying holders of Incentive Distribution
Rights,
apportioned equally among all holders of Incentive Distribution
Rights in
accordance with the relative number of Incentive Distribution
Rights held by
each such holder.
15
<PAGE>
"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 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
S-1
(Registration No. 333-85193) as it has been or as it may be amended
or
supplemented from time to time, filed by the Partnership with the
Commission
under the Securities Act to register the offering and sale of the
Common Units
in the Initial Offering.
"Remaining Net Positive Adjustments" means as of the end of any
taxable
period, (i) with respect to the Unitholders holding Common Units or
Subordinated
Units, the excess of (a) the Net Positive Adjustments of the
Unitholders holding
Common Units or Subordinated Units as of the end of such period
over (b) the sum
of those Partners' Share of Additional Book Basis Derivative Items
for each
prior taxable period, (ii) with respect to the General Partner (as
holder of the
General Partner Interest), the excess of (a) the Net Positive
Adjustments of the
General Partner as of the end of such period over (b) the sum of
the General
Partner's Share of Additional Book Basis Derivative Items with
respect to the
General Partner Interest for each prior taxable period, and (iii)
with respect
to the holders of Incentive Distribution Rights, the excess of (a)
the Net
Positive Adjustments of the holders of Incentive Distribution
Rights as of the
end of such period over (b) the sum of the Share of Additional Book
Basis
Derivative Items of the holders of the Incentive Distribution
Rights for each
prior taxable period.
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<PAGE>
"Required Allocations" means (a) any limitation imposed on any
allocation of Net Losses or Net Termination Losses under Section
6.1(b) or
6.1(c)(ii) and (b) any allocation of an item of income, gain, loss
or deduction
pursuant to Section 6.1(d)(i), 6.1(d)(ii), 6.1(d)(iv), 6.1(d)(vii)
or
6.1(d)(ix).
"Residual Gain" or "Residual Loss" means any item of gain or loss,
as
the case may be, of the Partnership recognized for federal income
tax purposes
resulting from a sale, exchange or other disposition of a
Contributed Property
or Adjusted Property, to the extent such item of gain or loss is
not allocated
pursuant to Section 6.2(b)(i)(A) or 6.2(b)(ii)(A), respectively, to
eliminate
Book-Tax Disparities.
"Resource Energy"
means Resource Energy, Inc., an Affiliate of the
Sponsor.
"Second Liquidation Target Amount" has the meaning assigned to
such
term in Section 6.1(c)(i)(E).
"Second Target Distribution" means $0.60 per Unit per Quarter (or,
with
respect to the period commencing on the Initial Closing Date and
ending on March
31, 2000, it means the product of $0.60 multiplied by a fraction of
which the
numerator is equal to the number of days in such period and of
which the
denominator is 92), subject to adjustment in accordance with
Sections 6.6 and
6.9.
"Securities Act" means the Securities Act of 1933, as amended,
supplemented or restated from time to time and any successor to
such statute.
"Share of Additional Book Basis Derivative Items" means in
connection
with any allocation of Additional Book Basis Derivative Items for
any taxable
period, (i) with respect to the Unitholders holding Common Units or
Subordinated
Units, the amount that bears the same ratio to such Additional Book
Basis
Derivative Items as the Unitholders' Remaining Net Positive
Adjustments as of
the end of such period bears to the Aggregate Remaining Net
Positive Adjustments
as of that time, (ii) with respect to the General Partner (as
holder of the
General Partner Interest), the amount that bears the same ratio to
such
additional Book Basis Derivative Items as the General Partner's
Remaining Net
Positive Adjustments as of the end of such period bears to the
Aggregate
Remaining Net Positive Adjustment as of that time, and (iii) with
respect to the
Partners holding Incentive Distribution Rights, the amount that
bears the same
ratio to such Additional Book Basis Derivative Items as the
Remaining Net
Positive Adjustments of the Partners holding the Incentive
Distribution Rights
as of the end of such period bears to the Aggregate Remaining Net
Positive
Adjustments as of that time.
"Special Approval" means approval by a majority of the members of
the
Conflicts Committee.
"Sponsor" means Atlas America, Inc.
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<PAGE>
"Subordinated Unit" means a Unit representing a fractional part of
the
Partnership Interests of all Limited Partners and Assignees (other
than of
holders of the Incentive Distribution Rights) and having the rights
and
obligations specified with respect to Subordinated Units in this
Agreement. The
term "Subordinated Unit" as used herein does not include a Common
Unit.
"Subordination Period" means the period commencing on the
Initial
Closing Date and ending on the first to occur of the following
dates:
(a) the first day of any Quarter beginning after December 31,
2004 in respect of which (i) (A) distributions of Available Cash
from
Operating Surplus on each of the Outstanding Common Units and
Subordinated Units with respect to each of the twelve
consecutive
Quarter periods immediately preceding such date equaled or exceeded
the
sum of the Minimum Quarterly Distribution on all Outstanding
Common
Units and Subordinated Units during such periods and (B) the
Adjusted
Operating Surplus generated during each of the twelve
consecutive
Quarter periods immediately preceding such date equaled or exceeded
the
sum of the Minimum Quarterly Distribution on all of the Common
Units
and Subordinated Units that were Outstanding during such periods on
a
fully diluted basis (i.e., taking into account for purposes of
such
determination all Outstanding Common Units, all Outstanding
Subordinated Units, all Common Units issuable upon exercise of
employee
options that have, as of the date of determination, already vested
or
are scheduled to vest prior to the end of the Quarter
immediately
following the Quarter with respect to which such determination is
made,
and all Common Units that have as of the date of determination,
been
earned by but not yet issued to management of the Partnership
in
respect of incentive compensation), plus the related distribution
on
the General Partner Interest in the Partnership and on the
general
partner interest in the Operating Partnership, during such periods
and
(ii) there are no Cumulative Common Unit Arrearages; and
(b) the date on which the General Partner is removed as
general partner of the Partnership upon the requisite vote by
holders
of Outstanding Units under circumstances where Cause does not exist
and
Units held by the General Partner and its Affiliates are not voted
in
favor of such removal.
For purposes of determining whether the test in subclause
(a)(i)(B)
above has been satisfied, Adjusted Operating Surplus will be
adjusted upwards or
downwards if the Conflicts Committee determines in good faith that
the amount of
Estimated Maintenance Capital Expenditure used in the determination
of Adjusted
Operating Surplus in subclause (a)(i)(B) was materially incorrect,
based on
circumstances prevailing at the time of original determination of
Estimated
Maintenance Capital Expenditures, for any one or more of the
preceding three
four-quarter periods.
"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.
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<PAGE>
"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).
"Trading Day" has the meaning assigned to such term in Section
15.1(a).
"Transfer" has the meaning assigned to such term in Section
4.4(a).
"Transfer Agent" means such bank, trust company or other Person
(including the General Partner or one of its Affiliates) as shall
be appointed
from time to time by the Partnership to act as registrar and
transfer agent for
the Common Units; provided that if no Transfer Agent is
specifically designated
for any other Partnership Securities, the General Partner shall act
in such
capacity.
"Transfer Application" means an application and agreement for
transfer
of Units in the form set forth on the back of a Certificate or in a
form
substantially to the same effect in a separate instrument.
"Underwriter" means each Person named as an underwriter in Schedule
I
to the Underwriting Agreement who purchases Common Units pursuant
thereto.
"Underwriting Agreement" means the Underwriting Agreement dated
January
27, 2000 among the Underwriters, the Partnership and certain other
parties,
providing for the purchase of Common Units by such
Underwriters.
"Unit" means a Partnership Security that is designated as a "Unit"
and
shall include Common Units and Subordinated Units but shall not
include (i) a
General Partner Interest or (ii) Incentive Distribution Rights.
"Unitholders" means the holders of Common Units and Subordinated
Units.
"Unit Majority" means, during the Subordination Period, at least
a
majority of the Outstanding Common Units voting as a class and at
least a
majority of the Outstanding Subordinated Units voting as a class,
and
thereafter, at least a majority of the Outstanding Common
Units.
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<PAGE>
"Unpaid MQD" has the meaning assigned to such term in Section
6.1(c)(i)(B).
"Unrealized Gain" attributable to any item of Partnership
property
means, as of any date of determination, the excess, if any, of (a)
the fair
market value of such property as of such date (as determined under
Section
5.5(d)) over (b) the Carrying Value of such property as of such
date (prior to
any adjustment to be made pursuant to Section 5.5(d) as of such
date).
"Unrealized Loss" attributable to any item of Partnership
property
means, as of any date of determination, the excess, if any, of (a)
the Carrying
Value of such property as of such date (prior to any adjustment to
be made
pursuant to Section 5.5(d) as of such date) over (b) the fair
market value of
such property as of such date (as determined under Section
5.5(d)).
"Unrecovered Capital" means at any time, with respect to a Unit,
the
Initial Unit Price less the sum of all distributions constituting
Capital
Surplus theretofore made in respect of an Initial Common Unit and
any
distributions of cash (or the Net Agreed Value of any distributions
in kind) in
connection with the dissolution and liquidation of the Partnership
theretofore
made in respect of an Initial Common Unit, adjusted as the General
Partner
determines to be appropriate to give effect to any distribution,
subdivision or
combination of such Units.
"U.S. GAAP" means United States Generally Accepted Accounting
Principles consistently applied.
"Viking Resources" means Viking Resources Corporation, a
Pennsylvania
corporation.
"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 requiring all such borrowings
thereunder to be
reduced to a relatively small amount each year for an economically
meaningful
period of time.
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.
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<PAGE>
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 the General Partner and the
Limited Partners
hereby amend and restate the First Amended and Restated Agreement
of Limited
Partnership of Atlas Pipeline 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 "Atlas Pipeline 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 110
S. Poplar
Street, Suite 101, Wilmington, Delaware 19801, and the registered
agent for
service of process on the Partnership in the State of Delaware at
such
registered office shall be Andrew M. Lubin. The principal office of
the
Partnership shall be located at 311 Rouser Road, Moon Township,
Pennsylvania
15108 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 311 Rouser Road, Moon Township, Pennsylvania 15108 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) hold a limited partnership interest of
98.9899% in
the Operating Partnership and, in connection therewith, to exercise
all the
rights and powers conferred upon the Partnership as a limited
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 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 (ii) enhances the operations of an
activity of the
Operating Partnership or a Partnership activity that generates
qualifying
income, 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.
21
<PAGE>
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.
(a) Each Limited Partner and each Assignee hereby constitutes
and
appoints the General Partner and, if a Liquidator shall have been
selected
pursuant to Section 12.3, the Liquidator, (and any successor to the
Liquidator
by merger, transfer, assignment, election or otherwise) and each of
their
authorized officers and attorneys-in-fact, as the case may be, with
full power
of substitution, as his true and lawful agent and attorney-in-fact,
with full
power and authority in his name, place and stead, to:
(i) execute, swear to, acknowledge, deliver, file and record
in the appropriate public offices (A) all certificates, documents
and
other instruments (including this Agreement and the Certificate
of
Limited Partnership) 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 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
22
<PAGE>
(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 such Limited Partner or Assignee hereby
agrees to be bound
by any representation made by the General Partner or the Liquidator
acting in
good faith pursuant to such power of attorney; and each such
Limited Partner or
Assignee, to the maximum extent permitted by law, hereby waives any
and all
defenses that may be available to contest, negate or disaffirm the
action of the
General Partner or the Liquidator taken in good faith under such
power of
attorney. Each Limited Partner or Assignee shall execute and
deliver to the
General Partner or the Liquidator, within 15 days after receipt of
the request
therefor, such further designation, powers of attorney and other
instruments as
the General Partner or the Liquidator deems necessary to effectuate
this
Agreement and the purposes of the Partnership.
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 close of Partnership business on
December 31,
2098 or until the earlier 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.
23
<PAGE>
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.
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, member, general partner, agent or
trustee of the
General Partner or any of its Affiliates, or any officer, director,
employee,
member, general partner, agent or trustee of a Group Member, in its
capacity as
such, shall not be deemed to be participation in the control of the
business of
the Partnership by a limited partner of the Partnership (within the
meaning of
Section 17-303(a) of the Delaware Act) and shall not affect, impair
or eliminate
the limitations on the liability of the Limited Partners or
Assignees under this
Agreement.
24
<PAGE>
SECTION 3.3 Outside Activities of 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, together with a copy of the
executed copies of all powers of attorney pursuant to which
this
Agreement, the Certificate of Limited Partnership and all
amendments
thereto have been executed;
(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).
25
<PAGE>
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 or Subordinated
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
or Subordinated Units, the Partnership shall issue to such Person
one or more
certificates evidencing such Incentive Distribution Rights or other
Partnership
Securities other than Common Units or Subordinated Units.
Certificates shall be
executed on behalf of the Partnership by the Chairman of the Board,
President or
any Executive Vice President or 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. Subject to
the requirements of Section 6.7(b), the Partners holding
Certificates evidencing
Subordinated Units may exchange such Certificates for Certificates
evidencing
Common Units on or after the date on which such Subordinated Units
are converted
into Common Units pursuant to the terms of Section 5.8.
SECTION 4.2 Mutilated, Destroyed, Lost or Stolen Certificates.
(a) If any mutilated Certificate is surrendered to the Transfer
Agent,
the appropriate officers of the General Partner on behalf of the
Partnership
shall execute, and the Transfer Agent shall countersign and deliver
in exchange
therefor, a new Certificate evidencing the same number and type of
Partnership
Securities as the Certificate so surrendered.
(b) The appropriate officers of the General Partner on behalf of
the
Partnership shall execute and deliver, and the Transfer Agent shall
countersign
a new Certificate in place of any Certificate previously issued if
the Record
Holder of the Certificate:
(i) makes proof by affidavit, in form and substance
satisfactory to the Partnership, that a previously issued
Certificate
has been lost, destroyed or stolen;
(ii) requests the issuance of a new Certificate before the
Partnership has notice that the Certificate has been acquired by
a
purchaser for value in good faith and without notice of an
adverse
claim;
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(iii) if requested by the Partnership, delivers to the
Partnership a bond, in form and substance satisfactory to the
Partnership, with surety or sureties and with fixed or open penalty
as
the Partnership 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 Partnership.
If a Limited Partner or Assignee fails to notify the Partnership
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 Partnership 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, 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, 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.
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<PAGE>
(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
issued and outstanding membership interests of the General
Partner.
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.
(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.
28
<PAGE>
(f) The General Partner and its Affiliates shall have the right
at
any time to transfer their Subordinated Units and Common Units
(whether issued
upon conversion of the Subordinated Units or otherwise) to one or
more Persons.
SECTION 4.6 Transfer of the General Partner's General Partner
Interest.
(a) Subject to Section 4.6(c) below, prior to the end of the
Subordination Period, 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 or (B)
another Person in connection with the merger or consolidation of
the General
Partner with or into another Person or the transfer by the General
Partner of
all or substantially all of its assets to another Person.
(b) Subject to Section 4.6(c) below, at or after the end of the
Subordination Period, the General Partner may transfer all or any
of its General
Partner Interest without Unitholder approval.
(c) Notwithstanding anything herein to the contrary, no
transfer
by the General Partner of all or any part of its General Partner
Interest to
another Person shall be permitted unless (i) the transferee agrees
to assume the
rights and duties of the General Partner under this Agreement and
the Operating
Partnership Agreement and to be bound by the provisions of this
Agreement and
the Operating Partnership 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 interest of the General
Partner as
the general partner 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 a 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 the end of the Subordination Period, 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
or (b) to another Person in connection with (i) the merger or
consolidation of
such holder of Incentive Distribution Rights with or into such
other Person or
(ii) the transfer by such holder of all or substantially all of its
assets to
such other Person. Any other transfer of the Incentive Distribution
Rights prior
to the end of the Subordination Period, shall require the prior
approval of
holders at least a majority of the Outstanding Common Units
(excluding Common
Units held by the General Partner and its Affiliates). At or after
the end of
the Subordination Period, the General Partner or any other holder
of Incentive
Distribution Rights may transfer any or all of its Incentive
Distribution Rights
without Unitholder approval. Notwithstanding anything herein to the
contrary, no
transfer of Incentive Distribution Rights to another Person shall
be permitted
unless the transferee agrees to be bound by the provisions of this
Agreement.
The General Partner shall have the authority (but shall not be
required) to
adopt such reasonable restrictions on the transfer of Incentive
Distribution
Rights and requirements for registering the transfer of Incentive
Distribution
Rights as the General Partner, in its sole discretion, shall
determine are
necessary or appropriate.
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<PAGE>
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 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,
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) The transfer of a Subordinated Unit that has converted into
a
Common Unit shall be subject to the restrictions imposed by Section
6.7(b).
(d) Nothing contained in this Article IV, or elsewhere in this
Agreement, shall preclude the settlement of any transactions
involving
Partnership Interests entered into through the facilities of any
National
Securities Exchange on which such Partnership Interests are listed
for trading.
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<PAGE>
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).
(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:
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<PAGE>
(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.
(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.
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<PAGE>
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 made an initial Capital Contribution to
the Partnership
in the amount of $10, for a certain interest in the Partnership and
was admitted
as the General Partner and as a Limited Partner of the Partnership,
and the
Organizational Limited Partner made an initial Capital Contribution
to the
Partnership in the amount of $990 for an interest in the
Partnership and was
admitted as a Limited Partner of the Partnership. As of the Initial
Closing
Date, the interest of the Organizational Limited Partner was
redeemed as
provided in the Contribution and Conveyance Agreement; the initial
Capital
Contributions of each Partner were thereupon refunded; and the
Organizational
Limited Partner ceased to be a Limited Partner of the Partnership.
One percent
of any interest or other profit that may have resulted from the
investment or
other use of such initial Capital Contributions was allocated and
distributed to
the Organizational Limited Partner, and the balance thereof was
allocated and
distributed to the General Partner.
SECTION 5.2 Contributions by the General Partner and Its
Affiliates.
(a) On the Initial Closing Date and pursuant to the Contribution
and
Conveyance Agreement, the General Partner contributed to the
Partnership, as a
Capital Contribution, all but 1.0101% of its general partnership
interest in the
Operating Partnership in exchange for (A) the continuation of its
1.0101%
General Partner Interest, subject to all of the rights, privileges
and duties of
the General Partner under this Agreement, (B) $16,636,000 in cash,
(C) the
Subordinated Units and (D) the Incentive Distribution Rights.
(b) Upon the issuance of any additional Limited Partner Interests
by
the Partnership (other than the issuance of the Common Units issued
in the
Initial Offering), the General Partner shall be required to make
additional
Capital Contributions equal to 1/99th of any amount contributed to
the
Partnership by the Limited Partners in exchange for such additional
Limited
Partner Interests.
SECTION 5.3 Contributions by Initial Limited Partners and
Reimbursement of the
General Partner.
(a) On the Initial Closing Date and pursuant to the
Underwriting
Agreement, each Underwriter contributed to the Partnership cash in
an amount
equal to the Issue Price per Initial Common Unit, multiplied by the
number of
Common Units specified in the Underwriting Agreement to be
purchased by such
Underwriter at the Initial Closing Date. In exchange for such
Capital
Contributions by the Underwriters, the Partnership issued Common
Units to each
Underwriter on whose behalf such Capital Contribution was made in
an amount
equal to the quotient obtained by dividing (i) the cash
contribution to the
Partnership by or on behalf of such Underwriter by (ii) the Issue
Price per
Initial Common Unit.
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<PAGE>
(b) No Limited Partner Interests were issued at the Initial
Closing
Date other than (i) the Common Units issuable pursuant to Section
5.3(a) in
aggregate number equal to 1,500,000, (ii) the 1,641,026
Subordinated Units
issuable to the General Partner or its Affiliates pursuant to
Section 5.2(a),
and (iii) the Incentive Distribution Rights.
SECTION 5.4 Interest and Withdrawal.
No interest shall be paid by the Partnership on Capital
Contributions.
No Partner or Assignee shall be entitled to the withdrawal or
return of its
Capital Contribution, except to the extent, if any, that
distributions made
pursuant to this Agreement or upon termination of the Partnership
may be
considered as such by law and then only to the extent provided for
in this
Agreement. Except to the extent expressly provided in this
Agreement, no Partner
or Assignee shall have priority over any other Partner or Assignee
either as to
the return of Capital Contributions or as to profits, losses or
distributions.
Any such return shall be a compromise to which all Partners and
Assignees agree
within the meaning of 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
used for that purpose), provided, that:
(i) Solely for purposes of this Section 5.5, the Partnership
shall be treated as owning directly its proportionate share (as
determined by the General Partner based upon the provisions of
the
Operating Partnership Agreement) of all property owned by the
Operating
Partnership or any other Subsidiary that is classified as a
partnership
for federal income tax purposes.
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<PAGE>
(ii) All fees and other expenses incurred by the Partnership
to promote the sale of (or to sell) a Partnership Interest that
can
neither be deducted nor amortized under Section 709 of the Code,
if
any, shall, for purposes of Capital Account maintenance, be treated
as
an item of deduction at the time such fees and other expenses
are
incurred and shall be allocated among the Partners pursuant to
Section
6.1.
(iii) Except as otherwise provided in Treasury Regulation
Section 1.704-1(b)(2)(iv)(m), the computation of all items of
income,
gain, loss and deduction shall be made without regard to any
election
under Section 754 of the Code which may be made by the Partnership
and,
as to those items described in Section 705(a)(1)(B) or 705(a)(2)(B)
of
the Code, without regard to the fact that such items are not
includable
in gross income or are neither currently deductible nor capitalized
for
federal income tax purposes. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section
734(b)
or 743(b) of the Code is required, pursuant to Treasury
Regulation
Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining
Capital Accounts, the amount of such adjustment in the Capital
Accounts
shall be treated as an item of gain or loss.
(iv) Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be determined as if
the
adjusted basis of such property as of such date of disposition
were
equal in amount to the Partnership's Carrying Value with respect
to
such property as of such date.
(v) In accordance with the requirements of Section 704(b) of
the Code, any deductions for depreciation, cost recovery or
amortization attributable to any Contributed Property shall be
determined as if the adjusted basis of such property on the date it
was
acquired by the Partnership were equal to the Agreed Value of
such
property. Upon an adjustment pursuant to Section 5.5(d) to the
Carrying
Value of any Partnership property subject to depreciation, cost
recovery or amortization, any further deductions for such
depreciation,
cost recovery or amortization attributable to such property shall
be
determined (A) as if the adjusted basis of such property were equal
to
the Carrying Value of such property immediately following such
adjustment and (B) using a rate of depreciation, cost recovery
or
amortization derived from the same method and useful life (or,
if
applicable, the remaining useful life) as is applied for federal
income
tax purposes; provided, however, that, if the asset has a zero
adjusted
basis for federal income tax purposes, depreciation, cost recovery
or
amortization deductions shall be determined using any reasonable
method
that the General Partner may adopt.
(vi) If the Partnership's adjusted basis in a depreciable or
cost recovery property is reduced for federal income tax
purposes
pursuant to Section 48(q)(1) or 48(q)(3) of the Code, the amount
of
such reduction shall, solely for purposes hereof, be deemed to be
an
additional depreciation or cost recovery deduction in the year
such
property is placed in service and shall be allocated among the
Partners
pursuant to Section 6.1. Any restoration of such basis pursuant
to
Section 48(q)(2) of the Code shall, to the extent possible, be
allocated in the same manner to the Partners to
