Exhibit 10.2
THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
SUBURBAN PROPANE, L.P.
(as amended on June 24, 2009)

 

 

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TABLE OF CONTENTS

              Page    
RECITALS:
    1  
ARTICLE I DEFINITIONS
    2  
1.1 Definitions
    2  
1.2 Construction
    10  
ARTICLE II ORGANIZATION
    10  
2.1 Formation
    10  
2.2 Name
    11  
2.3 Registered Office; Registered Agent; Principal Office; Other Offices
    11  
2.4 Purpose and Business
    12  
2.5 Powers
    12  
2.6 Power of Attorney
    12  
2.7 Term
    13  
2.8 Title to Partnership Assets
    14  
ARTICLE III RIGHTS OF THE LIMITED PARTNERS
    14  
3.1 Limitation of Liability
    14  
3.2 Management of Business
    14  
3.3 Rights of Limited Partners Relating to the Partnership
    15  
3.4 Outside Activities of the Limited Partners
    16  
ARTICLE IV TRANSFER OF PARTNERSHIP INTERESTS
    16  
4.1 Transfer Generally
    16  
4.2 Transfer of the General Partner’s Partnership Interest
    16  
4.3 Transfer of the Limited Partners’ Partnership Interests
    17  
4.4 Restrictions on Transfers
    17  
ARTICLE V CONTRIBUTIONS AND INITIAL TRANSFERS
    17  
5.1 Organizational Contributions
    17  
5.2 [Intentionally Deleted.]
    18  
5.3 Additional Capital Contributions
    18  
5.4 Interest and Withdrawal
    18  
5.5 Capital Accounts
    18  
5.6 Loans from Partners
    20  
5.7 No Preemptive Rights
    21  
5.8 Fully Paid and Non-Assessable Nature of Limited Partner Partnership
Interests
    21  

 

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TABLE OF CONTENTS
(continued)

              Page    
ARTICLE VI ALLOCATIONS AND DISTRIBUTIONS
    21  
6.1 Allocations for Capital Account Purposes
    21  
6.2 Allocations for Tax Purposes
    24  
6.3 [Intentionally Deleted.]
    26  
6.4 General Distributions
    26  
ARTICLE VII MANAGEMENT AND OPERATION OF BUSINESS
    27  
7.1 Management
    27  
7.2 The Board of Supervisors; Appointment; Manner of Acting
    29  
7.3 Removal of Members of the Board of Supervisors
    29  
7.4 Resignations of Members of the Board of Supervisors
    29  
7.5 Vacancies on the Board of Supervisors
    29  
7.6 Meetings; Committees; Chairman
    30  
7.7 Officers
    31  
7.8 Compensation
    33  
7.9 Restrictions on General Partner’s and Board of Supervisors’ Authority
    33  
7.10 Reimbursement of the General Partner; Employee Benefit Plans
    34  
7.11 Outside Activities of the General Partner
    34  
7.12 Loans from the General Partner; Contracts with Affiliates; Certain
Restrictions on the General Partner
    35  
7.13 Indemnification
    37  
7.14 Liability of Indemnitees
    38  
7.15 Resolution of Conflicts of Interest
    39  
7.16 Other Matters Concerning the General Partner and the Board of Supervisors
    41  
7.17 Reliance by Third Parties
    42  

 

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TABLE OF CONTENTS
(continued)

              Page    
ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS
    42  
8.1 Records and Accounting
    42  
8.2 Fiscal Year
    42  
ARTICLE IX TAX MATTERS
    43  
9.1 Tax Returns and Information
    43  
9.2 Tax Elections
    43  
9.3 Tax Controversies
    43  
9.4 Withholding
    43  
ARTICLE X ADMISSION OF PARTNERS
    44  
10.1 Current Partners
    44  
10.2 Admission of Substituted Limited Partners
    44  
10.3 Admission of Successor General Partner
    44  
10.4 Admission of Additional Limited Partners
    45  
10.5 Amendment of Agreement and Certificate of Limited Partnership
    45  
ARTICLE XI WITHDRAWAL OR REMOVAL OF PARTNERS
    45  
11.1 Withdrawal of the General Partner
    45  
11.2 Removal of the General Partner
    47  
11.3 Interest of Departing Partner and Successor General Partner; Delegation of
Authority to the Board of Supervisors by Successor General Partner
    48  
11.4 Withdrawal of the Limited Partner
    48  
ARTICLE XII DISSOLUTION AND LIQUIDATION
    48  
12.1 Dissolution
    48  
12.2 [Intentionally omitted]
    49  
12.3 Liquidator
    49  
12.4 Liquidation
    50  
12.5 Cancellation of Certificate of Limited Partnership
    50  
12.6 Return of Capital Contributions
    50  
12.7 Waiver of Partition
    51  
12.8 Capital Account Restoration
    51  

 

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TABLE OF CONTENTS
(continued)

              Page    
ARTICLE XIII AMENDMENT OF PARTNERSHIP AGREEMENT
    51  
13.1 Amendment to be Adopted Solely by the Board of Supervisors
    51  
13.2 Amendment Procedures
    52  
ARTICLE XIV MERGER
    53  
14.1 Authority
    53  
14.2 Procedure for Merger or Consolidation
    53  
14.3 Approval by Limited Partners of Mergers or Consolidations
    54  
14.4 Certificate of Merger
    54  
14.5 Effect of Merger
    54  
ARTICLE XV GENERAL PROVISIONS
    55  
15.1 Addresses and Notices
    55  
15.2 References
    55  
15.3 Further Action
    55  
15.4 Binding Effect
    55  
15.5 Integration
    55  
15.6 Creditors
    56  
15.7 Waiver
    56  
15.8 Counterparts
    56  
15.9 Applicable Law
    56  
15.10 Invalidity of Provisions
    56  

 

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THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
SUBURBAN PROPANE, L.P.
This Third Amended and Restated Agreement of Limited Partnership of Suburban
Propane, L.P. dated as of October 19, 2006, as amended on June 24, 2009, is
entered into by and among Suburban Energy Services Group LLC, a Delaware limited
liability company, as the General Partner, Suburban Propane Partners, L.P., a
Delaware limited partnership, as a Limited Partner, and Suburban LP Holding,
LLC, a Delaware limited liability company, as a Limited Partner, together with
any other Persons who become Partners in the Partnership or parties hereto as
provided herein. In consideration of the covenants, conditions and agreements
contained herein, the parties hereto hereby agree as follows:
R E C I T A L S:
WHEREAS, Suburban Propane GP, Inc., a Delaware corporation and the initial
general partner of the Partnership (the “Initial General Partner”), and certain
other parties organized the Partnership as a Delaware limited partnership
pursuant to an Amended and Restated Agreement of Limited Partnership dated as of
March 4, 1996 (the “Original Agreement”); and
WHEREAS, the Second Amended and Restated Agreement of Limited Partnership of the
Partnership, dated as of May 26, 1999 amended and restated the Original
Agreement in its entirety, (the “Second Restated Agreement”); and
WHEREAS, the Partnership, the MLP and the General Partner have entered into an
Exchange Agreement, dated as of July 27, 2006 (the “Exchange Agreement”); and
the MLP, Suburban LP, Suburban LP Holding, Inc., and the General Partner have
entered into a First Amendment and Assignment Agreement amending the Second
Restated Agreement, dated as of the date hereof (the “OLP Amendment”); and
WHEREAS, pursuant to the OLP Amendment, inter alia Suburban LP has been admitted
to the Partnership as a Limited Partner; and
WHEREAS, in connection with the transactions contemplated by the Exchange
Agreement, the OLP Amendment and the MLP Agreement (as defined herein), the
Second Restated Agreement was amended and restated in its entirety by the Third
Amended and Restated Agreement of Limited Partnership of the Partnership, dated
October 19, 2006 (the “Third Restated Agreement”); and
WHEREAS, the Third Restated Agreement is being further amended to permit the
General Partner to pledge its Partnership Interest in the Partnership solely for
the purpose of securing, directly or indirectly, indebtedness of the Partnership
or the MLP and to make certain related changes.

 

 

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NOW, THEREFORE, in consideration of the covenants and agreements made herein,
the Third Restated Agreement is hereby further amended to permit the General
Partner to pledge its Partnership Interest in the Partnership for certain
purposes solely for the purpose of securing, directly or indirectly,
indebtedness of the Partnership or the MLP and to make certain related changes:
ARTICLE I
Definitions
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.
Capitalized terms used herein but not otherwise defined shall have the meanings
assigned to such terms in the MLP Agreement.
“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 calendar year, (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 calendar
year, are reasonably expected to be allocated to such Partner in subsequent
years under Sections 704(e)(2) and 706(d) of the Code and Treasury
Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions
that, as of the end of such calendar 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(c)(i)
or 6.1(c)(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.
“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.

 

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“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
Board of Supervisors using such reasonable method of valuation as it may adopt.
The Board of Supervisors 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 Third Amended and Restated Agreement of Limited
Partnership of Suburban Propane, L.P., as it may be amended, supplemented or
restated from time to time.
“Audit Committee” means a committee of the Board of Supervisors of the
Partnership composed of the same individuals who serve as the audit committee of
the MLP.
“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 borrowings for
working capital purposes, in each case 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 Board of Supervisors to (i) provide for the proper
conduct of the business of the Partnership Group (including reserves for future
capital expenditures) subsequent to such Quarter, and (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; provided, however, 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 Board of Supervisors 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.
“Board of Supervisors” shall mean the board of supervisors of the Partnership,
composed of those individuals who serve as members of the MLP’s board of
supervisors, to whom the General Partner irrevocably delegates, and in which is
vested, pursuant to Section 7.1, and subject to Section 7.9, the power to manage
the business and activities of the Partnership. The Board of Supervisors shall
constitute a committee within the meaning of Section 17-303(b)(7) of the
Delaware Act.

 

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“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.
“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 New Jersey shall not be regarded as a Business Day.
“Capital Account” means the capital account maintained for a Partner pursuant to
Section 5.5.
“Capital Contribution” means any cash, cash equivalents or the Net Agreed Value
of Contributed Property that a Partner contributes or has contributed to the
Partnership pursuant to this Agreement (or the Original Agreement) or the
Contribution and Conveyance Agreement.
“Capitalized Lease Obligations” means obligations to pay rent or other amounts
under any lease of (or other arrangement conveying the right to use) real and/or
personal property, which obligations are accounted for as a capital lease on a
balance sheet under U.S. GAAP; for the purpose hereof the amount of such
obligations shall be the capitalized amount reflected on such balance sheet.
“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’ 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 Board of Supervisors.
“Cause” means a court of competent jurisdiction has entered a final,
non-appealable judgment finding a Person liable for actual fraud, gross
negligence or willful or wanton misconduct in its capacity as general partner of
the Partnership or as a member of the Board of Supervisors, as the case may be.

 

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“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 2.1, as such Certificate of Limited
Partnership may be amended, supplemented or restated from time to time.
“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 future
law.
“Commission” means the United States Securities and Exchange Commission.
“Contributed Property” means each property or other asset, in such form as may
be permitted by the Delaware Act, but excluding cash, contributed to the
Partnership. Once the Carrying Value of a Contributed Property is adjusted
pursuant to Section 5.5(d), such property shall no longer constitute a
Contributed Property, but shall be deemed an Adjusted Property.
“Contribution and Conveyance Agreement” means that certain Contribution,
Conveyance and Assumption Agreement, dated as of March 4, 1996, among the
Initial General Partner, the MLP, the Partnership and certain other parties,
together with the additional conveyance documents and instruments contemplated
or referenced thereunder.
“Curative Allocation” means any allocation of an item of income, gain,
deduction, loss or credit pursuant to the provisions of Section 6.1(c)(ix).
“Delaware Act” means the Delaware Revised Uniform Limited Partnership Act, 6 Del
C. §§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 event of withdrawal, including the removal of such former General
Partner pursuant to Section 11.1 or 11.2.
“Economic Risk of Loss” has the meaning set forth in Treasury
Regulation Section 1.752-2(a).
“Event of Withdrawal” has the meaning assigned to such term in Section 11.1(a).
“Exchange Agreement” has the meaning assigned to such term in the Recitals
hereof.
“General Partner” means Suburban Energy Services Group LLC, a Delaware limited
liability company, in its capacity as general partner of the Partnership, or any
additional or successor general partner of the Partnership admitted to the
Partnership as a general partner thereof in accordance with the terms hereof, in
its capacity as a general partner of the Partnership.

 

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“Group Member” means a member of the Partnership Group.
“Indebtedness,” as used in Section 7.9(b), means, as applied to any Person,
without duplication, any indebtedness, exclusive of deferred taxes, (i) in
respect of borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof); (ii) evidenced
by bonds, notes, debentures or similar instruments or letters of credit in
support of bonds, notes, debentures or similar instruments; (iii) representing
the balance deferred and unpaid of the purchase price of any property, if and to
the extent such indebtedness would appear as a liability on a balance sheet of
such Person prepared in accordance with U.S. GAAP (but excluding trade accounts
payable arising in the ordinary course of business that are not overdue by more
than 90 days or are being contested by such Person in good faith); (iv) any
Capitalized Lease Obligations of such Person; and (v) Indebtedness of others
guaranteed by such Person, including, without limitation, every obligation of
such Person (A) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or to purchase (or to advance or supply funds
for the purchase of) any security for the payment of such Indebtedness, or
(B) to maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness.
“Indemnitee” means (a) the members of the Board of Supervisors or the members of
the board of supervisors of the MLP or any other Group Member, (b) the General
Partner, any Departing Partner and any Person who is or was an Affiliate of the
General Partner or any Departing Partner, (c) any Person who is or was a member,
partner, director, officer, employee, agent or trustee of the MLP, any Group
Member, the General Partner or any Departing Partner or any Affiliate or the
MLP, any Group Member, the General Partner or any Departing Partner and (e) any
Person who is or was serving at the request of the Board of Supervisors, the
General Partner or any Departing Partner or any Affiliate of the General Partner
or any Departing Partner as a member, partner, director, officer, employee,
partner, agent, fiduciary or trustee of another Person, in each case, acting in
such capacity; 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 General Partner” means Suburban Propane GP, Inc., a Delaware
corporation.
“Limited Partner” means, collectively, unless the context otherwise requires,
the MLP, Suburban LP, each Substituted Limited Partner, each Additional Limited
Partner and any Departing Partner upon the change of its status from General
Partner to Limited Partner pursuant to Section 11.3.
“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 Partners 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.

 

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“Liquidator” means one or more Persons selected by the Board of Supervisors to
perform the functions described in Section 12.3.
“Merger Agreement” has the meaning assigned to such term in Section 14.1.
“MLP” means Suburban Propane Partners, L.P., a Delaware limited partnership.
“MLP Agreement” means the Third Amended and Restated Agreement of Limited
Partnership of the MLP, as it may be amended, supplemented or restated from time
to time.
“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 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 upon such
distribution or to which such property is subject at the time of distribution,
in either case, as determined under Section 752 of the Code.
“Net Income” means, for any taxable year, the excess, if any, of the
Partnership’s items of income and gain for such taxable year over the
Partnership’s items of loss and deduction 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(c).
“Net Loss” means, for any taxable year, the excess, if any, of the Partnership’s
items of loss and deduction for such taxable year over the Partnership’s items
of income and gain 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(c).
“Nonrecourse Built-in Gain” means, with respect to any Contributed Properties or
Adjusted Properties that are subject to a mortgage or pledge securing a
Nonrecourse Liability, the amount of any taxable gain that would be allocated to
the Partners pursuant to Sections 6.2(b)(i)(A), 6.2(b)(ii)(A) and 6.2(b)(iii) if
such properties were disposed of in a taxable transaction in full satisfaction
of such liabilities and for no other consideration.
“Nonrecourse Deductions” means any and all items of loss, deduction or
expenditures (including, without limitation, any expenditure described in
Section 705(a)(2)(B) of the Code) that, in accordance with the principles of
Treasury Regulation Section 1.704-2(b), are attributable to a Nonrecourse
Liability.
“Nonrecourse Liability” has the meaning set forth in Treasury Regulation
Section 1.752-1(a)(2).

 

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“OLP Subsidiary” means a Subsidiary of the Partnership.
“Officers” means the Chief Executive Officer, the President, any Vice
Presidents, the Secretary, the Treasurer, any Assistant Secretaries or Assistant
Treasurers and any other officers of the Partnership appointed by the Board of
Supervisors pursuant to Section 7.7.
“Opinion of Counsel” means a written opinion of counsel (who may be regular
counsel to the Partnership or the General Partner or any of their Affiliates)
acceptable to the Board of Supervisors in its reasonable discretion.
“Original Agreement” has the meaning assigned to such term in the Recitals to
this Agreement.
“Original Partnership Agreement” means the Amended and Restated Agreement of
Limited Partnership of the MLP dated as of March 4, 1996.
“Partner Nonrecourse Debt” has the meaning set forth in Treasury Regulation
Section 1.704-2(b)(4).
“Partner Nonrecourse Debt Minimum Gain” has the meaning set forth in Treasury
Regulation Section 1.704-2(i)(2).
“Partner Nonrecourse Deductions” means any and all items of loss, deduction or
expenditure (including, without limitation, any expenditure described in
Section 705(a)(2)(B) of the Code) that, in accordance with the principles of
Treasury Regulation Section 1.704-2(i), are attributable to a Partner
Nonrecourse Debt.
“Partners” means the General Partner and the Limited Partner.
“Partnership” means Suburban Propane, L.P., a Delaware limited partnership, and
any successors thereto.
“Partnership Group” means the Partnership and the OLP Subsidiaries, treated as a
single consolidated entity.
“Partnership Interest” means the interest of a Partner in the Partnership.
“Partnership Minimum Gain” means that amount determined in accordance with the
principles of Treasury Regulation Section 1.704-2(d).
“Percentage Interest” means (a) as to the General Partner (in its capacity as
General Partner without reference to any limited partner interests held by it)
zero, (b) as to the MLP as a Limited Partner, 99.9%, and (c) as to Suburban LP
as a Limited Partner, 0.1%.
“Person” means an individual or a corporation, limited liability company,
partnership, limited liability partnership, joint venture, trust, unincorporated
organization, association, government agency or political subdivision thereof or
other entity.

 

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“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 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.
“Required Allocations” means (a) any limitation imposed on any allocation of Net
Losses, and (b) any allocation of an item of income, gain, loss or deduction
pursuant to Section 6.1(c)(i), 6.1(c)(ii), 6.1(c)(iii), 6.1(c)(vi) or
6.1(c)(viii).
“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.
“Securities Act” means the Securities Act of 1933, as amended, supplemented or
restated from time to time and any successor to such statute.
“Special Approval” means approval by a majority of the members of the Audit
Committee.
“Subsidiary” means, with respect to any Person, (a) a corporation of which more
than 50% of the voting power of shares entitled (without regard to the
occurrence of any contingency) to vote in the election of directors or other
governing body of such corporation is owned, directly or indirectly, at the date
of determination, by such Person, by one or more Subsidiaries of such Person or
a combination thereof, (b) a partnership (whether general or limited) in which
such Person or a Subsidiary of such Person is, at the date of determination, a
general or limited partner of such partnership, but only if more than 50% of the
partnership interests of such partnership (considering all of the partnership
interests of the partnership as a single class) is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person or a combination thereof, or (c) any other Person
(other than a corporation or a partnership) in which such Person, one or more
Subsidiaries of such Person, or a combination thereof, directly or indirectly,
at the date of determination, has (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of a majority of the directors or
other governing body of such Person.
“Substituted Limited Partner” means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 10.2 in place of and with all the
rights of a Limited Partner.

 

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“Suburban LP” means Suburban LP Holding, LLC, a Delaware limited liability
company.
“Surviving Business Entity” has the meaning assigned to such term in
Section 14.2(b).
“Transfer” has the meaning assigned to such term in Section 4.1(a).
“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)).
“U.S. GAAP” means United States Generally Accepted Accounting Principles
consistently applied.
“Withdrawal Opinion of Counsel” has the meaning assigned to such term in
Section 11.1(b).
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) “include” or “includes” means includes, without
limitation, and “including” means including, without limitation.
ARTICLE II
Organization
2.1 Formation.
The Initial General Partner and the MLP previously formed the Partnership as a
limited partnership upon the filing on December 19, 1995 of the Certificate of
Limited Partnership with the Secretary of State of the State of Delaware
pursuant to the provisions of the Delaware Act. The General Partner and the
Limited Partners hereby amend the Third Restated Agreement to permit the General
Partner to pledge its Partnership Interest in the Partnership solely for the
purpose of securing, directly or indirectly, indebtedness of the Partnership or
the MLP and to make certain related changes. This amendment shall become
effective on the date of this Agreement. Except as expressly provided to the
contrary in this Agreement, the rights 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.

 

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The Initial General Partner has caused the Certificate of Limited Partnership to
be filed with the Secretary of State of the State of Delaware as required by the
Delaware Act and the General Partner shall use all reasonable efforts to cause
to be filed such other certificates or documents as may be determined by the
Board of Supervisors to be reasonable and necessary or appropriate for the
formation, continuation, qualification and operation of a limited partnership
(or a partnership in which the limited partners have limited liability) in the
State of Delaware or any other state in which the Partnership may elect to do
business or own property. To the extent that such action is determined by the
Board of Supervisors to be reasonable and necessary or appropriate, the General
Partner shall file amendments to and restatements of the Certificate of Limited
Partnership and do all things to maintain the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) under the laws of the State of Delaware or of any other state in
which the Partnership may elect to do business or own property, including in
connection with the Exchange Agreement and the transactions contemplated
thereby. Subject to the provisions of Section 3.4(a), the Partnership shall not
be required, before or after filing, to deliver or mail a copy of the
Certificate of Limited Partnership, any qualification document or any amendment
thereto to any Limited Partner.
2.2 Name.
The name of the Partnership shall be “Suburban Propane, L.P.” The Partnership’s
business may be conducted under any other name or names deemed necessary or
appropriate by the Board of Supervisors, including, if consented to by the
General Partner in its sole discretion, 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 Board of Supervisors 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.
2.3 Registered Office; Registered Agent; Principal Office; Other Offices.
Unless and until changed by the Board of Supervisors or the Chief Executive
Officer, the registered office of the Partnership in the State of Delaware shall
be located at Corporation Trust Center, 1209 Orange Street, New Castle County,
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 The
Corporation Trust Company. The principal office of the Partnership shall be
located at One Suburban Plaza, 240 Route 10 West, Whippany, New Jersey
07981-0206 or such other place as the Board of Supervisors 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 Board of Supervisors deems necessary or appropriate. The address of the
General Partner shall be One Suburban Plaza, 240 Route 10 West, Whippany, New
Jersey 07981-0106 or such other place as the General Partner may from time to
time designate by notice to the Limited Partners.

 

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2.4 Purpose and Business.
The purpose and nature of the business to be conducted by the Partnership shall
be to (a) acquire, manage and operate the assets and properties held by the
Partnership, (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 is approved by the Board of
Supervisors and which may lawfully be conducted by a limited partnership
organized pursuant to the Delaware Act and, in connection therewith, to exercise
all of the rights and powers conferred upon the Partnership pursuant to the
agreements relating to such business activity and (c) do anything necessary or
appropriate to the foregoing, including the making of capital contributions or
loans to any Group Member, the MLP or any Subsidiary of the MLP. The Board of
Supervisors has no obligation or duty to the Partnership or the Limited Partners
to propose or approve, and in its discretion may decline to propose or approve,
the conduct by the Partnership of any business.
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.
2.6 Power of Attorney.
(a) The Limited Partners hereby constitute and appoint the Chief Executive
Officer and President of the Partnership and, if a Liquidator shall have been
selected pursuant to Section 12.3, the Liquidator, severally (and any successor
to the Liquidator by merger, transfer, assignment, election or otherwise) and
each of their authorized officers and attorneys-in-fact, as the case may be,
with full power of substitution, as his true and lawful agent and
attorney-in-fact, with full power and authority in his name, place and stead,
to:
(i) execute, swear to, acknowledge, deliver, file and record in the appropriate
public offices (A) all certificates, documents and other instruments (including
this Agreement and the Certificate of Limited Partnership and all amendments or
restatements thereof) that the Board of Supervisors 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 Board
of Supervisors 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 Board of Supervisors 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 Interests; 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

 

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(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 Board of Supervisors 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 Board of Supervisors or the Liquidator, to
effectuate the terms or intent of this Agreement; provided, that when the
approval of the Limited Partners is required by any provision of this Agreement,
the Chief Executive Officer and President of the Partnership and the Liquidator
may exercise the power of attorney made in this Section 2.6(a)(ii) only after
the necessary consent or approval of the Limited Partners is obtained.
Nothing contained in this Section 2.6(a) shall be construed as authorizing the
Board of Supervisors 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 the Limited
Partners and the transfer of all or any portion of the Limited Partner’s
Partnership Interest and shall extend to the Limited Partner’s heirs,
successors, assigns and personal representatives. The Limited Partners hereby
agree to be bound by any representation made by the Chief Executive Officer or
President of the Partnership or the Liquidator acting in good faith pursuant to
such power of attorney; and the Limited Partners hereby waive, to the maximum
extent permitted by law, any and all defenses that may be available to contest,
negate or disaffirm the action of the Chief Executive Officer or President of
the Partnership or the Liquidator taken in good faith under such power of
attorney. The Limited Partners shall execute and deliver to the Chief Executive
Officer or President of the Partnership or the Liquidator, within 15 days after
receipt of the request therefor, such further designation, powers of attorney
and other instruments as the Chief Executive Officer or President of the
Partnership or the Liquidator deems necessary to effectuate this Agreement and
the purposes of the Partnership.
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 until
the close of Partnership business on September 30, 2085, or until the earlier
dissolution of the Partnership in accordance with the provisions of Article XII.

 

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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 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 or one or more nominees, as the Board of Supervisors 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 nominees shall be held by the General Partner 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 Board of Supervisors 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 an event of withdrawal 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 Board of Supervisors. 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 the Limited Partners
3.1 Limitation of Liability.
The Limited Partners shall have no liability under this Agreement except as
expressly provided in this Agreement or the Delaware Act.
3.2 Management of Business.
No Limited Partner (other than the General Partner, or any of its Affiliates or
any member, officer, director, employee, partner, agent or trustee of the
General Partner or any of its Affiliates, or any officer, member of the board of
supervisors or directors, employee or agent of a Group Member, in its capacity
as such, if such Person shall also be a Limited Partner) shall participate in
the operation, management or control (within the meaning of Section 17-303(a) 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
member, officer, director, employee, partner, agent or trustee of the General
Partner or any of its Affiliates, or any officer, member of the board of
supervisors or directors, member, partner, employee or agent of a Group Member,
the MLP or any Subsidiary of the MLP, 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 under this Agreement.

 

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3.3 Rights of Limited Partners Relating to the Partnership.
(a) In addition to other rights provided by this Agreement or by applicable law,
and except as limited by Section 3.3(b), each of the Limited Partners shall have
the right, for a purpose reasonably related to such Limited Partner’s interest
as a limited partner in the Partnership, upon reasonable demand and at the
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 tax returns for each year, provided, however, that only
the requesting Limited Partner’s Schedule K-1 will be included therewith;
(iii) to have furnished to it, upon notification to the Partnership, a current
list of the name and last known business, residence or mailing address of each
Partner;
(iv) to have furnished to it, upon notification to the Partnership, a copy of
this Agreement and the Certificate of Limited Partnership and all amendments
thereto, together with a copy of the executed copies of all powers of attorney
pursuant to which this Agreement, the Certificate of Limited Partnership and all
amendments thereto have been executed;
(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 Board of Supervisors may keep confidential from the Limited Partners,
for such period of time as the Board of Supervisors deems reasonable, (i) any
information that the Board of Supervisors reasonably believes to be in the
nature of trade secrets or (ii) other information the disclosure of which the
Board of Supervisors 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 agreements with third parties to keep
confidential (other than agreements with Affiliates the primary purpose of which
is to circumvent the obligations set forth in this Section 3.3).

 

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3.4 Outside Activities of the Limited Partners.
Subject to the provisions of Section 7.11, which shall continue to be applicable
to the Persons referred to therein, regardless of whether such Person shall also
be a Limited Partner, any Limited Partner 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.
ARTICLE IV
Transfer of Partnership Interests
4.1 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 a
Partner assigns its Partnership Interest to another Person, and includes a sale,
assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any
other disposition by law or otherwise, in whole or in part.
(b) No Partnership Interest shall be transferred, in whole or in part, except in
accordance with the terms and conditions set forth in this Article IV. Any
transfer or purported transfer of a Partnership Interest not made in accordance
with this Article IV shall be null and void.
(c) Nothing contained in this Agreement shall be construed to prevent a
disposition by any securityholder of the General Partner of any or all of the
issued and outstanding equity interests in the General Partner.
(d) Any transfer of a Partnership Interest shall be subject to all mortgages,
pledges, hypothecations and security interests, if any, encumbering such
Partnership Interest.
4.2 Transfer of the General Partner’s Partnership Interest.
If the General Partner transfers its partnership interest as the general partner
of the MLP to any Person in accordance with the provisions of the MLP Agreement,
upon the request of the Board of Supervisors, the General Partner shall
contemporaneously therewith, transfer all, but not less than all, of its
Partnership Interest as the general partner of the Partnership to such Person
for consideration of $10, and the Limited Partner hereby expressly consents to
such transfer. Except (i) in connection with any pledge of (or any related
foreclosure on) the General Partner’s Partnership Interest as the general
partner of the Partnership solely for the purpose of securing, directly or
indirectly, indebtedness of the Partnership or the MLP or (ii) as set forth in
the immediately preceding sentence, the General Partner may not transfer all or
any part of its Partnership Interest as the general partner of the Partnership.
Any transferee of the Partnership Interests of the General Partner pursuant to
this Section 4.2 shall be deemed to be a successor to the General Partner for
purposes of this Agreement.

 

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4.3 Transfer of the Limited Partners’ Partnership Interests .
Any Limited Partner may transfer all, but not less than all, of its Partnership
Interest as a limited partner of the Partnership in connection with the merger,
consolidation or other combination of any of the Limited Partners with or into
any other Person or the transfer by any of the Limited Partners of all or
substantially all of its assets to another Person, and following any such
transfer such Person may become a Substituted Limited Partner pursuant to
Article X. Except as set forth in the immediately preceding sentence or pursuant
to the Exchange Agreement, or in connection with any pledge of (or any related
foreclosure on) the Limited Partner’s Partnership Interest as a limited partner
of the Partnership solely for the purpose of securing, directly or indirectly,
indebtedness of the Partnership or the MLP, a Limited Partner may not transfer
all or any part of its Partnership Interest or withdraw from the Partnership.
4.4 Restrictions on Transfers.
(a) Notwithstanding the other provisions of this Article IV, no transfer of any
Partnership Interest 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
authorities with jurisdiction over such transfer, (ii) terminate the existence
or qualification of the Partnership or the MLP under the laws of the
jurisdiction of its formation or (iii) cause the Partnership or the MLP 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 Board of Supervisors 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
MLP 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 Board of Supervisors may determine to be
necessary or appropriate to impose such restrictions.
ARTICLE V
Contributions and Initial Transfers
5.1 Organizational Contributions.
In connection with the formation of the Partnership under the Delaware Act, the
Initial General Partner made an initial Capital Contribution to the Partnership
and was admitted as the general partner of the Partnership, and the MLP made an
initial Capital Contribution to the Partnership and was admitted as a limited
partner of the Partnership.

 

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5.2 [Intentionally Deleted.]
5.3 Additional Capital Contributions.
With the consent of the Board of Supervisors, any Limited Partner may, but shall
not be obliged to, make additional Capital Contributions to the Partnership.
Except as provided in Section 12.8, the General Partner shall not be obligated,
nor permitted, to make any additional Capital Contributions to the Partnership
in its capacity as the General Partner of the Partnership.
5.4 Interest and Withdrawal.
No interest shall be paid by the Partnership on Capital Contributions, and no
Partner shall be entitled to withdraw or a return of any part of its Capital
Contributions or to receive any distribution from the Partnership, except as
provided in Articles VI, XI and XII.
5.5 Capital Accounts.
(a) The Partnership shall maintain for each Partner owning a Partnership
Interest a separate Capital Account with respect to such Partnership Interest in
accordance with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such
Capital Account shall be increased by (i) the amount of all Capital
Contributions made to the Partnership with respect to such Partnership Interest
pursuant to this Agreement (or any previous partnership agreement of the
Partnership) 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 the Net Agreed Value
of all actual and deemed distributions of cash or property made with respect to
such Partnership Interest pursuant to this Agreement (or any previous
partnership agreement of the Partnership) 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. Immediately
following the consummation of the transactions contemplated in the Exchange
Agreement, the General Partner’s initial Capital Account shall be zero.
(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 Board of
Supervisors) of all property owned by any OLP Subsidiary that is classified as a
partnership for federal income tax purposes.
(ii) All fees and other expenses incurred by the Partnership to promote the sale
of (or to sell) a Partnership Interest that can neither be deducted nor
amortized under Section 709 of the Code, if any, shall, for purposes of Capital
Account maintenance, be treated as an item of deduction at the time such fees
and other expenses are incurred and shall be allocated among the Partners
pursuant to Section 6.1.

 

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(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 1.704-2(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
Board of Supervisors 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 whom such deemed deduction was allocated.

 

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(c) A transferee of a Partnership Interest shall succeed to a pro rata portion
of the Capital Account of the transferor relating to the Partnership Interest so
transferred.
(d) (i) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on
an issuance of additional Partnership Interests for cash or Contributed
Property, the Capital Account of all Partners and the Carrying Value of each
Partnership property immediately prior to such issuance shall be adjusted upward
or downward to reflect any Unrealized Gain or Unrealized Loss attributable to
such Partnership property, as if such Unrealized Gain or Unrealized Loss had
been recognized on an actual sale of each such property immediately prior to
such issuance and had been allocated to the Partners at such time pursuant to
Section 6.1. In determining such Unrealized Gain or Unrealized Loss, the
aggregate cash amount and fair market value of all Partnership assets
(including, without limitation, cash or cash equivalents) immediately prior to
the issuance of additional Partnership Interests shall be determined by the
Board of Supervisors using such reasonable method of valuation as it may adopt;
provided, however, that the Board of Supervisors, in arriving at such valuation,
must take fully into account the fair market value of the Partnership Interests
of all Partners at such time. The Board of Supervisors shall allocate such
aggregate value among the assets of the Partnership (in such manner as it
determines in its discretion to be reasonable) to arrive at a fair market value
for individual properties.
(ii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f),
immediately prior to any actual or deemed distribution to a Partner of any
Partnership property (other than a distribution of cash that is not in
redemption or retirement of a Partnership Interest), the Capital Accounts of all
Partners and the Carrying Value of all Partnership property shall be adjusted
upward or downward to reflect any Unrealized Gain or Unrealized Loss
attributable to such Partnership property, as if such Unrealized Gain or
Unrealized Loss had been recognized in a sale of such property immediately prior
to such distribution for an amount equal to its fair market value, and had been
allocated to the Partners, at such time, pursuant to Section 6.1. In determining
such Unrealized Gain or Unrealized Loss the aggregate cash amount and fair
market value of all Partnership assets (including, without limitation, cash or
cash equivalents) immediately prior to a distribution shall (A) in the case of
an actual distribution which is not made pursuant to Section 12.4, be determined
and allocated in the same manner as that provided in Section 5.5(d)(i) or (B) in
the case of a liquidating distribution pursuant to Section 12.4, be determined
and allocated by the Liquidator using such reasonable method of valuation as it
may adopt.
5.6 Loans from Partners.
Loans by a Partner to the Partnership shall not constitute Capital
Contributions. If any Partner shall advance funds to the Partnership in excess
of the amounts required hereunder to be contributed by it to the capital of the
Partnership, the making of such excess advances shall not result in any increase
in the amount of the Capital Account of such Partner. The amount of any such
excess advances shall be a debt obligation of the Partnership to such Partner
and shall be payable or collectible only out of the Partnership assets in
accordance with the terms and conditions upon which such advances are made.

 

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5.7 No Preemptive Rights.
No Person shall have any preemptive, preferential or other similar rights with
respect to (a) additional Capital Contributions; (b) issuance or sale of any
class or series of Partnership Interests, whether unissued, held in treasury by
the Partnership or hereafter created; (c) issuance of any obligations, evidences
of indebtedness or other securities of the Partnership convertible into or
exchangeable for, or carrying or accompanied by any rights to receive, purchase
or subscribe to, any such Partnership Interests; (d) issuance of any right of
subscription to or right to receive, or any warrant or option for the purchase
of, any such Partnership Interests; or (e) issuance or sale of any other
securities that may be issued or sold by the Partnership.
5.8 Fully Paid and Non-Assessable Nature of Limited Partner Partnership
Interests.
All Limited Partner Partnership Interests issued pursuant to, and in accordance
with the requirements of, this Article V shall be fully paid and non-assessable
Partnership Interests in the Partnership, except as such non-assessability may
be affected by Sections 17-607 and 17-804 of the Delaware Act.
ARTICLE VI
Allocations and Distributions
6.1 Allocations for Capital Account Purposes.
(a) General. In maintaining the Capital Accounts that determine the rights of
the Partners among themselves, the Partnership’s items of income, gain, loss and
deduction (computed in accordance with Section 5.5(b)), shall be allocated among
the Partners in accordance with their relative Percentage Interests, except as
otherwise provided below.
(b) Limitation on Losses. Any deduction otherwise allocable to a Limited Partner
that would create or add to a deficit in its Adjusted Capital Account shall
instead be allocated to the General Partner. Thereafter, any income that would
otherwise be allocable to such Limited Partner shall be allocated to the General
Partner until the aggregate amount so allocated under this sentence equals the
aggregate deductions previously allocated to the General Partner under the
preceding sentence.
(c) Special Allocations. Notwithstanding any other provision of this
Section 6.1, the following special allocations shall be made for such taxable
period:
(i) Partnership Minimum Gain Chargeback. Notwithstanding any other provision of
this Section 6.1, if there is a net decrease in Partnership Minimum Gain during
any Partnership taxable period, each Partner shall be allocated items of
Partnership income and gain for such period (and, if necessary, subsequent
periods) in the manner and amounts provided in Treasury
Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any
successor provision. For purposes of this Section 6.1(c), each Partner’s
Adjusted Capital Account balance shall be determined, and the allocation of
income or gain required hereunder shall be effected, prior to the application of
any other allocations pursuant to this Section 6.1(c) with respect to such
taxable period (other than an allocation pursuant to Sections 6.1(c)(v) and
6.1(c)(vi)). This Section 6.1(c)(i) is intended to comply with the Partnership
Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f)
and shall be interpreted consistently therewith.

 

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(ii) Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the
other provisions of this Section 6.1 (other than Section 6.l(c)(i)), except as
provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net
decrease in Partner Nonrecourse Debt Minimum Gain during any Partnership taxable
period, any Partner with a share of Partner Nonrecourse Debt Minimum Gain at the
beginning of such taxable period shall be allocated items of Partnership income
and gain for such period (and, if necessary, subsequent periods) in the manner
and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and
1.704-2(j)(2)(ii), or any successor provisions. For purposes of this
Section 6.1(c), each Partner’s Adjusted Capital Account balance shall be
determined, and the allocation of income or gain required hereunder shall be
effected, prior to the application of any other allocations pursuant to this
Section 6.1(c), other than Section 6.1(c)(i) and other than an allocation
pursuant to Sections 6.1(c)(v) and 6.1(c)(vi), with respect to such taxable
period. This Section 6.1(c)(ii) is intended to comply with the chargeback of
items of income and gain requirement in Treasury
Regulation Section 1.704-2(i)(4) and shall be interpreted consistently
therewith.
(iii) Qualified Income Offset. In the event any Partner unexpectedly receives
any adjustments, allocations or distributions described in Treasury
Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially
allocated to such Partner in an amount and manner sufficient to eliminate, to
the extent required by the Treasury Regulations promulgated under Section 704(b)
of the Code, the deficit balance, if any, in its Adjusted Capital Account
created by such adjustments, allocations or distributions as quickly as possible
unless such deficit balance is otherwise eliminated pursuant to
Section 6.1(c)(i) or (ii).
(iv) Gross Income Allocations. In the event any Partner has a deficit balance in
its Capital Account at the end of any Partnership taxable period in excess of
the sum of (A) the amount such Partner is required to restore pursuant to the
provisions of this Agreement and (B) the amount such Partner is deemed obligated
to restore pursuant to Treasury Regulation Sections 1.704-2(g) and
1.704-2(i)(5), such Partner shall be specially allocated items of Partnership
gross income and gain in the amount of such excess as quickly as possible;
provided, that an allocation pursuant to this Section 6.1(c)(iv) shall be made
only if and to the extent that such Partner would have a deficit balance in its
Capital Account as adjusted after all other allocations provided for in this
Section 6.1 have been tentatively made as if this Section 6.1(c)(iv) were not in
this Agreement.

 

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(v) Nonrecourse Deductions. Nonrecourse Deductions for any taxable period shall
be allocated to the Partners in accordance with their respective Percentage
Interests. If the Board of Supervisors determines in its good faith discretion
that the Partnership’s Nonrecourse Deductions must be allocated in a different
ratio to satisfy the safe harbor requirements of the Treasury Regulations
promulgated under Section 704(b) of the Code, the Board of Supervisors is
authorized, upon notice to the Limited Partners, to revise the prescribed ratio
to the numerically closest ratio that does satisfy such requirements.
(vi) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any
taxable period shall be allocated 100% to the Partner that bears the Economic
Risk of Loss with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable in accordance with Treasury
Regulation Section 1.704-2(i). If more than one Partner bears the Economic Risk
of Loss with respect to a Partner Nonrecourse Debt, such Partner Nonrecourse
Deductions attributable thereto shall be allocated between or among such
Partners in accordance with the ratios in which they share such Economic Risk of
Loss.
(vii) Nonrecourse Liabilities. For purposes of Treasury Regulation
Section 1.752-3(a)(3), the Partners agree that Nonrecourse Liabilities of the
Partnership in excess of the sum of (A) the amount of Partnership Minimum Gain
and (B) the total amount of Nonrecourse Built-in Gain shall be allocated among
the Partners in accordance with their respective Percentage Interests.
(viii) Code Section 754 Adjustments. To the extent an adjustment to the adjusted
tax basis of any Partnership asset pursuant to Section 734(b) or 743(c) 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 to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such item of gain or loss shall be specially
allocated to the Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such Section of the
Treasury Regulations.

 

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(ix) Curative Allocation.
(A) Notwithstanding any other provision of this Section 6.1, other than the
Required Allocations, the Required Allocations shall be taken into account in
making the Agreed Allocations so that, to the extent possible, the net amount of
items of income, gain, loss and deduction allocated to each Partner pursuant to
the Required Allocations and the Agreed Allocations, together, shall be equal to
the net amount of such items that would have been allocated to each such Partner
under the Agreed Allocations had the Required Allocations and the related
Curative Allocation not otherwise been provided in this Section 6.1.
Notwithstanding the preceding sentence, Required Allocations relating to
(1) Nonrecourse Deductions shall not be taken into account except to the extent
that there has been a decrease in Partnership Minimum Gain and (2) Partner
Nonrecourse Deductions shall not be taken into account except to the extent that
there has been a decrease in Partner Nonrecourse Debt Minimum Gain. Allocations
pursuant to this Section 6.1(c)(ix)(A) shall only be made with respect to
Required Allocations to the extent the Board of Supervisors reasonably
determines that such allocations will otherwise be inconsistent with the
economic agreement among the Partners. Further, allocations pursuant to this
Section 6.1(c)(ix)(A) shall be deferred with respect to allocations pursuant to
clauses (1) and (2) hereof to the extent the Board of Supervisors reasonably
determines that such allocations are likely to be offset by subsequent Required
Allocations.
(B) The Board of Supervisors shall have reasonable discretion, with respect to
each taxable period, to (1) apply the provisions of Section 6.1(c)(ix)(A) in
whatever order is most likely to minimize the economic distortions that might
otherwise result from the Required Allocations, and (2) divide all allocations
pursuant to Section 6.1(c)(ix)(A) among the Partners in a manner that is likely
to minimize such economic distortions.
6.2 Allocations for Tax Purposes.
(a) General. Except as otherwise provided herein, for federal income tax
purposes, each item of income, gain, loss and deduction shall be allocated among
the Partners in the same manner as its correlative item of “book” income, gain,
loss or deduction is allocated pursuant to Section 6.1.
(b) Contributed Property. In an attempt to eliminate Book-Tax Disparities
attributable to a Contributed Property or Adjusted Property, items of income,
gain, loss, depreciation, amortization and cost recovery deductions shall be
allocated for federal income tax purposes among the Partners as follows:
(i) (A) In the case of a Contributed Property, such items attributable thereto
shall be allocated among the Partners in the manner provided under Section
704(c) of the Code that takes into account the variation between the Agreed
Value of such property and its adjusted basis at the time of contribution; and
(B) any item of Residual Gain or Residual Loss attributable to a Contributed
Property shall be allocated among the Partners in the same manner as its
correlative item of “book” gain or loss is allocated pursuant to Section 6.1.

 

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(ii) (A) In the case of an Adjusted Property, such items shall (1) first, be
allocated among the Partners in a manner consistent with the principles of
Section 704(c) of the Code to take into account the Unrealized Gain or
Unrealized Loss attributable to such property and the allocations thereof
pursuant to Section 5.5(d)(i) or (ii), and (2) second, in the event such
property was originally a Contributed Property, be allocated among the Partners
in a manner consistent with Section 6.2(b)(i)(A); and (B) any item of Residual
Gain or Residual Loss attributable to an Adjusted Property shall be allocated
among the Partners in the same manner as its correlative item of “book” gain or
loss is allocated pursuant to Section 6.1.
(iii) The Board of Supervisors shall apply the principles of Treasury Regulation
Section 1.704-3(d) to eliminate Book-Tax Disparities.
(c) Discretionary Allocation Authority. For the proper administration of the
Partnership and for the preservation of uniformity of the Units of the MLP (or
any class or classes thereof), the Board of Supervisors shall have sole
discretion to (i) adopt such conventions as it deems appropriate in determining
the amount of depreciation, amortization and cost recovery deductions; (ii) make
special allocations for federal income tax purposes of income (including,
without limitation, gross income) or deductions; and (iii) amend the provisions
of this Agreement as appropriate (x) to reflect the proposal or promulgation of
Treasury Regulations under Section 704(b) or Section 704(c) of the Code or
(y) otherwise to preserve or achieve uniformity of the Units of the MLP (or any
class or classes thereof). The Board of Supervisors may adopt such conventions,
make such allocations and make such amendments to this Agreement as provided in
this Section 6.2(c) only if such conventions, allocations or amendments would
not have a material adverse effect on the Partners, the holders of any class or
classes of Units issued and outstanding or the Partnership, and if such
allocations are consistent with the principles of Section 704 of the Code.
(d) Discretionary Amortization Authority. The Board of Supervisors in its
discretion may determine to depreciate or amortize the portion of an adjustment
under Section 743(b) of the Code attributable to unrealized appreciation in any
Adjusted Property (to the extent of the unamortized Book-Tax Disparity) using a
predetermined rate derived from the depreciation or amortization method and
useful life applied to the Partnership’s common basis of such property, despite
any inconsistency of such approach with Treasury
Regulation Section 1.167(c)-1(a)(6). If the Board of Supervisors determines that
such reporting position cannot reasonably be taken, the Board of Supervisors may
adopt depreciation and amortization conventions under which all purchasers
acquiring Units of the MLP in the same month would receive depreciation and
amortization deductions, based upon the same applicable rate as if they had
purchased a direct interest in the Partnership’s property. If the Board of
Supervisors chooses not to utilize such aggregate method, the Board of
Supervisors may use any other reasonable depreciation and amortization
conventions to preserve the uniformity of the intrinsic tax characteristics of
any Units that would not have a material adverse effect on any Limited Partner
or the holders of any class or classes of Units.
(e) Recapture Income. Any gain allocated to the Partners upon the sale or other
taxable disposition of any Partnership asset shall, to the extent possible,
after taking into account other required allocations of gain pursuant to this
Section 6.2, be characterized as Recapture Income in the same proportions and to
the same extent as such Partners (or their predecessors in interest) have been
allocated any deductions directly or indirectly giving rise to the treatment of
such gains as Recapture Income.

 

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(f) Effect of Section 754 Election. All items of income, gain, loss, deduction
and credit recognized by the Partnership for federal income tax purposes and
allocated to the Partners in accordance with the provisions hereof shall be
determined without regard to any election under Section 754 of the Code which
may be made by the Partnership; provided, however, that such allocations, once
made, shall be adjusted as necessary or appropriate to take into account those
adjustments permitted or required by Sections 734 and 743 of the Code.
(g) Proration. The Board of Supervisors may adopt such methods of allocation of
income, gain, loss or deduction between a transferor and a transferee of a
Partnership Interest as it determines necessary, to the extent permitted or
required by Section 706 of the Code and the regulations or rulings promulgated
thereunder.
6.3 [Intentionally Deleted.]
6.4 General Distributions.
(a) Within 45 days following the end of each Quarter commencing with the Quarter
ending on June 29, 1996, an amount equal to 100% of Available Cash with respect
to such Quarter shall be distributed in accordance with this Article VI by the
Partnership to the Partners in accordance with their respective Percentage
Interests. The immediately preceding sentence shall not require any distribution
of cash if and to the extent such distribution would be prohibited by applicable
law or by any loan agreement, security agreement, mortgage, debt instrument or
other agreement or obligation to which the Partnership is a party or by which it
is bound or its assets are subject. All distributions required to be made under
this Agreement shall be made subject to Sections 17-607 or 17-804 of the
Delaware Act.
(b) In the event of the dissolution and liquidation of the Partnership, all
receipts received during or after the Quarter in which the Liquidation Date
occurs, except as otherwise provided in (a)(ii) of the definition of Available
Cash, shall be applied and distributed solely in accordance with, and subject to
the terms and conditions of, Section 12.4.
(c) The Board of Supervisors shall have the discretion to treat taxes paid by
the Partnership on behalf of, or amounts withheld with respect to, all or less
than all of the Partners, as a distribution of Available Cash to such Partners.

 

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ARTICLE VII
Management and Operation of Business
7.1 Management.
(a) Except as otherwise expressly provided in this Agreement, all management
powers over the business and affairs of the Partnership shall be vested
exclusively in the Board of Supervisors, and subject to the direction of the
Board of Supervisors and in accordance with the provisions of Section 7.7, the
Officers. Neither the General Partner (except as otherwise expressly provided in
this Agreement) nor any Limited Partner shall have any management power or
control over the business and affairs of the Partnership. Thus, except as
otherwise expressly provided in this Agreement, the business and affairs of the
Partnership shall be managed by or under the direction of the Board of
Supervisors, and the day-to-day activities of the Partnership shall be conducted
on the Partnership’s behalf by the Officers, who shall be agents of the
Partnership. In order to enable the Board of Supervisors to manage the business
and affairs of the Partnership, the General Partner, except as otherwise
expressly provided in this Agreement, hereby irrevocably delegates to the Board
of Supervisors all management powers over the business and affairs of the
Partnership that it may now or hereafter possess under applicable law. The
General Partner further agrees to take any and all action necessary and
appropriate, in the sole discretion of the Board of Supervisors, to effect any
duly authorized actions by the Board of Supervisors or any Officer, including
executing or filing any agreements, instruments or certificates, delivering all
documents, providing all information and taking or refraining from taking action
as may be necessary or appropriate to achieve the effective delegation of power
described in this Section 7.1(a). Each of the Partners and each Person who may
acquire an interest in a Partnership Interest hereby approves, consents to,
ratifies and confirms such delegation. The delegation by the General Partner to
the Board of Supervisors of management powers over the business and affairs of
the Partnership pursuant to the provisions of this Agreement shall not cause the
General Partner to cease to be a general partner of the Partnership nor shall it
cause the Board of Supervisors or any member thereof to be a general partner of
the Partnership or to have or be subject to the liabilities of a general partner
of the Partnership. Except as otherwise specifically provided in Sections 7.13,
7.14, 7.15 and 7.16, the authority, functions, duties and responsibilities of
the Board of Supervisors and of the Officers shall be identical to the
authority, functions, duties and responsibilities of the board of directors and
officers, respectively, of a corporation organized under the Delaware General
Corporation Law.
(b) Consistent with the management powers delegated to the Board of Supervisors
pursuant to the provisions of this Agreement, the Board of Supervisors shall
have the powers now or hereafter granted a general partner of a limited
partnership under the Delaware Act or any other applicable law and, except as
otherwise expressly provided in this Agreement, shall have full power and
authority to do all things and on such terms as it may deem necessary or
appropriate to conduct the business of the Partnership, to exercise all powers
set forth in Section 2.5 and to effectuate the purposes set forth in
Section 2.4, including the following:
(i) the making of any expenditures, the lending or borrowing of money, the
assumption or guarantee of, or other contracting for, indebtedness and other
liabilities, the issuance of evidences of indebtedness and the incurring of any
other obligations;
(ii) the making of tax, regulatory and other filings, or rendering of periodic
or other reports to governmental or other agencies having jurisdiction over the
business or assets of the Partnership;
(iii) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation
or exchange of any or all of the assets of the Partnership or the merger or
other combination of the Partnership with or into another Person;

 

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(iv) the use of the assets of the Partnership (including cash on hand) for any
purpose consistent with the terms of this Agreement, including the financing of
the conduct of the operations of any Group Member, the lending of funds to other
Persons (including the MLP or any Subsidiary of the MLP), the repayment of
obligations of any Group Member, the MLP or any Subsidiary of the MLP and the
making of capital contributions to any Group Member, the MLP or any Subsidiary
of the MLP.
(v) the negotiation, execution and performance of any contracts, conveyances or
other instruments (including instruments that limit the liability of the
Partnership under contractual arrangements to all or particular assets of the
Partnership, with the other party to the contract to have no recourse against
the General Partner or its assets other than its interest in the Partnership,
even if same results in the terms of the transaction being less favorable to the
Partnership than would otherwise be the case);
(vi) the distribution of Partnership cash;
(vii) the selection and dismissal of employees (including employees who are
Officers) and agents, outside attorneys, accountants, consultants and
contractors and the determination of their compensation and other terms of
employment or hiring;
(viii) the maintenance of such insurance for the benefit of the Partnership
Group and the Partners (including the assets of the Partnership) as it deems
necessary or appropriate,
(ix) the formation of, or acquisition of an interest in, and the contribution of
property and the making of loans to, any further limited or general
partnerships, joint ventures, corporations, limited liability companies or other
relationships;
(x) the control of any matters affecting the rights and obligations of the
Partnership, including the bringing and defending of actions at law or in equity
and otherwise engaging in the conduct of litigation and the incurring of legal
expense and the settlement of claims and litigation; and
(xi) the indemnification of any Person against liabilities and contingencies to
the extent permitted by law.
(c) Notwithstanding any other provision of this Agreement and the MLP Agreement,
and to the fullest extent permitted by applicable law, each of the Partners
hereby (i) approves, consents to, ratifies and confirms the General Partner’s
delegation of management powers to the Board of Supervisors pursuant to
paragraph (a) of this Section 7.1; (ii) approves, consents to, ratifies and
confirms the execution, delivery and performance by the parties thereto of the
Exchange Agreement and the other agreements executed in connection therewith
relating to the Partnership; (iii) agrees that the Partnership (through any duly
authorized Officer of the Partnership) is authorized to execute, deliver and
perform the agreements referred to in clause (ii) of this sentence and the other
agreements, acts, transactions and matters described in or contemplated by the
Proxy Statement without any further act, approval or vote of the Partners; and
(iv) agrees that the execution, delivery or performance by the General Partner,
the MLP, the Board of Supervisors or any member thereof, any duly authorized
Officer of the Partnership, any Group Member or any Affiliate of any of them, of
this Agreement or any agreement authorized or permitted under this Agreement,
shall not constitute a breach by any such Person of any duty that any of such
Persons may owe the Partnership, a Limited Partner or any other Persons under
this Agreement (or any other agreements) or of any duty stated or implied by law
or equity.

 

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7.2 The Board of Supervisors; Appointment; Manner of Acting.
(a) The Board of Supervisors shall consist of those individuals who serve as
members of the board of supervisors of the MLP.
(b) Each member of the Board of Supervisors shall have one vote. The vote of the
majority of the members of the Board of Supervisors present at a meeting at
which a quorum is present shall be the act of the Board of Supervisors. A
majority of the number of members of the Board of Supervisors then in office
shall constitute a quorum for the transaction of business at any meeting of the
Board of Supervisors, but if less than a quorum is present at a meeting, a
majority of the members of the Board of Supervisors present at such meeting may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
7.3 Removal of Members of the Board of Supervisors.
Any member of the Board of Supervisors may be removed with or without Cause, by
the affirmative vote of the majority of the members of the Board of Supervisors
of the MLP, but only if such person is also removed as a member of the MLP’s
Board of Supervisors; provided that his or her successor on the MLP’s board of
supervisors is elected in the manner set forth in the MLP Agreement. If an
individual who is a member of the board of supervisors of the MLP is removed
from such board, such individual will automatically be removed from the Board of
Supervisors.
7.4 Resignations of Members of the Board of Supervisors.
Any member of the Board of Supervisors may resign at any time by giving written
notice to the Board of Supervisors. Such resignation shall take effect at the
time specified therein, but only if such person also resigns from the MLP’s
board of supervisors. If an individual who is a member of the board of
supervisors of the MLP resigns from such board, such individual will
automatically be deemed to have resigned from the Board of Supervisors.
7.5 Vacancies on the Board of Supervisors.
If any Supervisor is removed, resigns or is otherwise unable to serve as a
member of the Board of Supervisors, or if the size of the Board of Supervisors
is increased, thereby creating a vacancy, the Board of Supervisors of the MLP
shall in its sole discretion, appoint an individual to fill the vacancy for the
unexpired term of such Supervisor’s predecessor in office, or, in connection
with an increase in the size of the Board of Supervisors, for the term of such
individual on the Board of Supervisors of the MLP, who is the same individual
appointed to fill the corresponding vacancy on the MLP’s board of supervisors,

 

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7.6 Meetings; Committees; Chairman.
(a) Regular meetings of the Board of Supervisors shall be held at such times and
places as shall be designated from time to time by resolution of the Board of
Supervisors. Notice of such regular meetings shall not be required. Special
meetings of the Board of Supervisors may be called by written request of a
majority of the members of the Board of Supervisors, on at least 48 hours prior
written notice to the other members (which written notice may take the form of
e-mail or other electronic communication). Any such notice, or waiver thereof,
need not state the purpose of such meeting except as may otherwise be required
by law. Attendance of a member of the Board of Supervisors at a meeting
(including pursuant to the penultimate sentence of this Section 7.6(a)) shall
constitute a waiver of notice of such meeting, except where such member attends
the meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened. Any
action required or permitted to be taken at a meeting of the Board of
Supervisors may be taken without a meeting, without prior notice and without a
vote if a consent or consents in writing, setting forth the action so taken, is
signed by all the members of the Board of Supervisors. Members of the Board of
Supervisors may participate in and hold meetings by means of conference
telephone, videoconference or similar communications equipment by means of which
all Persons participating in the meeting can hear each other, and participation
in such meetings shall constitute presence in person at the meeting. The Board
of Supervisors may establish any additional rules governing the conduct of its
meetings that are not inconsistent with the provisions of this Agreement.
(b) The Board of Supervisors shall appoint the Audit Committee to consist solely
of the individuals who serve as the audit committee of the MLP. The Audit
Committee shall perform the functions delegated to it pursuant to the terms of
this Agreement and its charter and such other matters as may be delegated to it
from time to time by resolution of the Board of Supervisors. The Board of
Supervisors, by a majority of the whole Board of Supervisors, may appoint one or
more additional committees of the Board of Supervisors to consist of one or more
members of the Board of Supervisors, which committee(s) shall have and may
exercise such of the powers and authority of the Board of Supervisors (including
in respect of Section 7.1) with respect to the management of the business and
affairs of the Partnership as may be provided in a resolution of the Board of
Supervisors. Any committee designated pursuant to this Section 7.6(b) shall
choose its own chairman, shall keep regular minutes of its proceedings and
report the same to the Board of Supervisors when requested, shall fix its own
rules or procedures and shall meet at such times and at such place or places as
may be provided by such rules or by resolution of such committee or resolution
of the Board of Supervisors. At every meeting of any such committee, the
presence of a majority of all the members thereof shall constitute a quorum and
the affirmative vote of a majority of the members present shall be necessary for
the taking of any action. Subject to the first sentence of this Section 7.6(b),
the Board of Supervisors may designate one or more members of the Board of
Supervisors as alternate members of any committee who may replace any absent or
disqualified member at any meeting of such committee. Subject to the first
sentence of this Section 7.6(b), in the absence or disqualification of a member
of a committee, the member or members present at any meeting and not
disqualified from voting, whether or not constituting a quorum, may unanimously
appoint another member of the Board of Supervisors to act at the meeting in the
place of the absent or disqualified member.

 

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(c) The Board of Supervisors may elect one of its members as Chairman or Vice
Chairman of the Board of Supervisors. The Chairman of the Board of Supervisors,
if any, and if present and acting, shall preside at all meetings of the Board of
Supervisors. In the absence of the Chairman of the Board of Supervisors, the
Vice Chairman of the Board of Supervisors, if any, and if present and acting,
shall preside at all meetings of the Board of Supervisors. In the absence of the
Chairman of the Board of Supervisors and the Vice Chairman of the Board of
Supervisors, the Chief Executive Officer, if present, or if not present, the
President, if present, acting and a member of the Board of Supervisors, or any
other member of the Board of Supervisors chosen by the Board of Supervisors
shall preside.
7.7 Officers.
(a) Generally. The Board of Supervisors, as set forth below, shall appoint
agents of the Partnership, referred to as ‘Officers’ of the Partnership as
described in this Section 7.7. Unless provided otherwise by resolution of the
Board of Supervisors, (i) the officers of the MLP shall hold the same position
as Officers of the Partnership and (ii) the Officers shall have the titles,
power, authority and duties described below in this Section 7.7.
(b) Titles and Number. The Officers shall be the Chief Executive Officer, the
President, any and all Vice Presidents, the Secretary and any and all Assistant
Secretaries and the Treasurer and any and all Assistant Treasurers and any other
Officers appointed pursuant to Section 7.7(j). Any person may hold two or more
offices.
(c) Appointment and Term of Office. The Officers shall be appointed by the Board
of Supervisors at such time and for such terms as the Board of Supervisors shall
determine. Any Officer may be removed, with or without Cause, only by the Board
of Supervisors. Vacancies in any office may be filled only by the Board of
Supervisors.
(d) Chairman and Vice Chairman of the Board of Supervisors. The Board of
Supervisors may elect one of its members as the Chairman or Vice Chairman of the
Board of Supervisors, provided, however, the Chairman and Vice-Chairman shall
not be “Officers” of the Partnership unless determined otherwise by the Board of
Supervisors.
(e) Chief Executive Officer. The Board of Supervisors may elect a Chief
Executive Officer of the Partnership. The Chief Executive Officer shall be
responsible for the general and active management and direction of the
Partnership and shall see that all orders and resolutions of the Board of
Supervisors are carried into effect. He shall have the power and authority to
sign all contracts, certificates and other instruments of the Partnership, which
may be authorized by the Board of Supervisors. He shall have such powers, duties
and authority as from time to time may be assigned to him/her by this Agreement
or by the Board of Supervisors.

 

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(f) President. The Board of Supervisors may elect a President of the
Partnership. Subject to the limitations imposed by this Agreement, any
employment agreement, any employee plan or any determination of the Board of
Supervisors, the President, subject to the direction of the Board of Supervisors
and the Chief Executive Officer shall be responsible for the management and
direction of the day-to-day business and affairs of the Partnership, its other
Officers, employees and agents, shall supervise generally the affairs of the
Partnership and shall have full authority to execute all documents and take all
actions that the Partnership may legally take. The President shall exercise such
other powers and perform such other duties as may be assigned to him by this
Agreement, the Board of Supervisors or the Chief Executive Officer, including
any duties and powers stated in any employment agreement approved by the Board
of Supervisors.
(g) Vice Presidents. Each Vice President shall perform such duties and may
exercise such powers as may from time to time be assigned to him by the Board of
Supervisors, the Chief Executive Officer or the President, including the power
to execute documents on behalf of the Partnership, within the authorization
limits established from time to time by the Board of Supervisors, the Chief
Executive Officer or the President.
(h) Secretary and Assistant Secretaries. The Secretary shall record or cause to
be recorded in books provided for that purpose the minutes of the meetings or
actions of the Board of Supervisors and Partners, shall see that all notices are
duly given in accordance with the provisions of this Agreement and as required
by law, shall be custodian of all records (other than financial), shall see that
the books, reports, statements, certificates and all other documents and records
required by law are properly kept and filed, and, in general, shall perform all
duties incident to the office of Secretary and such other duties as may, from
time to time, be assigned to him by this Agreement, the Board of Supervisors,
the Chief Executive Officer or the President. The Assistant Secretaries shall
exercise the powers of the Secretary during that Officer’s absence or inability
or refusal to act.
(i) Treasurer and Assistant Treasurers. The Treasurer shall keep or cause to be
kept the books of account of the Partnership and shall render statements of the
financial affairs of the Partnership in such form and as often as required by
this Agreement, the Board of Supervisors, the Chief Executive Officer or the
President. The Treasurer, subject to the order of the Board of Supervisors,
shall have the custody of all funds and securities of the Partnership. The
Treasurer shall perform all other duties commonly incident to his office and
shall perform such other duties and have such other powers as this Agreement,
the Board of Supervisors, the Chief Executive Officer or the President, shall
designate from time to time. The Assistant Treasurers shall exercise the power
of the Treasurer during that Officer’s absence or inability or refusal to act.
Each of the Assistant Treasurers shall possess the same power as the Treasurer
to sign all certificates, contracts, obligations and other instruments of the
Partnership. If no Treasurer or Assistant Treasurer is appointed and serving or
in the absence of the appointed Treasurer and Assistant Treasurer, the Vice
President and Chief Financial Officer, or such other Officer as the Board of
Supervisors shall select, shall have the powers and duties conferred upon the
Treasurer.

 

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(j) Other Officers and Agents. The Board of Supervisors may appoint such other
Officers and agents as may from time to time appear to be necessary or advisable
in the conduct of the affairs of the Partnership, who shall hold their offices
for such terms and shall exercise such powers and perform such duties as shall
be determined from time to time by the Board of Supervisors.
(k) Powers of Attorney. The Board of Supervisors may grant powers of attorney or
other authority as appropriate to establish and evidence the authority of the
Officers and other Persons.
(l) Officers’ Delegation of Authority. Unless otherwise provided by resolution
of the Board of Supervisors, no Officer shall have the power or authority to
delegate to any Person such Officer’s rights and powers as an Officer to manage
the business and affairs of the Partnership.
7.8 Compensation.
The Officers shall receive such compensation for their services as may be
designated by the Board of Supervisors or a committee thereof. In addition, the
Officers shall be entitled to be reimbursed for out-of-pocket costs and expenses
incurred in the course of their service hereunder. The members of the Board of
Supervisors who are not employees of the Partnership or its Affiliates shall
receive such compensation for their services as members of the Board of
Supervisors or members of a committee of the Board of Supervisors as the Board
of Supervisors shall determine. In addition, the members of the Board of
Supervisors shall be entitled to be reimbursed for out-of-pocket costs and
expenses incurred in the course of their service hereunder.
7.9 Restrictions on General Partner’s and Board of Supervisors’ Authority.
(a) Except as provided in Articles XII and XIV, neither the General Partner nor
the Board of Supervisors may sell, exchange or otherwise dispose of all or
substantially all of the Partnership’s assets in a single transaction or a
series of related transactions without written approval of the specific act by
the Limited Partners or by other written instrument executed and delivered by
the Limited Partners subsequent to the date of this Agreement; provided, however
that this provision shall not preclude or limit either the General Partner’s or
the Board of Supervisors’ ability to mortgage, pledge, hypothecate or grant a
security interest in all or substantially all of the assets of the Partnership
Group or, in the case of the General Partner, its general partner interest in
the Partnership, and shall not apply to any forced sale of any or all of the
Partnership’s assets or the General Partner’s general partner interest in the
Partnership pursuant to the foreclosure of, or other realization upon, any such
encumbrance.
(b) The Board of Supervisors may not cause the Partnership to incur any
Indebtedness that is recourse to the General Partner or any of its Affiliates
without the approval of the General Partner, which approval may be given or
withheld in the General Partner’s sole discretion.

 

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7.10 Reimbursement of the General Partner; Employee Benefit Plans.
(a) Except as provided in this Section 7.10 and elsewhere in this Agreement or
in the MLP Agreement, the General Partner shall not be compensated for its
services as general partner of any Group Member.
(b) The General Partner shall be reimbursed on a monthly basis, or such other
basis as the Board of Supervisors may determine, for (i) all direct and indirect
expenses it incurs or payments it makes on behalf of the Partnership (including
salary, bonus, incentive compensation and other amounts paid to any Person to
perform services for the Partnership or for the General Partner or the Board of
Supervisors in the discharge of its duties to the Partnership) and (ii) all
other necessary or appropriate expenses allocable to the Partnership or
otherwise reasonably incurred by the General Partner in connection with
operating the Partnership’s business (including expenses allocated to the
General Partner by its Affiliates). Reimbursements pursuant to this Section 7.10
shall be in addition to any reimbursement to the General Partner as a result of
indemnification pursuant to Section 7.13.
(c) The Board of Supervisors, in its sole discretion and without the approval of
the Limited Partners (who shall have no right to vote in respect thereof), may
propose and adopt on behalf of the Partnership employee benefit plans, employee
programs and employee practices for the benefit of the members of the Board of
Supervisors, employees of the Partnership, any Group Member or any Affiliate, or
any of them, in respect of services performed, directly or indirectly, for the
benefit of the Partnership Group.
7.11 Outside Activities of the General Partner.
(a) The General Partner, for so long as it is the general partner of the
Partnership, (i) agrees that its sole business will be to act as a general
partner of the Partnership and the MLP, and any other partnership of which the
Partnership or the MLP is, directly or indirectly, a partner and to undertake
activities that are ancillary or related thereto (including being a limited
partner in the MLP), and (ii) shall not enter into or conduct any business or
incur any debts or liabilities except in connection with or incidental to
(A) its performance of the activities required or authorized by this Agreement
or the MLP Agreement and (B) the acquisition, ownership or disposition of
Partnership Interests or partnership interests in the MLP or any other
partnership of which the Partnership or the MLP is, directly or indirectly, a
partner; provided, however, that notwithstanding the foregoing, employees of the
General Partner may perform limited services for other Affiliates of the General
Partner in addition to the Partnership and the MLP (it being understood that
full time employees of the General Partner shall devote substantially all their
employment services to the Partnership and the MLP).

 

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(b) Except as described in Section 7.11(a), each Indemnitee (other than the
General Partner) shall have the right to engage in businesses of every type and
description and other activities for profit and to engage in and possess an
interest in other business ventures of any and every type or description,
independently or with others, whether in the businesses engaged in by or
anticipated to be engaged in by the Partnership, the MLP, any Subsidiary of the
MLP, any Group Member or otherwise, including, without limitation, in the case
of any Affiliates of the General Partner, business interests and activities in
direct competition with the business and activities of the MLP, any Subsidiary
of the MLP or any Group Member, and none of the same shall constitute a breach
of this Agreement or the MLP Agreement or any duty to the MLP, any Subsidiary of
the MLP, any Group Member or any Partner existing hereunder, under the MLP
Agreement, at law, in equity or otherwise. Neither the MLP, any Subsidiary of
the MLP, any Group Member, any Limited Partner nor any other Person shall have
any rights by virtue of this Agreement, the MLP Agreement or the partnership
relationship established hereby or thereby in any business ventures of any
Indemnitee and such Indemnitees shall have no obligation to offer any interest
in any such business ventures to the MLP, any Subsidiary of the MLP, any Group
Member, any Limited Partner or any other Person. The General Partner and any
Affiliates of the General Partner may acquire Partnership Interests, and except
as otherwise provided in this Agreement, shall be entitled to exercise all
rights of a Limited Partner relating to such Partnership Interests.
(c) Subject to the terms of Sections 7.11(a) and (b) but otherwise
notwithstanding anything to the contrary in this Agreement, (i) the engaging in
competitive activities by any of the Indemnitees (other than the General
Partner) in accordance with Section 7.11(b) is hereby approved by the
Partnership and all Partners and (ii) it shall be deemed not to be a breach of
the General Partner’s fiduciary duties or any other obligation of any type
whatsoever of the General Partner for the General Partner to permit its
Affiliates to engage, or for any such Affiliate to engage, in business interests
and activities in preference to or to the exclusion of the Partnership.
(d) The term “Affiliates” when used in this Section 7.11 with respect to the
General Partner shall not include the MLP, any Subsidiary of the MLP, or any
Group Member.
7.12 Loans from the General Partner; Contracts with Affiliates; Certain
Restrictions on the General Partner.
(a) The General Partner or any Affiliate of the General Partner may lend to any
Group Member, and any Group Member may borrow from the General Partner and any
Affiliate of the General Partner, funds needed or desired by the Group Member,
for such periods of time and in such amounts as the General Partner may
determine; provided, however, that in any such case the lending party may not
charge the borrowing party interest at a rate greater than the rate that would
be charged the borrowing party or impose terms less favorable on the borrowing
party than would be charged or imposed on the borrowing party by unrelated
lenders on comparable loans made on an arms-length basis (without reference to
the lending party’s financial abilities or guarantees). The borrowing party
shall reimburse the lending party for any costs (other than any additional
interest costs) incurred by the lending party in connection with the borrowing
of such funds. For purposes of this Section 7.12(a) and Section 7.12(b), the
term “Group Member” shall include any Affiliate of the Group Member that is
controlled by the Group Member. No Group Member may lend funds to the General
Partner or any of its Affiliates; provided, however, that notwithstanding the
foregoing, any Group Member may lend funds to the MLP, any Subsidiary of the MLP
or another Group Member.

 

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(b) The Partnership may lend or contribute to the MLP, any Subsidiary of the
MLP, or any Group Member, and any Group Member may borrow from the MLP, any
Subsidiary of the MLP or the Partnership, funds on terms and conditions
established by the Board of Supervisors; provided, however, that the Partnership
may not charge the MLP, any Subsidiary of the MLP or a Group Member interest at
a rate greater than the rate that would be charged to the MLP, any Subsidiary of
the MLP or such Group Member (without reference to the General Partner’s
financial abilities or guarantees), by unrelated lenders on comparable loans.
The foregoing authority shall be exercised by the Board of Supervisors and shall
not create any right or benefit in favor of the MLP, any Subsidiary of the MLP,
any Group Member or any other Person.
(c) The General Partner may itself, or may enter into an agreement with any of
its Affiliates to, render services to a Group Member. Any services rendered to a
Group Member by the General Partner or any of its Affiliates shall be on terms
that are fair and reasonable to the Partnership; provided, however, that the
requirements of this Section 7.12(c) shall be deemed satisfied as to (i) any
transaction approved by Special Approval, (ii) any transaction, the terms of
which are no less favorable to the Partnership Group than those generally being
provided to or available from unrelated third parties or (iii) any transaction
that, taking into account the totality of the relationships between the parties
involved (including other transactions that may be particularly favorable or
advantageous to the Partnership Group), is equitable to the Partnership Group.
The provisions of Section 7.10 shall apply to the rendering of services
described in this Section 7.12(c).
(d) The Partnership may transfer assets to joint ventures, other partnerships,
corporations, limited liability companies or other business entities in which it
is or thereby becomes a participant upon such terms and subject to such
conditions as are consistent with this Agreement and applicable law.
(e) Neither the General Partner nor any of its Affiliates shall sell, transfer
or convey any property to, or purchase any property from, the Partnership,
directly or indirectly, except pursuant to transactions that are fair and
reasonable to the Partnership; provided, however, that the requirements of this
Section 7.12(e) shall be deemed to be satisfied as to (i) the transactions
effected pursuant to the Exchange Agreement, (ii) any transaction approved by
Special Approval, (iii) any transaction, the terms of which are no less
favorable to the Partnership than those generally being provided to or available
from unrelated third parties, or (iv) any transaction that, taking into account
the totality of the relationships between the parties involved (including other
transactions that may be particularly favorable or advantageous to the
Partnership), is equitable to the Partnership.
(f) The General Partner and its Affiliates will have no obligation to permit any
Group Member to use any facilities or assets of the General Partner and its
Affiliates, except as may be provided in contracts entered into from time to
time specifically dealing with such use, nor shall there be any obligation on
the part of the General Partner or its Affiliates to enter into such contracts.

 

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7.13 Indemnification.
(a) To the fullest extent permitted by law but subject to the limitations
expressly provided in this Agreement, all Indemnitees shall be indemnified and
held harmless by the Partnership from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including legal fees, expenses
and other disbursements), judgments, fines, penalties, interest, settlements and
other amounts arising from any and all claims, demands, actions, suits or
proceedings, whether civil, criminal, administrative or investigative, in which
any Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, by reason of its status as an Indemnitee, provided, that in each case
the Indemnitee acted in good faith and in a manner that such Indemnitee
reasonably believed to be in, or not opposed to, the best interests of the
Partnership and, with respect to any criminal proceeding, had no reasonable
cause to believe its conduct was unlawful. The termination of any action, suit
or proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not create a presumption that the
Indemnitee acted in a manner contrary to that specified above. Any
indemnification pursuant to this Section 7.13 shall be made only out of the
assets of the Partnership, it being agreed that the General Partner shall not be
personally liable for such indemnification and shall have no obligation to
contribute or loan any monies or property to the Partnership to enable it to
effectuate such indemnification.
(b) To the fullest extent permitted by law, expenses (including legal fees,
expenses and other disbursements) incurred by an Indemnitee who is indemnified
pursuant to Section 7.13(a) in defending any claim, demand, action, suit or
proceeding shall, from time to time, be advanced by the Partnership prior to the
final disposition of such claim, demand, action, suit or proceeding upon receipt
by the Partnership of any undertaking by or on behalf of the Indemnitee to repay
such amount if it shall be determined by a final, non-appealable order of a
court of competent jurisdiction that the Indemnitee is not entitled to be
indemnified as authorized in this Section 7.13.
(c) The indemnification provided by this Section 7.13 shall be in addition to
any other rights to which an Indemnitee may be entitled under any agreement,
pursuant to any vote of the Partners, as a matter of law or otherwise, both as
to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in
any other capacity, and shall continue as to an Indemnitee who has ceased to
serve in such capacity and shall inure to the benefit of the heirs, successors,
assigns and administrators of the Indemnitee.
(d) The Partnership may purchase and maintain (or reimburse the members of the
Board of Supervisors, the General Partner or its Affiliates for the cost of)
insurance, on behalf of the General Partner and the members of the Board of
Supervisors and such other Persons as the Board of Supervisors shall determine,
against any liability that may be asserted against or expense that may be
incurred by such Person in connection with the Partnership’s activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.

 

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(e) For purposes of this Section 7.13, the Partnership shall be deemed to have
requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Partnership also imposes
duties on, or otherwise involves services by, it to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute “fines”
within the meaning of Section 7.13(a); and action taken or omitted by it with
respect to any employee benefit plan in the performance of its duties for a
purpose reasonably believed by it to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose which is in, or
not opposed to, the best interests of the Partnership.
(f) In no event may an Indemnitee subject any Limited Partner to personal
liability by reason of the indemnification provisions set forth in this
Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in part under
this Section 7.13 because the Indemnitee had an interest in the transaction with
respect to which the indemnification applies if the transaction was otherwise
permitted by the terms of this Agreement.
(h) The provisions of this Section 7.13 are for the benefit of the Indemnitees,
their heirs, successors, assigns and administrators and shall not be deemed to
create any rights for the benefit of any other Persons.
(i) No amendment, modification or repeal of this Section 7.13 or any provision
hereof shall in any manner terminate, reduce or impair the right of any past,
present or future Indemnitee to be indemnified by the Partnership, nor the
obligations of the Partnership to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 7.13 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.
7.14 Liability of Indemnitees.
(a) Notwithstanding anything to the contrary set forth in this Agreement, no
Indemnitee shall be liable for monetary damages to the Partnership, any Limited
Partner or any other Persons who have acquired interests in the Partnership, for
losses sustained or liabilities incurred as a result of errors in judgment or
any act or omission if such Indemnitee acted in good faith pursuant to authority
granted in this Agreement.
(b) To the maximum extent permitted by law, the General Partner and its
Affiliates shall not be responsible for any act or omission by the Board of
Supervisors, any member of the Board of Supervisors, or any Officers of the
Partnership.
(c) To the maximum extent permitted by law, the members of the Board of
Supervisors and the Officers of the Partnership shall not be responsible for any
act or omission by the General Partner and its Affiliates.
(d) Subject to its obligations and duties set forth in Section 7.1(a), the Board
of Supervisors may exercise any of the powers granted to it by this Agreement
and perform any of the duties imposed upon it hereunder either directly or by or
through the Officers or other agents of the Partnership, and, to the maximum
extent permitted by law, the Board of Supervisors shall not be responsible for
any misconduct or negligence on the part of any such Officer or agent appointed
by the Board of Supervisors in good faith.

 

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(e) It will not constitute a breach of fiduciary or other duty for an Officer or
member of the Board of Supervisors to engage attorneys, accountants, engineers
and other advisors on behalf of the Partnership, its Board of Supervisors, or
any committee thereof, even though such persons may also be retained from time
to time by the General Partner or any of its Affiliates, and such persons may be
engaged with respect to any matter in which the interests of the Partnership and
the General Partner or any of its Affiliates may differ, or may be engaged by
both the Partnership and the General Partner or any of its Affiliates with
respect to a matter, as long as such Officer or member of the Board of
Supervisors reasonably believes that any conflict between the Partnership and
the General Partner or any of its Affiliates with respect to such matter is not
material; and
(f) Any amendment, modification or repeal of this Section 7.14 or any provision
hereof shall be prospective only and shall not in any way affect the limitations
on the liability to the Partnership and the Limited Partner, of the General
Partner, its directors, officers and employees and any other Indemnitees under
this Section 7.14 as in effect immediately prior to such amendment, modification
or repeal with respect to claims arising from or relating to matters occurring,
in whole or in part, prior to such amendment, modification or repeal, regardless
of when such claims may arise or be asserted.
7.15 Resolution of Conflicts of Interest.
(a) Unless otherwise expressly provided in this Agreement or the MLP Agreement,
whenever a potential conflict of interest exists or arises between the General
Partner or any of its Affiliates, or any Officer or member of the Board of
Supervisors, on the one hand, and the Partnership, the MLP, or any Partner, on
the other, any resolution or course of action in respect of such conflict of
interest shall be permitted and deemed approved by the Limited Partners, and
shall not constitute a breach of this Agreement, of the MLP Agreement, or of any
agreement contemplated herein or therein, or of any duty stated or implied by
law or equity, if the resolution or course of action is, or by operation of this
Agreement is deemed to be, fair and reasonable to the Partnership. The Board of
Supervisors shall be authorized but not required in connection with its
resolution of such conflict of interest to seek Special Approval of a resolution
of such conflict or course of action. Any conflict of interest and any
resolution of such conflict of interest shall be conclusively deemed fair and
reasonable to the Partnership if such conflict of interest or resolution is
(i) approved by Special Approval (as long as the material facts known to the
General Partner or any of its Affiliates or such Officer or member of the Board
of Supervisors regarding any proposed transaction were disclosed to the Audit
Committee at the time it gave its approval), (ii) on terms no less favorable to
the Partnership than those generally being provided to or available from
unrelated third parties or (iii) fair to the Partnership, taking into account
the totality of the relationships between the parties involved (including other
transactions that may be particularly favorable or advantageous to the
Partnership). The Board of Supervisors may also adopt a resolution or course of
action that has not received Special Approval. The Board of

 

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Supervisors (including the Audit Committee in connection with Special Approval)
shall be authorized in connection with its determination of what is “fair and
reasonable” to the Partnership and in connection with its resolution of any
conflict of interest to consider (A) the relative interests of any party to such
conflict, agreement, transaction or situation and the benefits and burdens
relating to such interest; (B) any customary or accepted industry practices and
any customary or historical dealings with a particular Person; (C) any
applicable generally accepted accounting practices or principles; and (D) such
additional factors as the Board of Supervisors (including the Audit Committee)
determines in its discretion to be relevant, reasonable or appropriate under the
circumstances. Nothing contained in this Agreement, however, is intended to nor
shall it be construed to require the Board of Supervisors (including the Audit
Committee) to consider the interests of any Person other than the Partnership.
In the absence of bad faith by the Board of Supervisors, the resolution, action
or terms so made, taken or provided by the Board of Supervisors with respect to
such matter shall not constitute a breach of this Agreement, the MLP Agreement
or any other agreement contemplated herein or therein or a breach of any
standard of care or duty imposed herein or therein or, to the extent permitted
by law, under the Delaware Act or any other law, rule or regulation or existing
in equity or otherwise.
(b) Whenever this Agreement or any other agreement contemplated hereby provides
that the Board of Supervisors is permitted or required to make a decision (i) in
its “sole discretion,” or “discretion” or that it deems “necessary or
appropriate” or “necessary or advisable” or under a grant of similar authority
or latitude, except as otherwise provided herein, the Board of Supervisors shall
make such decision in its sole discretion (regardless of whether there is a
reference to “sole discretion” or “discretion”) unless another express standard
is provided for or (ii) in “good faith” or under another express standard, the
Board of Supervisors shall act under such express standard and shall not be
subject to any other or different standards imposed by this Agreement, the MLP
Agreement, any other agreement contemplated hereby or under the Delaware Act or
any other law, rule or regulation or in equity or otherwise. In addition, any
actions taken by the Board of Supervisors consistent with the standards of
“reasonable discretion” set forth in the definition of Available Cash shall not
constitute a breach of any duty of the Board of Supervisors to the Partnership,
the Limited Partners or any partner of the MLP. The Board of Supervisors shall
have no duty, express or implied, to sell or otherwise dispose of any asset of
the Partnership Group.
(c) Whenever a particular transaction, arrangement or resolution of a conflict
of interest is required under this Agreement to be “fair and reasonable” to any
Person, the fair and reasonable nature of such transaction, arrangement or
resolution shall be considered in the context of all similar or related
transactions.
(d) The Limited Partners hereby authorize the Board of Supervisors on behalf of
the Partnership as a partner of a Group Member, to approve of actions by the
General Partner or the board of supervisors of such Group Member similar to
those actions permitted to be taken by the Board of Supervisors pursuant to this
Section 7.15.

 

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7.16 Other Matters Concerning the General Partner and the Board of Supervisors.
(a) The General Partner and the Board of Supervisors may rely and shall be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order, bond,
debenture or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties.
(b) The General Partner and the Board of Supervisors may consult with legal
counsel, accountants, appraisers, management consultants, investment bankers and
other consultants and advisers selected by either of them, and any act taken or
omitted to be taken in reliance upon the opinion (including an Opinion of
Counsel) of such Persons as to matters that the General Partner or the Board of
Supervisors reasonably believes to be within such Person’s professional or
expert competence shall be conclusively presumed to have been done or omitted in
good faith and in accordance with such opinion.
(c) The General Partner shall have the right, in respect of any of its powers or
obligations hereunder, to act through any of its duly authorized officers, a
duly appointed attorney or attorneys-in-fact or the duly authorized Officers of
the Partnership.
(d) The Board of Supervisors shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of the duly authorized
Officers of the Partnership or a duly appointed attorney or attorneys-in-fact.
(e) Any standard of care and duty imposed by this Agreement or under the
Delaware Act or any applicable law, rule or regulation, or in equity or
otherwise shall be modified, waived or limited, to the maximum extent permitted
by law, as required to permit the General Partner and the Board of Supervisors
to act under this Agreement or any other agreement contemplated by this
Agreement and to make any decision pursuant to the authority prescribed in this
Agreement, so long as such action is reasonably believed by the General Partner
or the Board of Supervisors to be in, or not inconsistent with, the best
interests of the Partnership.

 

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7.17 Reliance by Third Parties.
Notwithstanding anything to the contrary in this Agreement, any Person dealing
with the Partnership shall be entitled to assume that the Board of Supervisors
and any Officer of the Partnership authorized by the Board of Supervisors to act
on behalf of and in the name of the Partnership (including the General Partner,
acting pursuant to the direction of the Board of Supervisors in accordance with
Section 7.1(a)) has full power and authority to encumber, sell or otherwise use
in any manner any and all assets of the Partnership and to enter into any
contracts on behalf of the Partnership, and such Person shall be entitled to
deal with the Board of Supervisors or any such Officer (including the General
Partner, acting pursuant to the direction of the Board of Supervisors in
accordance with Section 7.1(a)) as if it were the Partnership’s sole party in
interest, both legally and beneficially. The Limited Partner hereby waives, to
the maximum extent permitted by law, any and all defenses or other remedies that
may be available against such Person to contest, negate or disaffirm any action
of the Board of Supervisors or any such Officer (including the General Partner,
acting pursuant to the direction of the Board of Supervisors in accordance with
Section 7.1(a)) in connection with any such dealing. In no event shall any
Person dealing with the Board of Supervisors or its representatives or any such
Officer (including the General Partner, acting pursuant to the direction of the
Board of Supervisors in accordance with Section 7.1(a)) be obligated to
ascertain that the terms of the Agreement have been complied with or to inquire
into the necessity or expedience of any act or action of the Board of
Supervisors or its representatives or any such Officer (including the General
Partner, acting pursuant to the direction of the Board of Supervisors in
accordance with Section 7.1(a)). Each and every certificate, document or other
instrument executed on behalf of the Partnership by the Board of Supervisors or
its representatives or any such Officer (including the General Partner, acting
pursuant to the direction of the Board of Supervisors in accordance with
Section 7.1 (a)) or shall be conclusive evidence in favor of any and every
Person relying thereon or claiming thereunder that (a) at the time of the
execution and delivery of such certificate, document or instrument, this
Agreement was in full force and effect, (b) the Person executing and delivering
such certificate, document or instrument was duly authorized and empowered to do
so for and on behalf of the Partnership and (c) such certificate, document or
instrument was duly executed and delivered in accordance with the terms and
provisions of this Agreement and is binding upon the Partnership.
ARTICLE VIII
Books, Records, Accounting and Reports
8.1 Records and Accounting.
The Partnership shall keep or cause to be kept at the principal office of the
Partnership appropriate books and records with respect to the Partnership’s
business, including all books and records necessary to provide to the Limited
Partners any information required to be provided pursuant to Section 3.3(a). Any
books and records maintained by or on behalf of the Partnership in the regular
course of its business, including books of account and records of Partnership
proceedings, may be kept on, or be in the form of, computer disks, hard drives,
punch cards, magnetic tape, photographs, micrographics or any other information
storage device, provided, that the books and records so maintained are
convertible into clearly legible written form within a reasonable period of
time. The books of the Partnership shall be maintained, for financial reporting
purposes, on an accrual basis in accordance with U.S. GAAP.
8.2 Fiscal Year.
The fiscal year of the Partnership shall be a 52-53 week fiscal year concluding
on the last Saturday in September.

 

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ARTICLE IX
Tax Matters
9.1 Tax Returns and Information.
The Partnership shall timely file all returns of the Partnership that are
required for federal, state and local income tax purposes on the basis of the
accrual method and a taxable year ending on December 31. The tax information
reasonably required by the Partners for federal and state income tax reporting
purposes with respect to a taxable year shall be furnished to them within
90 days of the close of the calendar year in which the Partnership’s taxable
year ends. The classification, realization and recognition of income, gain,
losses and deductions and other items shall be on the accrual method of
accounting for federal income tax purposes.
9.2 Tax Elections.
(a) The Partnership has made the election under Section 754 of the Code in
accordance with applicable regulations thereunder, subject to the reservation of
the right to seek to revoke such election upon the Board of Supervisors’
determination that such revocation is in the best interests of the Limited
Partners.
(b) The Partnership has elected to deduct expenses incurred in organizing the
Partnership ratably over a sixty-month period as provided in Section 709 of the
Code.
(c) Except as otherwise provided herein, the Board of Supervisors shall
determine whether the Partnership should make any other elections permitted by
the Code.
9.3 Tax Controversies.
Subject to the provisions hereof, the General Partner is designated as the Tax
Matters Partner (as defined in Section 6231(a)(7) of the Code) and is authorized
and required to represent the Partnership (at the Partnership’s expense) in
connection with all examinations of the Partnership’s affairs by tax
authorities, including resulting administrative and judicial proceedings, and to
expend Partnership funds for professional services and costs associated
therewith. Each Partner agrees to cooperate with the General Partner and to do
or refrain from doing any or all things reasonably required by the General
Partner to conduct such proceedings.
9.4 Withholding.
Notwithstanding any other provision of this Agreement, the Board of Supervisors
is authorized to take any action that it determines in its discretion to be
necessary or appropriate to cause the Partnership to comply with any withholding
requirements established under the Code or any other federal, state or local law
including, without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of
the Code. To the extent that the Partnership is required or elects to withhold
and pay over to any taxing authority any amount resulting from the allocation or
distribution of income to any Partner (including, without limitation, by reason
of Section 1446 of the Code), the amount withheld may be treated as a
distribution of cash pursuant to Section 6.4 in the amount of such withholding
from such Partner.

 

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ARTICLE X
Admission of Partners
10.1 Current Partners.
The General Partner and the MLP and Suburban LP, each as a Limited Partner, are
the current Partners of the Partnership as of the date of this Agreement.
10.2 Admission of Substituted Limited Partners.
Any Person that is the successor in interest to a Limited Partner as described
in Section 4.3 shall be admitted to the Partnership as a Limited Partner upon
(a) furnishing to the Board of Supervisors (i) written acceptance of all of the
terms and conditions of this Agreement and (ii) such other documents or
instruments as may be required by law to effect its admission as a Limited
Partner in the Partnership and (b) except in the case of the foreclosure of a
pledge referred to in Section 4.3, obtaining the consent of the Board of
Supervisors, which consent may be given or withheld in the Board of Supervisors’
sole discretion. Such Person shall be admitted to the Partnership as a Limited
Partner effective immediately prior to the transfer of the Partnership Interest,
and the business of the Partnership shall continue without dissolution.
10.3 Admission of Successor General Partner.
A successor General Partner approved pursuant to Section 11.1 or 11.2 or the
transferee of or successor to all of the General Partner’s Partnership Interest
as a general partner in the Partnership pursuant to Section 4.2 shall, subject
to compliance with the terms of Section 11.3, if applicable, be admitted to the
Partnership as the General Partner, effective simultaneously with the withdrawal
or removal of the General Partner pursuant to Section 11.1 or 11.2 or the
transfer of the General Partner’s Partnership Interest as a general partner in
the Partnership pursuant to Section 4.2; provided, however, that no such
successor shall be admitted to the Partnership until compliance with the terms
of Section 4.2, if applicable, has occurred and such successor has executed and
delivered written acceptance of all of the terms and conditions of this
Agreement and such other documents or instruments as may be required by law to
effect such admission. Any such successor is hereby authorized to and shall,
subject to the terms hereof, carry on the business of the Partnership without
dissolution. The admission of a successor General Partner shall not be deemed to
have affected in any manner the irrevocable delegation of all management powers
over the business and affairs of the Partnership to the Board of Supervisors
pursuant to Section 7.1(a). At no time shall the Partnership have more than one
general partner.

 

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10.4 Admission of Additional Limited Partners.
(a) A Person (other than the General Partner, the MLP or a Substituted Limited
Partner) who makes a Capital Contribution to the Partnership in accordance with
this Agreement shall be admitted to the Partnership as an Additional Limited
Partner only upon (A) furnishing to the Board of Supervisors (i) evidence of
acceptance in form satisfactory to the Board of Supervisors of all of the terms
and conditions of this Agreement, including the granting of the power of
attorney granted in Section 2.6, and (ii) such other documents or instruments as
may be required in the discretion of the Board of Supervisors to effect such
Person’s admission as an Additional Limited Partner and (B) if at such time, any
of the Partnership Interest of the Limited Partners are pledged to secure
indebtedness of the Partnership or the MLP, such Additional Limited Partner
granting a similar pledge of its Partnership Interest to the holders of such
indebtedness.
(b) Notwithstanding anything to the contrary in this Section 10.4, no Person
shall be admitted as an Additional Limited Partner without the consent of the
Board of Supervisors, which consent may be given or withheld in the Board of
Supervisors’ discretion. The admission of any Person as an Additional Limited
Partner shall become effective on the date upon which the name of such Person is
recorded as such in the books and records of the Partnership, following the
consent of the Board of Supervisors to such admission.
10.5 Amendment of Agreement and Certificate of Limited Partnership.
To effect the admission to the Partnership of any Partner, the Board of
Supervisors shall take all steps necessary and appropriate under the Delaware
Act to amend the records of the Partnership to reflect such admission and, if
necessary, to prepare as soon as practicable an amendment to this Agreement and,
if required by law, the General Partner shall prepare and file an amendment to
the Certificate of Limited Partnership, and the Chief Executive Officer and
President may for this purpose, among others, exercise the power of attorney
granted pursuant to Section 2.6.
ARTICLE XI
Withdrawal or Removal of Partners
11.1 Withdrawal of the General Partner.
(a) The General Partner shall be deemed to have withdrawn from the Partnership
upon the occurrence of any one of the following events (each such event herein
referred to as an “Event of Withdrawal”):
(i) the General Partner voluntarily withdraws from the Partnership (of which
event the General Partner shall give written notice to the Limited Partners);
(ii) the General Partner transfers all of its rights as General Partner pursuant
to Section 4.2; provided, however, that the pledge (but not any related
foreclosure) referred to in Section 4.2 shall not be deemed an Event of
Withdrawal;

 

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(iii) the General Partner is removed pursuant to Section 11.2;
(iv) the general partner of the MLP withdraws from, or is removed as the general
partner of, the MLP;
(v) the General Partner (A) makes a general assignment for the benefit of
creditors; (B) files a voluntary bankruptcy petition for relief under Chapter 7
of the United States Bankruptcy Code; (C) files a petition or answer seeking for
itself a liquidation, dissolution or similar relief (but not a reorganization)
under any law; (D) files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against the General Partner
in a proceeding of the type described in clauses (A)-(C) of this
Section 11.1(a)(v); or (E) seeks, consents to or acquiesces in the appointment
of a trustee (but not a debtor in possession), receiver or liquidator of the
General Partner or of all or any substantial part of its properties;
(vi) a final and non-appealable order of relief under Chapter 7 of the United
States Bankruptcy Code is entered by a court with appropriate jurisdiction
pursuant to a voluntary or involuntary petition by or against the General
Partner;
(vii) a certificate of dissolution or its equivalent is filed for the General
Partner, or 90 days expire after the date of notice to the General Partner of
revocation of its charter without a reinstatement of its charter, under the laws
of its state of incorporation or formation; or
(viii) (A) in the event the General Partner is a corporation, a certificate of
dissolution or its equivalent is filed for the General Partner, or 90 days
expire after the date of notice to the General Partner of revocation of its
charter without a reinstatement of its charter, under the laws of its state of
incorporation; (B) in the event the General Partner is a partnership or a
limited liability company, the dissolution and commencement of winding up of the
General Partner; (C) in the event the General Partner is acting in such capacity
by virtue of being a trustee of a trust, the termination of the trust; (D) in
the event the General Partner is a natural person, his death or adjudication of
incompetency; and (E) otherwise in the event of the termination of the General
Partner.
If an Event of Withdrawal specified in Section 11.1(a)(iv) (with respect to
withdrawal), (v), (vi), (vii) or (viii) (A), (B), (C) or (E) occurs, the
withdrawing General Partner shall give notice to the Limited Partners within
30 days after such occurrence. The Partners hereby agree that only the Events of
Withdrawal described in this Section 11.1 shall result in the withdrawal of the
General Partner from the Partnership.

 

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(b) Withdrawal of the General Partner from the Partnership upon the occurrence
of an Event of Withdrawal shall not constitute a breach of this Agreement under
the following circumstances: (i) at any time during the period beginning on
March 5, 1996 and ending at 12:00 midnight, Eastern Standard Time, on
September 30, 2006, the General Partner voluntarily withdraws by giving at least
90 days advance notice of its intention to withdraw to the Limited Partners;
provided that prior to the effective date of such withdrawal, the Limited
Partners approve such withdrawal and the General Partner delivers to the
Partnership an Opinion of Counsel (“Withdrawal Opinion of Counsel”) that such
withdrawal (following the selection of the successor General Partner) would not
result in the loss of the limited liability of any Limited Partner or of any
limited partner of the MLP, limited partner of any Group Member or cause the MLP
or the Partnership to be treated as an association taxable as a corporation or
otherwise to be taxed as an entity for federal income tax purposes; (ii) at any
time after 12:00 midnight, Eastern Standard Time, on September 30, 2006, the
General Partner voluntarily withdraws by giving at least 90 days’ advance notice
to the Limited Partners, such withdrawal to take effect on the date specified in
such notice; or (iii) at any time that the General Partner ceases to be the
General Partner pursuant to Section 11.1 (a)(ii), (iii) or (iv). If the General
Partner gives a notice of withdrawal pursuant to Section 11.1 (a)(i) or
Section 11.1 (a)(i) of the MLP Agreement, the Limited Partners may, prior to the
effective date of such withdrawal or removal, elect a successor General Partner
that is hereby authorized to and shall continue the business of the Partnership
without dissolution; provided, however, that such successor shall be the same
Person, if any, that is elected by the limited partners of the MLP pursuant to
Section 11.1 of the MLP Agreement as the successor to the General Partner in its
capacity as general partner of the MLP. If, prior to the effective date of the
General Partner’s withdrawal, a successor is not selected by the Limited
Partners as provided herein or the Partnership does not receive a Withdrawal
Opinion of Counsel, the Partnership shall be dissolved in accordance with
Section 12.1. Any successor General Partner elected in accordance with the terms
of this Section 11.1 shall be subject to the provisions of Section 10.3.
11.2 Removal of the General Partner.
The General Partner shall be removed if such General Partner is removed as a
general partner of the MLP pursuant to Section 11.2 of the MLP Agreement. Such
removal shall be effective concurrently with the effectiveness of the removal of
such General Partner as the general partner of the MLP pursuant to the terms of
the MLP Agreement. If a successor General Partner is elected in connection with
the removal of such General Partner as a general partner of the MLP, such
successor General Partner shall, upon admission pursuant to Article X,
automatically become a successor General Partner of the Partnership and is
hereby authorized to and shall continue the business of the Partnership without
dissolution. The admission of any such successor General Partner to the
Partnership shall be subject to the provisions of Section 10.3.

 

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11.3 Interest of Departing Partner and Successor General Partner; Delegation of
Authority to the Board of Supervisors by Successor General Partner.
(a) The Partnership Interest of a Departing Partner departing as a result of
withdrawal or removal pursuant to Section 11.1 or 11.2 shall be purchased by the
successor to the Departing Partner for cash in the manner specified in the MLP
Agreement for consideration of $10. Such purchase shall be a condition to the
admission to the Partnership of the successor as the General Partner. Any
successor General Partner shall indemnify the Departing Partner as to all debts
and liabilities of the Partnership arising on or after the effective date of the
withdrawal or removal of the Departing Partner. In the event of a foreclosure
referred to in Section 4.2, the successor General Partner shall have no
obligations under this Section 11.3(a) to the Departing Partner.
(b) The Departing Partner shall be entitled to receive all reimbursements due
such Departing Partner pursuant to Section 7.10, including any employee-related
liabilities (including severance liabilities), incurred in connection with the
termination of any employees employed by such Departing Partner for the benefit
of the Partnership or the other Group Members.
(c) Any successor General Partner will be deemed to have delegated irrevocably
to the Board of Supervisors all management powers over the business and affairs
of the Partnership to the same extent that the General Partner delegated such
management powers to the Board of Supervisors pursuant to Section 7.1 of this
Agreement.
11.4 Withdrawal of the Limited Partner.
Without the prior written consent of the General Partner, which may be granted
or withheld in its sole discretion, and except as provided in Section 10.1, no
Limited Partner shall have the right to withdraw from the Partnership.
ARTICLE XII
Dissolution and Liquidation
12.1 Dissolution.
The Partnership shall not be dissolved by the admission of Substituted Limited
Partners or Additional Limited Partners or by the admission of a successor
General Partner in accordance with the terms of this Agreement. Upon the removal
or withdrawal of the General Partner, if a successor General Partner is elected
pursuant to Section 10.3, 11.1 or 11.2 or this Section 12.1, the Partnership
shall not be dissolved and such successor General Partner is hereby authorized
to and shall continue the business of the Partnership. The Partnership shall
dissolve, and its affairs shall be wound up, upon:
(a) the expiration of its term as provided in Section 2.7;
(b) an Event of Withdrawal of the General Partner as provided in Section 11.1(a)
(other than Section 11.1(a)(ii)), unless a successor is elected and an Opinion
of Counsel is received as provided in Section 11.1(b) or 11.2 and such successor
is admitted to the Partnership pursuant to Section 10.3; or for Events of
Withdrawal of the General Partner for which the appointment of a successor
General Partner is not provided for hereunder, unless the Partnership is
continued without dissolution in accordance with the Delaware Act;

 

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(c) an election to dissolve the Partnership by the General Partner that is
approved by all of the Limited Partners;
(d) the entry of a decree of judicial dissolution of the Partnership pursuant to
the provisions of the Delaware Act;
(e) the sale of all or substantially all of the assets and properties of the
Partnership Group;
(f) the dissolution of the MLP; or
(g) at any time that there are no limited partners of the Partnership, unless
the Partnership is continued without dissolution pursuant to the Delaware Act.
12.2 [Intentionally omitted].
12.3 Liquidator.
Upon dissolution of the Partnership, the Board of Supervisors shall select one
or more Persons to act as Liquidator. The Liquidator shall be entitled to
receive such compensation for its services as may be approved by all of the
Limited Partners. The Liquidator shall agree not to resign at any time without
15 days’ prior notice and may be removed at any time, with or without cause, by
notice of removal approved by the all of Limited Partners. Upon dissolution,
removal or resignation of the Liquidator, a successor and substitute Liquidator
(who shall have and succeed to all rights, powers and duties of the original
Liquidator) shall within 30 days thereafter be approved by the all of Limited
Partners. The right to approve a successor or substitute Liquidator in the
manner provided herein shall be deemed to refer also to any such successor or
substitute Liquidator approved in the manner herein provided. Except as
expressly provided in this Article XII, the Liquidator approved in the manner
provided herein shall have and may exercise, without further authorization or
consent of any of the parties hereto, all of the powers conferred upon the Board
of Supervisors under the terms of this Agreement (but subject to all of the
applicable limitations, contractual and otherwise, upon the exercise of such
powers, other than the limitation on sale set forth in Section 7.9(a)) to the
extent necessary or desirable in the good faith judgment of the Liquidator to
carry out the duties and functions of the Liquidator hereunder for and during
such period of time as shall be reasonably required in the good faith judgment
of the Liquidator to complete the winding up and liquidation of the Partnership
as provided for herein.

 

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12.4 Liquidation.
The Liquidator shall proceed to dispose of the assets of the Partnership,
discharge its liabilities, and otherwise wind up its affairs in such manner and
over such period as the Liquidator determines to be in the best interest of the
Partners, subject to Section 17-804 of the Delaware Act and the following:
(a) Disposition of Assets. The assets may be disposed of by public or private
sale or by distribution in kind to one or more Partners on such terms as the
Liquidator and such Partner or Partners may agree. If any property is
distributed in kind, the Partner receiving the property shall be deemed for
purposes of Section 12.4(c) to have received cash equal to its fair market
value; and contemporaneously therewith, appropriate cash distributions must be
made to the other Partners. Under certain circumstances and subject to certain
limitations, the Liquidator may defer liquidation or distribution of the
Partnership’s assets for a reasonable time or distribute assets to the Partners
in kind if it determines that a sale would be impractical or would cause undue
loss to the Partners.
(b) Discharge of Liabilities. Liabilities of the Partnership include amounts
owed to Partners otherwise than in respect of their distribution rights under
Article VI. With respect to any liability that is contingent or is otherwise not
yet due and payable, the Liquidator shall either settle such claim for such
amount as it thinks appropriate or establish a reserve of cash or other assets
to provide for its payment. When paid, any unused portion of the reserve shall
be distributed as additional liquidation proceeds.
(c) Liquidation Distributions. All property and all cash in excess of that
required to discharge liabilities as provided in Section 12.4(b) shall be
distributed to the Partners in accordance with, and to the extent of, the
positive balances in their respective Capital Accounts, as determined after
taking into account all Capital Account adjustments (other than those made by
reason of distributions pursuant to this Section 12.4(c)) for the taxable year
of the Partnership during which the liquidation of the Partnership occurs (with
such date of occurrence being determined pursuant to Treasury Regulation,
Section 1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of
such taxable year (or, if later, within 90 days after said date of such
occurrence).
12.5 Cancellation of Certificate of Limited Partnership.
Upon the completion of the distribution of Partnership cash and property as
provided in Section 12.4 in connection with the liquidation of the Partnership,
the Certificate of Limited Partnership and all qualifications of the Partnership
as a foreign limited partnership in jurisdictions other than the State of
Delaware shall be canceled and such other actions as may be necessary to
terminate the Partnership shall be taken.
12.6 Return of Capital Contributions.
The General Partner shall not be personally liable for, and shall have no
obligation to contribute or loan any monies or property to the Partnership to
enable it to effectuate, the return of the Capital Contributions of any Limited
Partner, or any portion thereof, it being expressly understood that any such
return shall be made solely from Partnership assets.

 

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12.7 Waiver of Partition.
To the maximum extent permitted by law, each Partner hereby waives any right to
partition of the Partnership property.
12.8 Capital Account Restoration.
No Limited Partner shall have any obligation to restore any negative balance in
its Capital Account upon liquidation of the Partnership. The General Partner
shall be obligated to restore any negative balance in its Capital Account upon
liquidation of its interest in the Partnership by the end of the taxable year of
the Partnership during which such liquidation occurs, or, if later, within
90 days after the date of such liquidation.
ARTICLE XIII
Amendment of Partnership Agreement
13.1 Amendment to be Adopted Solely by the Board of Supervisors.
The Limited Partners agree that the Board of Supervisors, without the approval
of any Partner, may amend any provision of this Agreement, and may authorize any
Officer (pursuant to the powers of attorney granted in Section 2.6) to execute,
swear to, acknowledge, deliver, file and record whatever documents may be
required in connection therewith, to reflect:
(a) a change in the name of the Partnership, the location of the principal place
of business of the Partnership, the registered agent of the Partnership or the
registered office of the Partnership;
(b) admission, substitution, withdrawal or removal of Partners in accordance
with this Agreement;
(c) a change that, in the discretion of the Board of Supervisors, is necessary
or advisable to qualify or continue the qualification of the Partnership as a
limited partnership or a partnership in which the Limited Partners have limited
liability under the laws of any state or to ensure that neither the Partnership
nor the MLP will be treated as an association taxable as a corporation or
otherwise be taxed as an entity for federal income tax purposes;
(d) a change that, in the discretion of the Board of Supervisors, (i) does not
adversely affect the Limited Partners in any material respect, (ii) is necessary
or advisable to satisfy any requirements, conditions or guidelines contained in
any opinion, directive, order, ruling or regulation of any federal or state
agency or judicial authority or contained in any federal or state statute
(including the Delaware Act), compliance with any of which the Board of
Supervisors determines in its discretion to be in the best interests of the
Partnership and the Limited Partners, (iii) is required to effect the intent of
the provisions of this Agreement or is otherwise contemplated by this Agreement
or (iv) is required to conform the provisions of this Agreement with the
provisions of the MLP Agreement as the provisions of the MLP Agreement may be
amended, supplemented or restated from time to time.

 

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(e) a change in the fiscal year or taxable year of the Partnership and any
changes that, in the discretion of the Board of Supervisors, are necessary or
advisable as a result of a change in the fiscal year or taxable year of the
Partnership including, if the Board of Supervisors shall so determine, a change
in the definition of “Quarter” and the dates on which distributions are to be
made by the Partnership;
(f) an amendment that is necessary, in the Opinion of Counsel, to prevent the
Partnership or the members of the Board of Supervisors or the Officers, or the
General Partner or its directors, officers, trustees or agents from in any
manner being subjected to the provisions of the Investment Company Act of 1940,
as amended, the Investment Advisers Act of 1940, as amended, or “plan asset”
regulations adopted under the Employee Retirement Income Security Act of 1974,
as amended, regardless of whether such are substantially similar to plan asset
regulations currently applied or proposed by the United States Department of
Labor;
(g) any amendment expressly permitted in this Agreement to be made by the Board
of Supervisors acting alone;
(h) an amendment effected, necessitated or contemplated by a Merger Agreement
approved in accordance with Section 14.3;
(i) an amendment that, in the discretion of the Board of Supervisors, is
necessary or advisable to reflect, account for and deal with appropriately the
formation by the Partnership of, or investment by the Partnership in, any
corporation, partnership, joint venture, limited liability company or other
entity in connection with the conduct by the Partnership of activities permitted
by the terms of Section 2.4;
(j) an amendment that, in the discretion of the Board of Supervisors, is
necessary or advisable to effect or continue the irrevocable delegation by the
General Partner to the Board of Supervisors of all management powers over the
business and affairs of the Partnership; or
(k) any other amendments substantially similar to the foregoing.
13.2 Amendment Procedures.
Except with respect to amendments of the type described in Section 13.1, all
amendments to this Agreement shall be made in accordance with the following
requirements. Amendments to this Agreement may be proposed only by or with the
consent of the Board of Supervisors. A proposed amendment shall be effective
upon its approval by all of the Limited Partners.

 

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ARTICLE XIV
Merger
14.1 Authority.
The Partnership may merge or consolidate with one or more corporations,
statutory trusts, business trusts or associations, real estate investment
trusts, common law trusts or unincorporated businesses, including a general
partnership, limited partnership, limited liability limited partnership, limited
liability company or limited liability partnership formed under the laws of the
State of Delaware or any other state of the United States of America, pursuant
to a written agreement of merger or consolidation (“Merger Agreement”) in
accordance with this Article XIV.
14.2 Procedure for Merger or Consolidation.
Merger or consolidation of the Partnership pursuant to this Article XIV requires
the prior approval of the Board of Supervisors. If the Board of Supervisors
shall determine, in the exercise of its discretion, to consent to the merger or
consolidation, the Board of Supervisors shall approve the Merger Agreement,
which shall set forth:
(a) The names and jurisdictions of formation or organization of each of the
business entities proposing to merge or consolidate;
(b) The name and jurisdictions of formation or organization of the business
entity that is to survive the proposed merger or consolidation (the “Surviving
Business Entity”);
(c) The terms and conditions of the proposed merger or consolidation;
(d) The manner and basis of exchanging or converting the equity securities of
each constituent business entity for, or into, cash, property or general or
limited partner interests, rights, securities or obligations of the Surviving
Business Entity; and (i) if any general or limited partner interests, securities
or rights of any constituent business entity are not to be exchanged or
converted solely for, or into, cash, property or general or limited partner
interests, rights, securities or obligations of the Surviving Business Entity,
the cash, property or general or limited partner interests, rights, securities
or obligations of any limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity) which the holders of such general or
limited partner interests, securities or rights are to receive in exchange for,
or upon conversion of their general or limited partner interests, securities or
rights, and (ii) in the case of securities represented by certificates, upon the
surrender of such certificates, which cash, property or general or limited
partner interests, rights, securities or obligations of the Surviving Business
Entity or any general or limited partnership, corporation, trust or other entity
(other than the Surviving Business Entity), or evidences thereof, are to be
delivered;
(e) A statement of any changes in the constituent documents or the adoption of
new constituent documents (the articles or certificate of incorporation,
articles of trust, declaration of trust, certificate or agreement of limited
partnership, certificate of formation or agreement of limited liability company
or other similar charter or governing document) of the Surviving Business Entity
to be effected by such merger or consolidation;

 

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(f) The effective time of the merger, which may be the date of the filing of the
certificate of merger pursuant to Section 14.4 or a later date specified in or
determinable in accordance with the Merger Agreement (provided, that if the
effective time of the merger is to be later than the date of the filing of the
certificate of merger, the effective time shall be filed no later than the time
of the filing of the certificate of merger and stated therein); and
(g) Such other provisions with respect to the proposed merger or consolidation
as are deemed necessary or appropriate by the Board of Supervisors.
14.3 Approval by Limited Partners of Mergers or Consolidations.
(a) The Board of Supervisors, upon its approval of the Merger Agreement, shall
direct that the Merger Agreement and the merger or consolidation contemplated
thereby be submitted to the Limited Partners for their approval.
(b) The Merger Agreement and the merger or consolidation contemplated thereby
shall be approved upon receiving the approval of all of the Limited Partners.
(c) After such approval by the Limited Partners, and at any time prior to the
filing of the certificate of merger pursuant to Section 14.4, the merger or
consolidation may be abandoned pursuant to provisions therefor, if any, set
forth in the Merger Agreement .
14.4 Certificate of Merger.
Upon the required approval by the Board of Supervisors and the Limited Partners
of a Merger Agreement, a certificate of merger shall be executed and filed with
the Secretary of State of the State of Delaware in conformity with the
requirements of the Delaware Act.
14.5 Effect of Merger.
(a) At the effective time of the certificate of merger:
(i) all of the rights, privileges and powers of each of the business entities
that has merged or consolidated, and all property, real, personal and mixed, and
all debts due to any of those business entities and all other things and causes
of action belonging to each of those business entities shall be vested in the
Surviving Business Entity and after the merger or consolidation shall be the
property of the Surviving Business Entity to the extent they were of each
constituent business entity;
(ii) the title to any real property vested by deed or otherwise in any of those
constituent business entities shall not revert and is not in any way impaired
because of the merger or consolidation;

 

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(iii) all rights of creditors and all liens on or security interests in property
of any of those constituent business entities shall be preserved unimpaired; and
(iv) all debts, liabilities and duties of those constituent business entities
shall attach to the Surviving Business Entity, and may be enforced against it to
the same extent as if the debts, liabilities and duties had been incurred or
contracted by it.
(b) A merger or consolidation effected pursuant to this Article XIV shall not be
deemed to result in a transfer or assignment of assets or liabilities from one
entity to another.
ARTICLE XV
General Provisions
15.1 Addresses and Notices.
Any notice, demand, request, report or proxy materials required or permitted to
be given or made to a Partner under this Agreement shall be in writing and shall
be deemed given or made when received by it at the principal office of the
Partnership referred to in Section 2.3.
15.2 References.
Except as specifically provided as otherwise, references to “Articles” and
“Sections” are to Articles and Sections of this Agreement.
15.3 Further Action.
The parties shall execute and deliver all documents, provide all information and
take or refrain from taking action as may be necessary or appropriate to achieve
the purposes of this Agreement.
15.4 Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.
15.5 Integration.
This Agreement constitutes the entire agreement among the parties hereto
pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.

 

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15.6 Creditors.
None of the provisions of this Agreement shall be for the benefit of, or shall
be enforceable by, any creditor of the Partnership. This Section 15.6 is not
intended to limit the rights of a creditor of the Partnership to enforce its
security interest in the General Partner’s Partnership Interest or a Limited
Partner’s Partnership Interest and, in connection with any related foreclosure,
to be admitted as a successor General Partner or a Substitute Limited Partner in
the Partnership.
15.7 Waiver.
No failure by any party to insist upon the strict performance of any covenant,
duty, agreement or condition of this Agreement or to exercise any right or
remedy consequent upon a breach thereof shall constitute waiver of any such
breach of any other covenant, duty, agreement or condition.
15.8 Counterparts.
This Agreement may be executed in counterparts, all of which together shall
constitute an agreement binding on all the parties hereto, notwithstanding that
all such parties are not signatories to the original or the same counterpart.
Each party shall become bound by this Agreement immediately upon affixing its
signature hereto, independently of the signature of any other party.
15.9 Applicable Law.
This Agreement shall be construed in accordance with and governed by the laws of
the State of Delaware, without regard to the principles of conflicts of law.
15.10 Invalidity of Provisions.
If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

 

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In Witness Whereof, the parties hereto have executed this Agreement as of the
date first written above.

            LIMITED PARTNERS:

Suburban Propane Partners, L.P.
      By:   /s/ MARK A. ALEXANDER         Name:   Mark A. Alexander       
Title:   Chief Executive Officer        Suburban LP Holding, LLC.
      By:   /s/ MARK A. ALEXANDER         Name:   Mark A. Alexander       
Title:   Chief Executive Officer        GENERAL PARTNER:

Suburban Energy Services Group LLC
      By:   /s/ MARK A. ALEXANDER         Name:   Mark A. Alexander       
Title:   Member