**Exhibit 3.2**

 

EXECUTION COPY

 

 

AMENDED AND RESTATED

 

AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

OSG AMERICA L.P.

 

 

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TABLEOF CONTENTS

 
| ** **                                                       | ** ** | ** **                                                                                          | ** ** | **Page** |
|------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------|------------|----------|
| ARTICLE  I                                                       |
|                                                             |       |                                                                                                |       |     |
| Definitions                                                      |
|                                                             |       |                                                                                                |       |     |
| SECTION 1.01.                                                    |       | Definitions                                                                                         |       | 1        |
| SECTION 1.02.                                                    |       | Construction                                                                                        |       | 26       |
|                                                             |       |                                                                                                |       |     |
| ARTICLE  II                                                      |
|                                                             |       |                                                                                                |       |     |
| Organization                                                     |
|                                                             |       |                                                                                                |       |     |
| SECTION 2.01.                                                    |       | Formation                                                                                           |       | 26       |
| SECTION 2.02.                                                    |       | Name                                                                                                |       | 26       |
| SECTION 2.03.                                                    |       | Registered Office;  Registered Agent; Principal Office; Other Offices                               |       | 27       |
| SECTION 2.04.                                                    |       | Purpose and Business                                                                                |       | 27       |
| SECTION 2.05.                                                    |       | Powers                                                                                              |       | 27       |
| SECTION 2.06.                                                    |       | Power of Attorney                                                                                   |       | 28       |
| SECTION 2.07.                                                    |       | Term                                                                                                |       | 29       |
| SECTION 2.08.                                                    |       | Title to Partnership  Assets                                                                        |       | 29       |
|                                                             |       |                                                                                                |       |     |
| ARTICLE  III                                                     |
|                                                             |       |                                                                                                |       |     |
| Rights  of Limited Partners                                      |
|                                                             |       |                                                                                                |       |     |
| SECTION 3.01.                                                    |       | Limitation of Liability                                                                             |       | 30       |
| SECTION 3.02.                                                    |       | Management of Business                                                                              |       | 30       |
| SECTION 3.03.                                                    |       | Outside Activities of the  Limited Partners                                                         |       | 30       |
| SECTION 3.04.                                                    |       | Rights of Limited Partners                                                                          |       | 30       |
|                                                             |       |                                                                                                |       |     |
| ARTICLE  IV                                                      |
|                                                             |       |                                                                                                |       |     |
| Certificates;  Record Holders; Transfer of Partnership Interests |
|                                                             |       |                                                                                                |       |     |
| SECTION 4.01.                                                    |       | Certificates                                                                                        |       | 31       |
| SECTION 4.02.                                                    |       | Mutilated, Destroyed, Lost  or Stolen Certificates                                                  |       | 32       |
| SECTION 4.03.                                                    |       | Record Holders                                                                                      |       | 33       |
| SECTION 4.04.                                                    |       | Transfer Generally                                                                                  |       | 33       |
| SECTION 4.05.                                                    |       | Registration and Transfer  of Limited Partner Interests                                             |       | 34       |
| SECTION 4.06.                                                    |       | Transfer of the General  Partner’s General Partner Interest                                    |       | 35       |
| SECTION 4.07.                                                    |       | Transfer of Incentive  Distribution Rights                                                          |       | 36       |
| SECTION 4.08.                                                    |       | Restrictions on Transfers                                                                           |       | 36       |
| SECTION 4.09.                                                    |       | Cancellation or Forfeiture  of Property Under Non-Maritime Law; Redemption of Non-citizen Assignees |       | 37       |
| SECTION 4.10.                                                    |       | Foreign Ownership of Units                                                                          |       | 39       |

 

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| ** **                                                   | ** ** | ** **                                                                           | ** ** | **Page** |
|--------------------------------------------------------------|------------|--------------------------------------------------------------------------------------|------------|----------|
|                                                         |
| ARTICLE  V                                                   |
|                                                         |       |                                                                                 |       |     |
| Capital  Contributions and Issuance of Partnership Interests |
|                                                         |       |                                                                                 |       |     |
| SECTION 5.01.                                                |       | Organizational  Contributions                                                        |       | 44       |
| SECTION 5.02.                                                |       | Initial Unit Issuances;  General Partner Pre-emptive Rights                          |       | 44       |
| SECTION 5.03.                                                |       | Exercise of the  Over-Allotment Option                                               |       | 45       |
| SECTION 5.04.                                                |       | Interest and Withdrawal                                                              |       | 45       |
| SECTION 5.05.                                                |       | Capital Accounts                                                                     |       | 46       |
| SECTION 5.06.                                                |       | Issuances of Additional  Partnership Securities                                      |       | 49       |
| SECTION 5.07.                                                |       | Conversion of Subordinated  Units                                                    |       | 50       |
| SECTION 5.08.                                                |       | Limited Preemptive Right                                                             |       | 51       |
| SECTION 5.09.                                                |       | Splits and Combinations                                                              |       | 51       |
| SECTION 5.10.                                                |       | Fully Paid and  Non-Assessable Nature of Limited Partner Interests                   |       | 52       |
| SECTION 5.11.                                                |       | Issuance of Class B Units  in Connection with Reset of Incentive Distribution Rights |       | 52       |
|                                                         |       |                                                                                 |       |     |
| ARTICLE  VI                                                  |
|                                                         |       |                                                                                 |       |     |
| Allocations  and Distributions                               |
|                                                         |       |                                                                                 |       |     |
| SECTION 6.01.                                                |       | Allocations for Capital  Account Purposes                                            |       | 54       |
| SECTION 6.02.                                                |       | Allocations for Tax  Purposes                                                        |       | 65       |
| SECTION 6.03.                                                |       | Requirement and  Characterization of Distributions; Distributions to Record Holders  |       | 67       |
| SECTION 6.04.                                                |       | Distributions of Available  Cash from Operating Surplus                              |       | 68       |
| SECTION 6.05.                                                |       | Distributions of Available  Cash from Capital Surplus                                |       | 70       |
| SECTION 6.06.                                                |       | Adjustment of Minimum  Quarterly Distribution and Target Distribution Levels         |       | 70       |
| SECTION 6.07.                                                |       | Special Provisions  Relating to the Holders of Subordinated Units and Class B Units  |       | 71       |
| SECTION 6.08.                                                |       | Special Provisions  Relating to the Holders of Incentive Distribution Rights         |       | 72       |
| SECTION 6.09.                                                |       | Entity Level Taxation                                                                |       | 72       |
|                                                         |       |                                                                                 |       |     |
| ARTICLE  VII                                                 |
|                                                         |       |                                                                                 |       |     |
| Management  and Operation of Business                        |
|                                                         |       |                                                                                 |       |     |
| SECTION 7.01.                                                |       | Management                                                                           |       | 73       |
| SECTION 7.02.                                                |       | Certificate of Limited  Partnership                                                  |       | 75       |
| SECTION 7.03.                                                |       | Restrictions on the General  Partner’s Authority                                |       | 75       |
| SECTION 7.04.                                                |       | Reimbursement of the  General Partner                                                |       | 76       |
| SECTION 7.05.                                                |       | Outside Activities                                                                   |       | 77       |

 

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| ** **                              | ** ** | ** **                                                                                    | ** ** | **Page** |
|-----------------------------------------|------------|-----------------------------------------------------------------------------------------------|------------|----------|
|                                    |       |                                                                                          |       |     |
| SECTION 7.06.                           |       | Loans from the General  Partner; Loans or Contributions from the Partnership or Group Members |       | 78       |
| SECTION 7.07.                           |       | Indemnification                                                                               |       | 79       |
| SECTION 7.08.                           |       | Liability of Indemnitees                                                                      |       | 80       |
| SECTION 7.09.                           |       | Resolution of Conflicts of  Interest; Standards of Conduct and Modification of Duties         |       | 81       |
| SECTION 7.10.                           |       | Other Matters Concerning  the General Partner                                                 |       | 83       |
| SECTION 7.11.                           |       | Purchase or Sale of  Partnership Securities                                                   |       | 83       |
| SECTION 7.12.                           |       | Registration Rights of the  General Partner and its Affiliates                                |       | 84       |
| SECTION 7.13.                           |       | Reliance by Third Parties                                                                     |       | 87       |
|                                    |       |                                                                                          |       |     |
| ARTICLE  VIII                           |
|                                    |       |                                                                                          |       |     |
| Books,  Records, Accounting and Reports |
|                                    |       |                                                                                          |       |     |
| SECTION 8.01.                           |       | Records and Accounting                                                                        |       | 88       |
| SECTION 8.02.                           |       | Fiscal Year                                                                                   |       | 88       |
| SECTION 8.03.                           |       | Reports                                                                                       |       | 88       |
|                                    |       |                                                                                          |       |     |
| ARTICLE  IX                             |
|                                    |       |                                                                                          |       |     |
| Tax  Matters                            |
|                                    |       |                                                                                          |       |     |
| SECTION 9.01.                           |       | Tax Returns and  Information                                                                  |       | 89       |
| SECTION 9.02.                           |       | Tax Elections                                                                                 |       | 89       |
| SECTION 9.03.                           |       | Tax Controversies                                                                             |       | 89       |
| SECTION 9.04.                           |       | Withholding                                                                                   |       | 90       |
|                                    |       |                                                                                          |       |     |
| ARTICLE  X                              |
|                                    |       |                                                                                          |       |     |
| Admission  of Partners                  |
|                                    |       |                                                                                          |       |     |
| SECTION 10.01.                          |       | Admission of Initial  Limited Partners                                                        |       | 90       |
| SECTION 10.02.                          |       | Admission of Additional  Limited Partners                                                     |       | 90       |
| SECTION 10.03.                          |       | Admission of Successor  General Partner                                                       |       | 91       |
| SECTION 10.04.                          |       | Amendment of Agreement and  Certificate of Limited Partnership                                |       | 91       |
|                                    |       |                                                                                          |       |     |
| ARTICLE  XI                             |
|                                    |       |                                                                                          |       |     |
| Withdrawal  or Removal of Partners      |
|                                    |       |                                                                                          |       |     |
| SECTION 11.01.                          |       | Withdrawal of the General  Partner                                                            |       | 91       |
| SECTION 11.02.                          |       | Removal of the General  Partner                                                               |       | 93       |
| SECTION 11.03.                          |       | Interest of Departing  General Partner and Successor General Partner                          |       | 94       |

 

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| ** **                                                 | ** ** | ** **                                                                                                                     | ** ** | **Page** |
|------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------|------------|----------|
|                                                       |       |                                                                                                                           |       |     |
| SECTION 11.04.                                             |       | Termination of Subordination Period, Conversion of Subordinated Units  and Extinguishment of Cumulative Common Unit Arrearages |       | 95       |
| SECTION 11.05.                                             |       | Withdrawal of Limited  Partners                                                                                                |       | 96       |
|                                                       |       |                                                                                                                           |       |     |
| ARTICLE  XII                                               |
|                                                       |       |                                                                                                                           |       |     |
| Dissolution  and Liquidation                               |
|                                                       |       |                                                                                                                           |       |     |
| SECTION 12.01.                                             |       | Dissolution                                                                                                                    |       | 96       |
| SECTION 12.02.                                             |       | Continuation of the  Business of the Partnership After Dissolution                                                             |       | 96       |
| SECTION 12.03.                                             |       | Liquidator                                                                                                                     |       | 97       |
| SECTION 12.04.                                             |       | Liquidation                                                                                                                    |       | 98       |
| SECTION 12.05.                                             |       | Cancellation of  Certificate of Limited Partnership                                                                            |       | 98       |
| SECTION 12.06.                                             |       | Return of Contributions                                                                                                        |       | 99       |
| SECTION 12.07.                                             |       | Waiver of Partition                                                                                                            |       | 99       |
| SECTION 12.08.                                             |       | Capital Account  Restoration                                                                                                   |       | 99       |
|                                                       |       |                                                                                                                           |       |     |
| ARTICLE  XIII                                              |
|                                                       |       |                                                                                                                           |       |     |
| Amendment  of Partnership Agreement; Meetings; Record Date |
|                                                       |       |                                                                                                                           |       |     |
| SECTION 13.01.                                             |       | Amendments to be Adopted  Solely by the General Partner                                                                        |       | 99       |
| SECTION 13.02.                                             |       | Amendment Procedures                                                                                                           |       | 101      |
| SECTION 13.03.                                             |       | Amendment Requirements                                                                                                         |       | 101      |
| SECTION 13.04.                                             |       | Special Meetings                                                                                                               |       | 102      |
| SECTION 13.05.                                             |       | Notice of a Meeting                                                                                                            |       | 102      |
| SECTION 13.06.                                             |       | Record Date                                                                                                                    |       | 103      |
| SECTION 13.07.                                             |       | Adjournment                                                                                                                    |       | 103      |
| SECTION 13.08.                                             |       | Waiver of Notice; Approval  of Meeting                                                                                         |       | 103      |
| SECTION 13.09.                                             |       | Quorum and Voting                                                                                                              |       | 103      |
| SECTION 13.10.                                             |       | Conduct of a Meeting                                                                                                           |       | 104      |
| SECTION 13.11.                                             |       | Action Without a Meeting                                                                                                       |       | 104      |
| SECTION 13.12.                                             |       | Right to Vote and Related  Matters                                                                                             |       | 105      |
|                                                       |       |                                                                                                                           |       |     |
| ARTICLE  XIV                                               |
|                                                       |       |                                                                                                                           |       |     |
| Merger,  Consolidation or Conversion                       |
|                                                       |       |                                                                                                                           |       |     |
| SECTION 14.01.                                             |       | Authority                                                                                                                      |       | 105      |
| SECTION 14.02.                                             |       | Procedure for Merger or  Consolidation or Conversion                                                                           |       | 106      |
| SECTION 14.03.                                             |       | Approval by Limited  Partners of Merger Agreement or Plan of Conversion                                                        |       | 108      |
| SECTION 14.04.                                             |       | Certificate of Merger or  Articles of Conversion                                                                               |       | 109      |
| SECTION 14.05.                                             |       | Effect of Merger,  Consolidation or Conversion                                                                                 |       | 109      |

 

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| ** **                                  | ** ** | ** **                                  | ** ** | **Page** |
|---------------------------------------------|------------|---------------------------------------------|------------|----------|
|                                        |
| ARTICLE  XV                                 |
|                                        |       |                                        |       |     |
| Right  to Acquire Limited Partner Interests |
|                                        |       |                                        |       |     |
| SECTION 15.01.                              |       | Right to Acquire Limited  Partner Interests |       | 110      |
|                                        |       |                                        |       |     |
| ARTICLE  XVI                                |
|                                        |       |                                        |       |     |
| General  Provisions                         |
|                                        |       |                                        |       |     |
| SECTION 16.01.                              |       | Addresses and Notices                       |       | 112      |
| SECTION 16.02.                              |       | Further Action                              |       | 112      |
| SECTION 16.03.                              |       | Binding Effect                              |       | 112      |
| SECTION 16.04.                              |       | Integration                                 |       | 112      |
| SECTION 16.05.                              |       | Creditors                                   |       | 112      |
| SECTION 16.06.                              |       | Waiver                                      |       | 113      |
| SECTION 16.07.                              |       | Counterparts                                |       | 113      |
| SECTION 16.08.                              |       | Applicable Law                              |       | 113      |
| SECTION 16.09.                              |       | Invalidity of Provisions                    |       | 113      |
| SECTION 16.10.                              |       | Consent of Partners                         |       | 113      |
| SECTION 16.11.                              |       | Facsimile Signatures                        |       | 113      |
| SECTION 16.12.                              |       | Third-Party Beneficiaries                   |       | 113      |

 

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AMENDED AND RESTATED AGREEMENT OF LIMITEDPARTNERSHIP OF OSG AMERICA L.P., dated as of November 15, 2007, isentered into by and between OSG AMERICA LLC, a Delaware limited liabilitycompany, as the General Partner, and OSG BULK SHIPS, INC., a Delawarecorporation, as the Organizational Limited Partner, together with any otherPersons who become Partners in the Partnership or parties hereto as providedherein.

 

Inconsideration of the covenants, conditions and agreements contained herein, theparties hereto hereby agree as follows:

 

ARTICLE I

 

Definitions

 

## SECTION 1.01.  Definitions.  The following definitions shall be for allpurposes, unless otherwise clearly indicated to the contrary, applied to theterms used in this Agreement.

##  

“Acquisition”means any transaction in which any Group Member acquires (through an assetacquisition, merger, stock acquisition or other form of investment) controlover all or a portion of the assets, properties or business of another Personfor the purpose of increasing the long-term operating capacity or asset base ofthe Partnership Group from the operating capacity or asset base of the PartnershipGroup existing immediately prior to such transaction; provided, however,that any acquisition of properties or assets of another Person that is madesolely for investment purposes shall not constitute an Acquisition under thisAgreement.

 

“AdditionalBook Basis” means the portion of any remaining Carrying Value of anAdjusted Property that is attributable to positive adjustments made to suchCarrying Value as a result of Book-Up Events. For purposes of determining theextent that Carrying Value constitutes Additional Book Basis:

 

(a)  Any negative adjustment made to the Carrying Value of anAdjusted Property as a result of either a Book-Down Event or a Book-Up Eventshall first be deemed to offset or decrease that portion of the Carrying Valueof such Adjusted Property that is attributable to any prior positiveadjustments made thereto pursuant to a Book-Up Event or Book-Down Event.

 

(b)  If Carrying Value that constitutes Additional Book Basis isreduced as a result of a Book-Down Event and the Carrying Value of otherproperty is increased as a result of such Book-Down Event, an allocable portionof any such increase in Carrying Value shall be treated as Additional BookBasis; provided, however, that the amount treated as AdditionalBook Basis pursuant hereto as a result of such Book-Down Event shall not exceedthe amount by which the Aggregate Remaining Net Positive Adjustments after suchBook-Down Event

 

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exceedsthe remaining Additional Book Basis attributable to all of the Partnership’sAdjusted Property after such Book-Down Event (determined without regard to theapplication of this clause (b) to such Book-Down Event).

 

“AdditionalBook Basis Derivative Items” means any Book Basis Derivative Items that arecomputed with reference to Additional Book Basis. To the extent that theAdditional Book Basis attributable to all of the Partnership’s AdjustedProperty as of the beginning of any taxable period exceeds the AggregateRemaining Net Positive Adjustments as of the beginning of such period (the “ExcessAdditional Book Basis”), the Additional Book Basis Derivative Items forsuch period shall be reduced by the amount that bears the same ratio to theamount of Additional Book Basis Derivative Items determined without regard tothis sentence as the Excess Additional Book Basis bears to the Additional BookBasis as of the beginning of such period.

 

“AdjustedCapital Account”  means the CapitalAccount maintained for each Partner as of the end of each fiscal year of thePartnership, (a) increased by any amounts that such Partner is obligatedto restore under the standards set by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (oris deemed obligated to restore under Treasury Regulation Sections 1.704-2(g) and1.704-2(i)(5)) and (b) decreased by (i) the amount of all losses anddeductions that, as of the end of such fiscal year, are reasonably expected tobe allocated to such Partner in subsequent years under Sections 704(e)(2) and706(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 suchfiscal year, are reasonably expected to be made to such Partner in subsequentyears in accordance with the terms of this Agreement or otherwise to the extentthey exceed offsetting increases to such Partner’s Capital Account that arereasonably expected to occur during (or prior to) the year in which suchdistributions are reasonably expected to be made (other than increases as aresult of a minimum gain chargeback pursuant to Section 6.01(d)(i) or6.01(d)(ii)). The foregoing definition of Adjusted Capital Account is intendedto comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) andshall be interpreted consistently therewith. The “Adjusted Capital Account” ofa Partner in respect of a General Partner Unit, a Common Unit, a Class BUnit, a Subordinated Unit or an Incentive Distribution Right or any otherPartnership Interest shall be the amount that such Adjusted Capital Accountwould be if such General Partner Unit, Common Unit, Class B Unit,Subordinated Unit, Incentive Distribution Right or other Partnership Interestwere the only interest in the Partnership held by such Partner from and afterthe date on which such General Partner Unit, Common Unit, Class B Unit,Subordinated Unit, Incentive Distribution Right or other Partnership Interestwas first issued.

 

“AdjustedOperating Surplus” means, with respect to any period, Operating Surplusgenerated with respect to such period (a) less (i) any net increasein Working Capital Borrowings (or the Partnership’s proportionate share of anynet increase in Working Capital Borrowings in the case of Subsidiaries that arenot wholly owned) with respect to such period and (ii) any net decrease incash reserves for Operating Expenditures with respect to such period to theextent such decrease does not relate to an Operating Expenditure made withrespect to such period, and (b) plus (i) any net decrease in WorkingCapital Borrowings (or the Partnership’s proportionate share of any decrease

 

2

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inWorking Capital Borrowings in the case of Subsidiaries that are not whollyowned) with respect to such period, and (ii) any net increase in cashreserves (or the Partnership’s proportionate share of any net increase in cashreserves in the case of Subsidiaries that are not wholly owned) for OperatingExpenditures with respect to such period to the extent such reserve is requiredby any debt instrument for the repayment of principal, interest or premium.  Adjusted Operating Surplus does not includethat portion of Operating Surplus included in clause (a)(i) of thedefinition of Operating Surplus.

 

“AdjustedProperty” means any property the Carrying Value of which has been adjustedpursuant to Section 5.05(d)(i) or 5.05(d)(ii).

 

“Affiliate”means, with respect to any Person, any other Person that directly or indirectlythrough one or more intermediaries controls, is controlled by or is undercommon control with, the Person in question. As used herein, the term “control” means the possession, direct orindirect, of the power to direct or cause the direction of the management andpolicies of a Person, whether through ownership of voting securities, bycontract or otherwise.

 

“AggregateQuantity of Class B Units” has the meaning assigned to such term in Section 5.11(a).

 

“AggregateRemaining Net Positive Adjustments” means, as of the end of any taxableperiod, the sum of the Remaining Net Positive Adjustments of all the Partners.

 

“AgreedAllocation” means any allocation, other than a Required Allocation, of anitem of income, gain, loss or deduction pursuant to the provisions of Section 6.01,including a Curative Allocation (if appropriate to the context in which theterm “Agreed Allocation” is used).

 

“AgreedValue” means the gross fair market value of the applicable property orother consideration at the time of contribution or distribution, as the casemay be, as determined by the General Partner.

 

“Agreement”means this Amended and Restated Agreement of Limited Partnership of OSG AmericaL.P., as it may be amended, supplemented or restated from time to time.

 

“Associate”means, when used to indicate a relationship with any Person, (a) anycorporation or organization of which such Person is a director, officer orpartner or is, directly or indirectly, the owner of 20% or more of any class ofvoting stock or other voting interest, (b) any trust or other estate inwhich such Person has at least a 20% beneficial interest or as to which suchPerson serves as trustee or in a similar fiduciary capacity, and (c) anyrelative or spouse of such Person, or any relative of such spouse, who has thesame principal residence as such Person.

 

“ATC”means Alaska Tanker Company, LLC, a Delaware limited liability company.

 

3

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“Available Cash” means, with respect to anyQuarter ending prior to the Liquidation Date:

 

(a) the sum of (i) all cash and cash equivalents of thePartnership Group on hand at the end of such Quarter (or the Partnership’sproportionate share of cash and cash equivalents in the case of Subsidiariesthat are not wholly owned), and (ii) all additional cash and cashequivalents of the Partnership Group (or the Partnership’s proportionate shareof cash and cash equivalents in the case of Subsidiaries that are not whollyowned) on hand on the date of determination of Available Cash with respect tosuch Quarter resulting from Working Capital Borrowings made subsequent to theend of such Quarter, less

 

(b) the amount of any cash reserves (or the Partnership’sproportionate share of cash reserves in the case of Subsidiaries that are notwholly owned) established by the General Partner to (i) provide for theproper conduct of the business of the Partnership Group (including reserves forfuture capital expenditures and for anticipated future credit needs of thePartnership Group) subsequent to such Quarter, (ii) comply with applicablelaw or any loan agreement, security agreement, mortgage, debt instrument orother agreement or obligation to which any Group Member is a party or by whichit is bound or its assets are subject or (iii) provide funds fordistributions under Section 6.04 or Section 6.05 in respect ofany one or more of the next four Quarters; provided, however,that the General Partner may not establish cash reserves pursuant toclause (iii) above if the effect of such reserves would be that thePartnership is unable to distribute the Minimum Quarterly Distribution on allCommon Units, plus any Cumulative Common Unit Arrearage on all Common Units,with respect to such Quarter; and, provided further that disbursementsmade by a Group Member or cash reserves established, increased or reduced afterthe end of such Quarter but on or before the date of determination of AvailableCash with respect to such Quarter shall be deemed to have been made,established, increased or reduced, for purposes of determining Available Cash,within such Quarter if the General Partner so determines.

 

Notwithstanding the foregoing, “Available Cash” with respect to theQuarter in which the Liquidation Date occurs and any subsequent Quarter shallequal zero.

 

“Boardof Directors” means, with respect to the General Partner, its board ofdirectors or managers, as applicable, if the General Partner is a corporationor limited liability company or the board of directors or board of managers ofthe general partner of the General Partner, if the General Partner is a limitedpartnership.

 

“Book Basis Derivative Items” means any item of income, deduction, gain orloss included in the determination of Net Income or Net Loss that is computedwith reference to the Carrying Value of an Adjusted Property (e.g.,depreciation, depletion, or gain or loss with respect to an Adjusted Property).

 

4

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“Book-DownEvent” means an event that triggers a negative adjustment to the CapitalAccounts of the Partners pursuant to Section 5.05(d).

 

“Book-TaxDisparity” means with respect to any item of Contributed Property orAdjusted Property, as of the date of any determination, the difference betweenthe Carrying Value of such Contributed Property or Adjusted Property and theadjusted basis thereof for federal income tax purposes as of such date. APartner’s share of the Partnership’s Book-Tax Disparities in all of itsContributed Property and Adjusted Property will be reflected by the differencebetween such Partner’s Capital Account balance as maintained pursuant to Section 5.05and the hypothetical balance of such Partner’s Capital Account computed as ifit had been maintained strictly in accordance with federal income taxaccounting principles.

 

“Book-UpEvent” means an event that triggers a positive adjustment to the CapitalAccounts of the Partners pursuant to Section 5.05(d).

 

“BusinessDay” means Monday through Friday of each week, except that a legal holidayrecognized as such by the government of the United States of America or theState of New York shall not be regarded as a Business Day.

 

“CapitalAccount” means the capital account maintained for a Partner pursuant to Section 5.05.The “Capital Account” of a Partner in respect of a General Partner Unit, aCommon Unit, a Class B Unit, a Subordinated Unit, an IncentiveDistribution Right or any other Partnership Interest shall be the amount thatsuch Capital Account would be if such General Partner Unit, Common Unit, Class BUnit, Subordinated Unit, Incentive Distribution Right or other PartnershipInterest were the only interest in the Partnership held by such Partner fromand after the date on which such General Partner Unit, Common Unit, Class BUnit, Subordinated Unit, Incentive Distribution Right or other PartnershipInterest was first issued.

 

“CapitalContribution” means any cash, cash equivalents or the Net Agreed Value ofContributed Property that a Partner contributes to the Partnership.

 

“CapitalImprovement” means any (a) addition or improvement to the capitalassets owned by any Group Member, (b) acquisition of existing, or theconstruction of new, capital assets (including product carriers, shuttletankers, barges, tugs, and related assets) or (c) capital contributions bya Group Member to a Person that is not a Subsidiary in which a Group Member hasan equity interest to fund such Group Member’s pro rata share of the cost of anaddition or improvement to the capital assets owned by such Person or theacquisition of existing, or the construction of new, capital assets, if suchaddition, improvement, acquisition or construction is made to increase thelong-term operating capacity or asset base of the Partnership Group, in thecase of clauses (a) and (b), or of such Person, in the case of clause (c),from the operating capacity or asset base of the Partnership Group or suchPerson, as applicable, existing immediately prior to such addition,improvement, acquisition or construction.

 

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“CapitalSurplus” has the meaning assigned to such term in Section 6.03(a).

 

“CarryingValue” means (a) with respect to a Contributed Property, the AgreedValue of such property reduced (but not below zero) by all depreciation,amortization and cost recovery deductions charged to the Partners’ andAssignees’ Capital Accounts in respect of such Contributed Property, and (b) withrespect to any other Partnership property, the adjusted basis of such propertyfor federal income tax purposes, all as of the time of determination. TheCarrying Value of any property shall be adjusted from time to time inaccordance with Sections 5.05(d)(i) and 5.05(d)(ii) and toreflect changes, additions or other adjustments to the Carrying Value fordispositions and acquisitions of Partnership properties, as deemed appropriateby the General Partner.

 

“Cause”means a court of competent jurisdiction has entered a final, non-appealablejudgment finding the General Partner liable for actual fraud or willfulmisconduct in its capacity as a general partner of the Partnership.

 

“Certificate”means (a) a certificate (i) substantially in the form of Exhibit Ato this Agreement, (ii) issued in global form in accordance with the rules andregulations of the Depositary or (iii) in such other form as may beadopted by the General Partner, issued by the Partnership evidencing ownershipof one or more Common Units or (b) a certificate, in such form as may beadopted by the General Partner, issued by the Partnership evidencing ownershipof one or more other Partnership Securities.

 

“Certificateof Limited Partnership” means the Certificate of Limited Partnership of thePartnership filed with the Secretary of State of the State of Delaware asreferenced in Section 7.02 as such Certificate of Limited Partnership maybe amended, supplemented or restated from time to time.

 

“CitizenshipCertification” means a properly completed certificate in such form as maybe specified by the General Partner by which a transferee of Units or a LimitedPartner certifies that he (and if he is a nominee holding for the account ofanother Person, that to the best of his knowledge such other Person) is anEligible Citizen.

 

“claim”(as used in Section 7.12(d)) has the meaning assigned to such term in Section 7.12(d).

 

“Class BUnits” means a Partnership Security representing a fractional part of thePartnership Interests of all Limited Partners, and having the rights andobligations specified with respect to Class B Units in this Agreement.

 

“ClosingDate” means the first date on which Common Units are sold by thePartnership to the Underwriters pursuant to the provisions of the UnderwritingAgreement.

 

“ClosingPrice” means, in respect of any class of Limited Partner Interests, as ofthe date of determination, the last sale price on such day, regular way, or incase no such sale takes place on such day, the average of the closing bid andasked prices on such

 

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day,regular way, as reported in the principal consolidated transaction reportingsystem with respect to securities listed or admitted to trading on theprincipal National Securities Exchange on which such Limited Partner Interestsare listed or admitted to trading, or, if such Limited Partner Interests arenot listed or admitted to trading on any National Securities Exchange, the lastquoted price on such day, or, if not so quoted, the average of the high bid andlow asked prices on such day in the over-the-counter market, as reported by anyquotation system then in use with respect to such Limited Partner Interests,or, if on any such day such Limited Partner Interests are not quoted by anysuch system, the average of the closing bid and asked prices on such day asfurnished by a professional market maker making a market in such LimitedPartner Interests selected by the General Partner, or, if on any such day nomarket maker is making a market in such Limited Partner Interests, the fairvalue of such Limited Partner Interests on such day as determined by theGeneral Partner.

 

“Code”means the Internal Revenue Code of 1986, as amended and in effect from time totime.  Any reference herein to a specificsection or sections of the Code shall be deemed to include a reference to anycorresponding provision of any successor law.

 

“CombinedInterest” has the meaning assigned to such term in Section 11.03(a).

 

“CommencesCommercial Service” and “Commenced Commercial Service” means thedate upon which a Capital Improvement is first put into commercial service by aGroup Member following, if applicable, completion of construction and testing.

 

“Commission”means the United States Securities and Exchange Commission.

 

“CommonUnit” means a Partnership Security representing a fractional part of thePartnership Interests of all Limited Partners and having the rights andobligations specified with respect to Common Units in this Agreement.  The term “Common Unit” does not include aSubordinated Unit or a Class B Unit prior to its conversion into a CommonUnit pursuant to the terms hereof.

 

“CommonUnit Arrearage” means, for any Quarter, for any Common Unit, wheneverissued, the excess, if any, of (a) the Minimum Quarterly Distribution over(b) the amount of Available Cash distributed per Common Unit pursuant to Section 6.04(a)(i) forthat Quarter.

 

“ConflictsCommittee” means a committee of the Board of Directors of the GeneralPartner composed entirely of two or more directors, each of whom (a) isnot a security holder, officer or employee of the General Partner, (b) isnot an officer, director or employee of any Affiliate of the General Partner, (c) isnot a holder of any ownership interest in the Partnership Group other thanCommon Units and (d) meets the independence standards required ofdirectors who serve on an audit committee of a board

 

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ofdirectors established by the Securities Exchange Act of 1934, as amended, andthe rules and regulations of the Commission thereunder and by the NationalSecurities Exchange on which the Common Units are listed or admitted totrading.

 

“ContributedProperty” means each property or other asset, in such form as may bepermitted by the Delaware Act, but excluding cash, contributed or otherwisetransferred to the Partnership. Once the Carrying Value of a ContributedProperty is adjusted pursuant to Section 5.05(d), such property shall nolonger constitute a Contributed Property, but shall be deemed an AdjustedProperty.

 

“ContributionAgreement” means that certain Amended and Restated Contribution, Conveyanceand Assumption Agreement, dated as of the Closing Date, among the GeneralPartner, the Partnership, OSG Bulk Ships, Inc. and the other parties namedtherein, together with the additional conveyance documents and instrumentscontemplated or referenced thereunder.

 

“ConvertedCommon Units” has the meaning assigned to such term in Section 6.01(d)(x)(B).

 

“CumulativeCommon Unit Arrearage” means, as of the end of any Quarter, for any CommonUnit, whenever issued, the excess, if any, of (a) the total Common UnitArrearages for an Initial Common Unit for each of the Quarters within theSubordination Period ending on or before the last day of such Quarter over (b) thetotal distributions made pursuant to Section 6.04(a)(ii) and thesecond sentence of Section 6.05 with respect to an Initial Common Unit foreach of those Quarters (including any such distributions to be made in respectof the last of such Quarters).

 

“CurativeAllocation” means any allocation of an item of income, gain, deduction,loss or credit pursuant to the provisions of Section 6.01(d)(xi).

 

“CurrentMarket Price” means, in respect of any class of Limited Partner Interests, asof the date of determination, the average of the daily Closing Prices perLimited Partner Interest of such class for the 20 consecutive Trading Daysimmediately prior to such date.

 

“DelawareAct” means the Delaware Revised Uniform Limited Partnership Act, 6 Del C. Section 17-101,et seq., as amended, supplemented or restated from time to time, and anysuccessor to such statute.

 

“DepartingGeneral Partner” means a former General Partner from and after theeffective date of any withdrawal or removal of such former General Partnerpursuant to Section 11.01 or Section 11.02.

 

“Depositary”means, with respect to any Units issued in global form, The Depository TrustCompany and its successors and permitted assigns.

 

“EconomicRisk of Loss” has the meaning set forth in Treasury Regulation Section 1.752-2(a).

 

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“EligibleCitizen” means a Person qualified to own interests in property injurisdictions in which any Group Member does business or proposes to do businessfrom time to time, and whose status as a Limited Partner the General Partnerdetermines does not or would not subject such Group Member to a significantrisk of cancellation or forfeiture of any of its properties or any interesttherein.

 

“EstimatedIncremental Quarterly Tax Amount” has the meaning assigned to such term in Section 6.09.

 

“EstimatedMaintenance Capital Expenditures” means an estimate made in good faith bythe Board of Directors of the General Partner (with the concurrence of theConflicts Committee) of the average quarterly Maintenance Capital Expendituresthat the Partnership will need to incur to maintain the operating capacity orasset base of the Partnership Group (including the Partnership’s proportionateshare of the average quarterly Maintenance Capital Expenditures of itsSubsidiaries that are not wholly owned) existing at the time the estimate ismade.  The Board of Directors of theGeneral Partner (with the concurrence of the Conflicts Committee) will bepermitted to make such estimate in any manner it determines reasonable.  The estimate will be made at least annuallyand whenever an event occurs that is likely to result in a material adjustmentto the amount of future Maintenance Capital Expenditures on a long-termbasis.  The Partnership shall disclose toits Partners any change in the amount of Estimated Maintenance CapitalExpenditures in its reports made in accordance with Section 8.03 to theextent not previously disclosed.  Exceptas provided in the definition of Subordination Period, any adjustments toEstimated Maintenance Capital Expenditures shall be prospective only.

 

“Eventof Withdrawal” has the meaning assigned to such term in Section 11.01(a).

 

“ExcessUnits” has the meaning assigned to such term in Section 4.10(d).

 

“ExpansionCapital Expenditures” means cash expenditures for Acquisitions or CapitalImprovements.  Expansion CapitalExpenditures shall not include Investment Capital Expenditures or MaintenanceCapital Expenditures.  Expansion CapitalExpenditures shall include interest (and related fees) on debt incurred anddistributions on equity issued, in each case, to finance the construction of aCapital Improvement and paid during the period beginning on the date that thePartnership enters into a binding obligation to commence construction of theCapital Improvement and ending on the earlier to occur of the date that suchCapital Improvement Commences Commercial Service or the date that such CapitalImprovement is abandoned or disposed. Debt incurred or equity issued to fund any such construction periodinterest payments, or such construction period distributions on equity duringsuch period shall also be deemed to be debt incurred or equity issued, as thecase may be, to finance the construction of a Capital Improvement.

 

“FinalSubordinated Units” has the meaning assigned such term in Section 6.01(d)(x)(A).

 

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“FirstLiquidation Target Amount” has the meaning assigned to such term in Section 6.01(c)(i)(E).

 

“FirstTarget Distribution” means $0.43125 per Unit per Quarter (or, with respectto the period commencing on the Closing Date and ending on December 31,2007, the product of $0.43125 multiplied by a fraction of which the numeratoris the number of days in such period and the denominator is the total number ofdays in the fiscal quarter in which the Closing Date occurs), subject toadjustment in accordance with Section 5.11, Section 6.06 and Section 6.09.

 

“FullyDiluted Basis” means, when calculating the number of Outstanding Units forany period, a basis that includes, in addition to the Outstanding Units, allPartnership Securities and options, rights, warrants and appreciation rightsrelating to an equity interest in the Partnership (a) that are convertibleinto or exercisable or exchangeable for Units that are senior to or paripassu with the Subordinated Units, (b) whose conversion, exerciseor exchange price is less than the Current Market Price on the date of suchcalculation, (c) that may be converted into or exercised or exchanged forsuch Units prior to or during the Quarter immediately following the end of theperiod for which the calculation is being made without the satisfaction of anycontingency beyond the control of the holder other than the payment ofconsideration and the compliance with administrative mechanics applicable tosuch conversion, exercise or exchange and (d) that were not converted intoor exercised or exchanged for such Units during the period for which thecalculation is being made; provided, however, that for purposesof determining the number of Outstanding Units on a Fully Diluted Basis whencalculating whether the Subordination Period has ended or Subordinated Unitsare entitled to convert into Common Units pursuant to Section 5.07, suchPartnership Securities, options, rights, warrants and appreciation rights shallbe deemed to have been Outstanding Units only for the four Quarters thatcomprise the last four Quarters of the measurement period; and, providedfurther, that if consideration will be paid to any Group Member inconnection with such conversion, exercise or exchange, the number of Units tobe included in such calculation shall be that number equal to the differencebetween (i) the number of Units issuable upon such conversion, exercise orexchange and (ii) the number of Units that such consideration wouldpurchase at the Current Market Price.

 

“GeneralPartner” means OSG America LLC, a Delaware limited liability company, andany of its successors and permitted assigns that are admitted to thePartnership as general partner of the Partnership, in its capacity as generalpartner of the Partnership (except as the context otherwise requires).

 

“GeneralPartner Interest” means the ownership interest of the General Partner in thePartnership (in its capacity as a general partner without reference to anyLimited Partner Interest held by it), which is evidenced by the General PartnerUnits, and includes any and all benefits to which the General Partner isentitled as provided in this Agreement, together with all obligations of theGeneral Partner to comply with the terms and provisions of this Agreement.

 

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“GeneralPartner’s Initial General Partner Interest” has the meaning assigned tosuch term in Section 5.01.

 

“GeneralPartner Unit” means a Partnership Security representing a fractional partof the General Partner Interest and having the rights and obligations specifiedwith respect to the General Partner Interest. A General Partner Unit is not a Unit.

 

“Group”means a Person that with or through any of its Affiliates or Associates has anyagreement, arrangement, understanding or relationship for the purpose ofacquiring, holding, voting (except voting pursuant to a revocable proxy orconsent given to such Person in response to a proxy or consent solicitationmade to 10 or more Persons), exercising investment power or disposing of anyPartnership Securities with any other Person that beneficially owns, or whoseAffiliates or Associates beneficially own, directly or indirectly, PartnershipSecurities.

 

“GroupMember” means a member of the Partnership Group.

 

“GroupMember Agreement” means the partnership agreement of any Group Member,other than the Partnership, that is a limited or general partnership, thelimited liability company agreement of any Group Member that is a limitedliability company, the certificate of incorporation and bylaws (or similarorganizational documents) of any Group Member that is a corporation, the jointventure agreement or similar governing document of any Group Member that is ajoint venture and the governing or organizational or similar documents of anyother Group Member that is a Person other than a limited or generalpartnership, limited liability company, corporation or joint venture, in eachcase as amended, supplemented or restated from time to time.

 

“Holder”(as used in Section 7.12) has the meaning assigned to such term in Section 7.12(a).

 

“IDRReset Election” has the meaning assigned to such term in Section 5.11(a).

 

“IncentiveDistribution Right” means a non-voting Limited Partner Interest issued tothe General Partner, which Limited Partner Interest will confer upon the holderthereof only the rights and obligations specifically provided in this Agreementwith respect to Incentive Distribution Rights (and no other rights otherwiseavailable to or other obligations of a holder of a Partnership Interest).  Notwithstanding anything in this Agreement tothe contrary, the holder of an Incentive Distribution Right shall not beentitled to vote such Incentive Distribution Right on any Partnership matterexcept as may otherwise be required by law.

 

“IncentiveDistributions” means any amount of cash distributed to the holders of theIncentive Distribution Rights pursuant to Sections 6.04(a)(v), (vi) and(vii), and 6.04(b)(iii), (iv) and (v).

 

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“IncrementalIncome Taxes” has the meaning assigned to such term in Section 6.09.

 

“IndemnifiedPersons” has the meaning assigned to such term in Section 7.12(d).

 

“Indemnitee”means (a) the General Partner, (b) any Departing General Partner, (c) anyPerson who is or was an Affiliate of the General Partner or any DepartingGeneral Partner, (d) any Person who is or was a member, manager, partner,director, officer, fiduciary or trustee of any Group Member, the GeneralPartner or any Departing General Partner or any Affiliate of any Group Member,the General Partner or any Departing General Partner, (e) any Person whois or was serving at the request of the General Partner or any DepartingGeneral Partner or any Affiliate of the General Partner or any DepartingGeneral Partner as a member, manager, partner, director, officer, fiduciary ortrustee of another Person; provided, however, that a Person shallnot be an Indemnitee by reason of providing, on a fee-for-services basis,trustee, fiduciary or custodial services, and (f) any Person the GeneralPartner designates as an “Indemnitee” for purposes of this Agreement.

 

“InitialCommon Units” means the Common Units sold in the Initial Offering.

 

“InitialLimited Partners” means OSG Bulk Ships, Inc., OSGAMLP One PercentInterest Corporation and the General Partner (with respect to the IncentiveDistribution Rights received by it pursuant to Section 5.02), and theUnderwriters, in each case upon being admitted to the Partnership in accordancewith Section 10.01.

 

“InitialOffering” means the initial offering and sale of Common Units to thepublic, as described in the Registration Statement.

 

“InitialUnit Price” means (a) with respect to the Common Units and theSubordinated Units, the initial public offering price per Common Unit at whichthe Underwriters offered the Common Units to the public for sale as set forthon the cover page of the prospectus included as part of the RegistrationStatement and first issued at or after the time the Registration Statementfirst became effective or (b) with respect to any other class or series ofUnits, the price per Unit at which such class or series of Units is initiallysold by the Partnership, as determined by the General Partner, in each caseadjusted as the General Partner determines to be appropriate to give effect toany distribution, subdivision or combination of Units.

 

“InterimCapital Transactions” means the following transactions if they occur priorto the Liquidation Date:  (a) borrowings,refinancings or refundings of indebtedness (other than Working CapitalBorrowings and other than for items purchased on open account in the ordinarycourse of business) by any Group Member and sales of debt securities of anyGroup Member; (b) sales of equity interests of any Group Member (includingthe Common Units sold to the Underwriters pursuant to the exercise of theOver-Allotment Option); (c) sales or other voluntary or involuntarydispositions of any

 

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assetsof any Group Member other than (i) sales or other dispositions ofinventory, accounts receivable and other assets in the ordinary course ofbusiness and (ii) sales or other dispositions of assets as part of normalretirements or replacements; (d) the termination of interest rate swapagreements; (e) capital contributions received; and (f) corporatereorganizations or restructurings.

 

“InvestmentCapital Expenditures” means capital expenditures other than MaintenanceCapital Expenditures or Expansion Capital Expenditures.

 

“IRS”means the U.S. Internal Revenue Service.

 

“IssuePrice” means the price at which a Unit is purchased pursuant to theUnderwriting Agreement, net of any sales commission or underwriting discountcharged to the Partnership.

 

“LimitedPartner” means, unless the context otherwise requires, the OrganizationalLimited Partner prior to its withdrawal from the Partnership, each InitialLimited Partner, each additional Person that becomes a Limited Partner pursuantto the terms of this Agreement and any Departing General Partner upon thechange of its status from General Partner to Limited Partner pursuant to Section 11.03,in each case, in such Person’s capacity as a limited partner of thePartnership; provided, however, that when the term “LimitedPartner” is used herein in the context of any vote or other approval, includingArticles XIII and XIV, such term shall not, solely for such purpose,include any holder of an Incentive Distribution Right (solely with respect toits Incentive Distribution Rights and not with respect to any other LimitedPartner Interest held by such Person) except as may otherwise be required bylaw.  Limited Partners may includecustodians, nominees or any other individual or entity in its own or anyrepresentative capacity.

 

“LimitedPartner Interest” means the ownership interest of a Limited Partner in thePartnership, which may be evidenced by Common Units, Class B Units,Subordinated Units, Incentive Distribution Rights or other PartnershipSecurities or a combination thereof or interest therein, and includes any andall benefits to which such Limited Partner is entitled as provided in thisAgreement, together with all obligations of such Limited Partner to comply withthe terms and provisions of this Agreement; provided, however,that when the term “Limited Partner Interest” is used herein in the context ofany vote or other approval, including Articles XIII and XIV, such termshall not, solely for such purpose, include any Incentive Distribution Rightexcept as may otherwise be required by law.

 

“LiquidationDate” means (a) in the case of an event giving rise to the dissolutionof the Partnership of the type described in clauses (a) and (b) ofthe first sentence of Section 12.02, the date on which the applicable timeperiod during which the holders of Outstanding Units have the right to elect tocontinue the business of the Partnership has expired without such an electionbeing made, and (b) in the case of any other event giving rise to thedissolution of the Partnership, the date on which such event occurs.

 

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“LiquidationPreference” shall mean with respect to a Common Unit the greater of (a) theCurrent Market Price of a Common Unit as of the date three trading days priorto the announcement of a proposed liquidation of the Partnership pursuant to Section 12.04and (b) the sum of the Unrecovered Capital and the Cumulative Common UnitArrearage for a Common Unit as of such date.

 

“Liquidator”means one or more Persons selected by the General Partner to perform thefunctions described in Section 12.04 as liquidating trustee of thePartnership within the meaning of the Delaware Act.

 

“MaintenanceCapital Expenditures” means cash expenditures (including expenditures forthe addition or improvement to the capital assets owned by any Group Member orfor the acquisition of existing, or the construction of new, capital assets) ifsuch expenditure is made to maintain over the long term the operating capacityor asset base of the Partnership Group. Maintenance Capital Expenditures shall not include Expansion CapitalExpenditures or Investment Capital Expenditures.  Maintenance Capital Expenditures shallinclude interest (and related fees) on debt incurred and distributions onequity issued, in each case, to finance the construction of a replacement assetand paid during the period beginning on the date that the Group Member entersinto a binding obligation to commence constructing a replacement asset andending on the earlier to occur of the date that such replacement assetCommences Commercial Service or the date that such replacement asset isabandoned or disposed.  Debt incurred orequity issued to fund any such construction period interest payments, or suchconstruction period distributions on equity during such period shall also bedeemed to be debt or equity, as the case may be, incurred to finance the constructionof a replacement asset.

 

“MaritimeLaws” has the meaning assigned to such term in Section 4.10(a).

 

“MergerAgreement” has the meaning assigned to such term in Section 14.01.

 

“MinimumQuarterly Distribution” means $0.375 per Unit per Quarter (or with respectto the period commencing on the Closing Date and ending on December 31,2007, the product of $0.375 multiplied by a fraction of which the numerator isthe number of days in such period and the denominator is the total number ofdays in the fiscal quarter in which the Closing Date occurs), subject toadjustment in accordance with Section 5.11, Section 6.05 and Section 6.09.

 

“NationalSecurities Exchange” means an exchange registered with the Commission underSection 6(a) of the Securities Exchange Act of 1934, as amended,supplemented or restated from time to time, and any successor to such statute,or the Nasdaq Stock Market or any successor thereto.

 

“NetAgreed Value” means (a) in the case of any Contributed Property, theAgreed Value of such property reduced by any liabilities either assumed by thePartnership upon the contribution of such property or to which such property issubject

 

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whencontributed and (b) in the case of any property distributed to a Partnerby the Partnership, the Agreed Value of such property, reduced by anyindebtedness either assumed by such Partner upon the distribution of suchproperty or to which such property is subject at the time of distribution.

 

“NetIncome” means, for any taxable year, the excess, if any, of the Partnership’sitems of income and gain (other than those items taken into account in thecomputation of Net Termination Gain or Net Termination Loss) for such taxableyear over the Partnership’s items of loss and deduction (other than those itemstaken into account in the computation of Net Termination Gain or NetTermination Loss) for such taxable year. The items included in the calculationof Net Income shall be determined in accordance with Section 5.05(b) andshall not include any items specially allocated under Section 6.01(d); providedthat the determination of the items that have been specially allocated under Section 6.01(d) shallbe made as if Section 6.01(d)(xii) were not in this Agreement.

 

“NetLoss” means, for any taxable year, the excess, if any, of the Partnership’sitems of loss and deduction (other than those items taken into account in thecomputation of Net Termination Gain or Net Termination Loss) for such taxableyear over the Partnership’s items of income and gain (other than those itemstaken into account in the computation of Net Termination Gain or NetTermination Loss) for such taxable year. The items included in the calculationof Net Loss shall be determined in accordance with Section 5.05(b) andshall not include any items specially allocated under Section 6.01(d); providedthat the determination of the items that have been specially allocated under Section 6.01(d) shallbe made as if Section 6.01(d)(xii) were not in this Agreement.

 

“NetPositive Adjustments” means, with respect to any Partner, the excess, ifany, of the total positive adjustments over the total negative adjustments madeto the Capital Account of such Partner pursuant to Book-Up Events and Book-DownEvents.

 

“NetTermination Gain” means, for any taxable year, the sum, if positive, of allitems of income, gain, loss or deduction recognized by the Partnership afterthe Liquidation Date. The items included in the determination of NetTermination Gain shall be determined in accordance with Section 5.05(b) andshall not include any items of income, gain or loss specially allocated under Section 6.01(d).

 

“NetTermination Loss” means, for any taxable year, the sum, if negative, of allitems of income, gain, loss or deduction recognized by the Partnership afterthe Liquidation Date. The items included in the determination of NetTermination Loss shall be determined in accordance with Section 5.05(b) andshall not include any items of income, gain or loss specially allocated under Section 6.01(d).

 

“Non-citizenAssignee” means a Person whom the General Partner has determined does notconstitute an Eligible Citizen and as to whose Partnership Interest the GeneralPartner has become the substituted Limited Partner, pursuant to Section 4.09.

 

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“Non-U.S.Citizen” has the meaning assigned to such term in Section 4.10(h)(iii).

 

“Non-U.S.Citizen Redemption Price” has the meaning assigned to such term in Section 4.10(e)(i).

 

“NonrecourseBuilt-in Gain” means with respect to any Contributed Properties or AdjustedProperties that are subject to a mortgage or pledge securing a NonrecourseLiability, the amount of any taxable gain that would be allocated to thePartners pursuant to Sections 6.02(b)(i)(A), 6.02(b)(ii)(A) and6.02(b)(iii) if such properties were disposed of in a taxable transactionin full satisfaction of such liabilities and for no other consideration.

 

“NonrecourseDeductions” means any and all items of loss, deduction or expenditure(including any expenditure described in Section 705(a)(2)(B) of theCode) that, in accordance with the principles of Treasury Regulation Section 1.704-2(b),are attributable to a Nonrecourse Liability.

 

“NonrecourseLiability” has the meaning set forth in Treasury Regulation Section 1.752-1(a)(2).

 

“Noticeof Election to Purchase” has the meaning assigned to such term in Section 15.01(b).

 

“OmnibusAgreement” means that certain Omnibus Agreement, dated as of the ClosingDate, among OSG Shipholding Group, Inc., the General Partner, thePartnership and the Operating Company.

 

“OnePercent” has the meaning assigned to such term in Section 5.01.

 

“OnePercent’s Initial Partner Interest” has the meaning assigned to such termin Section 5.01.

 

“OperatingCompany” means OSG America Operating Company LLC, a Delaware limitedliability company.

 

“Operating Expenditures” means allPartnership Group expenditures (or the Partnership’s proportionate share ofexpenditures in the case of Subsidiaries that are not wholly owned), includingtaxes, reimbursements of the General Partner, repayment of Working CapitalBorrowings, debt service payments, payments made in the ordinary course underinterest rate swap agreements (but excluding payments made in connection withthe termination of any interest rate swap agreement prior to its stipulatedsettlement date), any non-Pro Rata repurchase of Units (other than those madewith the proceeds of an Interim Capital Transaction) and capital expenditures,subject to the following:

 

(a) repayment of Working Capital Borrowings deducted fromOperating Surplus pursuant to clause (b)(iii) of the definition ofOperating Surplus shall not constitute Operating Expenditures when actuallyrepaid;

 

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(b) payments (including prepayments and prepayment penalties) ofprincipal of and premium on indebtedness other than Working Capital Borrowingsshall not constitute Operating Expenditures; and

 

(c) Operating Expenditures shall not include (i) ExpansionCapital Expenditures, Investment Capital Expenditures or actual MaintenanceCapital Expenditures, but shall include Estimated Maintenance CapitalExpenditures, (ii) payment of transaction expenses (including taxes)relating to Interim Capital Transactions or (iii) distributions toPartners.

 

Where capital expenditures consist of both (x) Maintenance CapitalExpenditures and (y) Expansion Capital Expenditures and/or InvestmentCapital Expenditures, the General Partner, with the concurrence of the ConflictsCommittee, shall determine the allocation between the amounts paid for each.

 

“Operating Surplus” means, with respect toany period ending prior to the Liquidation Date, on a cumulative basis andwithout duplication:

 

(a) the sum of (i) an amount equal to two times the amountneeded for any one Quarter for the Partnership to pay a distribution on allUnits, the General Partner Units and the Incentive Distribution Rights at thesame per Unit amount as was distributed immediately preceding the date ofdetermination (or with respect to the period commencing on the Closing Date andending on December 31, 2007, an amount equal to the product of (A) $0.35multiplied by (B) a fraction of which the numerator is the number of daysin such period and the denominator is the total number of days in the fiscalquarter in which the Closing Date occurs multiplied by (C) the number ofUnits and General Partner Units Outstanding on the Record Date with respect tosuch period), (ii) all cash receipts of the Partnership Group (or thePartnership’s proportionate share of cash reserves in the case of Subsidiariesthat are not wholly owned) for the period beginning on the Closing Date andending on the last day of such period, other than cash receipts from InterimCapital Transactions (provided that cash receipts from the termination of aninterest rate swap agreement prior to its specified settlement date shall beincluded in Operating Surplus in equal quarterly installments over theremaining scheduled life of such interest rate swap agreement), (iii) allcash receipts of the Partnership Group (or the Partnership’s proportionateshare of cash reserves in the case of Subsidiaries that are not wholly owned)after the end of such period but on or before the date of determination ofOperating Surplus with respect to such period resulting from Working CapitalBorrowings and (iv) all cash receipts of the Partnership Group after theend of such period but on or before the date of determination of OperatingSurplus with respect to such period resulting from cash distributions receivedon the Partnership’s equity interest in a Person that is not a Subsidiary(excluding any such receipts from the proceeds of a transaction that wouldconstitute an Interim Capital Transaction if undertaken by the Partnership),less

 

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(b) the sum of (i) Operating Expenditures for the periodbeginning on the Closing Date and ending on the last day of such period, (ii) theamount of cash reserves (or the Partnership’s proportionate share of cashreserves in the case of Subsidiaries that are not wholly owned) established bythe General Partner to provide funds for future Operating Expenditures and (iii) allWorking Capital Borrowings not repaid within 12 months after having beenincurred; provided, however, that disbursements made (includingcontributions to a Group Member or disbursements on behalf of a Group Member)or cash reserves established, increased or reduced after the end of such periodbut on or before the date of determination of Available Cash with respect tosuch period shall be deemed to have been made, established, increased orreduced, for purposes of determining Operating Surplus, within such period ifthe General Partner so determines.

 

Notwithstandingthe foregoing, “Operating Surplus” with respect to the Quarter in which theLiquidation Date occurs and any subsequent Quarter shall equal zero.

 

“Opinionof Counsel” means a written opinion of counsel (who may be regular counselto the Partnership or the General Partner or any of its Affiliates) acceptableto the General Partner.

 

“OptionClosing Date” means the date or dates on which any Common Units are sold bythe Partnership to the Underwriters upon exercise of the Over-Allotment Option.

 

“OrganizationalLimited Partner” means OSG Bulk Ships, Inc. in its capacity as theorganizational limited partner of the Partnership pursuant to this Agreement.

 

“OrganizationalLimited Partner’s Initial Limited Partner Interest” has the meaningassigned to such term in Section 5.01.

 

“OSGM”means OSG Ship Management, Inc., a Delaware corporation.

 

“Outstanding”means, with respect to Partnership Securities, all Partnership Securities thatare issued by the Partnership and reflected as outstanding on the Partnership’sbooks and records as of the date of determination; provided, however,that if at any time any Person or Group (other than the General Partner or itsAffiliates) beneficially owns 20% or more of the Outstanding PartnershipSecurities of any class then Outstanding, all Partnership Securities owned bysuch Person or Group shall not be voted on any matter and shall not beconsidered to be Outstanding when sending notices of a meeting of LimitedPartners to vote on any matter (unless otherwise required by law), calculatingrequired votes, determining the presence of a quorum or for other similarpurposes under this Agreement, except that Partnership Securities so ownedshall be considered to be Outstanding for purposes of Section 11.01(b)(iv) (suchPartnership Securities shall not, however, be treated as a separate class ofPartnership Securities for purposes of this Agreement); provided further,that the foregoing limitation shall not

 

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applyto (i) any Person or Group who acquired 20% or more of the OutstandingPartnership Securities of any class then Outstanding directly from the GeneralPartner or its Affiliates, (ii) any Person or Group who acquired 20% ormore of the Outstanding Partnership Securities of any class then Outstandingdirectly or indirectly from a Person or Group described in clause (i); provided,however, that the General Partner shall have notified such Person orGroup in writing that such limitation shall not apply, or (iii) any Personor Group who acquired 20% or more of any Partnership Securities issued by thePartnership with the prior approval of the Board of Directors of the GeneralPartner.

 

“Over-AllotmentOption” means the over-allotment option granted to the Underwriters by thePartnership pursuant to the Underwriting Agreement.

 

“PartnerNonrecourse Debt” has the meaning set forth in Treasury Regulation Section 1.704-2(b)(4).

 

“PartnerNonrecourse Debt Minimum Gain” has the meaning set forth in TreasuryRegulation Section 1.704-2(i)(2).

 

“PartnerNonrecourse Deductions” means any and all items of loss, deduction orexpenditure (including any expenditure described in Section 705(a)(2)(B) ofthe Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(i),are attributable to a Partner Nonrecourse Debt.

 

“Partners”means the General Partner and the Limited Partners.

 

“Partnership”means Overseas America L.P., a Delaware limited partnership, and any successorsthereto.

 

“PartnershipGroup” means the Partnership and its Subsidiaries treated as a singleconsolidated entity.

 

“PartnershipInterests” mean an interest in the Partnership, which shall include theGeneral Partner Interest and Limited Partner Interests.

 

“PartnershipMinimum Gain” means that amount determined in accordance with theprinciples of Treasury Regulation Section 1.704-2(d).

 

“PartnershipSecurity” means any class or series of equity interest in the Partnership(but excluding any options, rights, warrants and appreciation rights relatingto an equity interest in the Partnership), including Common Units, Class BUnits, Subordinated Units, General Partner Units and Incentive DistributionRights.

 

“PerUnit Capital Amount” means, as of any date of determination, the CapitalAccount, stated on a per Unit basis, underlying any Unit held by a Person otherthan the General Partner or any Affiliate of the General Partner who holdsUnits.

 

“PercentageInterest” means as of any date of determination (a) as to the GeneralPartner with respect to General Partner Units and as to any Unitholder with

 

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respectto Units, the product obtained by multiplying (i) 100% less the percentageapplicable to clause (b) below by (ii) the quotient obtained bydividing (A) the number of Units held by such Unitholder or the number ofGeneral Partner Units held by the General Partner, as the case may be, by (B) thetotal number of all Outstanding Units and General Partner Units, and (b) asto the holders of other Partnership Securities issued by the Partnership inaccordance with Section 5.06, the percentage established as a part of suchissuance.  The Percentage Interest withrespect to an Incentive Distribution Right shall at all times be zero.

 

“PermittedPercentage” has the meaning assigned to such term in Section 4.10(h)(iv).

 

“Person”means an individual or a corporation, firm, limited liability company,partnership, joint venture, trust, unincorporated organization, association,government agency or political subdivision thereof or other entity.

 

“Planof Conversion” has the meaning assigned to such term in Section 14.01.

 

“ProRata” means (a) when used with respect to Units or any class thereof,apportioned equally among all designated Units in accordance with their relativePercentage Interests, (b) when used with respect to Partners or RecordHolders, apportioned equally among all Partners or Record Holders in accordancewith their relative Percentage Interests and (c) when used with respect toholders of Incentive Distribution Rights, apportioned equally among all holdersof Incentive Distribution Rights in accordance with the relative number orpercentage of Incentive Distribution Rights held by each such holder.

 

“PurchaseDate” means the date determined by the General Partner as the date forpurchase of all Outstanding Limited Partner Interests of a certain class (otherthan Limited Partner Interests owned by the General Partner and its Affiliates)pursuant to Article XV.

 

“Quarter”means, unless the context requires otherwise, a fiscal quarter of thePartnership, or, with respect to the fiscal quarter of the Partnership whichincludes the Closing Date, the portion of such fiscal quarter after the ClosingDate.

 

“RecaptureIncome” means any gain recognized by the Partnership (computed withoutregard to any adjustment required by Section 734 or Section 743 ofthe Code) upon the disposition of any property or asset of the Partnership,which gain is characterized as ordinary income because it represents therecapture of deductions previously taken with respect to such property orasset.

 

“RecordDate” means the date established by the General Partner or otherwise inaccordance with this Agreement for determining (a) the identity of theRecord Holders entitled to notice of, or to vote at, any meeting of LimitedPartners or entitled to vote by ballot or give approval of Partnership actionin writing without a meeting or entitled to exercise rights in respect of anylawful action of Limited Partners

 

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or(b) the identity of Record Holders entitled to receive any report ordistribution or to participate in any offer.

 

“RecordHolder” means (a) the Person in whose name a Common Unit is registeredon the books of the Transfer Agent as of the opening of business on aparticular Business Day, or (b) with respect to other PartnershipSecurities, the Person in whose name any such other Partnership Securities isregistered on the books that the General Partner has caused to be kept as ofthe opening of business on such Business Day.

 

“RedeemableInterests” means any Partnership Interests for which a redemption noticehas been given, and has not been withdrawn, pursuant to Section 4.09 or Section 4.10.

 

“RegistrationStatement” means the Registration Statement on Form S-1 (Registration No. 333-145341)as it has been or as it may be amended or supplemented from time to time, filedby the Partnership with the Commission under the Securities Act to register theoffering and sale of the Common Units in the Initial Offering.

 

“Regulations”means the applicable Treasury regulations promulgated under the Code, as suchregulations may be amended from time to time (including correspondingprovisions of succeeding regulations).

 

“ReimbursementPayment” means an aggregate amount equal to $136,500,000, to reimburse theOrganizational Limited Partner, One Percent and the General Partner for certainpreformation capital expenditures in respect of Overseas Luxmar, OverseasMaremar and certain other vessels being transferred to the Partnership.

 

“RemainingNet Positive Adjustments” means as of the end of any taxable period, (i) withrespect to the Unitholders holding Common Units, Class B Units orSubordinated Units, the excess of (a) the Net Positive Adjustments of theUnitholders holding Common Units, Class B Units or Subordinated Units asof the end of such period over (b) the sum of those Partners’ Share ofAdditional Book Basis Derivative Items for each prior taxable period, (ii) withrespect to the General Partner (as holder of the General Partner Units), theexcess of (a) the Net Positive Adjustments of the General Partner as ofthe end of such period over (b) the sum of the General Partner’s Share ofAdditional Book Basis Derivative Items with respect to the General PartnerUnits for each prior taxable period, and (iii) with respect to the holdersof Incentive Distribution Rights, the excess of (a) the Net PositiveAdjustments of the holders of Incentive Distribution Rights as of the end ofsuch period over (b) the sum of the Share of Additional Book BasisDerivative Items of the holders of the Incentive Distribution Rights for eachprior taxable period.

 

“RequiredAllocations” means (a) any limitation imposed on any allocation of NetLosses or Net Termination Losses under Section 6.01(b) or Section 6.01(c)(ii) and(b) any allocation of an item of income, gain, loss or deduction

 

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pursuantto Section 6.01(d)(i), Section 6.01(d)(ii), Section 6.01(d)(iv),Section 6.01(d)(vii) or Section 6.01(d)(ix).

 

“ResetMQD” has the meaning assigned to such term in Section 5.11(e).

 

“ResetNotice” has the meaning assigned to such term in Section 5.11(b).

 

“ResidualGain” or “Residual Loss” means any item of gain or loss, as the casemay be, of the Partnership recognized for federal income tax purposes resultingfrom a sale, exchange or other disposition of a Contributed Property orAdjusted Property, to the extent such item of gain or loss is not allocatedpursuant to Section 6.02(b)(i) or 6.02(b)(ii), respectively, toeliminate Book-Tax Disparities.

 

“RetainedConverted Subordinated Units” has the meaning assigned to such term in Section 5.05(c)(ii).

 

“SecondLiquidation Target Amount” has the meaning assigned to such term in Section 6.01(c)(i)(F).

 

“SecondTarget Distribution” means $0.46875 per Unit per Quarter (or, with respectto the period commencing on the Closing Date and ending on December 31,2007, the product of $0.46875 multiplied by a fraction of which the numeratoris the number of days in such period and the denominator is the total number ofdays in the fiscal quarter in which the Closing Date occurs), subject toadjustment in accordance with Section 5.11, Section 6.06 and Section 6.09.

 

“SecuritiesAct” means the Securities Act of 1933, as amended, supplemented or restatedfrom time to time and any successor to such statute.

 

“Shareof Additional Book Basis Derivative Items” means in connection with anyallocation of Additional Book Basis Derivative Items for any taxable period, (i) withrespect to the Unitholders holding Common Units, Class B Units orSubordinated Units, the amount that bears the same ratio to such AdditionalBook Basis Derivative Items as the Unitholders’ Remaining Net PositiveAdjustments as of the end of such period bears to the Aggregate Remaining NetPositive Adjustments as of that time, (ii) with respect to the GeneralPartner (as holder of the General Partner Units), the amount that bears thesame ratio to such Additional Book Basis Derivative Items as the GeneralPartner’s Remaining Net Positive Adjustments as of the end of such period bearsto the Aggregate Remaining Net Positive Adjustment as of that time, and (iii) withrespect to the Partners holding Incentive Distribution Rights, the amount thatbears the same ratio to such Additional Book Basis Derivative Items as theRemaining Net Positive Adjustments of the Partners holding the IncentiveDistribution Rights as of the end of such period bears to the AggregateRemaining Net Positive Adjustments as of that time.

 

“SpecialApproval” means approval by a majority of the members of the ConflictsCommittee acting in good faith.

 

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“Subordinated Unit” means a Partnership Security representing afractional part of the Partnership Interests of all Limited Partners and havingthe rights and obligations specified with respect to Subordinated Units in thisAgreement.  The term “Subordinated Unit”does not include a Common Unit.  ASubordinated Unit that is convertible into a Common Unit shall not constitute aCommon Unit until such conversion occurs.

 

“Subordination Period” means theperiod commencing on the Closing Date and ending on the first to occur of thefollowing dates:

 

(a) the first day of any Quarterbeginning after September 30, 2010, in respect of which (i)(A) distributionsof Available Cash from Operating Surplus on each of the Outstanding CommonUnits, Subordinated Units, General Partner Units and any other OutstandingUnits that are senior or equal in right of distribution to the SubordinatedUnits equaled or exceeded the Minimum Quarterly Distribution during each of thethree consecutive, nonoverlapping four-Quarter periods immediately precedingsuch date and (B) the Adjusted Operating Surplus for each of the threeconsecutive, nonoverlapping four-Quarter periods immediately preceding suchdate equaled or exceeded the sum of the Minimum Quarterly Distribution on allof the Common Units, Subordinated Units, General Partner Units and any otherUnits that are senior or equal in right of distribution to the SubordinatedUnits that were Outstanding during such periods on a Fully Diluted Basis withrespect to each such period and (ii) there are no Cumulative Common UnitArrearages;

 

(b) the first date on which there are nolonger outstanding any Subordinated Units due to the conversion of SubordinatedUnits into Common Units pursuant to Section 5.07 or otherwise; and

 

(c) the date on which the GeneralPartner is removed as general partner of the Partnership upon the requisitevote by holders of Outstanding Units under circumstances where Cause does notexist and no Units held by the General Partner and its Affiliates are voted infavor of such removal.

 

For purposes of determining whether the test in subclause (a)(i)(B) abovehas been satisfied, Adjusted Operating Surplus will be adjusted upwards ordownwards if the Conflicts Committee determines in good faith that the amountof Estimated Maintenance Capital Expenditures used in the determination ofAdjusted Operating Surplus in subclause (a)(i)(B) was materiallyincorrect, based on circumstances prevailing at the time of originaldetermination of Estimated Maintenance Capital Expenditures, for any one ormore of the preceding three four-Quarter periods.

 

“Subsidiary” means, with respect to any Person, (a) acorporation of which more than 50% of the voting power of shares entitled(without regard to the occurrence of any contingency) to vote in the electionof directors or other governing body of such corporation is owned, directly orindirectly, at the date of determination, by such Person, by one or moreSubsidiaries of such Person or a combination thereof, (b) a partnership

 

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(whether general or limited) in which such Person or a Subsidiary ofsuch Person is, at the date of determination, a general or limited partner ofsuch partnership, but only if more than 50% of the partnership interests ofsuch partnership (considering all of the partnership interests of thepartnership as a single class) is owned, directly or indirectly, at the date ofdetermination, by such Person, by one or more Subsidiaries of such Person, or acombination thereof, or (c) any other Person (other than a corporation ora 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 toelect or direct the election of a majority of the directors or other governingbody of such Person.

 

“Surviving Business Entity” has the meaning assigned to suchterm in Section 14.02(b)(ii).

 

“Target Distributions” means, collectively, the First TargetDistribution, Second Target Distribution and Third Target Distribution.

 

“Third Liquidation Target Amount” has the meaning assigned tosuch term in Section 6.01(c)(i)(G).

 

“Third Target Distribution” means $0.5625 per unit per Quarter(or, with respect to the period commencing on the Closing Date and ending on December 31,2007, the product of $0.5625 multiplied by a fraction of which the numerator isequal to the number of days in such period and the denominator is the total numberof days in the fiscal quarter in which the Closing Date occurs), subject toadjustment in accordance with Section 5.11, Section 6.06 and Section 6.09.

 

“Trading Day” means, for the purpose of determining the CurrentMarket Price of any class of Limited Partner Interests, a day on which theprincipal National Securities Exchange on which such class of Limited PartnerInterests is listed or admitted to trading is open for the transaction ofbusiness or, if Limited Partner Interests of a class are not listed or admittedto trading on any National Securities Exchange, a day on which bankinginstitutions in New York City generally are open.

 

“transfer” has the meaning assigned to such term in Section 4.04(a).

 

“Transfer Agent” means such bank, trust company or other Person(including the General Partner or one of its Affiliates) as shall be appointedfrom time to time by the General Partner to act as registrar and transfer agentfor the Common Units; provided, however, that if no TransferAgent is specifically designated for any other Partnership Securities, theGeneral Partner shall act in such capacity.

 

“Transfer Application” means a properly completed applicationand agreement for transfer of Units in the form set forth on the back of aCertificate or in a form substantially to the same effect in a separateinstrument.

 

“Treasury Regulation” means a Treasury regulation promulgatedunder the Code.

 

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“Underwriter” means each Person named as an underwriter in Schedule Ito the Underwriting Agreement who purchases Common Units pursuant thereto.

 

“Underwriting Agreement” means the Underwriting Agreementdated               ,2007 among the Underwriters, the Partnership, the General Partner, OSG BulkShips, Inc. and the other parties thereto, providing for the purchase ofCommon Units by such Underwriters.

 

“Unit” means a Partnership Security that is designated as a “Unit”and shall include Common Units, Class B Units and Subordinated Units butshall not include (i) General Partner Units (or the General PartnerInterest represented thereby) or (ii) Incentive Distribution Rights.

 

“Unitholders” means the holders of Units.

 

“Unit Majority” means, during the Subordination Period, at leasta majority of the Outstanding Common Units (excluding Common Units owned by theGeneral Partner and its Affiliates) voting as a class and at least a majorityof the Outstanding Subordinated Units voting as a class, and after the end ofthe Subordination Period, at least a majority of the Outstanding Common Unitsand Class B Units, if any, voting as a single class.

 

“Unit Register” means the register of the Partnership for theregistration and transfer of Limited Partnership Interests as provided in Section 4.05.

 

“Unpaid MQD” has the meaning assigned to such term in Section 6.01(c)(i)(B).

 

“Unrealized Gain” attributable to any item of Partnershipproperty means, as of any date of determination, the excess, if any, of (a) thefair market value of such property as of such date (as determined under Section 5.05(d))over (b) the Carrying Value of such property as of such date (prior to anyadjustment to be made pursuant to Section 5.05(d) as of such date).

 

“Unrealized Loss” attributable to any item of Partnershipproperty means, as of any date of determination, the excess, if any, of (a) theCarrying Value of such property as of such date (prior to any adjustment to bemade pursuant to Section 5.05(d) as of such date) over (b) thefair market value of such property as of such date (as determined under Section 5.05(d)).

 

“Unrecovered Capital” means at any time, with respect to a Unit,the Initial Unit Price less the sum of all distributions constituting CapitalSurplus previously made in respect of an Initial Common Unit and anydistributions of cash (or the Net Agreed Value of any distributions in kind) inconnection with the dissolution and liquidation of the Partnership previouslymade in respect of an Initial Common Unit, adjusted as the General Partnerdetermines to be appropriate to give effect to any distribution, subdivision orcombination of such Units.

 

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“U.S. Citizen” has the meaning assigned to such term in Section 4.10(h)(ii).

 

“U.S. GAAP” means United States generally accepted accountingprinciples consistently applied.

 

“Withdrawal Opinion of Counsel” has the meaning assigned to suchterm in Section 11.01(b).

 

“Working Capital Borrowings” means borrowings used solely forworking capital purposes or to pay distributions to Partners made pursuant to acredit facility, commercial paper facility or similar financing arrangementavailable to a Group Member, provided, however, that when suchborrowing is incurred it is the intent of the borrower to repay such borrowingwithin 12 months from other than additional Working Capital Borrowings.

 

## SECTION 1.02.  Construction.  Unless the context requires otherwise:  (a) any pronoun used in this Agreementshall include the corresponding masculine, feminine or neuter forms, and thesingular form of nouns, pronouns and verbs shall include the plural and viceversa; (b) references to Articles and Sections refer to Articles andSections of this Agreement; (c) the terms “include” or “includes” meansincludes, without limitation, and “including” means including, withoutlimitation; and (d) the terms “hereof”, “herein” and “hereunder” refer tothis Agreement as a whole and not to any particular provision of thisAgreement.  Unless otherwise expresslyprovided herein, any statute or law defined or referred to herein means suchstatute or law as from time to time amended, modified or supplemented,including by succession of comparable successor statutes or laws.  The table of contents and headings containedin this Agreement are for reference purposes only, and shall not affect in anyway the meaning or interpretation of this Agreement.

##  

ARTICLE II

 

Organization

 

## SECTION 2.01.  Formation.  The General Partner and the OrganizationalLimited Partner have previously formed the Partnership as a limited partnershippursuant to the provisions of the Delaware Act. The General Partner, the Organizational Limited Partner and One Percenthereby amend and restate the original Agreement of Limited Partnership ofOverseas America L.P. in its entirety. This amendment and restatement shall become effective on the date ofthis Agreement.  Except as expresslyprovided to the contrary in this Agreement, the rights, duties (includingfiduciary duties), liabilities and obligations of the Partners and theadministration, dissolution and termination of the Partnership shall begoverned by the Delaware Act.  AllPartnership Interests shall constitute personal property of the owner thereoffor all purposes.

##  

## SECTION 2.02.  Name. The name of the Partnership shall be “Overseas America L.P.”.  The Partnership’s business may be conductedunder any other name or

 

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## names as determined by the General Partner,including the name of the General Partner. The words “Limited Partnership” or letters “L.P.” or “Ltd.” or similarwords or letters shall be included in the Partnership’s name where necessaryfor the purpose of complying with the laws of any jurisdiction that sorequires.  The General Partner may changethe name of the Partnership at any time and from time to time and shall notifythe Limited Partners of such change in the next regular communication to theLimited Partners.

##  

## SECTION 2.03.  Registered Office; Registered Agent;Principal Office; Other Offices. Unless and until changed by the General Partner, the registered officeof the Partnership in the State of Delaware shall be located at1209 Orange Street, Wilmington, County of New Castle, Delaware 19801,and the registered agent for service of process on the Partnership in the Stateof Delaware at such registered office shall be The Corporation TrustCompany.  The principal office of thePartnership shall be located at Two Harbour Place, 302 Knights Run Avenue,Suite 1200, Tampa, Florida 33602 or such other place as the GeneralPartner may from time to time designate by notice to the Limited Partners.  The Partnership may maintain offices at suchother place or places within or outside the State of Delaware as the GeneralPartner determines to be necessary or appropriate.  The address of the General Partner shall beTwo Harbour Place, 302 Knights Run Avenue, Suite 1200, Tampa,Florida 33602 or such other place as the General Partner may from time totime designate by notice to the Limited Partners.

##  

## SECTION 2.04.  Purpose and Business.  The purpose and nature of the business to beconducted by the Partnership shall be to (a) engage directly in, or enterinto or form, hold and dispose of any corporation, partnership, joint venture,limited liability company or other arrangement to engage indirectly in, anybusiness activity that is approved by the General Partner and that lawfully maybe conducted by a limited partnership organized pursuant to the Delaware Actand, in connection therewith, to exercise all of the rights and powers conferredupon the Partnership pursuant to the agreements relating to such businessactivity, and (b) do anything necessary or appropriate to the foregoing,including the making of capital contributions or loans to a Group Member; provided,however, that the General Partner shall not cause the Partnership toengage, directly or indirectly, in any business activity that the GeneralPartner determines would cause the Partnership to be treated as an associationtaxable as a corporation or otherwise taxable as an entity for federal incometax purposes.  To the fullest extentpermitted by law, the General Partner shall have no duty or obligation topropose or approve, and may decline to propose or approve, the conduct by thePartnership of any business free of any fiduciary duty or obligation whatsoeverto the Partnership or any Limited Partner and, in declining to so propose orapprove, shall not be required to act in good faith or pursuant to any otherstandard imposed by this Agreement, any Group Member Agreement, any otheragreement contemplated hereby or under the Delaware Act or any other law, rule orregulation or at equity.

##  

## SECTION 2.05.  Powers.  The Partnership shall be empowered to do anyand all acts and things necessary, appropriate or convenient for the furtheranceand accomplishment of the purposes and business described in Section 2.04and for the protection and benefit of the Partnership.

 

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## SECTION 2.06.  Power of Attorney.  (a)  Each Limited Partner hereby constitutesand appoints the General Partner and, if a Liquidator shall have been selectedpursuant to Section 12.03, the Liquidator (and any successor to theLiquidator by merger, transfer, assignment, election or otherwise) and each oftheir authorized officers and attorneys-in-fact, as the case may be, with fullpower of substitution, as his true and lawful agent and attorney-in-fact, withfull 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) allcertificates, documents and other instruments (including this Agreement and theCertificate of Limited Partnership and all amendments or restatements hereof orthereof) that the General Partner or the Liquidator determines to be necessaryor appropriate to form, qualify or continue the existence or qualification ofthe Partnership as a limited partnership (or a partnership in which the limitedpartners have limited liability) in the State of Delaware and in all otherjurisdictions in which the Partnership may conduct business or own property; (B) allcertificates, documents and other instruments that the General Partner or theLiquidator determines to be necessary or appropriate to reflect, in accordancewith its terms, any amendment, change, modification or restatement of thisAgreement; (C) all certificates, documents and other instruments(including conveyances and a certificate of cancellation) that the GeneralPartner or the Liquidator determines to be necessary or appropriate to reflectthe dissolution and liquidation of the Partnership pursuant to the terms ofthis Agreement; (D) all certificates, documents and other instrumentsrelating to the admission, withdrawal, removal or substitution of any Partner pursuantto, or other events described in, Article IV, Article X, Article XIor Article XII; (E) all certificates, documents and other instrumentsrelating to the determination of the rights, preferences and privileges of anyclass or series of Partnership Securities issued pursuant to Section 5.06;and (F) all certificates, documents and other instruments (includingagreements and a certificate of merger or conversion) relating to a merger,consolidation or conversion of the Partnership pursuant to Article XIV;and

 

(ii)  execute, swear to, acknowledge,deliver, file and record all ballots, consents, approvals, waivers,certificates, documents and other instruments that the General Partner or theLiquidator determines to be necessary or appropriate to (A) make,evidence, give, confirm or ratify any vote, consent, approval, agreement orother action that is made or given by the Partners hereunder or is consistentwith the terms of this Agreement or (B) effectuate the terms or intent ofthis Agreement; provided, however, that when required by Section 13.03or any other provision of this Agreement that establishes a percentage of theLimited Partners or of the Limited Partners of any class or series required totake any action, the General Partner and the Liquidator may exercise the powerof attorney made in this Section 2.06(a)(ii) only after the necessaryvote, consent or approval of the Limited Partners or of the Limited Partners ofsuch class or series, as applicable.

 

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Nothing contained in this Section 2.06(a) shall be construedas authorizing the General Partner to amend this Agreement except in accordancewith Article XIII or as may be otherwise expressly provided for in thisAgreement.

 

### (b)  The foregoing powerof attorney is hereby declared to be irrevocable and a power coupled with aninterest, and it shall survive and, to the maximum extent permitted by law, notbe affected by the subsequent death, incompetency, disability, incapacity,dissolution, bankruptcy or termination of any Limited Partner or the transferof all or any portion of such Limited Partner’s Limited Partner Interest andshall extend to such Limited Partner’s heirs, successors, assigns and personalrepresentatives.  Each such Limited Partnerhereby agrees to be bound by any representation made by the General Partner orthe Liquidator acting in good faith pursuant to such power of attorney, andeach such Limited Partner, to the maximum extent permitted by law, herebywaives any and all defenses that may be available to contest, negate ordisaffirm the action of the General Partner or the Liquidator taken in goodfaith under such power of attorney.  EachLimited Partner shall execute and deliver to the General Partner or theLiquidator, within 15 days after receipt of the request therefor, suchfurther designation, powers of attorney and other instruments as the GeneralPartner or the Liquidator may request in order to effectuate this Agreement andthe purposes of the Partnership.

###  

SECTION 2.07.  Term.  The term of the Partnership commenced uponthe filing of the Certificate of Limited Partnership in accordance with theDelaware Act and shall continue in existence until the dissolution of thePartnership in accordance with the provisions of Article XII.  The existence of the Partnership as aseparate legal entity shall continue until the cancellation of the Certificateof Limited Partnership as provided in the Delaware Act.

 

SECTION 2.08.  Title toPartnership Assets.  Title toPartnership assets, whether real, personal or mixed and whether tangible orintangible, shall be deemed to be owned by the Partnership as an entity, and noPartner, individually or collectively, shall have any ownership interest insuch Partnership assets or any portion thereof. Title to any or all of the Partnership assets may be held in the name ofthe Partnership, the General Partner, one or more of its Affiliates or one ormore nominees, as the General Partner may determine.  The General Partner hereby declares and warrantsthat any Partnership assets for which record title is held in the name of theGeneral Partner or one or more of its Affiliates or one or more nominees shallbe held by the General Partner or such Affiliate or nominee for the use andbenefit of the Partnership in accordance with the provisions of this Agreement;provided, however, that the General Partner shall usecommercially reasonable efforts to cause record title to such assets (otherthan those assets in respect of which the General Partner determines that theexpense and difficulty of conveyancing makes transfer of record title to thePartnership impracticable) to be vested in the Partnership as soon asreasonably practicable; and, provided further, that, prior to thewithdrawal or removal of the General Partner or as soon thereafter aspracticable, the General Partner shall use commercially reasonable efforts toeffect the transfer of record title to the Partnership and, prior to any suchtransfer, will provide for the use of such assets in a manner satisfactory tothe General Partner.  All Partnership

 

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assets shall be recorded as the property of the Partnership in itsbooks and records, irrespective of the name in which record title to such Partnershipassets is held.

 

ARTICLE III

 

Rights of Limited Partners

 

## SECTION 3.01.  Limitation of Liability.  The Limited Partners shall have no liabilityunder this Agreement except as expressly provided in this Agreement or theDelaware Act.

##  

## SECTION 3.02.  Management of Business.  No Limited Partner, in its capacity as such,shall participate in the operation, management or control (within the meaningof the Delaware Act) of the Partnership’s business, transact any business inthe Partnership’s name or have the power to sign documents for or otherwisebind the Partnership.  Any action takenby any Affiliate of the General Partner or any officer, director, employee,manager, member, general partner, agent or trustee of the General Partner orany of its Affiliates, or any officer, director, employee, manager, member,general partner, agent or trustee of a Group Member, in its capacity as such,shall not be deemed to be participation in the control of the business of thePartnership by a limited partner of the Partnership (within the meaning of Section 17-303(a) ofthe Delaware Act) and shall not affect, impair or eliminate the limitations onthe liability of the Limited Partners under this Agreement.

##  

## SECTION 3.03.  Outside Activities of the LimitedPartners.  Subject to the provisionsof Section 7.05, which shall continue to be applicable to the Personsreferred to therein, regardless of whether such Persons shall also be LimitedPartners, any Limited Partner shall be entitled to and may have businessinterests and engage in business activities in addition to those relating tothe Partnership, including business interests and activities in directcompetition with the Partnership Group. Neither the Partnership nor any of the other Partners shall have anyrights by virtue of this Agreement in any business ventures of any LimitedPartner.

 

## SECTION 3.04.  Rights of Limited Partners.  (a)  In addition to other rightsprovided by this Agreement or by applicable law, and except as limited by Section 3.04(b),each Limited Partner shall have the right, for a purpose reasonably related tosuch Limited Partner’s interest as a Limited Partner in the Partnership, uponreasonable written demand stating the purpose of such demand, and at suchLimited Partner’s own expense, to obtain from the General Partner:

 

(i)  true and full information regardingthe status of the business and financial condition of the Partnership (providedthat the requirements of this Section 3.04(a)(i) shall be satisfiedby furnishing to a Limited Partner upon its demand pursuant to this Section 3.04(a)(i) thePartnership’s most recent filings with the Commission on Form 10-K and anysubsequent filings on Form 10-Q and 8-K);

 

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(ii)  promptly after becoming available,a copy of the Partnership’s federal, state and local income tax returns foreach year;

 

(iii)  a current list of the name andlast known business, residence or mailing address of each Partner;

 

(iv)  a copy of this Agreement and theCertificate of Limited Partnership and all amendments thereto, together with acopy of the executed copies of all written powers of attorney pursuant to whichthis Agreement, the Certificate of Limited Partnership and all amendmentsthereto have been executed;

 

(v)  true and full information regardingthe amount of cash and a description and statement of the Net Agreed Value ofany other Capital Contribution by each Partner and which each Partner hasagreed to contribute in the future, and the date on which each became aPartner; and

 

(vi)  such other information regardingthe affairs of the Partnership as is just and reasonable.

 

(b)  The General Partner may keep confidential from the LimitedPartners, for such period of time as the General Partner deems reasonable, (i) anyinformation that the General Partner reasonably believes to be in the nature oftrade secrets or (ii) other information the disclosure of which theGeneral Partner in good faith believes (A) is not in the best interest ofthe Partnership Group, (B) could damage the Partnership Group or itsbusiness or (C) which any Group Member is required by law or by agreementwith any third party to keep confidential (other than agreements withAffiliates of the Partnership the primary purpose of which is to circumvent theobligations set forth in this Section 3.04).

 

ARTICLE IV

 

Certificates; Record Holders; Transfer of Partnership Interests

 

SECTION 4.01.  Certificates.  Upon the Partnership’s issuance of CommonUnits, Subordinated Units or Class B Units to any Person, the Partnershipshall issue, upon the request of such Person, one or more Certificates in thename of such Person (or, if issued in global form, in the name of theDepositary or its nominee) evidencing the number of such Units being so issued.  In addition, (a) upon the GeneralPartner’s request, the Partnership shall issue to it one or more Certificatesin the name of the General Partner evidencing its General Partner Units and (b) uponthe request of any Person owning Incentive Distribution Rights or any otherPartnership Securities other than Common Units, Subordinated Units or Class BUnits, the Partnership shall issue to such Person one or more Certificatesevidencing such Incentive Distribution Rights or other Partnership Securitiesother than Common Units, Subordinated Units or Class B Units.  Certificates shall be executed on behalf ofthe Partnership by the Chairman of the Board of Directors, Chief ExecutiveOfficer, President or any Executive Vice President, Senior Vice President orVice President and the Secretary or any Assistant Secretary of

 

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the General Partner.  No CommonUnit Certificate shall be valid for any purpose until it has been countersignedby the Transfer Agent; provided, however, that the Units may becertificated or uncertificated as provided in the Delaware Act; providedfurther, that if the General Partner elects to issue Common Units in globalform, the Common Unit Certificates shall be valid upon receipt of a certificatefrom the Transfer Agent certifying that the Common Units have been dulyregistered in accordance with the directions of the Partnership.  Subject to the requirements of Section 6.07(b),the Partners holding Certificates evidencing Subordinated Units may exchangesuch Certificates for Certificates evidencing Common Units on or after the dateon which such Subordinated Units are converted into Common Units pursuant tothe terms of Section 5.07.  Subjectto the requirements of Section 6.07(d), the Partners holding Certificatesevidencing Class B Units may exchange such Certificates for Certificatesevidencing Common Units on or after the period set forth in Section 5.11(f) pursuantto the terms of Section 5.11.

 

SECTION 4.02.  Mutilated,Destroyed, Lost or Stolen Certificates. (a)  If any mutilated Certificate is surrendered to the TransferAgent (for Common Units) or the General Partner (for Partnership Securitiesother than Common Units), the appropriate officers of the General Partner onbehalf of the Partnership shall execute, and the Transfer Agent (for CommonUnits) or the General Partner (for Partnership Securities other than CommonUnits) shall countersign and deliver in exchange therefor, a new Certificateevidencing the same number and type of Partnership Securities as theCertificate so surrendered.

 

#### (b)  The appropriateofficers of the General Partner on behalf of the Partnership shall execute anddeliver, and the Transfer Agent (for Common Units) shall countersign, a newCertificate in place of any Certificate previously issued, or issueuncertificated Common Units, if the Record Holder of the Certificate:

###  

#### (i)  makes proof by affidavit, in form and substance satisfactoryto the General Partner, that a previously issued Certificate has been lost,destroyed or stolen;

####  

#### (ii)  requests the issuance of a new Certificate or the issuanceof uncertificated Units before the General Partner has notice that theCertificate has been acquired by a purchaser for value in good faith andwithout notice of an adverse claim;

####  

#### (iii)  if requested by the General Partner, delivers to theGeneral Partner a bond, in form and substance satisfactory to the GeneralPartner, with surety or sureties and with fixed or open penalty as the GeneralPartner may direct to indemnify the Partnership, the Partners, the GeneralPartner and the Transfer Agent against any claim that may be made on account ofthe alleged loss, destruction or theft of the Certificate; and

####  

#### (iv)  satisfies any other reasonable requirements imposed by theGeneral Partner.

 

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If a Limited Partner fails to notify the General Partner within areasonable period of time after he has notice of the loss, destruction or theftof a Certificate, and a transfer of the Limited Partner Interests representedby the Certificate is registered before the Partnership, the General Partner orthe Transfer Agent receives such notification, the Limited Partner shall beprecluded from making any claim against the Partnership, the General Partner orthe Transfer Agent for such transfer or for a new Certificate or uncertificatedUnits.

 

(c)  As a condition to the issuance of any new Certificate oruncertificated Units under this Section 4.02, the General Partner mayrequire the payment of a sum sufficient to cover any tax or other governmentalcharge that may be imposed in relation thereto and any other expenses(including the fees and expenses of the Transfer Agent) reasonably connectedtherewith.

 

## SECTION 4.03.  Record Holders.  The Partnership shall be entitled torecognize the Record Holder as the Partner with respect to any PartnershipInterest and, accordingly, shall not be bound to recognize any equitable orother claim to, or interest in, such Partnership Interest on the part of any otherPerson, regardless of whether the Partnership shall have actual or other noticethereof, except as otherwise provided by law or any applicable rule,regulation, guideline or requirement of any National Securities Exchange onwhich such Partnership Interests are listed or admitted to trading.  Without limiting the foregoing, when a Person(such as a broker, dealer, bank, trust company or clearing corporation or anagent of any of the foregoing) is acting as nominee, agent or in some otherrepresentative capacity for another Person in acquiring and/or holdingPartnership Interests, as between the Partnership on the one hand, and suchother Persons on the other, such representative Person (a) shall be thePartner of record and beneficially, (b) must execute and deliver aTransfer Application and a Citizen Certification on behalf of such nominee,agent or representative and of the Person for whom he is acting in suchcapacity and (c) shall be bound by this Agreement and shall have therights and obligations of a Partner hereunder and as, and to the extent,provided for herein.

##  

## SECTION 4.04.  Transfer Generally.  (a)  The term “transfer,” when used inthis Agreement with respect to a Partnership Interest, shall be deemed to referto a transaction (i) by which the General Partner assigns its GeneralPartner Units to another Person or by which a holder of Incentive DistributionRights assigns its Incentive Distribution Rights to another Person, andincludes a sale, assignment, gift, pledge, encumbrance, hypothecation,mortgage, exchange or any other disposition by law or otherwise or (ii) bywhich the holder of a Limited Partner Interest (other than an IncentiveDistribution Right) assigns such Limited Partner Interest to another Person whois or becomes a Limited Partner, and includes a sale, assignment, gift,exchange or any other disposition by law or otherwise, excluding a pledge,encumbrance, hypothecation or mortgage but including any transfer uponforeclosure of any pledge, encumbrance, hypothecation or mortgage.

 

(b)  No Partnership Interest shall be transferred, in whole or inpart, except in accordance with the terms and conditions set forth in this Article IV.  Any transfer or

 

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purported transfer of a Partnership Interest not made in accordancewith this Article IV shall be null and void.

 

(c)  Nothing contained in this Agreement shall be construed toprevent a disposition by any stockholder, member, partner or other owner of theGeneral Partner of any or all of the shares of stock, membership interests,partnership interests or other ownership interests in the General Partner.

 

SECTION 4.05.  Registrationand Transfer of Limited Partner Interests. (a)  The General Partner shall keep or cause to be kept on behalfof the Partnership a register in which, subject to such reasonable regulationsas it may prescribe and subject to the provisions of Section 4.05(c), thePartnership will provide for the registration and transfer of Limited PartnerInterests.  The Transfer Agent is herebyappointed registrar and transfer agent for the purpose of registering CommonUnits and transfers of such Common Units as herein provided.  The Partnership shall not recognize transfersof Certificates evidencing Limited Partner Interests or transfers ofuncertificated Units unless such transfers are effected in the manner describedin this Section 4.05.

 

(b)  Upon surrender of a Certificate for registration of transferof any Limited Partner Interests evidenced by a Certificate, and subject to theprovisions of Section 4.05(c), the appropriate officers of the GeneralPartner on behalf of the Partnership shall execute and deliver, and in the caseof Common Units, the Transfer Agent shall countersign and deliver, in the nameof the holder or the designated transferee or transferees, as required pursuantto the holder’s instructions, one or more new Certificates evidencing the sameaggregate number and type of Limited Partner Interests as was evidenced by theCertificate so surrendered or upon request of the Person entitled thereto newequivalent uncertificated Units shall be issued to such Person and thetransaction shall be recorded upon the books of the Partnership.

 

(c)  Except as otherwise provided in Section 4.09 and subjectto Section 4.10, the General Partner shall not recognize any transfer ofLimited Partner Interests until the Certificates evidencing such LimitedPartner Interests are surrendered for registration of transfer and suchCertificates are accompanied by a Transfer Application and CitizenshipCertification properly completed and duly executed by the transferee (or thetransferee’s attorney-in-fact duly authorized in writing).  No charge shall be imposed by the GeneralPartner for such transfer; provided, however, that as a conditionto the issuance of any new Certificate under this Section 4.05, theGeneral Partner may require the payment of a sum sufficient to cover any tax orother governmental charge that may be imposed with respect thereto.

 

(d)  Upon the receipt of proper transfer instructions from theregistered owner of uncertificated Units, and subject to Section 4.05(e),such uncertificated Units shall be canceled, issuance of new equivalentuncertificated Units shall be made to the Person entitled thereto and thetransaction shall be recorded upon the books of the Partnership or upon therequest of the Person entitled thereto the appropriate officers of the GeneralPartner on behalf of the Partnership shall execute and deliver, and in the caseof Common Units, the Transfer Agent shall countersign and deliver, in the nameof the

 

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holder of the designated transferee or transferees, as requestedpursuant to the holder’s instructions, one or more new Certificates evidencingthe aggregate number and type of such uncertificated Units.

 

(e)  Except as otherwise provided in Section 4.09 and subjectto Section 4.10, the General Partner shall not recognize any transfer ofuncertificated Units until the transfer instructions from the registered ownerof such uncertificated Units are accompanied by a Transfer Application andCitizenship Certification, properly completed and duly executed by thetransferee (or the transferee’s attorney-in-fact duly authorized inwriting).  No charge shall be imposed bythe General Partner for such transfer; provided, however, that asa condition to the issuance of any new Certificate under this Section 4.05,the General Partner may require the payment of a sum sufficient to cover anytax or other governmental charge that may be imposed with respect thereto.

 

(f)  Subject to Section 4.10, the General Partner and itsAffiliates shall have the right at any time to transfer their SubordinatedUnits, Class B Units and Common Units (whether issued upon conversion ofthe Subordinated Units or Class B Units, as the case may be, or otherwise)to one or more Persons.

 

SECTION 4.06.  Transferof the General Partner’s General Partner Interest.  (a)  Subject to Section 4.06(c) below,prior to June 30, 2017, the General Partner shall not transfer all or anypart of its General Partner Interest (represented by General Partner Units) toa Person unless such transfer (i) has been approved by the prior writtenconsent or vote of the holders of at least a majority of the Outstanding CommonUnits (excluding Common Units held by the General Partner and its Affiliates)or (ii) is of all, but not less than all, of its General Partner Interestto (A) an Affiliate of the General Partner (other than an individual) or (B) anotherPerson (other than an individual) in connection with (1) the merger orconsolidation of the General Partner with or into such other Person or (2) thetransfer by the General Partner of all or substantially all of its assets tosuch other Person.

 

(b)  Subject to Section 4.06(c) below, on or after June 30,2017, the General Partner may transfer all or any of its General PartnerInterest without Unitholder approval.

 

(c)  Notwithstanding anything herein to the contrary, no transferby the General Partner of all or any part of its General Partner Interest toanother Person shall be permitted unless (i) the transferee is a U.S.Citizen as evidenced by the submission of a Transfer Application andCitizenship Certification properly completed and duly executed by thetransferee, (ii) the transferee agrees to assume the rights and duties ofthe General Partner under this Agreement and to be bound by the provisions ofthis Agreement, (iii) the Partnership receives an Opinion of Counsel thatsuch transfer would not result in the loss of limited liability of any LimitedPartner under the Delaware Act or cause the Partnership to be treated as anassociation taxable as a corporation or otherwise to be taxed as an entity forfederal income tax purposes (to the extent not already so treated or taxed) and(iv) such transferee also agrees to purchase all (or the appropriateportion thereof, if applicable) of the partnership or membership interest ofthe General Partner as

 

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the general partner or managing member, if any, of each other GroupMember.  In the case of a transferpursuant to and in compliance with this Section 4.06, the transferee orsuccessor (as the case may be) shall, subject to compliance with the terms of Section 10.03,be admitted to the Partnership as the General Partner immediately prior to thetransfer of the General Partner Interest, and the business of the Partnershipshall continue without dissolution.

 

SECTION 4.07.  Transferof Incentive Distribution Rights. Prior to June 30, 2017, a holder of Incentive Distribution Rightsmay transfer any or all of the Incentive Distribution Rights held by suchholder without any consent of the Unitholders to (a) an Affiliate of suchholder (other than an individual) or (b) another Person (other than anindividual) in connection with (i) the merger or consolidation of suchholder with or into such other Person, (ii) the transfer by such holder ofall or substantially all of its assets to such other Person or (iii) thesale of all the ownership interests in such holder.  Any other transfer of the IncentiveDistribution Rights prior to June 30, 2017, shall require the priorapproval of holders of at least a majority of the Outstanding Common Units(excluding Common Units held by the General Partner and its Affiliates).  On or after June 30, 2017, the GeneralPartner or any other holder of Incentive Distribution Rights may transfer anyor all of its Incentive Distribution Rights without Unitholder approval.  Notwithstanding anything herein to thecontrary, (a) the transfer of Class B Units issued pursuant to Section 5.11,or the transfer of Common Units issued upon conversion of the Class BUnits, shall not be treated as a transfer of all or any part of the IncentiveDistribution Rights and (b) no transfer of Incentive Distribution Rightsto another Person shall be permitted unless the transferee agrees to be boundby the provisions of this Agreement.  TheGeneral Partner and any transferee or transferees of the Incentive DistributionRights may agree in a separate instrument as to the General Partner’s exerciseof its rights with respect to the Incentive Distribution Rights under Section 11.03hereof.

 

SECTION 4.08.  Restrictionson Transfers.  (a)  Except asprovided in Section 4.08(e) below, and notwithstanding the otherprovisions of this Article IV, no transfer of any Partnership Interestsshall be made if such transfer would (i) violate the then applicablefederal or state securities laws or rules and regulations of theCommission, any state securities commission or any other governmental authoritywith jurisdiction over such transfer, (ii) terminate the existence orqualification of the Partnership or any Group Member under the laws of thejurisdiction of its formation, (iii) cause the Partnership or any GroupMember to be treated as an association taxable as a corporation or otherwise tobe taxed as an entity for federal income tax purposes (to the extent notalready so treated or taxed), or (iv) cause the Partnership to violate theprovisions of Section 4.10.

 

### (b)  The General Partnermay impose restrictions on the transfer of Partnership Interests if it receivesan Opinion of Counsel that such restrictions are necessary to avoid asignificant risk of any Group Member becoming taxable as a corporation orotherwise becoming taxable as an entity for federal income tax purposes. TheGeneral Partner may impose such restrictions by amending this Agreement; provided,however, that any amendment that would result in the delisting orsuspension

 

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### of trading of any class of Limited PartnerInterests on the principal National Securities Exchange on which such class ofLimited Partner Interests is then listed or admitted to trading must beapproved, prior to such amendment being effected, by the holders of at least amajority of the Outstanding Limited Partner Interests of such class.

###  

(c)  The transfer of a Subordinated Unit that has converted into aCommon Unit shall be subject to the restrictions imposed by Section 6.07(c).

 

(d)  The transfer of a Class B Unit that has converted into aCommon Unit shall be subject to the restrictions imposed by Section 6.07(d).

 

(e)  Nothing contained in this Article IV, or elsewhere inthis Agreement, shall preclude the settlement of any transactions involvingPartnership Interests entered into through the facilities of any NationalSecurities Exchange on which such Partnership Interests are listed or admittedto trading.

 

SECTION 4.09.  Cancellationor Forfeiture of Property Under Non-Maritime Law; Redemption of Non-citizenAssignees.  (a)  If any GroupMember is or becomes subject to any federal, state or local law or regulation(other than Maritime Law) that the General Partner determines would create asubstantial risk of cancellation or forfeiture of any property in which theGroup Member has an interest based on the nationality, citizenship or otherrelated status of a Limited Partner (other than under any Maritime Laws), theGeneral Partner may request any Limited Partner to furnish to the GeneralPartner, within 30 days after receipt of such request, an executedCitizenship Certification or such other information concerning his nationality,citizenship or other related status (or, if the Limited Partner is a nomineeholding for the account of another Person, the nationality, citizenship orother related status of such Person) as the General Partner may request. If aLimited Partner fails to furnish to the General Partner within the aforementioned30-day period such Citizenship Certification or other requested information orif upon receipt of such Citizenship Certification or other requestedinformation the General Partner determines that a Limited Partner is not anEligible Citizen, the Limited Partner Interests owned by such Limited Partnershall be subject to redemption in accordance with the provisions of Section 4.09(e).In addition, the General Partner may require that the status of any suchLimited Partner be changed to that of a Non-citizen Assignee and, thereupon,the General Partner shall be substituted for such Non-citizen Assignee as theLimited Partner in respect of the Non-citizen Assignee’s Limited PartnerInterests; provided, however, that such Non-citizen Assigneeshall continue to receive allocations and distributions until the date fixedfor redemption of such Limited Partner Interests (if applicable) pursuant to Section 4.09(e)(i).

 

### (b)  The General Partnershall, in exercising voting rights in respect of Limited Partner Interests heldby it on behalf of Non-citizen Assignees, distribute the votes in the sameratios as the votes of Partners (including the General Partner) in respect ofLimited Partner Interests other than those of Non-citizen Assignees are cast,either for, against or abstaining as to the matter.

 

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(c)  Upon dissolution of the Partnership, a Non-citizen Assigneeshall have no right to receive a distribution in kind pursuant to Section 12.04but shall be entitled to the cash equivalent thereof, and the Partnership shallprovide cash in exchange for an assignment of the Non-citizen Assignee’s shareof any distribution in kind. Such payment and assignment shall be treated forPartnership purposes as a purchase by the Partnership from the Non-citizenAssignee of his Limited Partner Interest (representing his right to receive hisshare of such distribution in kind).

 

(d)  At any time after he can and does certify that he has becomean Eligible Citizen, a Non-citizen Assignee may, upon application to theGeneral Partner, request that with respect to any Limited Partner Interests ofsuch Non-citizen Assignee not redeemed pursuant to Section 4.09(e), suchNon-citizen Assignee be admitted as a Limited Partner, and upon approval of theGeneral Partner, such Non-citizen Assignee shall be admitted as a LimitedPartner and shall no longer constitute a Non-citizen Assignee and the GeneralPartner shall cease to be deemed to be the Limited Partner in respect of theNon-citizen Assignee’s Limited Partner Interests.

 

(e)  If at any time a Limited Partner fails to furnish aCitizenship Certification or other information requested within the 30-dayperiod specified in Section 4.09(a), or if upon receipt of suchCitizenship Certification or other information the General Partner determinesthat a Limited Partner is not an Eligible Citizen, the Partnership may, unlessthe Limited Partner establishes to the satisfaction of the General Partnerprior to the date fixed for redemption as provided below that such LimitedPartner is an Eligible Citizen or has transferred his Partnership Interests toa Person who is an Eligible Citizen and who furnishes a CitizenshipCertification to the General Partner prior to the date fixed for redemption asprovided below, redeem the Limited Partner Interest of such Limited Partner asfollows:

 

#### (i)  The General Partner shall, not later than the 30th day beforethe date fixed for redemption, give notice of redemption to the Limited Partnerat his last address designated on the records of the Partnership or theTransfer Agent, by registered or certified mail, postage prepaid. The noticeshall be deemed to have been given when so mailed. The notice shall specify theRedeemable Interests, the date fixed for redemption, the place of payment, thatpayment of the redemption price will be made upon surrender of the Certificateevidencing the Redeemable Interests or, if uncertificated, upon receipt ofevidence satisfactory to the General Partner of the ownership of the RedeemableInterests, and that on and after the date fixed for redemption no furtherallocations or distributions to which the Limited Partner would otherwise beentitled in respect of the Redeemable Interests will accrue or be made.

####  

#### (ii)  The aggregate redemption price for Redeemable Interestsshall be an amount equal to the Current Market Price (the date of determinationof which shall be the date fixed for redemption) of Limited Partner Interestsof the class to be so redeemed multiplied by the number of Limited PartnerInterests of each such class included among the Redeemable Interests. Theredemption price shall be paid, as determined by the General Partner, in cashor by delivery of a

 

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#### promissorynote of the Partnership in the principal amount of the redemption price,bearing interest at the rate of 5% annually and payable in three equal annualinstallments of principal together with accrued interest, commencing one yearafter the redemption date.

####  

#### (iii)  Upon surrender by or on behalf of the Limited Partner, atthe place specified in the notice of redemption, of (A) if certificated,the Certificate evidencing the Redeemable Interests, duly endorsed in blank oraccompanied by an assignment duly executed in blank, or (B) ifuncertificated, upon receipt of evidence satisfactory to the General Partner ofthe ownership of the Redeemable Interests, the Limited Partner or his dulyauthorized representative shall be entitled to receive the payment therefor.

####  

#### (iv)  After the redemption date, Redeemable Interests shall nolonger constitute issued and Outstanding Limited Partner Interests.

####  

(f)  The provisions of Sections 4.09(e) through (h) shallalso be applicable to Limited Partner Interests held by a Limited Partner asnominee of a Person determined to be other than an Eligible Citizen.

 

(g)  Nothing in Sections 4.09(e) or 4.09(f) or thisSection 4.09(g) shall prevent the recipient of a notice of redemptionfrom transferring his Limited Partner Interest before the redemption date ifsuch transfer is otherwise permitted under this Agreement. Upon receipt ofnotice of such a transfer, the General Partner shall withdraw the notice ofredemption, provided the transferee of such Limited Partner Interest certifiesto the satisfaction of the General Partner in a Citizenship Certificationdelivered in connection with the Transfer Application that he is an EligibleCitizen. If the transferee fails to make such certification, such redemptionshall be effected from the transferee on the original redemption date.

 

(h)  This Section 4.09 shall not apply to the determinationof whether a Person is a U.S. Citizen under applicable Maritime Laws or to thetreatment of any such Person under this Agreement in the event that it is determinedthat such Person is a Non-U.S. Citizen under applicable Maritime Laws. Section 4.10shall control for purposes of any such determination or treatment.

 

SECTION 4.10.  ForeignOwnership of Units.  (a)  InGeneral.  It is the policy of thePartnership that Non-U.S. Citizens should Own, individually or in theaggregate, no more than the Permitted Percentage of the Units of any class. Ifat any time Non-U.S. Citizens, individually or in the aggregate, become theOwners of more than the Permitted Percentage of the Units of any class, thenthe Partnership shall have the power to take the actions prescribed insubparagraphs (c), (d) and (e) of this Section 4.10. Theprovisions of this Section 4.10 are intended to assure that thePartnership remains in continuous compliance with Title 46 of the UnitedStates Code Section 53101 et. seq. (formerly the Maritime Security Act of2003), as amended, Title 46 of the United States Code Section 50501(formerly Section 2 of the Shipping Act, 1916), as amended, Title 46of the United States Code Section 57109 (formerly Section 9 of theShipping Act, 1916),

 

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as amended, Title 46 of the United States Code Section 55102(formerly Section 27 of the Merchant Marine Act, 1920, popularly known asthe Jones Act), as amended, and Title 46 of the United States Code Section 12102et. seq. (citizenship requirements for documenting vessels under United Statesflag), as amended, (collectively, the “Maritime Laws”) and theregulations promulgated thereunder, including the United States Coast Guardcitizenship requirements under Part 67 of Title 46 of the Code ofFederal Regulations and the Maritime Administration, Department ofTransportation citizenship requirements under Part 355 of Title 46 ofthe Code of Federal Regulations and to enable the Partnership to submit anyproof of citizenship required by law or contract with the United Statesgovernment (or any agency thereof). Any amendments to the Maritime Laws or theregulations relating to the citizenship of U.S. vessel owners or operators ofcoastwise trade vessels are deemed to be incorporated herein by reference.

 

### (b)  Dual Unit CertificateSystem. To implement the policy set forth in subparagraph (a) hereof,the Partnership may institute a Dual Unit Certificate System such that (i) eachCertificate representing Units that are Owned by a U.S. Citizen shall be marked“U.S. Citizen” and each Certificate representing Units that are Owned by aNon-U.S. Citizen shall be marked “Non-U.S. Citizen,” but with all suchCertificates to be identical in all other respects and to comply with allprovisions of the Delaware Act, (ii) to the extent necessary to enable thePartnership to submit any proof of citizenship required by law or by contractwith the United States government (or any agency thereof), the Partnership mayrequire the Record Holders and the Owners of such Units to confirm theircitizenship status from time to time, and voting rights and distributionspayable with respect to Units held by such Record Holder or Owned by such Ownermay, in the discretion of the General Partner, be withheld until confirmationof such citizenship status is received and (iii) the Unit Register of thePartnership shall be maintained in such manner as to enable the percentage ofUnits of any class that is Owned by Non-U.S. Citizens and by U.S. Citizens tobe confirmed. The General Partner is authorized to take such other ministerialactions or make such interpretations as it may deem necessary or advisable in orderto implement the policy set forth in subparagraph (a) hereof.

###  

(c)  Restrictions on Transfer; Change of Status.  (i)  Any transfer, or attemptedtransfer, of any Units, the effect of which would be to cause one or moreNon-U.S. Citizens to Own Units in excess of the Permitted Percentage, shall beineffective as against the Partnership, and neither the Partnership nor itsTransfer Agent shall register such transfer or purported transfer on the UnitRegister of the Partnership and neither the Partnership nor its Transfer Agentshall be required to recognize the transferee or purported transferee thereofas a Unitholder of the Partnership for any purpose whatsoever except to theextent necessary to effect any remedy available to the Partnership under this Section 4.10.  A Citizenship Certification may be requiredfrom all transferees (and from any recipient upon original issuance) of Unitsof the Partnership and, if such transferee (or recipient) is acting as afiduciary or nominee for an Owner, such Owner, and registration of transfer (ororiginal issuance) shall be denied upon refusal to furnish such certificate.

 

#### (ii)  Each Record Holder and Owner shall advise the Partnership inwriting of any change in such Record Holder’s or Owner’s citizenship status.

 

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### (d)  No Voting Rights;Temporary Withholding of Distributions. If on any date (including any Record Date) the number of Units that isOwned by Non-U.S. Citizens is in excess of the Permitted Percentage (such Unitsherein referred to as the “Excess Units”), the General Partner shalldetermine those Units Owned by Non-U.S. Citizens that constitute such ExcessUnits. The determination of those Units that constitute Excess Units shall bemade by reference to the date or dates Units were acquired by Non-U.S.Citizens, starting with the most recent acquisition of Units by a Non-U.S.Citizen and including, in reverse chronological order of acquisition, all otheracquisitions of Units by Non-U.S. Citizens from and after the acquisition ofthose Units by a Non-U.S. Citizen that first caused the Permitted Percentage tobe exceeded. The determination of the General Partner as to those Units thatconstitute the Excess Units shall be conclusive. Units deemed to constituteExcess Units shall (so long as such excess exists) not be accorded any votingrights and shall not be deemed to be outstanding for purposes of determiningthe vote required on any matter properly brought before the Unitholders of thePartnership for a vote thereon. The Partnership shall (so long as such excessexists) withhold the payment of regular distributions, if any, and the sharingin any other distribution (upon liquidation or otherwise) in respect of theExcess Units. At such time as the Permitted Percentage is no longer exceeded,full voting rights shall be restored to any Units previously deemed to beExcess Units and any distribution with respect thereto that has been withheldshall be due and paid solely to the Record Holders of such Units at the timethe Permitted Percentage is no longer exceeded.

###  

### (e)  Redemptionof Excess Units.  The Partnershipshall have the power, but not the obligation, to redeem Excess Units subject tothe following terms and conditions:

###  

#### (i)  the per Unit redemption price (the “Non-U.S. CitizenRedemption Price”) to be paid for the Excess Units to be redeemed shall bethe sum of (A) the Current Market Price of the Units and (B) anydistribution declared with respect to such Units prior to the date such Unitsare called for redemption hereunder but which has been withheld by thePartnership pursuant to subparagraph (d);

####  

#### (ii)  the Non-U.S. Citizen Redemption Price shall be paid in cash;

####  

#### (iii)  a notice of redemption shall be given by first class mail,postage prepaid, mailed not less than ten days prior to the redemption date toeach Record Holder of the Units to be redeemed, at such holder’s address as thesame appears on the Unit Register of the Partnership. Each such notice shallstate (A) the redemption date, (B) the number of Units to be redeemedfrom such holder, (C) the Non-U.S. Citizen Redemption Price, and themanner of payment thereof, (D) the place where certificates for such Unitsare to be surrendered for payment of the Non-U.S. Citizen Redemption Price, and(E) that distributions on the Units to be redeemed will cease to accrue onsuch redemption date;

####  

#### (iv)  from and after the redemption date, distributions on theUnits called for redemption shall cease to accrue and such Units shall nolonger be deemed to be outstanding and all rights of the holders thereof asUnitholders of the

 

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#### Partnership(except the right to receive from the Partnership the Non-U.S. CitizenRedemption Price) shall cease. Upon surrender of the Certificates for any Unitsso redeemed in accordance with the requirements of the notice of redemption(properly endorsed or assigned for transfer if the General Partner shall sorequire and the notice shall so state), such Units shall be redeemed by thePartnership at the Non-U.S. Citizen Redemption Price. In case fewer than allthe Units represented by any such Certificate are redeemed, a new Certificateshall be issued representing the Units not redeemed without cost to the holderthereof; and

####  

#### (v)  such other terms and conditions as the General Partner mayreasonably determine.

####  

### (f)  Determination ofCitizenship.  In determining thecitizenship of the Owners or their transferees of Units, the General Partnermay rely on the Unit Register of the Partnership and the CitizenshipCertificates given by the Owners or their transferees or any recipients (in thecase of original issuance) (in each case whether such certificates have beengiven on their own behalf or on behalf of others) to establish the citizenshipof such Owners, transferees or recipients of the Units. The determination ofthe citizenship of Owners and their transferees of the Units may also besubject to proof in such other way or ways as the General Partner may deemreasonable. The General Partner may at any time require proof, in addition tothe Citizenship Certificates, of any Owner or proposed transferee of Units, andthe payment of distributions may be withheld, and any application for transferof ownership on the Unit Register of the Partnership may be refused, until suchadditional proof is submitted. The determination of the General Partner as tothe citizenship of the Owners or their transferees in accordance with thissubparagraph (f) shall be conclusive.

###  

### (g)  Severability.  Each provision of subparagraphs (a) through(f) of this Section 4.10 is intended to be severable from every otherprovision. If any one or more of the provisions contained in such subparagraphsof this Section 4.10 is held to be invalid, illegal or unenforceable, thevalidity, legality or enforceability of any other provision ofsubparagraphs (a) through (f) of this Section 4.10 shallnot be affected, and such subparagraphs of this Section 4.10 shall beconstrued as if the provisions held to be invalid, illegal or unenforceable hadbeen reformed to the extent required to be valid, legal and enforceable.

 

### (h)  For purposes of this Section 4.10:

 

#### (i)  A Person shall be deemed the “Owner” of, or to “Own” Units orother ownership interests to the extent such Units or other ownership interestsare (A) owned beneficially or held of record (with the power to act onbehalf of the beneficial owner), with respect to any class of Units or otherownership interests, by such Person; (B) may be voted by such Person; (C) entitledto distributions in respect of such Units or other ownership interests by suchPerson; or (D) which by any other means whatsoever controlled by suchPerson, or in which control is permitted to be exercised by such Person, withthe General Partner being authorized to determine reasonably the meaning ofsuch control for this purpose

 

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#### under theguidelines set forth in Subpart C (Sections 67.30-67.47) of Title 46of the Code of Federal Regulations, as amended, modified or supplemented.

####  

#### (ii)  “U.S. Citizen” shall mean: (A) an individual whois native-born, naturalized, a derivative citizen of the United States, orotherwise qualifies as a United States citizen; (B) a partnership of whichall of its general partners are citizens of the United States and at least 75%of the interest in the partnership is Owned by citizens of the United States; (C) atrust of whereby each of its trustees is a citizen of the United States, eachbeneficiary with an enforceable interest in the trust is a citizen of theUnited States, and at least 75% of the interest in the trust is Owned bycitizens of the United States; (D) an association or joint venture if eachof its members is a citizen of the United States; (E) a corporation if (1) itis incorporated under the laws of the United States or of a State of the UnitedStates or a political subdivision thereof, Guam, Puerto Rico, the VirginIslands, American Samoa, the District of Columbia, the Northern MarianaIslands, or any other territory or possession of the United States, (2) itschief executive officer, by whatever title, and its chairman of the board ofdirectors are citizens of the United States, (3) no more of its directorsare non-citizens than a minority of the number necessary to constitute aquorum, and (4) at least 75% of the interest in the corporation is Ownedby citizens of the United States; (F) a governmental entity that is anentity of the federal government of the United States or of the government of aState of the United States or a political subdivision thereof, Guam, PuertoRico, the Virgin Islands, American Samoa, the District of Columbia, theNorthern Mariana Islands, or any other territory or possession of the UnitedStates, all as further defined in Subpart C (Sections 67.30-67.47) ofTitle 46 of the Code of Federal Regulations and Part 355(Sections 355.1-355.5) of Title 46 of the Code of FederalRegulations, as amended, modified or supplemented. With respect to a limitedliability company, a “U.S. Citizen” shall mean an entity that (X) ifmember managed, all members of the limited liability company are citizens ofthe United States and (Y) if not member managed, any Person elected tomanage the limited liability company or who is authorized to bind the limitedliability company and any Person who holds a position equivalent to the chiefexecutive officer, by whatever title, and the chairman of the board ofdirectors in a corporation and any Person authorized to act in their absenceare citizens of the United States; non-U.S. citizens do not have authoritywithin a management group whether through veto power, combined voting, orotherwise to exercise control over the limited liability company and 75% of theequity interest at each tier is owned by citizens of the United States.

####  

#### (iii)  The term “Non-U.S. Citizen” shall mean any Personother than a U.S. Citizen.

####  

#### (iv)  The term “Permitted Percentage” shall mean apercentage equal to not more than 24.0% as determined from time to time by theGeneral Partner, it being understood that the initial percentage is 15%.

 

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ARTICLE V

 

Capital Contributions and Issuance of Partnership Interests

 

## SECTION 5.01.  Organizational Contributions.  In connection with the formation of thePartnership under the Delaware Act, the General Partner made an initial CapitalContribution to the Partnership in the amount of $20.00, for a General PartnerInterest representing a 2% percentage interest in the Partnership and has beenadmitted as the General Partner of the Partnership, and the OrganizationalLimited Partner made an initial Capital Contribution to the Partnership in theamount of $980.00 for a Limited Partner Interest representing a 98% percentageinterest in the Partnership and has been admitted as a Limited Partner of thePartnership.  Subsequent to the formationof Partnership the Organizational Limited Partner transferred a Limited PartnerInterest representing a 1% Percentage Interest in the Partnership (“OnePercent’s Initial Partner Interest”) to OSGAMLP One Percent InterestCorporation (“One Percent”) such that after such transfer to OnePercent, the Organizational Limited Partner held a Limited Partner Interestrepresenting a 97% percentage interest in the Partnership (the “OrganizationalLimited Partner’s Initial Limited Partner Interest”) and the GeneralPartner held a General Partner Interest representing a 2% percentage interestin the Partnership (the “General Partner’s Initial General Partner Interest”).  On August 30, 2007, the OrganizationalLimited Partner, on behalf of itself, One Percent and the General Partner,transferred 100% of the limited liability company interests in each of LuxmarTanker LLC and Maremar LLC to the Partnership.

##  

SECTION 5.02.  InitialUnit Issuances; General Partner Pre-emptive Rights.  (a)  On or prior to the Closing Date andpursuant to the Contribution Agreement, (i) the Organizational LimitedPartner, on behalf of itself, One Percent and the General Partner, shalltransfer 100% of the limited liability company interests in the OperatingCompany to the Partnership, and as consideration therefor and the transfer of100% of the limited liability company interests of each of Luxmar Tanker LLCand Maremar Tanker LLC on August 30, 2007, the Partnership shall (A) issueto the Organizational Limited Partner 6,496,827 Common Units, (B) issue tothe Organizational Limited Partner 14,999,999 Subordinated Units, (C) makea cash distribution to the Organizational Limited Partner in an aggregateamount equal to the Reimbursement Payment, (D) issue to One Percent277,413 Common Units, (E) issue to the General Partner 585,999 GeneralPartner Units, and (F) issue to the General Partner the IncentiveDistribution Rights, (ii) OSGM shall transfer all of its ownershipinterest in ATC to the Partnership, and as consideration therefor, thePartnership shall issue to OSGM 725,759 Common Units, (iii) theOrganizational Limited Partner’s Initial Limited Partner Interest shall beconverted into one Subordinated Unit, (iv) One Percent’s Initial LimitedPartner Interest shall be converted into one Common Unit and (v) theGeneral Partner’s Initial General Partner Interest shall be converted into oneGeneral Partner Unit.

 

### (b)  On the Closing Dateand pursuant to the Underwriting Agreement, each Underwriter shall contributeto the Partnership cash in an amount equal to the Issue Price per InitialCommon Unit, multiplied by the number of Common Units specified in theUnderwriting Agreement to be purchased by such Underwriter at the Closing Date.

 

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### In exchange for such Capital Contributions bythe Underwriters, the Partnership shall issue Common Units to each Underwriteron whose behalf such Capital Contribution is made in an amount equal to thenumber of Common Units specified in the Underwriting Agreement to be purchasedby such Underwriter on the Closing Date.

###  

(c)  Upon the issuance of any additional Limited Partner Interestsby the Partnership (other than Common Units and Subordinated Units issuedpursuant to Section 5.02(a), any Class B Units issued pursuant to Section 5.11,any Common Units issued upon the conversion of Subordinated Units or Class BUnits and any Common Units issued in the Initial Offering, including any CommonUnits issued pursuant to the Over-Allotment Option), the General Partner may,in exchange for a proportionate number of General Partner Units, makeadditional Capital Contributions in an amount equal to the product obtained bymultiplying (i) the quotient determined by dividing (A) the GeneralPartner’s Percentage Interest immediately prior to such issuance by (B) 100less the General Partner’s Percentage Interest immediately prior to suchissuance by (ii) the amount contributed to the Partnership by the LimitedPartners in exchange for such additional Limited Partner Interests.  Except as set forth in Article XII, theGeneral Partner shall not be obligated to make any additional CapitalContributions to the Partnership.

 

(d)  No Limited Partner Interests will be issued or issuable as ofor at the Closing Date other than (i) the Common Units issuable pursuantto Section 5.02(b) in aggregate number equal to 7,500,000, (ii) the“Option Units” as such term is used in the Underwriting Agreement in an aggregatenumber up to 1,125,000 issuable upon exercise of the Over-Allotment Optionpursuant to Section 5.03, (iii) the 15,000,000 Subordinated Unitsissuable to pursuant to Section 5.02(a), (iv) the 7,500,000 CommonUnits issuable pursuant to Section 5.02(a), (v) the IncentiveDistribution Rights issuable pursuant to Section 5.02(a) and (vi) anyCommon Units issuable pursuant to the Partnership’s 2007 Omnibus IncentiveCompensation Plan.

 

SECTION 5.03.  Exerciseof the Over-Allotment Option.  Uponany exercise of the Over-Allotment Option, each Underwriter shall contribute tothe Partnership cash in an amount equal to the Issue Price per Initial CommonUnit, multiplied by the number of Common Units to be purchased by suchUnderwriter at the Option Closing Date.  Inexchange for such Capital Contributions by the Underwriters, the Partnershipshall issue Common Units to each Underwriter on whose behalf such CapitalContribution is made in an amount equal to the quotient obtained by dividing (i) thecash contributions to the Partnership by or on behalf of such Underwriter by (ii) theIssue Price per Initial Common Unit. Upon receipt by the Partnership of the Capital Contributions from theUnderwriters as provided in this Section 5.03, the Partnership shall usesuch cash to redeem first from One Percent, second from OSGM and third from theOrganizational Limited Partner that number of Common Units equal to the numberof Common Units issued to the Underwriters under this Section 5.03.

 

SECTION 5.04.  Interestand Withdrawal.  No interest shall bepaid by the Partnership on Capital Contributions.  No Partner shall be entitled to thewithdrawal or return of its Capital Contribution, except to the extent, if any,that distributions made

 

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pursuant to this Agreement or upon termination of the Partnership maybe considered as such by law and then only to the extent provided for in thisAgreement.  Except to the extentexpressly provided in this Agreement, no Partner shall have priority over anyother Partner either as to the return of Capital Contributions or as toprofits, losses or distributions.  Anysuch return shall be a compromise to which all Partners agree within themeaning of Section 17-502(b) of the Delaware Act.

 

SECTION 5.05.  CapitalAccounts.  (a)  The Partnershipshall maintain for each Partner (or a beneficial owner of Partnership Interestsheld by a nominee in any case in which the nominee has furnished the identityof such owner to the Partnership in accordance with Section 6031(c) ofthe Code or any other method acceptable to the General Partner) owning aPartnership Interest a separate Capital Account with respect to suchPartnership 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 CapitalContributions made to the Partnership with respect to such Partnership Interestand (ii) all items of Partnership income and gain (including income andgain exempt from tax) computed in accordance with Section 5.05(b) andallocated with respect to such Partnership Interest pursuant to Section 6.01,and decreased by (A) the amount of cash or Net Agreed Value of all actualand deemed distributions of cash or property made with respect to suchPartnership Interest and (B) all items of Partnership deduction and losscomputed in accordance with Section 5.05(b) and allocated withrespect to such Partnership Interest pursuant to Section 6.01.

 

(b)  For purposes of computing the amount of any item of income,gain, loss or deduction which is to be allocated pursuant to Article VIand is to be reflected in the Partners’ Capital Accounts, the determination,recognition and classification of any such item shall be the same as itsdetermination, recognition and classification for federal income tax purposes(including any method of depreciation, cost recovery or amortization used forthat purpose); provided, however, that:

 

(i)  Solely for purposes of this Section 5.05,the Partnership shall be treated as owning directly its proportionate share (asdetermined by the General Partner based upon the provisions of the applicableGroup Member Agreement or governing, organizational or similar documents) ofall property owned by (A) any other Group Member that is classified as apartnership for federal income tax purposes and (B) any other partnership,limited liability company, unincorporated business or other entity classifiedas a partnership for federal income tax purposes of which a Group Member isdirectly or indirectly a partner.

 

(ii)  All fees and other expensesincurred by the Partnership to promote the sale of (or to sell) a PartnershipInterest that can neither be deducted nor amortized under Section 709 ofthe Code, if any, shall, for purposes of Capital Account maintenance, betreated as an item of deduction at the time such fees and other expenses areincurred and shall be allocated among the Partners pursuant to Section 6.01.

 

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(iii)  Except as otherwise provided inTreasury Regulation Section 1.704-1(b)(2)(iv)(m), the computation of allitems of income, gain, loss and deduction shall be made without regard to anyelection under Section 754 of the Code which may be made by the Partnershipand, as to those items described in Section 705(a)(1)(B) or 705(a)(2)(B) ofthe Code, without regard to the fact that such items are not includable ingross income or are neither currently deductible nor capitalized for federalincome tax purposes. To the extent an adjustment to the adjusted tax basis ofany Partnership asset pursuant to Section 734(b) or 743(b) ofthe 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 suchadjustment in the Capital Accounts shall be treated as an item of gain or loss.

 

(iv)  Any income, gain or lossattributable to the taxable disposition of any Partnership property shall bedetermined as if the adjusted basis of such property as of such date ofdisposition were equal in amount to the Partnership’s Carrying Value withrespect to such property as of such date.

 

(v)  In accordance with the requirementsof Section 704(b) of the Code, any deductions for depreciation, costrecovery or amortization attributable to any Contributed Property shall bedetermined as if the adjusted basis of such property on the date it wasacquired by the Partnership were equal to the Agreed Value of suchproperty.  Upon an adjustment pursuant toSection 5.05(d) to the Carrying Value of any Partnership propertysubject to depreciation, cost recovery or amortization, any further deductionsfor such depreciation, cost recovery or amortization attributable to suchproperty shall be determined (A) as if the adjusted basis of such propertywere equal to the Carrying Value of such property immediately following suchadjustment and (B) using a rate of depreciation, cost recovery oramortization derived from the same method and useful life (or, if applicable, theremaining useful life) as is applied for federal income tax purposes; provided,however, that, if the asset has a zero adjusted basis for federal incometax purposes, depreciation, cost recovery or amortization deductions shall bedetermined using any method that the General Partner may adopt.

 

(vi)  If the Partnership’s adjustedbasis in a depreciable or cost recovery property is reduced for federal incometax purposes pursuant to Section 48(q)(1) or 48(q)(3) of theCode, the amount of such reduction shall, solely for purposes hereof, be deemedto be an additional depreciation or cost recovery deduction in the year suchproperty is placed in service and shall be allocated among the Partnerspursuant to Section 6.01. Any restoration of such basis pursuant to Section 48(q)(2) ofthe Code shall, to the extent possible, be allocated in the same manner to thePartners to whom such deemed deduction was allocated.

 

(c)  (i) A transferee of a Partnership Interest shall succeedto a pro rata portion of the Capital Account of the transferor relating to thePartnership Interest so transferred.

 

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(ii)  Subject to Section 6.07(b),immediately prior to the transfer of a Subordinated Unit or of a SubordinatedUnit that has converted into a Common Unit pursuant to Section 5.07 by aholder thereof (other than a transfer to an Affiliate unless the GeneralPartner elects to have this subparagraph 5.05(c)(ii) apply), theCapital Account maintained for such Person with respect to its SubordinatedUnits or converted Subordinated Units will (A) first, be allocated to theSubordinated Units or converted Subordinated Units to be transferred in anamount equal to the product of (1) the number of such Subordinated Unitsor converted Subordinated Units to be transferred and (2) the Per UnitCapital Amount for a Common Unit, and (B) second, any remaining balance insuch Capital Account will be retained by the transferor, regardless of whetherit has retained any Subordinated Units or converted Subordinated Units (“RetainedConverted Subordinated Units”). Following any such allocation, the transferor’s Capital Account, if any,maintained with respect to the retained Subordinated Units or RetainedConverted Subordinated Units, if any, will have a balance equal to the amountallocated under clause (B) hereinabove, and the transferee’s CapitalAccount established with respect to the transferred Subordinated Units orconverted Subordinated Units will have a balance equal to the amount allocatedunder clause (A) hereinabove. Immediately after the issuance of Class B Units to the holder ofthe Incentive Distribution Rights pursuant to Section 5.11, the entireCapital Account balance of such holder with respect to its IncentiveDistribution Rights immediately prior to such issuance shall (A) first, beallocated to (and will constitute such holder’s initial Capital Account balancein respect of) the Class B Units issued in an amount equal to the productof (1) the number of such Class B Units to be issued and (2) thePer Unit Capital Amount for a Common Unit, and (B) second, any remainingbalance in such Capital Account will constitute such holder’s Capital Accountbalance with respect to the Incentive Distribution Rights retained by suchholder.

 

(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 ContributedProperty, the issuance of Partnership Interests as consideration for theprovision of services, the issuance of Class B Units pursuant to Section 5.11or the conversion of the General Partner’s Combined Interest to Common Unitspursuant to Section 11.03(b), the Capital Account of all Partners and theCarrying Value of each Partnership property immediately prior to such issuanceshall be adjusted upward or downward to reflect any Unrealized Gain orUnrealized Loss attributable to such Partnership property, as if suchUnrealized Gain or Unrealized Loss had been recognized on an actual sale ofeach such property immediately prior to such issuance and had been allocated tothe Partners at such time pursuant to Section 6.01(c) in the samemanner as any item of gain or loss actually recognized during such period wouldhave been allocated. In determining such Unrealized Gain or Unrealized Loss,the aggregate cash amount and fair market value of all Partnership assets(including cash or cash equivalents) immediately prior to the issuance ofadditional Partnership Interests shall be determined by the General Partner usingsuch method of valuation as it may adopt; provided, however, thatthe General Partner, in arriving at such valuation, must take fully intoaccount the fair market value of the Partnership Interests of all Partners atsuch time. The General Partner shall allocate

 

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such aggregate value among the assets of the Partnership (in suchmanner as it determines) to arrive at a fair market value for individualproperties.

 

(ii)  In accordance with Treasury RegulationSection 1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemeddistribution to a Partner of any Partnership property (other than adistribution of cash that is not in redemption or retirement of a PartnershipInterest), the Capital Accounts of all Partners and the Carrying Value of allPartnership property shall be adjusted upward or downward to reflect anyUnrealized Gain or Unrealized Loss attributable to such Partnership property,as if such Unrealized Gain or Unrealized Loss had been recognized in a sale ofsuch property immediately prior to such distribution for an amount equal to itsfair market value, and had been allocated to the Partners, at such time,pursuant to Section 6.01(c) in the same manner as any item of gain orloss actually recognized during such period would have been allocated. Indetermining such Unrealized Gain or Unrealized Loss the aggregate cash amountand fair market value of all Partnership assets (including cash or cashequivalents) immediately prior to a distribution shall (A) in the case ofan actual distribution that is not made pursuant to Section 12.04 or inthe case of a deemed distribution, be determined and allocated in the samemanner as that provided in Section 5.05(d)(i) or (B) in the caseof a liquidating distribution pursuant to Section 12.04, be determined andallocated by the Liquidator using such method of valuation as it may adopt.

 

SECTION 5.06.  Issuancesof Additional Partnership Securities. (a)  The Partnership may issue additional Partnership Securitiesand options, rights, warrants and appreciation rights relating to thePartnership Securities for any Partnership purpose at any time and from time totime to such Persons for such consideration and on such terms and conditions asthe General Partner shall determine, all without the approval of any LimitedPartners.

 

(b)  Each additional Partnership Security authorized to be issuedby the Partnership pursuant to Section 5.06(a) may be issued in oneor more classes, or one or more series of any such classes, with suchdesignations, preferences, rights, powers and duties (which may be senior toexisting classes and series of Partnership Securities), as shall be fixed bythe General Partner, including (i) the right to share in Partnershipprofits and losses or items thereof, (ii) the right to share inPartnership distributions, (iii) the rights upon dissolution andliquidation of the Partnership, (iv) whether, and the terms and conditionsupon which, the Partnership may or shall be required to redeem the PartnershipSecurity, (v) whether such Partnership Security is issued with theprivilege of conversion or exchange and, if so, the terms and conditions ofsuch conversion or exchange, (vi) the terms and conditions upon which eachPartnership Security will be issued, evidenced by certificates and assigned ortransferred, (vii) the method for determining the Percentage Interest asto such Partnership Security and (viii) the right, if any, of each suchPartnership Security to vote on Partnership matters, including matters relatingto the relative rights, preferences and privileges of such PartnershipSecurity.

 

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(c)  The General Partner shall take all actions that itdetermines to be necessary or appropriate in connection with (i) eachissuance of Partnership Securities and options, rights, warrants andappreciation rights relating to Partnership Securities pursuant to thisSection 5.06, (ii) the conversion of the General Partner Interest(represented by General Partner Units) or any Incentive Distribution Rightsinto Units pursuant to the terms of this Agreement, (iii) the issuance ofClass B Units pursuant to Section 5.11 and the conversion ofClass B Units into Common Units pursuant to the terms of this Agreement,(iv) reflecting the admission of additional Limited Partners in the booksand records of the Partnership as the Record Holder of such Limited Partner Interestand (v) all additional issuances of Partnership Securities. The GeneralPartner shall determine the relative rights, powers and duties of the holdersof the Units or other Partnership Securities being so issued. The GeneralPartner shall do all things necessary to comply with the Delaware Act and isauthorized and directed to do all things that it determines to be necessary orappropriate in connection with any future issuance of Partnership Securities orin connection with the conversion of the General Partner Interest or anyIncentive Distribution Rights into Units pursuant to the terms of thisAgreement, including compliance with any statute, rule, regulation or guidelineof any federal, state or other governmental agency or any National SecuritiesExchange on which the Units or other Partnership Securities are listed oradmitted to trading.

 

SECTION 5.07. Conversion of Subordinated Units. (a)  All of the Outstanding Subordinated Unitsshall convert into Common Units on a one-for-one basis on the first dayfollowing the distribution of Available Cash to Partners pursuant toSection 6.04 in respect of any Quarter ending on or afterSeptember 30, 2010, in respect of which:

 

(i) distributions of Available Cash fromOperating Surplus under Section 6.04(a) on each of the Outstanding CommonUnits, Subordinated Units, General Partner Units and any other OutstandingUnits that are senior or equal in right of distribution to the SubordinatedUnits equaled or exceeded the Third Target Distribution during the four-Quarterperiod immediately preceding such date;

 

(ii) the Adjusted Operating Surplus for thefour-Quarter period immediately preceding such date equaled or exceeded the sumof  the Third Target Distribution on allof the Common Units, Subordinated Units, General Partner Units and any otherUnits that are senior or equal in right of distribution to the SubordinatedUnits that were Outstanding during such period on a Fully Diluted Basis withrespect to such period; and

 

(iii) there are no Cumulative Common UnitArrearages.

 

(b)  If the Subordinated Units are not converted into Common Unitspursuant to Section 5.07(a), the Subordinated Units shall convert intoCommon Units on a one-for-one basis upon the expiration of the SubordinationPeriod.

 

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(c)  Notwithstanding any other provision of this Agreement, theSubordinated Units will automatically convert into Common Units on aone-for-one basis as set forth in, and pursuant to the terms of,Section 11.04.

 

(d)  A Subordinated Unit that has converted into a Common Unitshall be subject to the provisions of Section 6.07(b).

 

SECTION 5.08. Limited Preemptive Right. Except as provided inthis Section 5.08 and in Section 5.02(c), no Person shall have anypreemptive, preferential or other similar right with respect to the issuance ofany Partnership Security, whether unissued, held in the treasury or hereaftercreated. The General Partner shall have the right, which it may from time totime assign in whole or in part to any of its Affiliates, to purchasePartnership Securities from the Partnership whenever, and on the same termsthat, the Partnership issues Partnership Securities to Persons other than theGeneral Partner and its Affiliates, to the extent necessary to maintain thePercentage Interests of the General Partner and its Affiliates equal to thatwhich existed immediately prior to the issuance of such Partnership Securities.

 

SECTION 5.09. Splits and Combinations. (a)  Subject to Section 5.09(d),Section 6.06 and Section 6.09 (dealing with adjustments ofdistribution levels), the Partnership may make a Pro Rata distribution ofPartnership Securities to all Record Holders or may effect a subdivision orcombination of Partnership Securities so long as, after any such event, eachPartner shall have the same Percentage Interest in the Partnership as beforesuch event, and any amounts calculated on a per Unit basis (including anyCommon Unit Arrearage or Cumulative Common Unit Arrearage) or stated as anumber of Units (including the number of Subordinated Units that may convertprior to the end of the Subordination Period) are proportionately adjusted.

 

### (b)  Wheneversuch a distribution, subdivision or combination of Partnership Securities isdeclared, the General Partner shall select a Record Date as of which thedistribution, subdivision or combination shall be effective and shall sendnotice thereof at least 20 days prior to such Record Date to each Record Holderas of a date not less than 10 days prior to the date of such notice. TheGeneral Partner also may cause a firm of independent public accountantsselected by it to calculate the number of Partnership Securities to be held byeach Record Holder after giving effect to such distribution, subdivision orcombination. The General Partner shall be entitled to rely on any certificateprovided by such firm as conclusive evidence of the accuracy of suchcalculation.

###  

### (c)  Promptlyfollowing any such distribution, subdivision or combination, the Partnershipmay issue Certificates or uncertificated Partnership Securities to the RecordHolders of Partnership Securities as of the applicable Record Date representingthe new number of Partnership Securities held by such Record Holders, or theGeneral Partner may adopt such other procedures that it determines to benecessary or appropriate to reflect such changes. If any such combinationresults in a smaller total number of Partnership Securities Outstanding, thePartnership shall require, as a condition to the delivery to a Record Holder ofsuch new Certificate, the surrender of any Certificate or

###  

### 51

### 

###  

### uncertificated Partnership Securities held bysuch Record Holder immediately prior to such Record Date.

###  

(d)  The Partnership shall not issue fractional Units uponany distribution, subdivision or combination of Units. If a distribution,subdivision or combination of Units would result in the issuance of fractionalUnits but for the provisions of this Section 5.09(d), each fractional Unitshall be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded tothe next higher Unit).

 

SECTION 5.10. Fully Paid and Non-Assessable Nature of LimitedPartner Interests. All Limited Partner Interests issued pursuant to, and inaccordance with the requirements of, this Article V shall be fully paidand non-assessable Limited Partner Interests in the Partnership, except as suchnon-assessability may be affected by Sections 17-607 and 17-804 of theDelaware Act.

 

SECTION 5.11. Issuance of Class B Units in Connection with Reset ofIncentive Distribution Rights. (a) Subject to the provisions of this Section 5.11, the holder of theIncentive Distribution Rights (or, if there is more than one holder of theIncentive Distribution Rights, the holders of a majority in interest of theIncentive Distribution Rights) shall have the right, at any time when there areno Subordinated Units outstanding and the Partnership has made a distributionpursuant to Section 6.04(b)(v) for each of the four most recentlycompleted Quarters and the amount of each such distribution did not exceedAdjusted Operating Surplus for such Quarter, to make an election (the “IDRReset Election”) to cause the Minimum Quarterly Distribution and the TargetDistributions to be reset in accordance with the provisions ofSection 5.11(e) and, in connection therewith, the holder or holders of theIncentive Distribution Rights will become entitled to receive their respectiveproportionate share of a number of Class B Units derived by dividing(i) the average amount of cash distributions made by the Partnership forthe two full Quarters immediately preceding the giving of the Reset Notice (asdefined in Section 5.11(b)) in respect of the Incentive DistributionRights by (ii) the average of the cash distributions made by thePartnership in respect of each Common Unit for the two full Quartersimmediately preceding the giving of the Reset Notice (the number ofClass B Units determined by such quotient is referred to herein as the “AggregateQuantity of Class B Units”). Upon the issuance of such Class B Units,the Partnership will issue to the General Partner that number of additionalGeneral Partner Units equal to the product obtained by multiplying (A) thequotient obtained by dividing (1) the Percentage Interest of the GeneralPartner immediately prior to such issuance by (2) a percentage equal to100% less such Percentage Interest of the General Partner by (B) thenumber of such Class B Units, and the General Partner shall not be obligatedto make any additional Capital Contribution to the Partnership in exchange forthe issuance of such General Partner Units. The making of the IDR ResetElection in the manner specified in Section 5.11(b) shall cause theMinimum Quarterly Distribution and the Target Distributions to be reset inaccordance with the provisions of Section 5.11(e) and, in connectiontherewith, the holder or holders of the Incentive Distribution Rights and theGeneral Partner will become entitled to receive Class B Units and GeneralPartner Units, respectively, on the basis specified above, without any furtherapproval required by the General Partner or the Unitholders, at

 

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the time specified in Section 5.11(c) unless the IDR ResetElection is rescinded pursuant to Section 5.11(d).

 

(b)  To exercise the right specified in Section 5.11(a),the holder of the Incentive Distribution Rights (or, if there is more than oneholder of the Incentive Distribution Rights, the holders of a majority ininterest of the Incentive Distribution Rights) shall deliver a written notice(the “Reset Notice”) to the Partnership. Within 10 Business Daysafter the receipt by the Partnership of such Reset Notice, the Partnershipshall deliver a written notice to the holder or holders of the IncentiveDistribution Rights of the Partnership’s determination of the aggregate numberof Class B Units that each holder of Incentive Distribution Rights will beentitled to receive.

 

(c)  The holder or holders of the Incentive DistributionRights will be entitled to receive the Aggregate Quantity of Class B Unitsand the General Partner will be entitled to receive the additional GeneralPartner Units on the 15th Business Day after receipt by the Partnership ofthe Reset Notice, and the Partnership shall issue Certificates for theClass B Units to the holder or holders of the Incentive DistributionRights; provided, however, that the issuance of Class BUnits to the holder or holders of the Incentive Distribution Rights shall notoccur prior to the approval of the listing or admission to trading of theCommon Units into which the Class B Units are convertible pursuant toSection 5.11(f) by the principal National Securities Exchange upon whichthe Common Units are then listed or admitted to trading if any such approval isrequired pursuant to the rules and regulations of such National SecuritiesExchange.

 

(d)  If the principal National Securities Exchange upon whichthe Common Units are then traded has not approved the listing or admission totrading of the Common Units into which the Class B Units are convertiblepursuant to Section 5.11(f) on or before the 30th calendar dayfollowing the Partnership’s receipt of the Reset Notice and such approval isrequired by the rules and regulations of such National Securities Exchange,then the holder of the Incentive Distribution Rights (or, if there is more thanone holder of the Incentive Distribution Rights, the holders of a majority ininterest of the Incentive Distribution Rights) shall have the right to eitherrescind the IDR Reset Election or elect to receive other Partnership Securitieshaving such terms as the General Partner may approve, with the approval of theConflicts Committee, that will provide (i) the same economic value, in theaggregate, as the Aggregate Quantity of Class B Units would have had atthe time of the Partnership’s receipt of the Reset Notice, as determined by theGeneral Partner, and (ii) for the subsequent conversion of suchPartnership Securities into Common Units within not more than 12 monthsfollowing the Partnership’s receipt of the Reset Notice upon the satisfactionof one or more conditions that are reasonably acceptable to the holder of theIncentive Distribution Rights (or, if there is more than one holder of theIncentive Distribution Rights, the holders of a majority in interest of theIncentive Distribution Rights).

 

(e)  The Minimum Quarterly Distribution, First TargetDistribution, Second Target Distribution and Third Target Distribution shall beadjusted at the time of the issuance of Class B Units or other PartnershipSecurities pursuant to this Section 5.11 such that (i) the MinimumQuarterly Distribution shall be reset to equal the average cash

 

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distribution amount per Common Unit for the two Quarters immediatelyprior to the giving of the Reset Notice (the “Reset MQD”), (ii) theFirst Target Distribution shall be reset to equal 115% of the Reset MQD,(iii) the Second Target Distribution shall be reset to equal to 125% ofthe Reset MQD and (iv) the Third Target Distribution shall be reset toequal 150% of the Reset MQD.

 

(f)  Any holder of Class B Units shall have the right toelect, by giving written notice to the General Partner, to convert all or aportion of the Class B Units held by such holder, at any time following thefirst anniversary of the issuance of such Class B Units, into Common Units on aone-for-one basis, such conversion to be effective on the second Business Dayfollowing the General Partner’s receipt of such written notice.

 

ARTICLE VI

 

Allocations and Distributions

 

SECTION 6.01. Allocations for Capital Account Purposes. Forpurposes of maintaining the Capital Accounts the Partnership’s items of income,gain, loss and deduction (computed in accordance with Section 5.05(b))shall be allocated among the Partners in each taxable year (or portion thereof)as provided in this Section 6.01.

 

(a)  Net Income. After giving effect to the specialallocations set forth in Section 6.01(d), Net Income for each taxable yearand all items of income, gain, loss and deduction taken into account incomputing Net Income for such taxable year shall be allocated as follows:

 

(i) First, 100% to the General Partner, in anamount equal to the aggregate Net Losses allocated to the General Partnerpursuant to Section 6.01(b)(iii) for all previous taxable years until theaggregate Net Income allocated to the General Partner pursuant to thisSection 6.01(a)(i) for the current taxable year and all previous taxableyears is equal to the aggregate Net Losses allocated to the General Partnerpursuant to Section 6.01(b)(iii) for all previous taxable years;

 

(ii) Second, 100% to the General Partner andall Unitholders, in proportion to, and until the aggregate Net Income allocatedto such Partners pursuant to this Section 6.01(a)(ii) for the currenttaxable year and all previous taxable years is equal to the aggregate NetLosses allocated to such Partners pursuant to Section 6.01(b)(ii) for allprevious taxable years;

 

(iii) Third, the balance, if any, 100% to theGeneral Partner and all Unitholders in accordance with their respectivePercentage Interests,

 

provided, however, Unitholders holdingClass B Units will not be allocated any items of income, gain, loss ordeduction pursuant to this Section 6.01(a) with respect to theirClass B Units until the Adjusted Capital Account of each Common Unit orcomparable fraction thereof and each Class B Unit or comparable fractionthereof are equal.

 

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(b)  Net Losses. After giving effect to the specialallocations set forth in Section 6.01(d), Net Losses for each taxableperiod and all items of income, gain, loss and deduction taken into account incomputing Net Losses for such taxable period shall be allocated as follows:

 

(i)  First,100% to the General Partner and all Unitholders in proportion to, and until theaggregate Net Losses allocated pursuant to this Section 6.01(b)(i) for thecurrent taxable year and all previous taxable years is equal to, the aggregateNet Income allocated to such Partners pursuant to Section 6.01(a)(iii) forall previous taxable years; provided, however, that the NetLosses shall not be allocated pursuant to this Section 6.01(b)(i) to theextent that such allocation would cause any Unitholder to have a deficitbalance in its Adjusted Capital Account at the end of such taxable year (orincrease any existing deficit balance in its Adjusted Capital Account);

 

(ii)  Second,100% to the General Partner and all Unitholders in accordance with theirrespective Percentage Interests; provided, however, that NetLosses shall not be allocated pursuant to this Section 6.01(b)(ii) to theextent that such allocation would cause any Unitholder to have a deficitbalance in its Adjusted Capital Account at the end of such taxable year (orincrease any existing deficit balance in its Adjusted Capital Account); and

 

(iii) Third, the balance, if any, 100% to theGeneral Partner,

 

provided, however, Unitholders holdingClass B Units will not be allocated any items of income, gain, loss ordeduction pursuant to this Section 6.01(b) with respect to theirClass B Units until the Adjusted Capital Account of each Common Unit orcomparable fraction thereof and each Class B Unit or comparable fractionthereof are equal.

 

(c)  Net Termination Gains and Losses. After givingeffect to the special allocations set forth in Section 6.01(d), all itemsof income, gain, loss and deduction taken into account in computing NetTermination Gain or Net Termination Loss for such taxable period shall beallocated in the same manner as such Net Termination Gain or Net TerminationLoss is allocated hereunder. All allocations under this Section 6.01(c)shall be made after Capital Account balances have been adjusted by all otherallocations provided under this Section 6.01 and after all distributionsof Available Cash provided under Section 6.04 and Section 6.05 havebeen made; provided, however, that solely for purposes of thisSection 6.01(c), Capital Accounts shall not be adjusted for distributionsmade pursuant to Section 12.04.

 

(i)  Ifa Net Termination Gain is recognized (or deemed recognized pursuant toSection 5.05(d)), such Net Termination Gain shall be allocated among thePartners in the following manner (and the Capital Accounts of the Partnersshall be increased by the amount so allocated in each of the followingsubclauses, in the order listed, before an allocation is made pursuant to thenext succeeding subclause):

 

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(A) First, to each Partner having a deficitbalance in its Capital Account, in the proportion that such deficit balancebears to the total deficit balances in the Capital Accounts of all Partners,until each such Partner has been allocated Net Termination Gain equal to anysuch deficit balance in its Capital Account;

 

(B) Second,(1) to the General Partner in its Percentage Interest and (2) to allUnitholders holding Common Units, Pro Rata, in a percentage equal to 100% less theGeneral Partner’s Percentage Interest, until the Capital Account in respect ofeach Common Unit then Outstanding is equal to the sum of (aa) itsUnrecovered Capital plus (bb) the Minimum Quarterly Distribution for theQuarter during which the Liquidation Date occurs, reduced by any distributionpursuant to Section 6.04(a)(i) or 6.04(b)(i) with respect to such CommonUnit for such Quarter (the amount determined pursuant to this clause (B)is hereinafter defined as the “Unpaid MQD”) plus (cc) any then existingCumulative Common Unit Arrearage;

 

(C) Third, ifthe Adjusted Capital Account of a Common Unit or comparable fraction thereofand a Class B Unit (or converted Class B Unit) or a comparablefraction thereof are not identical, (1) to all Unitholders holding theclass of Units with the lower Adjusted Capital Account, Pro Rata, a percentageequal to 100% less the General Partner’s Percentage Interest, and (2) tothe General Partner in accordance with its Percentage Interest, until theAdjusted Capital Account of each Common Unit or comparable fraction thereof andeach Class B Unit (or converted Class B Unit) or comparable fractionthereof are equal;

 

(D) Fourth, ifsuch Net Termination Gain is recognized (or is deemed to be recognized) priorto the conversion of the last Outstanding Subordinated Unit, (1) to theGeneral Partner in its Percentage Interest and (2) to all Unitholdersholding Subordinated Units, Pro Rata, in a percentage equal to 100% less theGeneral Partner’s Percentage Interest, until the Capital Account in respect ofeach Subordinated Unit then Outstanding equals the sum of (aa) itsUnrecovered Capital, determined for the taxable year (or portion thereof) towhich this allocation of gain relates, plus (bb) the Minimum Quarterly Distributionfor the Quarter during which the Liquidation Date occurs, reduced by anydistribution pursuant to Section 6.04(a)(iii) with respect to suchSubordinated Unit for such Quarter;

 

(E) Fifth, tothe General Partner and all Unitholders in accordance with their respectivePercentage Interests, until the Capital Account in respect of each Common Unitthen Outstanding

 

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is equal to the sum of (1) itsUnrecovered Capital, plus (2) the Unpaid MQD, plus (3) any then existingCumulative Common Unit Arrearage, plus (4) the excess of (aa) theFirst Target Distribution less the Minimum Quarterly Distribution for eachQuarter of the Partnership’s existence over (bb) the cumulative per Unitamount of any distributions of Available Cash that is deemed to be OperatingSurplus made pursuant to Sections 6.04(a)(iv) and 6.04(b)(ii) (the sum of(1) plus (2) plus (3) plus (4) is hereinafter defined as the “FirstLiquidation Target Amount”);

 

(F) Sixth,(1) to the General Partner in its Percentage Interest and (2) 13% tothe holders of the Incentive Distribution Rights, Pro Rata, and (3) to allUnitholders, Pro Rata, in a percentage equal to 100% less the sum of thepercentages applicable to subclause (1) and (2) of this clause (F), untilthe Capital Account in respect of each Common Unit then Outstanding is equal tothe sum of (aa) the First Liquidation Target Amount, plus (bb) theexcess of (x) the Second Target Distribution less the First TargetDistribution for each Quarter of the Partnership’s existence over (y) thecumulative per Unit amount of any distributions of Available Cash that isdeemed to be Operating Surplus made pursuant to Sections 6.04(a)(v) and6.04(b)(iii) (the sum of (aa) plus (bb) is hereinafter defined as the “SecondLiquidation Target Amount”);

 

(G) Seventh,(1) to the General Partner in its Percentage Interest and (2) 23% tothe holders of the Incentive Distribution Rights, Pro Rata, and (3) to allUnitholders, Pro Rata, in a percentage equal to 100% less the sum of thepercentages applicable to subclause (1) and (2) of this clause (G),until the Capital Account in respect of each Common Unit then Outstanding isequal to the sum of (aa) the Second Liquidation Target Amount, plus(bb) the excess of (x) the Third Target Distribution less the SecondTarget Distribution for each Quarter of the Partnership’s existence over(y) the cumulative per Unit amount of any distributions of Available Cashthat is deemed to be Operating Surplus made pursuant to Sections 6.04(a)(vi)and 6.04(b)(iv) (the sum of (1) plus (2) is hereinafter defined as the “ThirdLiquidation Target Amount”); and

 

(H) Finally,(1) to the General Partner in its Percentage Interest, (2) 48% to theholders of the Incentive Distribution Rights, Pro Rata, and (3) to allUnitholders, Pro Rata, in a percentage equal to 100% less the sum of thepercentages applicable to subclause (1) and (2) of this clause (H).

 

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(ii) if a Net Termination Loss is recognized(or deemed recognized pursuant to Section 5.05(d)), such Net TerminationLoss shall be allocated among the Partners in the following manner:

 

(A) First, if such Net Termination Loss isrecognized (or is deemed to be recognized) prior to the conversion of the lastOutstanding Subordinated Unit, to the General Partner and to all Unitholdersholding Subordinated Units in accordance with their respective PercentageInterests, until the Capital Account in respect of each Subordinated Unit thenOutstanding has been reduced to zero;

 

(B) Second, if the Adjusted Capital Accountof a Common Unit or comparable fraction thereof and a Class B Unit (orconverted Class B Unit) or comparable fraction thereof are not identical,(1) to the Unitholders holding the class of Units with the higher AdjustedCapital Account and (2) to the General Partner, in accordance with theirrespective Percentage Interests, until the Adjusted Capital Account of eachCommon Unit or comparable fraction thereof and each Class B Unit (or convertedClass B Unit) or comparable fraction thereof are equal;

 

(C) Third, (1) to the General Partner inits Percentage Interest and (2) to all Unitholders, Pro Rata, a percentageequal to 100% less the sum of the percentages applicable to subclause (1)of this clause (C), until the Capital Account in respect of each Unit thenOutstanding has been reduced to zero; and

 

(D) Fourth, the balance, if any, 100% to theGeneral Partner.

 

(d)  SpecialAllocations. Notwithstanding any other provision of this Section 6.01,the following special allocations shall be made for such taxable period:

 

(i)  PartnershipMinimum Gain Chargeback. Notwithstanding any other provision of thisSection 6.01, if there is a net decrease in Partnership Minimum Gainduring any Partnership taxable period, each Partner shall be allocated items ofPartnership income and gain for such period (and, if necessary, subsequentperiods) in the manner and amounts provided in Treasury RegulationSections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or anysuccessor provision. For purposes of this Section 6.01(d), each Partner’sAdjusted Capital Account balance shall be determined, and the allocation ofincome or gain required hereunder shall be effected, prior to the applicationof any other allocations pursuant to this Section 6.01(d) with respect tosuch taxable period (other than an allocation pursuant toSections 6.01(d)(vi) and 6.01(d)(vii)). This Section 6.01(d)(i) isintended to comply with the Partnership Minimum Gain

 

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chargeback requirement in Treasury Regulation Section 1.704-2(f)and shall be interpreted consistently therewith.

 

(ii) Chargeback of Partner NonrecourseDebt Minimum Gain. Notwithstanding the other provisions of thisSection 6.01 (other than Section 6.01(d)(i)), except as provided inTreasury Regulation Section 1.704-2(i)(4), if there is a net decrease inPartner Nonrecourse Debt Minimum Gain during any Partnership taxable period,any Partner with a share of Partner Nonrecourse Debt Minimum Gain at thebeginning of such taxable period shall be allocated items of Partnership incomeand gain for such period (and, if necessary, subsequent periods) in the mannerand amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and1.704-2(j)(2)(ii), or any successor provisions. For purposes of thisSection 6.01(d), each Partner’s Adjusted Capital Account balance shall bedetermined, and the allocation of income or gain required hereunder shall beeffected, prior to the application of any other allocations pursuant to thisSection 6.01(d), other than Section 6.01(d)(i) and other than anallocation pursuant to Section 6.01(d)(vi) and Section 6.01(d)(vii),with respect to such taxable period. This Section 6.01(d)(ii) is intendedto comply with the chargeback of items of income and gain requirement inTreasury Regulation Section 1.704-2(i)(4) and shall be interpretedconsistently therewith.

 

#### (iii) Priority Allocations.

####  

(A) If the amount of cash or the Net AgreedValue of any property distributed (except cash or property distributed pursuantto Section 12.04) to any Unitholder with respect to its Units for ataxable year is greater (on a per Unit basis) than the amount of cash or theNet Agreed Value of property distributed to the other Unitholders with respectto their Units (on a per Unit basis), then (1) each Unitholder receivingsuch greater cash or property distribution shall be allocated gross income inan amount equal to the product of (aa) the amount by which thedistribution (on a per Unit basis) to such Unitholder exceeds the distribution(on a per Unit basis) to the Unitholders receiving the smallest distributionand (bb) the number of Units owned by the Unitholder receiving the greaterdistribution; and (2) the General Partner shall be allocated gross incomein an aggregate amount equal to the product obtained by multiplying(aa) the quotient determined by dividing (x) the General Partner’sPercentage Interest at the time in which the greater cash or propertydistribution occurs by (y) 100% less the General Partner’s PercentageInterest at the time in which the greater cash or property distribution occursby (bb) the sum of the amounts allocated in clause (1) above.

 

(B) After the application ofSection 6.01(d)(iii)(A), all or any portion of the remaining items ofPartnership gross income or gain for the taxable period, if any, shall beallocated (1) to the

 

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holders of Incentive Distribution Rights, Pro Rata, until the aggregateamount of such items allocated to the holders of Incentive Distribution Rightspursuant to this paragraph 6.01(d)(iii)(B) for the current taxable yearand all previous taxable years is equal to the cumulative amount of allIncentive Distributions made to the holders of Incentive Distribution Rightsfrom the Closing Date to a date 45 days after the end of the currenttaxable year and (2) to the General Partner in an amount equal to theproduct obtained by multiplying (aa) an amount equal to the quotientdetermined by dividing (x) the General Partner’s Percentage Interest by(y) 100% less the General Partner’s Percentage Interest by (bb) thesum of the amounts allocated in clause (1) above.

 

(C) After the application ofSection 6.01(d)(iii)(A) and Section 6.01(d)(iii)(B), all or anyportion of the remaining items of Partnership income or gain for the taxableperiod, if any, shall be allocated (1) to the Unitholders holdingClass B Units, Pro Rata, until the aggregate amount of such itemsallocated to the holders of Class B Units pursuant to thisSection 6.01(d)(iii)(C) for the current taxable year and all previoustaxable years is equal to the cumulative amount of all distributions ofAvailable Cash made to the holders of Class B Units during the periodssuch holders of Class B Units are not allocated any items of income, gain,loss or deduction pursuant to Section 6.01(a) or Section 6.01(b) withrespect to their Class B Units; and (2) to the General Partner anamount equal to the product obtained by multiplying (aa) an amount equalto the quotient determined by dividing (x) the General Partner’sPercentage Interest by (y) 100% less the General Partner’s PercentageInterest times (bb) the sum of the amounts allocated in clause (1)above.

 

(iv) Qualified Income Offset. In theevent any Partner unexpectedly receives any adjustments, allocations ordistributions described in Treasury RegulationSections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain shall bespecially allocated to such Partner in an amount and manner sufficient toeliminate, to the extent required by the Treasury Regulations promulgated underSection 704(b) of the Code, the deficit balance, if any, in its AdjustedCapital Account created by such adjustments, allocations or distributions asquickly as possible unless such deficit balance is otherwise eliminatedpursuant to Section 6.01(d)(i) or Section 6.01(d)(ii).

 

(v) Gross Income Allocations. In theevent any Partner has a deficit balance in its Capital Account at the end ofany Partnership taxable period in excess of the sum of (A) the amount suchPartner is required to restore pursuant to the provisions of this Agreement and(B) the amount such Partner is deemed

 

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obligated to restore pursuant to Treasury RegulationSections 1.704-2(g) and 1.704-2(i)(5), such Partner shall be speciallyallocated items of Partnership gross income and gain in the amount of suchexcess as quickly as possible; provided, however, that anallocation pursuant to this Section 6.01(d)(v) shall be made only if andto the extent that such Partner would have a deficit balance in its CapitalAccount as adjusted after all other allocations provided for in thisSection 6.01 have been tentatively made as if this Section 6.01(d)(v)were not in this Agreement.

 

(vi) Nonrecourse Deductions. NonrecourseDeductions for any taxable period shall be allocated to the Partners inaccordance with their respective Percentage Interests. If the General Partnerdetermines that the Partnership’s Nonrecourse Deductions should be allocated ina different ratio to satisfy the safe harbor requirements of the TreasuryRegulations promulgated under Section 704(b) of the Code, the GeneralPartner is authorized, upon notice to the other Partners, to revise theprescribed ratio to the numerically closest ratio that does satisfy suchrequirements.

 

(vii) Partner Nonrecourse Deductions. PartnerNonrecourse Deductions for any taxable period shall be allocated 100% to thePartner that bears the Economic Risk of Loss with respect to the PartnerNonrecourse Debt to which such Partner Nonrecourse Deductions are attributablein accordance with Treasury Regulation Section 1.704-2(i). If more thanone Partner bears the Economic Risk of Loss with respect to a PartnerNonrecourse Debt, such Partner Nonrecourse Deductions attributable theretoshall be allocated between or among such Partners in accordance with the ratiosin which they share such Economic Risk of Loss.

 

(viii) Nonrecourse Liabilities. Forpurposes of Treasury Regulation Section 1.752-3(a)(3), the Partners agreethat Nonrecourse Liabilities of the Partnership in excess of the sum of(A) the amount of Partnership Minimum Gain and (B) the total amountof Nonrecourse Built-in Gain shall, first, at the General Partner’s discretion,be allocated to any Partner up to the amount of built-in gain that is allocableto such Partner on Section 704(c) property (as defined under TreasuryRegulation Section 1.704-3(a)(3)(ii)) or property (as defined underTreasury Regulation Section 1.704-3(a)(6)(i)) where such property issubject to Nonrecourse Liability to the extent that such built-in gain exceedsthe Nonrecourse Built-in Gain with respect to such property, and, second, amongthe Partners in accordance with their respective Percentage Interests.

 

(ix) Code Section 754 Adjustments.To the extent an adjustment to the adjusted tax basis of any Partnership assetpursuant to Section 734(b) or 743(b) of the Code is required, pursuant toTreasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into accountin determining Capital Accounts, the amount of such adjustment to the CapitalAccounts shall be treated as an item of gain (if the adjustment increases thebasis of the asset) or loss (if the adjustment decreases such basis), and suchitem of gain or loss shall be specially allocated to the Partners in a mannerconsistent with the manner in which their Capital

 

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Accounts are required to be adjusted pursuant to such Section of theTreasury Regulations.

 

#### (x) Economic Uniformity.

####  

(A) At the election of the General Partnerwith respect to any taxable period ending upon, or after, the termination ofthe Subordination Period with respect to any class of Units, all or a portionof the remaining items of Partnership gross income or gain for such taxableperiod, after taking into account allocations pursuant toSection 6.01(d)(iii), shall be allocated 100% to each Partner holdingSubordinated Units of that class that are Outstanding as of the termination ofthe Subordination Period (“Final Subordinated Units”) in the proportionof the number of Final Subordinated Units held by such Partner to the totalnumber of Final Subordinated Units then Outstanding, until each such Partnerhas been allocated an amount of gross income or gain that increases the CapitalAccount maintained with respect to such Final Subordinated Units to an amountequal to the product of (A) the number of Final Subordinated Units held bysuch Partner and (B) the Per Unit Capital Amount for a Common Unit. Thepurpose of this allocation is to establish uniformity between the CapitalAccounts underlying Final Subordinated Units and the Capital Accounts underlyingCommon Units held by Persons other than the General Partner and its Affiliatesimmediately prior to the conversion of such Final Subordinated Units intoCommon Units. This allocation method for establishing such economic uniformitywill be available to the General Partner only if the method for allocating theCapital Account maintained with respect to the Subordinated Units between thetransferred and retained Subordinated Units pursuant toSection 5.05(c)(ii) does not otherwise provide such economic uniformity tothe Final Subordinated Units.

 

(B) At the election of the General Partnerwith respect to any taxable period ending upon, or after, the conversion of theClass B Units pursuant to Section 5.11(f), all or a portion of theremaining items of Partnership income or gain for such taxable period, aftertaking into account allocations pursuant to Section 6.01(d)(iii) andSection 6.01(d)(x)(A), or all or a portion of the Partnership’s items ofloss and deduction, shall be allocated 100% to the holder or holders of theCommon Units resulting from the conversion pursuant to Section 5.11(f) (“ConvertedCommon Units”) in the proportion of the number of the Converted CommonUnits held by such holder or holders to the total number of Converted CommonUnits then Outstanding, until each such holder has been allocated an amount ofincome or gain that increases, or 

 

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an amount of loss and deduction, as the case may be, the CapitalAccount maintained with respect to such Converted Common Units to an amountequal to the product of (A) the number of Converted Common Units held bysuch holder and (B) the Per Unit Capital Amount for a Common Unit. Thepurpose of this allocation is to establish uniformity between the Capital Accountsunderlying Converted Common Units and the Capital Accounts underlying CommonUnits held by Persons other than the General Partner and its Affiliatesimmediately prior to the receipt of Common Units pursuant toSection 5.11(f).

 

#### (xi) Curative Allocation.

####  

(A) Notwithstanding any other provision ofthis Section 6.01, other than the Required Allocations, the RequiredAllocations shall be taken into account in making the Agreed Allocations sothat, to the extent possible, the net amount of items of income, gain, loss anddeduction allocated to each Partner pursuant to the Required Allocations andthe Agreed Allocations, together, shall be equal to the net amount of suchitems that would have been allocated to each such Partner under the AgreedAllocations had the Required Allocations and the related Curative Allocationnot otherwise been provided in this Section 6.01. Notwithstanding thepreceding sentence, Required Allocations relating to (1) NonrecourseDeductions shall not be taken into account except to the extent that there hasbeen a decrease in Partnership Minimum Gain and (2) Partner NonrecourseDeductions shall not be taken into account except to the extent that there hasbeen a decrease in Partner Nonrecourse Debt Minimum Gain. Allocations pursuantto this Section 6.01(d)(xi)(A) shall only be made with respect to RequiredAllocations to the extent the General Partner determines that such allocationswill otherwise be inconsistent with the economic agreement among the Partners.Further, allocations pursuant to this Section 6.01(d)(xi)(A) shall bedeferred with respect to allocations pursuant to clauses (1) and (2) hereof tothe extent the General Partner determines that such allocations are likely tobe offset by subsequent Required Allocations.

 

(B) The General Partner shall, with respectto each taxable period, (1) apply the provisions ofSection 6.01(d)(xi)(A) in whatever order is most likely to minimize theeconomic distortions that might otherwise result from the Required Allocations,and (2) divide all allocations pursuant to Section 6.01(d)(xi)(A)among the Partners in a manner that is likely to minimize such economicdistortions.

 

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#### (xii) Corrective Allocations. In the event of any allocation ofAdditional Book Basis Derivative Items or any Book-Down Event or anyrecognition of a Net Termination Loss, the following rules shall apply:

####  

(A) In the case of any allocation ofAdditional Book Basis Derivative Items (other than an allocation of UnrealizedGain or Unrealized Loss under Section 5.05(d) hereof), the General Partnershall allocate additional items of gross income and gain away from the holdersof Incentive Distribution Rights to the Unitholders and the General Partner, oradditional items of deduction and loss away from the Unitholders and theGeneral Partner to the holders of Incentive Distribution Rights, to the extentthat the Additional Book Basis Derivative Items allocated to the Unitholders orthe General Partner exceed their Share of Additional Book Basis DerivativeItems. For this purpose, the Unitholders and the General Partner shall betreated as being allocated Additional Book Basis Derivative Items to the extentthat such Additional Book Basis Derivative Items have reduced the amount ofincome that would otherwise have been allocated to the Unitholders or theGeneral Partner under the Partnership Agreement (e.g., Additional Book BasisDerivative Items taken into account in computing cost of goods sold wouldreduce the amount of book income otherwise available for allocation among thePartners). Any allocation made pursuant to this Section 6.01(d)(xii)(A)shall be made after all of the other Agreed Allocations have been made as ifthis Section 6.01(d)(xii) were not in this Agreement and, to the extentnecessary, shall require the reallocation of items that have been allocatedpursuant to such other Agreed Allocations.

 

(B) In the case of any negative adjustmentsto the Capital Accounts of the Partners resulting from a Book-Down Event orfrom the recognition of a Net Termination Loss, such negative adjustment(1) shall first be allocated, to the extent of the Aggregate Remaining NetPositive Adjustments, in such a manner, as determined by the General Partner,that to the extent possible the aggregate Capital Accounts of the Partners willequal the amount that would have been the Capital Account balance of thePartners if no prior Book-Up Events had occurred, and (2) any negativeadjustment in excess of the Aggregate Remaining Net Positive Adjustments shallbe allocated pursuant to Section 6.01(c) hereof.

 

(C) In making the allocations required underthis Section 6.01(d)(xii), the General Partner may apply whateverconventions or other methodology it determines will satisfy the purpose of thisSection 6.01(d)(xii).

 

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## SECTION 6.02. Allocationsfor Tax Purposes.

##  

(a)  Except as otherwise providedherein, for federal income tax purposes, each item of income, gain, loss anddeduction shall be allocated among the Partners in the same manner as itscorrelative item of “book” income, gain, loss or deduction is allocatedpursuant to Section 6.01.

 

(b)  In an attempt to eliminateBook-Tax Disparities attributable to a Contributed Property or AdjustedProperty, items of income, gain, loss, depreciation, amortization and costrecovery deductions shall be allocated for federal income tax purposes amongthe Partners as follows:

 

(i) (A) In the case of a ContributedProperty, such items attributable thereto shall be allocated among the Partnersin the manner provided under Section 704(c) of the Code using remedialallocations within the meaning of Treasury RegulationSection 1.704-3(d) that takes into account the variation between theAgreed Value of such property and its adjusted basis at the time ofcontribution and (B) any item of Residual Gain or Residual Lossattributable to a Contributed Property shall be allocated among the Partners inthe same manner as its correlative item of “book” gain or loss is allocatedpursuant to Section 6.01.

 

(ii) (A) In the case of an AdjustedProperty, such items shall (1) first, be allocated among the Partners in amanner consistent with the principles of Section 704(c) of the Code totake into account the Unrealized Gain or Unrealized Loss attributable to suchproperty and the allocations thereof pursuant to Section 5.05(d)(i) orSection 5.05(d)(ii), and (2) second, in the event such property wasoriginally a Contributed Property, be allocated among the Partners in a mannerconsistent with Section 6.02(b)(i)(A); and (B) any item of ResidualGain or Residual Loss attributable to an Adjusted Property shall be allocatedamong the Partners in the same manner as its correlative item of “book” gain orloss is allocated pursuant to Section 6.01.

 

(iii) The General Partner shall apply theprinciples of Treasury Regulation Section 1.704-3(d) to eliminate Book-TaxDisparities.

 

(c)  For the proper administration of the Partnership and forthe preservation of uniformity of the Limited Partner Interests (or any classor classes thereof), the General Partner shall (i) adopt such conventionsas it deems appropriate in determining the amount of depreciation, amortizationand cost recovery deductions; (ii) make special allocations for federalincome tax purposes of income (including gross income) or deductions; and(iii) amend the provisions of this Agreement as appropriate (x) toreflect the proposal or promulgation of Treasury Regulations underSection 704(b) or Section 704(c) of the Code or (y) otherwise topreserve or achieve uniformity of the Limited Partner Interests (or any classor classes thereof). The General Partner may adopt such conventions, make suchallocations and make such amendments to this Agreement as provided in this Section 6.02(c)only if such conventions, allocations or amendments would not have a materialadverse effect on the Partners, the holders of any class or

 

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classes of Limited Partner Interests issued and Outstanding or thePartnership, and if such allocations are consistent with the principles ofSection 704 of the Code.

 

(d)  The General Partner may determine to depreciate oramortize the portion of an adjustment under Section 743(b) of the Codeattributable to unrealized appreciation in any Adjusted Property (to the extentof the unamortized Book-Tax Disparity) using a predetermined rate derived fromthe depreciation or amortization method and useful life applied to thePartnership’s common basis of such property, despite any inconsistency of suchapproach with Treasury Regulation Section 1.167(c)-l(a)(6) or anysuccessor regulations thereto. If the General Partner determines that suchreporting position cannot reasonably be taken, the General Partner may adoptdepreciation and amortization conventions under which all purchasers acquiringLimited Partner Interests in the same month would receive depreciation andamortization deductions, based upon the same applicable rate as if they hadpurchased a direct interest in the Partnership’s property. If the GeneralPartner chooses not to utilize such aggregate method, the General Partner mayuse any other depreciation and amortization conventions to preserve theuniformity of the intrinsic tax characteristics of any Limited PartnerInterests, so long as such conventions would not have a material adverse effecton the Limited Partners or the Record Holders of any class or classes ofLimited Partner Interests.

 

(e)  Any gain allocated to the Partners upon the sale or othertaxable disposition of any Partnership asset shall, to the extent possible,after taking into account other required allocations of gain pursuant to thisSection 6.02, be characterized as Recapture Income in the same proportionsand to the same extent as such Partners (or their predecessors in interest)have been allocated any deductions directly or indirectly giving rise to thetreatment of such gains as Recapture Income.

 

(f)  All items of income, gain,loss, deduction and credit recognized by the Partnership for federal income taxpurposes and allocated to the Partners in accordance with the provisions hereofshall be determined without regard to any election under Section 754 ofthe Code that may be made by the Partnership; provided, however,that such allocations, once made, shall be adjusted (in the manner determinedby the General Partner) to take into account those adjustments permitted orrequired by Sections 734 and 743 of the Code.

 

(g)  Each item of Partnershipincome, gain, loss and deduction shall, for federal income tax purposes, bedetermined on an annual basis and prorated on a monthly basis and shall beallocated to the Partners as of the opening of the National Securities Exchangeon which the Common Units are listed or admitted to trading on the firstBusiness Day of each month; provided, however, such items for theperiod beginning on the Closing Date and ending on the last day of the month inwhich the Option Closing Date or the expiration of the Over-Allotment Optionoccurs shall be allocated to the Partners as of the opening of the NationalSecurities Exchange on which the Common Units are listed or admitted to tradingon the first Business Day of the next succeeding month; and provided furtherthat gain or loss on a sale or other disposition of any assets of thePartnership or any other extraordinary item of income or loss realized and

 

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recognized other than in the ordinary course of business, as determinedby the General Partner, shall be allocated to the Partners as of the opening ofthe National Securities Exchange on which the Common Units are listed oradmitted to trading on the first Business Day of the month in which such gainor loss is recognized for federal income tax purposes. The General Partner mayrevise, alter or otherwise modify such methods of allocation to the extentpermitted or required by Section 706 of the Code and the regulations orrulings promulgated thereunder.

 

(h)  Allocations that wouldotherwise be made to a Limited Partner under the provisions of thisArticle VI shall instead be made to the beneficial owner of LimitedPartner Interests held by a nominee in any case in which the nominee hasfurnished the identity of such owner to the Partnership in accordance withSection 6031(c) of the Code or any other method determined by the GeneralPartner.

 

SECTION 6.03. Requirement and Characterization of Distributions;Distributions to Record Holders. (a) Within 45 days following the end of each Quarter commencing withthe Quarter ending on December 31, 2007, an amount equal to 100% ofAvailable Cash with respect to such Quarter shall, subject toSection 17-607 of the Delaware Act, be distributed in accordance with thisArticle VI by the Partnership to the Partners as of the Record Dateselected by the General Partner. All amounts of Available Cash distributed bythe Partnership on any date from any source shall be deemed to be OperatingSurplus until the sum of all amounts of Available Cash theretofore distributedby the Partnership to the Partners pursuant to Section 6.04 equals theOperating Surplus from the Closing Date through the close of the immediatelypreceding Quarter. Any remaining amounts of Available Cash distributed by thePartnership on such date shall, except as otherwise provided inSection 6.05, be deemed to be “Capital Surplus.”  Notwithstanding any provision to the contraryin this Agreement, the Partnership shall not make a distribution to any Partneron account of its interest in the Partnership if such distribution wouldviolate the Delaware Act or any other applicable law.

 

(b)  NotwithstandingSection 6.03(a), in the event of the dissolution and liquidation of thePartnership, all receipts received during or after the Quarter in which theLiquidation Date occurs shall be applied and distributed solely in accordancewith, and subject to the terms and conditions of, Section 12.04.

 

(c)  The General Partner maytreat taxes paid by the Partnership on behalf of, or amounts withheld withrespect to, all or less than all of the Partners, as a distribution ofAvailable Cash to such Partners.

 

(d)  Each distribution in respectof a Partnership Interest shall be paid by the Partnership, directly or throughthe Transfer Agent or through any other Person or agent, only to the RecordHolder of such Partnership Interest as of the Record Date set for suchdistribution. Such payment shall constitute full payment and satisfaction ofthe Partnership’s liability in respect of such payment, regardless of any claimof any Person who may have an interest in such payment by reason of anassignment or otherwise.

 

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SECTION 6.04. Distributions of Available Cash from Operating Surplus.(a)  During Subordination Period. AvailableCash with respect to any Quarter within the Subordination Period that is deemedto be Operating Surplus pursuant to the provisions of Section 6.03 orSection 6.05 shall, subject to Section 17-607 of the Delaware Act, bedistributed as follows, except as otherwise contemplated bySection 5.06(b) in respect of other Partnership Securities issued pursuantthereto:

 

#### (i) First, (A) to the General Partner in its Percentage Interestand (B) to all the Unitholders holding Common Units, Pro Rata, in apercentage equal to 100% less the General Partner’s Percentage Interest, untilthere has been distributed in respect of each Common Unit then Outstanding anamount equal to the Minimum Quarterly Distribution for such Quarter;

####  

#### (ii) Second, (A) to the General Partner in its Percentage Interestand (B) to all Unitholders holding Common Units, Pro Rata, in a percentageequal to 100% less the General Partner’s Percentage Interest, until there hasbeen distributed in respect of each Common Unit then Outstanding an amount equalto the Cumulative Common Unit Arrearage existing at the end of such Quarter;

####  

#### (iii) Third, (A) to the General Partner in its Percentage Interestand (B) to all Unitholders holding Subordinated Units, Pro Rata, in apercentage equal to 100% less the General Partner’s Percentage Interest, untilthere has been distributed in respect of each Subordinated Unit thenOutstanding an amount equal to the Minimum Quarterly Distribution for suchQuarter;

####  

#### (iv) Fourth, to the General Partner and all Unitholders in accordancewith their respective Percentage Interests, until there has been distributed inrespect of each Unit then Outstanding an amount equal to the excess of theFirst Target Distribution over the Minimum Quarterly Distribution for suchQuarter;

####  

#### (v) Fifth, (A) to the General Partner in its Percentage Interest,(B) 13% to the holders of the Incentive Distribution Rights, Pro Rata and(C) to all Unitholders, Pro Rata, in a percentage equal to 100% less thesum of the percentages applicable to subclauses (A) and (B) of thisclause (v), until there has been distributed in respect of each Unit thenOutstanding an amount equal to the excess of the Second Target Distributionover the First Target Distribution for such Quarter;

####  

#### (vi) Sixth, (A) to the General Partner in its Percentage Interest,(B) 23% to the holders of the Incentive Distribution Rights, Pro Rata and(C) to all Unitholders, Pro Rata, in a percentage equal to 100% less thesum of the percentages applicable to subclauses (A) and (B) of thissubclause (vi), until there has been distributed in respect of each Unitthen Outstanding an amount equal to the excess of the Third Target Distributionover the Second Target Distribution for such Quarter; and

####  

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#### 

####  

#### (vii) Thereafter, (A) to the General Partner in its PercentageInterest, (B) 48% to the holders of the Incentive Distribution Rights, ProRata and (C) to all Unitholders, Pro Rata, in a percentage equal to 100%less the sum of the percentages applicable to subclauses (A) and (B) ofthis clause (vii);

####  

provided, however, that if the MinimumQuarterly Distribution, the First Target Distribution, the Second TargetDistribution and the Third Target Distribution have been reduced to zeropursuant to the second sentence of Section 6.06, the distribution ofAvailable Cash that is deemed to be Operating Surplus with respect to anyQuarter will be made solely in accordance with Section 6.04(a)(vii).

 

(b)  After SubordinationPeriod. Available Cash with respect to any Quarter after the SubordinationPeriod that is deemed to be Operating Surplus pursuant to the provisions ofSection 6.03 or Section 6.05 shall, subject to Section 17-607 ofthe Delaware Act, be distributed as follows, except as otherwise required bySection 5.06(b) in respect of other Partnership Securities issued pursuantthereto:

 

#### (i) First, to the General Partner and all Unitholders in accordancewith their respective Percentage Interests, until there has been distributed inrespect of each Unit then Outstanding an amount equal to the Minimum QuarterlyDistribution for such Quarter;

####  

#### (ii) Second, to the General Partner and all Unitholders in accordancewith their respective Percentage Interests, until there has been distributed inrespect of each Unit then Outstanding an amount equal to the excess of theFirst Target Distribution over the Minimum Quarterly Distribution for suchQuarter;

####  

#### (iii) Third, (A) to the General Partner in its PercentageInterest, (B) 13% to the holders of the Incentive Distribution Rights, ProRata and (C) to all Unitholders, Pro Rata, in a percentage equal to 100%less the sum of the percentages applicable to subclauses (A) and (B) ofthis clause (iii), until there has been distributed in respect of eachUnit then Outstanding an amount equal to the excess of the Second TargetDistribution over the First Target Distribution for such Quarter;

####  

#### (iv) Fourth, (A) to the General Partner in its PercentageInterest, (B) 23% to the holders of the Incentive Distribution Rights, ProRata and (C) to all Unitholders, Pro Rata, in a percentage equal to 100%less the sum of the percentages applicable to subclause (A) and (B) ofthis clause (iv), until there has been distributed in respect of each Unitthen Outstanding an amount equal to the excess of the Third Target Distributionover the Second Target Distribution for such Quarter; and

####  

#### (v) Thereafter, (A) to the General Partner in its PercentageInterest, (B) 48% to the holders of the Incentive Distribution Rights, ProRata and (C) to all Unitholders, Pro Rata, in a percentage equal to 100%less the sum of the percentages applicable to subclauses (A) and (B) ofthis clause (v);

####  

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#### 

####  

provided, however, that if the MinimumQuarterly Distribution, the First Target Distribution, the Second TargetDistribution and the Third Target Distribution have been reduced to zeropursuant to the second sentence of Section 6.06, the distribution ofAvailable Cash that is deemed to be Operating Surplus with respect to anyQuarter will be made solely in accordance with Section 6.04(b)(v).

 

SECTION 6.05. Distributions of Available Cash from Capital Surplus.Available Cash that is deemed to be Capital Surplus pursuant to the provisionsof Section 6.03(a) shall, subject to Section 17-607 of the DelawareAct, be distributed as follows:

 

##### (a)  First, to the GeneralPartner and all Unitholders in accordance with their respective PercentageInterests, until there has been distributed to a hypothetical holder of aCommon Unit acquired on the Closing Date in respect of such Common Unitdistributions of Available Cash that are deemed to be Capital Surplus in anaggregate amount equal to the Initial Unit Price;

#####  

##### (b)  Second, (i) to theGeneral Partner in its Percentage Interest and (ii) to all Unitholdersholding Common Units, Pro Rata, in a percentage equal to 100% less the GeneralPartner’s Percentage Interest, until there has been distributed in respect ofeach Common Unit then Outstanding an amount equal to the Cumulative Common UnitArrearage.

#####  

Thereafter, all Available Cash shall be distributed as if it wereOperating Surplus and shall be distributed in accordance withSection 6.04.

 

SECTION 6.06. Adjustment of Minimum Quarterly Distribution andTarget Distribution Levels. (a)  TheMinimum Quarterly Distribution, First Target Distribution, Second TargetDistribution, Third Target Distribution, Common Unit Arrearages and CumulativeCommon Unit Arrearages shall be proportionately adjusted in the event of anydistribution, combination or subdivision (whether effected by a distributionpayable in Units or otherwise) of Units or other Partnership Securities inaccordance with Section 5.09. In the event of a distribution of AvailableCash that is deemed to be from Capital Surplus, the then applicable MinimumQuarterly Distribution, First Target Distribution, Second Target Distributionand Third Target Distribution, shall be adjusted proportionately downward toequal the product, obtained by multiplying the otherwise applicable Minimum QuarterlyDistribution, First Target Distribution, Second Target Distribution and ThirdTarget Distribution, as the case may be, by a fraction of which the numeratoris the Unrecovered Capital of the Common Units immediately after giving effectto such distribution and of which the denominator is the Unrecovered Capital ofthe Common Units immediately prior to giving effect to such distribution.

 

(b)  The Minimum QuarterlyDistribution, First Target Distribution, Second Target Distribution and ThirdTarget Distribution, shall also be subject to adjustment pursuant toSection 5.11 and Section 6.09.

 

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SECTION 6.07. Special Provisions Relating to the Holders ofSubordinated Units and Class B Units. (a)  Except with respect to the right to vote onor approve matters requiring the vote or approval of a percentage of theholders of Outstanding Common Units and the right to participate in allocationsof income, gain, loss and deduction and distributions made with respect toCommon Units, the holder of a Subordinated Unit shall have all of the rightsand obligations of a Unitholder holding Common Units hereunder; provided,however, that immediately upon the conversion of Subordinated Units intoCommon Units pursuant to Section 5.07, the Unitholder holding aSubordinated Unit shall possess all of the rights and obligations of aUnitholder holding Common Units hereunder, including the right to vote as aCommon Unitholder and the right to participate in allocations of income, gain,loss and deduction and distributions made with respect to Common Units; provided,however, that such converted Subordinated Units shall remain subject tothe provisions of Section 5.05(c)(ii), Section 6.01(d)(x)(A) and Section6.07(b).

 

(b)  A Unitholder holding a Common Unit that has resultedfrom the conversion of a Subordinated Unit pursuant to Section 5.07 shallnot be issued a Common Unit Certificate pursuant to Section 4.01, andshall not be permitted to transfer such Common Unit to a Person that is not anAffiliate of the holder until such time as the General Partner determines,based on advice of counsel, that each such Common Unit should have, as asubstantive matter, like intrinsic economic and federal income taxcharacteristics, in all material respects, to the intrinsic economic andfederal income tax characteristics of an Initial Common Unit. In connectionwith the condition imposed by this Section 6.07(b), the General Partnermay take whatever steps are required to provide economic uniformity to suchCommon Units in preparation for a transfer of such Common Units, including theapplication of Section 5.05(c)(ii) and Section 6.01(d)(x)(A); provided,however, that no such steps may be taken that would have a materialadverse effect on the Unitholders holding Common Units represented by CommonUnit Certificates.

 

(c)  Except with respect to theright to vote on or approve matters requiring the vote or approval of apercentage of the holders of Outstanding Common Units and the right to participatein allocations of income, gain, loss and deduction and distributions made withrespect to Common Units, the holder of a Class B Unit shall have all therights and obligations of a Unitholder holding Common Units; provided, however,that immediately upon the conversion of Class B Units into Common Unitspursuant to Section 5.11, the Unitholder holding a Class B Unit shallpossess all of the rights and obligations of a Unitholder holding Common Unitshereunder, including the right to vote as a Common Unitholder and the right toparticipate in allocations of income, gain, loss and deduction anddistributions made with respect to Common Units; provided, however,that such converted Class B Units shall remain subject to the provisionsof Section 6.01(a), Section 6.01(b), Section 6.01(d)(iii),Section 6.01(d)(x)(B) and Section 6.07(d).

 

(d)  A Unitholder of a CommonUnit that has resulted from the conversion of a Class B Unit pursuant toSection 5.11(f) shall not be issued a Common Unit Certificate pursuant to Section 4.01,and shall not be permitted to transfer such Common

 

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Units to a Person that is not an Affiliate of the holder until suchtime as the General Partner determines, based on advice of counsel, that eachsuch Common Unit should have, as a substantive matter, like intrinsic economicand federal income tax characteristics, in all material respects, to theintrinsic economic and federal income tax characteristics of an Initial CommonUnit. In connection with the condition imposed by this Section 6.07(d),the General Partner may take whatever steps are required to provide economicuniformity to such Common Units in preparation for a transfer of such CommonUnits, including the application of Section 6.01(d)(x)(B); provided,however, that no such steps may be taken that would have a materialadverse effect on the Unitholders holding Common Units represented by CommonUnit Certificates.

 

SECTION 6.08. Special Provisions Relating to the Holders ofIncentive Distribution Rights. Notwithstanding anything to the contrary setforth in this Agreement, the holders of the Incentive Distribution Rights(a) shall (i) possess the rights and obligations provided in thisAgreement with respect to a Limited Partner pursuant to Article III andArticle VII and (ii) have a Capital Account as a Partner pursuant toSection 5.05 and all other provisions related thereto and (b) shallnot (i) be entitled to vote on or approve any matters requiring the voteor approval of a percentage of the holders of Outstanding Common Units, exceptas provided by law, (ii) be entitled to any distributions other than asprovided in Sections 6.04(a)(v), (vi) and (vii),Sections 6.04(b)(iii), (iv) and (v), and Section 12.04 or(iii) be allocated items of income, gain, loss or deduction other than asspecified in this Article VI.

 

SECTION 6.09. Entity Level Taxation. If legislation is enactedor the interpretation of existing language is modified by a governmental taxingauthority so that a Group Member is treated as an association taxable as acorporation or is otherwise subject to an entity level tax for federal, stateor local income tax purposes, then the General Partner may reduce the MinimumQuarterly Distribution, the First Target Distribution, the Second TargetDistribution and the Third Target Distribution by the amount of income taxesthat are payable by reason of any such new legislation or interpretation (the “IncrementalIncome Taxes”), or any portion thereof selected by the General Partner, inthe manner provided in this Section 6.09. If the General Partner elects toreduce the Minimum Quarterly Distribution, the First Target Distribution, theSecond Target Distribution and the Third Target Distribution for any Quarterwith respect to all or a portion of any Incremental Income Taxes, the GeneralPartner shall estimate for such Quarter the Partnership Group’s aggregateliability (the “Estimated Incremental Quarterly Tax Amount”) for allsuch income taxes that are payable by reason of any such new legislation orinterpretation; provided that any difference between such estimate and theactual tax liability for such Quarter that is owed by reason of any such newlegislation or interpretation shall be taken into account in determining theEstimated Incremental Quarterly Tax Amount with respect to each Quarter inwhich any such difference can be determined. For each such Quarter, the MinimumQuarterly Distribution, the First Target Distribution, the Second TargetDistribution and the Third Target Distribution shall be the product obtained bymultiplying (a) the amounts therefor that are set out herein prior to theapplication of this Section 6.09 times (b) the quotient obtained bydividing (i) Available Cash with respect to such Quarter by (ii) thesum of Available Cash with respect to such Quarter and the EstimatedIncremental Quarterly Tax Amount for such

 

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Quarter, as determined by the General Partner. For purposes of theforegoing, Available Cash with respect to a Quarter will be deemed reduced bythe Estimated Incremental Quarterly Tax Amount for that Quarter.

 

ARTICLE VII

 

Management and Operation of Business

 

SECTION 7.01. Management. (a) The General Partner shall conduct, direct and manage all activities ofthe Partnership. Except as otherwise expressly provided in this Agreement, allmanagement powers over the business and affairs of the Partnership shall beexclusively vested in the General Partner, and no Limited Partner shall haveany management power over the business and affairs of the Partnership. Inaddition to the powers now or hereafter granted a general partner of a limitedpartnership under applicable law or that are granted to the General Partnerunder any other provision of this Agreement, the General Partner, subject toSection 7.03, shall have full power and authority to do all things and onsuch terms as it determines to be necessary or appropriate to conduct thebusiness of the Partnership, to exercise all powers set forth in Section 2.05and to effectuate the purposes set forth in Section 2.04, including thefollowing:

 

#### (i) the making of any expenditures, the lending or borrowing of money,the assumption or guarantee of, or other contracting for, indebtedness andother liabilities, the issuance of evidences of indebtedness, includingindebtedness that is convertible into Partnership Securities, and the incurringof any other obligations;

####  

#### (ii) the making of tax, regulatory and other filings, or rendering ofperiodic or other reports to governmental or other agencies having jurisdictionover 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 themerger, consolidation or other combination of the Partnership with or intoanother Person (the matters described in this clause (iii) being subject,however, to any prior approval that may be required by Section 7.03 andArticle XIV);

 

#### (iv) the use of the assets of the Partnership (including cash on hand)for any purpose consistent with the terms of this Agreement, including thefinancing of the conduct of the operations of the Partnership Group; subject toSection 7.06(a), the lending of funds to other Persons (including otherGroup Members); the repayment or guarantee of obligations of any Group Member;and the making of capital contributions to any Group Member;

 

#### (v) the negotiation, execution and performance of any contracts,conveyances or other instruments (including instruments that limit theliability of the Partnership under contractual arrangements to all orparticular assets of the

####  

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#### 

####  

#### Partnership,with the other party to the contract to have no recourse against the GeneralPartner or its assets other than its interest in the Partnership, even if suchnon-recourse provision results in the terms of the transaction being lessfavorable to the Partnership than would otherwise be the case);

 

(vi) the distribution of Partnership cash;

 

(vii) the selection and dismissal ofemployees (including employees having titles such as “president,” “vicepresident,” “secretary” and “treasurer”) and agents, outside attorneys,accountants, consultants and contractors and the determination of theircompensation and other terms of employment or hiring;

 

(viii) the maintenance of insurance for thebenefit of the Partnership Group, the Partners and Indemnitees;

 

(ix) the formation of, or acquisition of aninterest in, and the contribution of property and the making of loans to, anyfurther limited or general partnerships, joint ventures, corporations, limitedliability companies or other relationships (including the acquisition ofinterests in, and the contributions of property to, any Group Member from timeto time) subject to the restrictions set forth in Section 2.04;

 

(x) the control of any matters affecting therights and obligations of the Partnership, including the bringing and defendingof actions at law or in equity and otherwise engaging in the conduct oflitigation, arbitration or mediation and the incurring of legal expense and thesettlement of claims and litigation;

 

(xi) the indemnification of any Personagainst liabilities and contingencies to the extent permitted by law;

 

(xii) the entering into of listing agreementswith any National Securities Exchange and the delisting of some or all of theLimited Partner Interests from, or requesting that trading be suspended on, anysuch exchange (subject to any prior approval that may be required underSection 4.08);

 

(xiii) the purchase, sale or otheracquisition or disposition of Partnership Securities, or the issuance ofoptions, rights, warrants, appreciation rights and tracking and phantominterests relating to Partnership Securities;

 

(xiv) the undertaking of any action inconnection with the Partnership’s participation in any Group Member; and

 

(xv) the entering into of agreements with anyof its Affiliates to render services to a Group Member or to itself in the dischargeof its duties as General Partner of the Partnership.

 

(b)   Notwithstanding any other provision of thisAgreement, any Group Member Agreement, the Delaware Act or any applicable law,rule or regulation, each of

 

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the Partners and each other Person who may acquire an interest inPartnership Securities hereby (i) approves, ratifies and confirms theexecution, delivery and performance by the parties thereto of this Agreement,the Underwriting Agreement, the Omnibus Agreement, the Contribution Agreement,any Group Member Agreement of any other Group Member and the other agreementsdescribed in or filed as exhibits to the Registration Statement that arerelated to the transactions contemplated by the Registration Statement;(ii) agrees that the General Partner (on its own or on behalf of thePartnership) is authorized to execute, deliver and perform the agreementsreferred to in clause (i) of this sentence and the other agreements, acts,transactions and matters described in or contemplated by the RegistrationStatement on behalf of the Partnership without any further act, approval orvote of the Partners or the other Persons who may acquire an interest inPartnership Securities; and (iii) agrees that the execution, delivery orperformance by the General Partner, any Group Member or any Affiliate of any ofthem of this Agreement or any agreement authorized or permitted under thisAgreement (including the exercise by the General Partner or any Affiliate of theGeneral Partner of the rights accorded pursuant to Article XV) shall notconstitute a breach by the General Partner of any duty that the General Partnermay owe the Partnership or the Limited Partners or any other Persons under thisAgreement (or any other agreements) or of any duty stated or implied by law orequity.

 

SECTION 7.02. Certificate of Limited Partnership. The GeneralPartner has caused the Certificate of Limited Partnership to be filed with theSecretary of State of the State of Delaware as required by the Delaware Act. TheGeneral Partner shall use all commercially reasonable efforts to cause to befiled such other certificates or documents that the General Partner determinesto be necessary or appropriate for the formation, continuation, qualificationand operation of a limited partnership (or a partnership or other entity inwhich the limited partners have limited liability) in the State of Delaware orany other state in which the Partnership may elect to do business or ownproperty. To the extent the General Partner determines such action to benecessary or appropriate, the General Partner shall file amendments to andrestatements of the Certificate of Limited Partnership and do all things tomaintain the Partnership as a limited partnership (or a partnership or otherentity in which the limited partners have limited liability) under the laws ofthe State of Delaware or of any other state in which the Partnership may electto do business or own property. Subject to the terms of Section 3.04(a),the General Partner shall not be required, before or after filing, to deliveror mail a copy of the Certificate of Limited Partnership, any qualificationdocument or any amendment thereto to any Limited Partner.

 

SECTION 7.03. Restrictions on the General Partner’s Authority. Exceptas provided in Article XII and Article XIV, the General Partner maynot sell, exchange or otherwise dispose of all or substantially all of theassets of the Partnership Group, taken as a whole, in a single transaction or aseries of related transactions (including by way of merger, consolidation,other combination or sale of ownership interests in the Partnership’sSubsidiaries) without the approval of holders of a Unit Majority; provided,however, that this provision shall not preclude or limit the GeneralPartner’s ability to mortgage, pledge, hypothecate or grant a lien,encumbrance, or security interest in all or substantially all of the assets ofthe Partnership Group and shall not apply to any forced

 

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sale of any or all of the assets of the Partnership Group pursuant tothe foreclosure of, or other realization upon, any such encumbrance. Withoutthe approval of holders of a Unit Majority, the General Partner shall not, onbehalf of the Partnership, except as permitted under Section 4.06,Section 11.01 and Section 11.02, elect or cause the Partnership toelect a successor general partner of the Partnership.

 

SECTION 7.04. Reimbursement of the General Partner. (a)  Except as provided in this Section 7.04and elsewhere in this Agreement, the General Partner shall not be compensatedfor its services as a general partner or managing member of any Group Member.

 

(b)  The General Partner shall bereimbursed on a monthly basis, or such other basis as the General Partner maydetermine, for (i) all direct and indirect expenses it incurs or paymentsit makes on behalf of the Partnership Group (including salary, bonus, incentivecompensation and other amounts paid to any Person, including Affiliates of theGeneral Partner, to perform services for the Partnership Group or for theGeneral Partner in the discharge of its duties to the Partnership Group), and(ii) all other direct and indirect expenses allocable to the PartnershipGroup or otherwise incurred by the General Partner in connection with operatingthe Partnership Group’s business (including expenses allocated to the GeneralPartner by its Affiliates). The General Partner shall determine the expensesthat are allocable to the Partnership Group. Reimbursements pursuant to thisSection 7.04 shall be in addition to any reimbursement to the GeneralPartner as a result of indemnification pursuant to Section 7.07.

 

(c)  The General Partner and itsAffiliates may charge any member of the Partnership Group a management fee tothe extent necessary to allow the Partnership Group to reduce the amount of anyfederal, state or local or any non-U.S. franchise or income tax or any othertax based upon the revenues or gross margin of any member of the PartnershipGroup if the tax benefit produced by the payment of such management fee or feesexceeds the amount of such fee or fees.

 

(d)  The General Partner, withoutthe approval of the Limited Partners (who shall have no right to vote inrespect thereof), may propose and adopt on behalf of the Partnership employeebenefit plans, employee programs and employee practices (including plans,programs and practices involving the issuance of Partnership Securities oroptions to purchase or rights, warrants, appreciation rights, or phantom ortracking interests relating to Partnership Securities), or cause thePartnership to issue Partnership Securities in connection with, or pursuant to,any employee benefit plan, employee program or employee practice maintained orsponsored by the General Partner, any Group Member or any Affiliate, in eachcase for the benefit of employees and directors of the General Partner, anyGroup Member or any Affiliate thereof, or any of them, in respect of servicesperformed, directly or indirectly, for the benefit of the Partnership Group. ThePartnership agrees to issue and sell to the General Partner or any of itsAffiliates any Partnership Securities that the General Partner or suchAffiliates are obligated to provide to any employees and directors pursuant toany such employee benefit plans, employee programs or employee practices. Expensesincurred by the General Partner in connection with any such plans, programs andpractices (including the

 

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net cost to the General Partner or such Affiliates of PartnershipSecurities purchased by the General Partner or such Affiliates from thePartnership or in the open market to fulfill options or awards under suchplans, programs and practices) shall be reimbursed in accordance withSection 7.04(b). Any and all obligations of the General Partner under anyemployee benefit plans, employee programs or employee practices adopted by theGeneral Partner as permitted by this Section 7.04(d) shall constituteobligations of the General Partner hereunder and shall be assumed by anysuccessor General Partner approved pursuant to Section 11.01 orSection 11.02 or the transferee of or successor to all of the GeneralPartner’s General Partner Interest (represented by General Partner Units)pursuant to Section 4.06.

 

SECTION 7.05. Outside Activities. (a)  After the Closing Date, the General Partner,for so long as it is the General Partner of the Partnership (i) agreesthat its sole business will be to act as a general partner or managing member,as the case may be, of the Partnership and any other partnership or limitedliability company of which the Partnership is, directly or indirectly, apartner or member and to undertake activities that are ancillary or relatedthereto (including being a limited partner in the Partnership), and(ii) shall not engage in any business or activity or incur any debts orliabilities except in connection with or incidental to (A) its performanceas general partner or managing member, if any, of one or more Group Members oras described in or contemplated by the Registration Statement or (B) theacquiring, owning or disposing of debt or equity securities in any GroupMember.

 

(b)  Each Indemnitee (other thanthe General Partner) shall have the right to engage in businesses of every typeand description and other activities for profit and to engage in and possess aninterest in other business ventures of any and every type or description,whether in businesses engaged in or anticipated to be engaged in by any GroupMember, independently or with others, including business interests andactivities in direct competition with the business and activities of any GroupMember, and none of the same shall constitute a breach of this Agreement or anyduty expressed or implied by law or equity to any Group Member or any Partner. Noneof any Group Member, any Limited Partner or any other Person shall have anyrights by virtue of this Agreement, any Group Member Agreement, or thepartnership relationship established hereby in any business ventures of anyIndemnitee. Notwithstanding anything to the contrary in this Agreement, or anyduty existing at law, in equity or otherwise, (i) the possessing ofcompetitive interests and engaging in competitive activities by any Indemnitees(other than the General Partner) in accordance with the provisions of thisSection 7.05 is hereby approved by the Partnership and all Partners,(ii) it shall be deemed not to be a breach of any fiduciary duty or any otherobligation of any type whatsoever of the General Partner or of any Indemniteefor the Indemnitees (other than the General Partner) to engage in such businessinterests and activities in preference to or to the exclusion of thePartnership and (iii) the Indemnitees shall have no obligation hereunderor as a result of any duty expressed or implied by law to present businessopportunities to the Partnership.

 

(c)  Notwithstanding anything tothe contrary in this Agreement, the doctrine of corporate opportunity, or anyanalogous doctrine, shall not apply to any Indemnitee (including the GeneralPartner) and no Indemnitee (including the General 

 

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Partner) who acquires knowledge of a potential transaction, agreement,arrangement or other matter that may be an opportunity for the Partnershipshall have any duty to communicate or offer such opportunity to thePartnership, and such Indemnitee (including the General Partner) shall not beliable to the Partnership, to any Limited Partner or any other Person forbreach of any fiduciary or other duty by reason of the fact that suchIndemnitee (including the General Partner) pursues or acquires such opportunityfor itself, directs such opportunity to another Person or does not communicatesuch opportunity or information to the Partnership.

 

(d)  The General Partner and eachof its Affiliates may acquire Units or other Partnership Securities in additionto those acquired pursuant to the Contribution Agreement and, except asotherwise provided in this Agreement, shall be entitled to exercise, at theiroption, all rights relating to all Units or other Partnership Securitiesacquired by them. The term “Affiliates” when used in this Section 7.05(d)with respect to the General Partner shall not include any Group Member.

 

SECTION 7.06. Loans from the General Partner; Loans or Contributionsfrom the Partnership or Group Members. (a) The General Partner or any of its Affiliates may lend to any GroupMember, and any Group Member may borrow from the General Partner or any of itsAffiliates, funds needed or desired by the Group Member for such periods oftime and in such amounts as the General Partner may determine; provided,however, that in any such case the lending party may not charge the borrowingparty interest at a rate greater than the rate that would be charged theborrowing party or impose terms less favorable to the borrowing party thanwould be charged or imposed on the borrowing party by unrelated lenders oncomparable loans made on an arm’s-length basis (without reference to thelending party’s financial abilities or guarantees), all as determined by theGeneral Partner. The borrowing party shall reimburse the lending party for anycosts (other than any additional interest costs) incurred by the lending partyin connection with the borrowing of such funds. For purposes of thisSection 7.06(a) and Section 7.06(b), the term “Group Member” shallinclude any Affiliate of a Group Member that is controlled by the Group Member.

 

### (b)  The Partnership may lend or contribute to anyGroup Member, and any Group Member may borrow from the Partnership, funds onterms and conditions determined by the General Partner. No Group Member maylend funds to the General Partner or any of its Affiliates (other than anotherGroup Member).

###  

### (c)  No borrowing by any Group Member or theapproval thereof by the General Partner shall be deemed to constitute a breachof any duty, expressed or implied, of the General Partner or its Affiliates tothe Partnership or the Limited Partners existing hereunder, or existing at law,in equity or otherwise by reason of the fact that the purpose or effect of suchborrowing is directly or indirectly to (i) enable distributions to theGeneral Partner or its Affiliates (including in their capacities as LimitedPartners) to exceed the General Partner’s Percentage Interest of the totalamount distributed to all partners or (ii) hasten the expiration of theSubordination Period or the conversion of any Subordinated Units into CommonUnits.

 

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###  

SECTION 7.07.  Indemnification.  (a)  To the fullest extent permitted bylaw but subject to the limitations expressly provided in this Agreement, allIndemnitees shall be indemnified and held harmless by the Partnership from andagainst any and all losses, claims, damages, liabilities, joint or several,expenses (including legal fees and expenses), judgments, fines, penalties,interest, settlements or other amounts arising from any and all claims,demands, actions, suits or proceedings, whether civil, criminal, administrativeor investigative, in which any Indemnitee may be involved, or is threatened tobe involved, as a party or otherwise, by reason of its status as an Indemnitee;provided, however, that the Indemnitee shall not be indemnifiedand held harmless if there has been a final and non-appealable judgment enteredby a court of competent jurisdiction determining that, in respect of the matterfor which the Indemnitee is seeking indemnification pursuant to this Section 7.07,the Indemnitee acted in bad faith or engaged in fraud or willful misconduct or,in the case of a criminal matter, acted with knowledge that the Indemnitee’sconduct was unlawful; and, provided further, that no indemnificationpursuant to this Section 7.07 shall be available to the General Partner orits Affiliates (other than a Group Member) with respect to its or theirobligations incurred pursuant to the Underwriting Agreement, the OmnibusAgreement, or the Contribution Agreement (other than obligations incurred bythe General Partner on behalf of the Partnership).  Any indemnification pursuant to this Section 7.07shall be made only out of the assets of the Partnership, it being agreed thatthe General Partner shall not be personally liable for such indemnification andshall have no obligation to contribute or loan any monies or property to thePartnership to enable it to effectuate such indemnification.

 

(b)  To the fullest extent permitted by law, expenses(including legal fees and expenses) incurred by an Indemnitee who is indemnifiedpursuant to Section 7.07(a) in defending any claim, demand, action,suit or proceeding shall, from time to time, be advanced by the Partnershipprior to a determination that the Indemnitee is not entitled to be indemnifiedupon receipt by the Partnership of an undertaking by or on behalf of theIndemnitee to repay such amount if it shall be determined that the Indemniteeis not entitled to be indemnified as authorized in this Section 7.07.

 

(c)  The indemnification provided by this Section 7.07shall be in addition to any other rights to which an Indemnitee may be entitledunder any agreement, pursuant to any vote of the holders of Outstanding LimitedPartner Interests, as a matter of law or otherwise, both as to actions in theIndemnitee’s capacity as an Indemnitee and as to actions in any other capacity(including any capacity under the Underwriting Agreement), and shall continueas to an Indemnitee who has ceased to serve in such capacity and shall inure tothe benefit of the heirs, successors, assigns and administrators of theIndemnitee.

 

(d)  The Partnership may purchase and maintain (or reimbursethe General Partner or its Affiliates for the cost of) insurance, on behalf ofthe General Partner, its Affiliates and such other Persons as the GeneralPartner shall determine, against any liability that may be asserted against, orexpense that may be incurred by, such Person in connection with the Partnership’sactivities or such Person’s activities on behalf of the Partnership, regardlessof whether the Partnership would have the power to indemnify such Personagainst such liability under the provisions of this Agreement.

 

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(e)  For purposes of this Section 7.07, the Partnershipshall be deemed to have requested an Indemnitee to serve as fiduciary of anemployee benefit plan whenever the performance by the Indemnitee of its dutiesto the Partnership also imposes duties on, or otherwise involves services by,it to the plan or participants or beneficiaries of the plan; excise taxesassessed on an Indemnitee with respect to an employee benefit plan pursuant toapplicable law shall constitute “fines” within the meaning of Section 7.07(a);and action taken or omitted by the Indemnitee with respect to any employeebenefit plan in the performance of its duties for a purpose reasonably believedby it to be in the best interest of the participants and beneficiaries of theplan shall be deemed to be for a purpose that is in the best interests of thePartnership.

 

(f)  In no event may an Indemnitee subject the LimitedPartners to personal liability by reason of the indemnification provisions setforth in this Agreement.

 

(g)  An Indemnitee shall not be denied indemnification inwhole or in part under this Section 7.07 because the Indemnitee had aninterest in the transaction with respect to which the indemnification appliesif the transaction was otherwise permitted by the terms of this Agreement.

 

(h)  The provisions of this Section 7.07 are for thebenefit of the Indemnitees, their heirs, successors, assigns and administratorsand shall not be deemed to create any rights for the benefit of any otherPersons.

 

(i)  No amendment, modification or repeal of this Section 7.07or any provision hereof shall in any manner terminate, reduce or impair theright of any past, present or future Indemnitee to be indemnified by thePartnership, nor the obligations of the Partnership to indemnify any suchIndemnitee under and in accordance with the provisions of this Section 7.07as in effect immediately prior to such amendment, modification or repeal withrespect to claims arising from or relating to matters occurring, in whole or inpart, prior to such amendment, modification or repeal, regardless of when suchclaims may arise or be asserted.

 

SECTION 7.08.  Liability of Indemnitees.  (a)  Notwithstanding anything to thecontrary set forth in this Agreement, no Indemnitee shall be liable formonetary damages to the Partnership, the Limited Partners or any other Personswho have acquired interests in the Partnership Securities, for losses sustainedor liabilities incurred as a result of any act or omission of an Indemniteeunless there has been a final and non-appealable judgment entered by a court ofcompetent jurisdiction determining that, in respect of the matter in question,the Indemnitee acted in bad faith or engaged in fraud or willful misconduct or,in the case of a criminal matter, acted with knowledge that the Indemnitee’sconduct was criminal.

 

(b)  Subject to its obligations and duties as General Partnerset forth in Section 7.01(a), the General Partner may exercise any of thepowers granted to it by this Agreement and perform any of the duties imposedupon it hereunder either directly or by or through its agents, and the GeneralPartner shall not be responsible for any misconduct

 

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or negligence on the part ofany such agent appointed by the General Partner in good faith.

 

(c)  To the extent that, at law or in equity, an Indemniteehas duties (including fiduciary duties) and liabilities relating thereto to thePartnership or to the Partners, the General Partner and any other Indemniteeacting in connection with the Partnership’s business or affairs shall not beliable to the Partnership or to any Partner for its good faith reliance on theprovisions of this Agreement.

 

(d)  Any amendment, modification or repeal of this Section 7.08or any provision hereof shall be prospective only and shall not in any wayaffect the limitations on the liability of the Indemnitees under this Section 7.08as in effect immediately prior to such amendment, modification or repeal withrespect to claims arising from or relating to matters occurring, in whole or inpart, prior to such amendment, modification or repeal, regardless of when suchclaims may arise or be asserted.

 

SECTION 7.09.  Resolution of Conflicts of Interest;Standards of Conduct and Modification of Duties.  (a)  Unless otherwise expressly providedin this Agreement or any Group Member Agreement, whenever a potential conflictof interest exists or arises between the General Partner or any of itsAffiliates, on the one hand, and the Partnership, any Group Member or anyPartner, on the other, any resolution or course of action by the GeneralPartner or its Affiliates in respect of such conflict of interest shall bepermitted and deemed approved by all Partners, and shall not constitute abreach of this Agreement, of any Group Member Agreement, of any agreementcontemplated herein or therein, or of any duty stated or implied by law orequity, if the resolution or course of action in respect of such conflict ofinterest is (i) approved by Special Approval, (ii) approved by thevote of a majority of the Outstanding Common Units (excluding Common Unitsowned by the General Partner and its Affiliates), (iii) on terms no lessfavorable to the Partnership than those generally being provided to oravailable from unrelated third parties or (iv) fair and reasonable to thePartnership, taking into account the totality of the relationships between theparties involved (including other transactions that may be particularlyfavorable or advantageous to the Partnership). The General Partner shall be authorized but not required in connectionwith any resolution or course of action by the General Partner or itsAffiliates in respect of such conflict of interest to seek Special Approval ofsuch resolution or course of action, and the General Partner may also adopt aresolution or course of action that has not received Special Approval.  If Special Approval is sought, then it shallbe presumed that, in making its decision, the Conflicts Committee acted in goodfaith, and if Special Approval is not sought and the Board of Directors of theGeneral Partner determines that the resolution or course of action taken withrespect to a conflict of interest satisfies either of the standards set forthin clauses (iii) or (iv) above, then it shall be presumed that,in making its decision, the Board of Directors of the General Partner acted ingood faith, and in either case, in any proceeding brought by any LimitedPartner or by or on behalf of such Limited Partner or any other Limited Partneror the Partnership challenging such approval, the Person bringing or prosecutingsuch proceeding shall have the burden of overcoming such presumption.  Notwithstanding anything to the contrary inthis Agreement or any duty otherwise existing at law or equity, the existenceof the conflicts

 

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of interest described in theRegistration Statement are hereby approved by all Partners and shall notconstitute a breach of this Agreement.

 

(b)  Whenever the General Partner makes a determination ortakes or declines to take any other action, or any of its Affiliates causes itto do so, in its capacity as the general partner of the Partnership as opposedto in its individual capacity, whether under this Agreement, any Group MemberAgreement or any other agreement contemplated hereby or otherwise, then, unlessanother express standard is provided for in this Agreement, the GeneralPartner, or such Affiliates causing it to do so, shall make such determinationor take or decline to take such other action in good faith and shall not besubject to any other or different standards imposed by this Agreement, anyGroup Member Agreement, any other agreement contemplated hereby or under theDelaware Act or any other law, rule or regulation or at equity.  In order for a determination or other actionto be in “good faith” for purposes of this Agreement, the Person or Personsmaking such determination or taking or declining to take such other action mustbelieve that the determination or other action is in the best interests of thePartnership, unless the context otherwise requires.

###  

### (c)  Whenever the General Partner makes a determination ortakes or declines to take any other action, or any of its Affiliates causes itto do so, in its individual capacity as opposed to in its capacity as thegeneral partner of the Partnership, whether under this Agreement, any GroupMember Agreement or any other agreement contemplated hereby or otherwise, thenthe General Partner, or such Affiliates causing it to do so, are entitled tomake such determination or to take or decline to take such other action free ofany fiduciary duty or obligation whatsoever to the Partnership or any LimitedPartner, and the General Partner, or such Affiliates causing it to do so, shallnot be required to act in good faith or pursuant to any other standard imposedby this Agreement, any Group Member Agreement, any other agreement contemplatedhereby or under the Delaware Act or any other law, rule or regulation orat equity.  By way of illustration andnot of limitation, whenever the phrase, “at the option of the General Partner,”or some variation of that phrase, is used in this Agreement, it indicates thatthe General Partner is acting in its individual capacity.  For the avoidance of doubt, whenever theGeneral Partner votes or transfers its Units, General Partner Interest orIncentive Distribution Rights, to the extent permitted under this Agreement, orrefrains from voting or transferring its Units, General Partner Units orIncentive Distribution Rights, as appropriate, it shall be acting in its individualcapacity.  The General Partner’sorganizational documents may provide that determinations to take or decline totake any action in its individual, rather than representative, capacity may orshall be determined by its members, if the General Partner is a limitedliability company, stockholders, if the General Partner is a corporation, orthe members or stockholders of the General Partner’s general partner, if theGeneral Partner is a partnership.

###  

### (d)  Notwithstanding anything to the contrary in thisAgreement, the General Partner and its Affiliates shall have no duty orobligation, express or implied, to (i) sell or otherwise dispose of anyasset of the Partnership Group other than in the ordinary course of business or(ii) permit any Group Member to use any facilities or assets of theGeneral Partner and its Affiliates, except as may be provided in contracts

 

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### entered into from time to time specificallydealing with such use.  Any determinationby the General Partner or any of its Affiliates to enter into such contractsshall be at its option.

###  

### (e)  Except as expressly set forth in this Agreement, neitherthe General Partner nor any other Indemnitee shall have any duties orliabilities, including fiduciary duties, to the Partnership or any LimitedPartner and the provisions of this Agreement, to the extent that they restrict,eliminate or otherwise modify the duties and liabilities, including fiduciaryduties, of the General Partner or any other Indemnitee otherwise existing atlaw or in equity, are agreed by the Partners to replace such other duties andliabilities of the General Partner or such other Indemnitee.

###  

(f)  The Unitholders hereby authorize the General Partner, onbehalf of the Partnership as a partner or managing member of a Group Member, toapprove of actions by the general partner or managing member of such GroupMember similar to those actions permitted to be taken by the General Partnerpursuant to this Section 7.09.

 

SECTION 7.10.  Other Matters Concerning the GeneralPartner.  (a)  The GeneralPartner may rely and shall be protected in acting or refraining from actingupon any resolution, certificate, statement, instrument, opinion, report,notice, request, consent, order, bond, debenture or other paper or documentbelieved by it to be genuine and to have been signed or presented by the properparty or parties.

 

### (b)  The General Partner may consult with legal counsel,accountants, appraisers, management consultants, investment bankers and otherconsultants and advisers selected by it, and any act taken or omitted to betaken in reliance upon the advice or opinion (including an Opinion of Counsel)of such Persons as to matters that the General Partner reasonably believes tobe within such Person’s professional or expert competence shall be conclusivelypresumed to have been done or omitted in good faith and in accordance with suchadvice or opinion.

###  

### (c)  The General Partner shall have the right, in respect ofany of its powers or obligations hereunder, to act through any of its dulyauthorized officers, a duly appointed attorney or attorneys-in-fact or the dulyauthorized officers of the Partnership or any Group Member.

###  

SECTION 7.11.  Purchase or Sale of PartnershipSecurities.  The General Partner maycause the Partnership to purchase or otherwise acquire Partnership Securities; provided,however, that except as permitted pursuant to Section 4.09 and Section 4.10,the General Partner may not cause any Group Member to purchase SubordinatedUnits during the Subordination Period. Such Partnership Securities shall be held by the Partnership as treasurysecurities unless they are expressly cancelled by action of an appropriateofficer of the General Partner.  As longas Partnership Securities are held by any Group Member, such PartnershipSecurities shall not be considered Outstanding for any purpose, except asotherwise provided herein.  The GeneralPartner or any Affiliate of the General Partner may also purchase or otherwiseacquire and sell or

 

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otherwise dispose ofPartnership Securities for its own account, subject to the provisions ofArticles IV and X.

 

SECTION 7.12.  Registration Rights of the GeneralPartner and its Affiliates.  (a) If (i) the General Partner or any Affiliate of the General Partner(including for purposes of this Section 7.12, any Person that is anAffiliate of the General Partner at the date hereof notwithstanding that it maylater cease to be an Affiliate of the General Partner, but excluding anyindividual who is an Affiliate of the General Partner based on such individual’sstatus as an officer, director or employee of the General Partner or anAffiliate of the General Partner) holds Partnership Securities that it desiresto sell and (ii) Rule 144 of the Securities Act (or any successor rule orregulation to Rule 144) or another exemption from registration is notavailable to enable such holder of Partnership Securities (the “Holder”)to dispose of the number of Partnership Securities it desires to sell at thetime it desires to do so without registration under the Securities Act, then atthe option and upon the request of the Holder, the Partnership shall file withthe Commission as promptly as practicable after receiving such request, and useits reasonable best efforts to cause to become effective and remain effectivefor a period of not less than six months following its effective date or suchshorter period as shall terminate when all Partnership Securities covered bysuch registration statement have been sold, a registration statement under theSecurities Act registering the offering and sale of the number of PartnershipSecurities specified by the Holder; provided, however, that thePartnership shall not be required to effect more than five registrationspursuant to this Section 7.12(a) and Section 7.12(b); and, providedfurther, that if the Conflicts Committee determines in good faith that therequested registration would be materially detrimental to the Partnership andits Partners because such registration would (A) interfere in a waymaterially adverse to the Partnership with a significant acquisition, merger,disposition, reorganization or other similar transaction involving thePartnership, (B) require premature disclosure of material information thatthe Partnership has a bona fide business purpose for preserving asconfidential or (C) render the Partnership unable to comply withrequirements under applicable securities laws, then the Partnership shall have theright to postpone such requested registration for a period of not more than90 days after receipt of the Holder’s request, such right pursuant to thisSection 7.12(a) or Section 7.12(b) not to be utilized morethan once in any twelve-month period. Except as provided in the preceding sentence, the Partnership shall bedeemed not to have used its reasonable best efforts to keep the registrationstatement effective during the applicable period if it voluntarily takes anyaction that would result in Holders of Partnership Securities covered therebynot being able to offer and sell such Partnership Securities at any time duringsuch period, unless such action is required by applicable law.  In connection with any registration pursuantto this Section 7.12(a), the Partnership shall (i) promptly prepareand file (A) such documents as may be necessary to register or qualify thesecurities subject to such registration under the securities laws of suchstates as the Holder shall reasonably request; provided, however,that no such qualification shall be required in any jurisdiction where, as aresult thereof, the Partnership would become subject to general service ofprocess or to taxation or qualification to do business as a foreign corporationor partnership doing business in such jurisdiction solely as a result of suchregistration, and (B) such documents as may be necessary to apply forlisting or to list the Partnership Securities subject to such registration onsuch National Securities

 

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Exchange as the Holder shallreasonably request, and (ii) do any and all other acts and things that maybe necessary or appropriate to enable the Holder to consummate a public sale ofsuch Partnership Securities in such states.  Except as set forth in Section 7.12(d),all costs and expenses of any such registration and offering (other than theunderwriting discounts and commissions) shall be paid by the Partnership,without reimbursement by the Holder.

 

(b)  If any Holder holds Partnership Securities that itdesires to sell and Rule 144 of the Securities Act (or any successor rule orregulation to Rule 144) or another exemption from registration is notavailable to enable such Holder to dispose of the number of Partnership Securitiesit desires to sell at the time it desires to do so without registration underthe Securities Act, then at the option and upon the request of the Holder, thePartnership shall file with the Commission as promptly as practicable afterreceiving such request, and use commercially reasonable efforts to cause tobecome effective and remain effective for a period of not less than six monthsfollowing its effective date or such shorter period as shall terminate when allPartnership Securities covered by such shelf registration statement have beensold, a “shelf” registration statement covering the Partnership Securitiesspecified by the Holder on an appropriate form under Rule 415 under theSecurities Act, or any similar rule that may be adopted by the Commission;provided, however, that the Partnership shall not be required toeffect more than five registrations pursuant to Section 7.12(a) andthis Section 7.12(b); and provided further, however, that ifthe Conflicts Committee determines in good faith that any offering under, orthe use of any prospectus forming a part of, the shelf registration statementwould be materially detrimental to the Partnership and its Partners becausesuch offering or use would (x) interfere in a way materially adverse tothe Partnership with a significant acquisition, merger, disposition,reorganization or other similar transaction involving the Partnership, (y) requirepremature disclosure of material information that the Partnership has a bona fide business purpose for preserving asconfidential or (z) render the Partnership unable to comply withrequirements under applicable securities laws, then the Partnership shall havethe right to suspend such offering or use for a period of not more than 90 daysafter receipt of the Holder’s request, such right pursuant to Section 7.12(a) orthis Section 7.12(b) not to be utilized more than once in anytwelve-month period.  In connection withany shelf registration pursuant to this Section 7.12(b), the Partnershipshall (i) promptly prepare and file (A) such documents as may benecessary to register or qualify the securities subject to such shelfregistration under the securities laws of such states as the Holder shallreasonably request; provided, however, that no such qualificationshall be required in any jurisdiction where, as a result thereof, thePartnership would become subject to general service of process or to taxationor qualification to do business as a foreign corporation or partnership doingbusiness in such jurisdiction solely as a result of such shelf registration,and (B) such documents as may be necessary to apply for listing or to listthe Partnership Securities subject to such shelf registration on such NationalSecurities Exchange as the Holder shall reasonably request, and (ii) doany and all other acts and things that may be necessary or appropriate toenable the Holder to consummate a public sale of such Partnership Securities insuch states.  Except as set forth in Section 7.12(d),all costs and expenses of any such shelf registration and offering (other thanthe underwriting

 

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discounts and commissions)shall be paid by the Partnership, without reimbursement by the Holder.

 

(c)  If the Partnership shall at any time propose to file aregistration statement under the Securities Act for an offering of PartnershipSecurities for cash (other than an offering relating solely to an employeebenefit plan), the Partnership shall notify all Holders of such proposal anduse its reasonable best efforts to include such number or amount of PartnershipSecurities held by any Holder in such registration statement as the Holdershall request; provided, however, that the Partnership is notrequired to make any effort or take any action to include the PartnershipSecurities of such Holder once the registration statement is declared effectiveby the Commission or otherwise becomes effective, including any registrationstatement providing for the offering from time to time of Partnership Securitiespursuant to Rule 415 of the Securities Act.  If the proposed offering pursuant to this Section 7.12(c) shallbe an underwritten offering, then, in the event that the managing underwriteror managing underwriters of such offering advise the Partnership and the Holderin writing that in their opinion the inclusion of all or some of the Holder’sPartnership Securities would adversely and materially affect the success of theoffering, the Partnership shall include in such offering only that number oramount, if any, of Partnership Securities held by the Holder that, in theopinion of the managing underwriter or managing underwriters, will not soadversely and materially affect the offering. Except as set forth in Section 7.12(d), all costs and expenses ofany such registration and offering (other than the underwriting discounts andcommissions) shall be paid by the Partnership, without reimbursement by theHolder.

 

(d)  If underwriters are engaged in connection with anyregistration referred to in this Section 7.12, the Partnership shallprovide indemnification, representations, covenants, opinions and otherassurance to the underwriters in form and substance reasonably satisfactory tosuch underwriters.  Further, in additionto and not in limitation of the Partnership’s obligation under Section 7.07,the Partnership shall, to the fullest extent permitted by law, indemnify andhold harmless the Holder, its officers, directors and each Person who controlsthe Holder (within the meaning of the Securities Act) and any agent thereof(collectively, “Indemnified Persons”) from and against any and alllosses, claims, demands, actions, causes of action, assessments, damages,liabilities (joint or several), costs and expenses (including interest,penalties and reasonable attorneys’ fees and disbursements), judgments, fines,penalties, interest, settlements or other amounts arising from any and allclaims, demands, actions, suits or proceedings, whether civil, criminal,administrative or investigative, in which any Indemnified Person may beinvolved or is threatened to be involved, as a party or otherwise, under theSecurities Act or otherwise (hereinafter referred to in this Section 7.12as a “claim” and in the plural as “claims”) based upon, arising out of orresulting from any untrue statement or alleged untrue statement of any materialfact contained in any registration statement under which any PartnershipSecurities were registered under the Securities Act or any state securities orBlue Sky laws, in any preliminary prospectus (if used prior to the effectivedate of such registration statement), or in any summary or final prospectus orin any issuer free writing prospectus as defined in Rule 433 of theSecurities Act or in any amendment or supplement thereto (if used during theperiod the Partnership is required to keep the registration statement current),or

 

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arising out of, based upon orresulting from the omission or alleged omission to state therein a materialfact required to be stated therein or necessary to make the statements madetherein not misleading; provided, however, that the Partnershipshall not be liable to any Indemnified Person to the extent that any such claimarises out of, is based upon or results from an untrue statement or allegeduntrue statement or omission or alleged omission made in such registrationstatement, such preliminary, summary or final prospectus, free writingprospectus or such amendment or supplement, in reliance upon and in conformitywith written information furnished to the Partnership by or on behalf of suchIndemnified Person specifically for use in the preparation thereof.

 

(e)  The provisions of Section 7.12(a), Section 7.12(c) andSection 7.12(d)  shall continue to be applicable with respect to theGeneral Partner (and any of the General Partner’s Affiliates) after it ceasesto be a general partner of the Partnership, for a period of at least two yearssubsequent to the effective date of such cessation and for so long thereafteras is required for the Holder to sell all of the Partnership Securities withrespect to which it has requested during such two-year period inclusion in aregistration statement otherwise filed or that a registration statement befiled; provided, however, that the Partnership shall not berequired to file successive registration statements covering the samePartnership Securities for which registration was demanded during such two-yearperiod.  The provisions of Section 7.12(d)   shall continue in effect thereafter.

 

(f)  The rights to cause the Partnership to registerPartnership Securities pursuant to this Section 7.12 may be assigned (butonly with all related obligations) by a Holder to a transferee or assignee ofsuch Partnership Securities; provided, however, that (i) thePartnership is, within a reasonable time after such transfer, furnished withwritten notice of the name and address of such transferee or assignee and thePartnership Securities with respect to which such registration rights are beingassigned, and (ii) such transferee or assignee agrees in writing to bebound by and subject to the terms set forth in this Section 7.12.

 

(g)  Any request to register Partnership Securities pursuantto this Section 7.12 shall (i) specify the Partnership Securitiesintended to be offered and sold by the Person making the request, (ii) expresssuch Person’s present intent to offer such Partnership Securities fordistribution, (iii) describe the nature or method of the proposed offerand sale of Partnership Securities, and (iv) contain the undertaking ofsuch Person to provide all such information and materials and take all actionas may be required in order to permit the Partnership to comply with allapplicable requirements in connection with the registration of such PartnershipSecurities.

 

SECTION 7.13.  Reliance by Third Parties.  Notwithstanding anything to the contrary inthis Agreement, any Person dealing with the Partnership shall be entitled toassume that the General Partner and any officer of the General Partnerauthorized by the General Partner to act on behalf of and in the name of thePartnership has full power and authority to encumber, sell or otherwise use inany manner any and all assets of the Partnership and to enter into anyauthorized contracts on behalf of the Partnership, and such Person shall beentitled to deal with the General Partner or any such officer as if it were thePartnership’s sole party in interest, both legally and beneficially.  Each Limited

 

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Partner hereby waives any andall defenses or other remedies that may be available against such Person tocontest, negate or disaffirm any action of the General Partner or any suchofficer in connection with any such dealing. In no event shall any Person dealing with the General Partner or anysuch officer or its representatives be obligated to ascertain that the terms ofthis Agreement have been complied with or to inquire into the necessity orexpedience of any act or action of the General Partner or any such officer orits representatives.  Each and everycertificate, document or other instrument executed on behalf of the Partnershipby the General Partner, its officers or its representatives shall be conclusiveevidence in favor of any and every Person relying thereon or claimingthereunder that (a) at the time of the execution and delivery of suchcertificate, document or instrument, this Agreement was in full force andeffect, (b) the Person executing and delivering such certificate, documentor instrument was duly authorized and empowered to do so for and on behalf ofthe Partnership and (c) such certificate, document or instrument was dulyexecuted and delivered in accordance with the terms and provisions of thisAgreement and is binding upon the Partnership.

##  

# ARTICLE VIII

#  

# Books, Records, Accounting and Reports

#  

SECTION 8.01.  Records and Accounting.  The General Partner shall keep or cause to bekept at the principal office of the Partnership appropriate books and recordswith respect to the Partnership’s business, including all books and recordsnecessary to provide to the Limited Partners any information required to beprovided pursuant to Section 3.04(a). Any books and records maintained by or on behalf of the Partnership in theregular course of its business, including the record of the Record Holders ofUnits or other Partnership Securities, books of account and records ofPartnership proceedings, may be kept on, or be in the form of, computer disks,hard drives, magnetic tape, photographs, micrographics or any other informationstorage device; provided, however, that the books and records somaintained are convertible into clearly legible written form within areasonable period of time.  The books ofthe Partnership shall be maintained, for financial reporting purposes, on anaccrual basis in accordance with U.S. GAAP.

 

SECTION 8.02.  Fiscal Year.  The fiscal year of the Partnership shall be afiscal year ending December 31.

 

SECTION 8.03.  Reports.  (a)  As soon as practicable, but in noevent later than 120 days after the close of each fiscal year of thePartnership, the General Partner shall cause to be mailed or made available, byany reasonable means (including posting on or accessible through thePartnership’s or the SEC’s website), to each Record Holder of a Unit as of adate selected by the General Partner, an annual report containing financialstatements of the Partnership for such fiscal year of the Partnership,presented in accordance with U.S. GAAP, including a balance sheet andstatements of operations, Partnership equity and cash flows, such statements tobe audited by an independent registered public accounting firm selected by theGeneral Partner.

 

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(b)  As soon as practicable, but in no event later than 90days after the close of each Quarter except the last Quarter of each fiscalyear, the General Partner shall cause to be mailed or made available, by anyreasonable means (including posting on or accessible through the Partnership’sor the SEC’s website), to each Record Holder of a Unit, as of a date selectedby the General Partner, a report containing unaudited financial statements ofthe Partnership and such other information as may be required by applicable law,regulation or rule of any National Securities Exchange on which the Unitsare listed or admitted to trading, or as the General Partner determines to benecessary or appropriate.

###  

# ARTICLE IX

#  

# Tax Matters

#  

## SECTION 9.01.  Tax Returns and Information.  The Partnership shall timely file all returnsof the Partnership that are required for federal, state and local income taxpurposes on the basis of the accrual method and a taxable year ending on December 31.The tax information reasonably required by Record Holders for federal and stateincome tax reporting purposes with respect to a taxable year shall be furnishedto them within 90 days of the close of the calendar year in which thePartnership’s taxable year ends. The classification, realization and recognitionof income, gain, losses and deductions and other items shall be on the accrualmethod of accounting for federal income tax purposes.

##  

SECTION 9.02.  Tax Elections.  (a)  The Partnership shall make theelection under Section 754 of the Code in accordance with applicableregulations thereunder, subject to the reservation of the right to seek torevoke any such election upon the General Partner’s determination that suchrevocation is in the best interests of the Limited Partners. Notwithstandingany other provision herein contained, for the purposes of computing theadjustments under Section 743(b) of the Code, the General Partnershall be authorized (but not required) to adopt a convention whereby the pricepaid by a transferee of a Limited Partner Interest will be deemed to be thelowest quoted closing price of the Limited Partner Interests on any NationalSecurities Exchange on which such Limited Partner Interests are listed oradmitted to trading during the calendar month in which such transfer is deemedto occur pursuant to Section 6.02(g) without regard to the actualprice paid by such transferee.

 

(b)  Except as otherwise provided herein, the General Partnershall determine whether the Partnership should make any other electionspermitted by the Code.

###  

SECTION 9.03.  Tax Controversies.  Subject to the provisions hereof, the GeneralPartner is designated as the Tax Matters Partner (as defined in the Code) andis authorized and required to represent the Partnership (at the Partnership’sexpense) in connection with all examinations of the Partnership’s affairs bytax authorities, including resulting administrative and judicial proceedings,and to expend Partnership funds for professional services and costs associatedtherewith. Each Partner agrees to cooperate

 

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with the General Partner and todo or refrain from doing any or all things reasonably required by the GeneralPartner to conduct such proceedings.

##  

SECTION 9.04.  Withholding.  Notwithstanding any other provision of thisAgreement, the General Partner is authorized to take any action that may berequired to cause the Partnership and other Group Members to comply with anywithholding requirements established under the Code or any other federal, stateor local law including pursuant to Sections 1441, 1442, 1445 and 1446 ofthe Code. To the extent that the Partnership is required or elects to withholdand pay over to any taxing authority any amount resulting from the allocationor distribution of income to any Partner or Assignee (including by reason of Section 1446of the Code), the General Partner may treat the amount withheld as adistribution of cash pursuant to Section 6.03 in the amount of suchwithholding from such Partner.

 

# ARTICLE X

#  

# Admission of Partners

#  

SECTION 10.01.  Admission of Initial LimitedPartners.  Upon the issuance by thePartnership of Common Units, Subordinated Units and Incentive DistributionRights to the General Partner, OSG Bulk Ships, Inc. and the Underwritersas described in Article V, the General Partner shall admit such parties tothe Partnership as Initial Limited Partners in respect of the Common Units,Subordinated Units or Incentive Distribution Rights issued to them.

 

SECTION 10.02.  Admission of Additional Limited Partners.  (a)  By acceptance of the transfer ofany Limited Partner Interests in accordance with Article IV or theacceptance of any Limited Partner Interests issued pursuant to Article Vor pursuant to a merger or consolidation pursuant to Article XIV, and exceptas provided in Section 4.09 or Section 4.10 each transferee of, orother such Person acquiring, a Limited Partner Interest (including any nomineeholder or an agent or representative acquiring such Limited Partner Interestsfor the account of another Person) (i) shall be admitted to thePartnership as a Limited Partner with respect to the Limited Partner Interestsso transferred or issued to such Person when any such transfer, issuance oradmission is reflected in the books and records of the Partnership and suchLimited Partner becomes the Record Holder of the Limited Partner Interests sotransferred, (ii) shall become bound by the terms of this Agreement, (iii) representsthat the transferee has the capacity, power and authority to enter into thisAgreement, (iv) grants the powers of attorney set forth in this Agreementand (v) makes the consents and waivers contained in this Agreement, allwith or without execution of this Agreement by such Person.  The transfer of any Limited Partner Interestsand the admission of any new Limited Partner shall not constitute an amendmentto this Agreement.  A Person may become aLimited Partner or Record Holder of a Limited Partner Interest without theconsent or approval of any of the Partners. A Person may not become a Limited Partner until such Person acquires aLimited Partner Interest and such Person is reflected in the books and recordsof the Partnership as the Record Holder of such Limited Partner Interest.  The rights and obligations of a Person who isa Non-citizen Assignee shall be determined in accordance

 

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with Section 4.09 and therights and obligations of a Person who is a holder of Excess Units shall bedetermined in accordance with Section 4.10.

 

(b)  The name and mailing address of each Limited Partnershall be listed on the books and records of the Partnership maintained for suchpurpose by the Partnership or the Transfer Agent.  The General Partner shall update the booksand records of the Partnership from time to time as necessary to reflectaccurately the information therein (or shall cause the Transfer Agent to do so,as applicable).  A Limited PartnerInterest may be represented by a Certificate, as provided in Section 4.01hereof.

 

(c)  Any transfer of a Limited Partner Interest shall notentitle the transferee to share in the profits and losses, to receivedistributions, to receive allocations of income, gain, loss, deduction orcredit or any similar item or to any other rights to which the transferor wasentitled until the transferee becomes a Limited Partner pursuant to Section 10.02(a).

 

SECTION 10.03.  Admission of Successor GeneralPartner.  A successor General Partnerapproved pursuant to Section 11.01 or Section 11.02 or the transfereeof or successor to all of the General Partner Interest (represented by GeneralPartner Units) pursuant to Section 4.06 who is proposed to be admitted asa successor General Partner shall be admitted to the Partnership as the GeneralPartner, effective immediately prior to the withdrawal or removal of thepredecessor or transferring General Partner, pursuant to Section 11.01 or11.02 or the transfer of the General Partner Interest (represented by GeneralPartner Units) pursuant to Section 4.06; provided, however,that no such successor shall be admitted to the Partnership until compliancewith the terms of Section 4.06 has occurred and such successor hasexecuted and delivered such other documents or instruments as may be requiredto effect such admission.  Any suchsuccessor shall, subject to the terms hereof, carry on the business of themembers of the Partnership Group without dissolution.

 

SECTION 10.04.  Amendment of Agreement andCertificate of Limited Partnership. To effect the admission to the Partnership of any Partner, the GeneralPartner shall take all steps necessary or appropriate under the Delaware Act toamend the records of the Partnership to reflect such admission and, ifnecessary, 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 tothe Certificate of Limited Partnership, and the General Partner may for thispurpose, among others, exercise the power of attorney granted pursuant to Section 2.06.

 

# ARTICLE XI

#  

# Withdrawal or Removal of Partners

#  

SECTION 11.01.  Withdrawal of the General Partner.  (a)  The General Partner shall be deemedto have withdrawn from the Partnership upon the occurrence of any one of thefollowing events (each such event herein referred to as an “Event ofWithdrawal”):

 

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#### (i)  the General Partner voluntarily withdraws from thePartnership by giving written notice to the other Partners;

####  

#### (ii)  the General Partner transfers all of its rights asGeneral Partner pursuant to Section 4.06;

####  

#### (iii)  the General Partner is removed pursuant to Section 11.02;

####  

#### (iv)  the General Partner (A) makes a general assignmentfor the benefit of creditors, (B) files a voluntary bankruptcy petitionfor relief under Chapter 7 of the U.S. Bankruptcy Code, (C) files apetition or answer seeking for itself a liquidation, dissolution or similarrelief (but not a reorganization) under any law, (D) files an answer orother pleading admitting or failing to contest the material allegations of apetition filed against the General Partner in a proceeding of the typedescribed in clauses (A), (B) or (C) of this Section 11.01(a)(iv),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 Partneror of all or any substantial part of its properties;

####  

#### (v)  a final and non-appealable order of relief underChapter 7 of the U.S. Bankruptcy Code is entered by a court withappropriate jurisdiction pursuant to a voluntary or involuntary petition by oragainst the General Partner; or

####  

#### (vi)  (A) in the event the General Partner is acorporation, a certificate of dissolution or its equivalent is filed for theGeneral Partner, or 90 days expire after the date of notice to the GeneralPartner of revocation of its charter without a reinstatement of its charterunder the laws of its state of incorporation, (B) in the event the GeneralPartner is a partnership or a limited liability company, the dissolution andcommencement of winding up of the General Partner, (C) in the event theGeneral Partner is acting in such capacity by virtue of being a trustee of atrust, the termination of the trust, (D) in the event the General Partneris a natural person, his death or adjudication of incompetency, and (E) otherwisein the event of the termination of the General Partner.

 

If an Event of Withdrawal specified in Section 11.01(a)(iv), (v) or(vi)(A), (B), (C) or (E) occurs, the withdrawing General Partnershall give notice to the Limited Partners within 30 days after suchoccurrence.  The Partners hereby agreethat only the Events of Withdrawal described in this Section 11.01 shallresult in the withdrawal of the General Partner from the Partnership.

 

(b)  Withdrawal of the General Partner from the Partnershipupon the occurrence of an Event of Withdrawal shall not constitute a breach ofthis Agreement under the following circumstances:  (i) at any time during the periodbeginning on the Closing Date and ending at 12:00 midnight, prevailingEastern Time, on June 30, 2017, the General Partner voluntarily withdrawsby giving at least 90 days’ advance notice of its intention to withdraw tothe Limited Partners; provided, however, that prior to theeffective date of such withdrawal, the withdrawal is approved by Unitholdersholding at

 

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least a majority of theOutstanding Common Units (excluding Common Units held by the General Partnerand its Affiliates) and the General Partner delivers to the Partnership anOpinion of Counsel (“Withdrawal Opinion of Counsel”) that suchwithdrawal (following the selection of the successor General Partner) would notresult in the loss of the limited liability of any Limited Partner or any GroupMember or cause any Group Member to be treated as an association taxable as acorporation or otherwise to be taxed as an entity for federal income taxpurposes (to the extent not already so treated or taxed); (ii) at any timeafter 12:00 midnight, prevailing Eastern Time, on June 30, 2017, theGeneral Partner voluntarily withdraws by giving at least 90 days’ advancenotice to the Unitholders, such withdrawal to take effect on the date specifiedin such notice; (iii) at any time that the General Partner ceases to bethe General Partner pursuant to Section 11.01(a)(ii) or is removedpursuant to Section 11.02; or (iv) notwithstanding clause (i) ofthis sentence, at any time that the General Partner voluntarily withdraws bygiving at least 90 days’ advance notice of its intention to withdraw tothe Limited Partners, such withdrawal to take effect on the date specified inthe notice, if at the time such notice is given one Person and its Affiliates(other than the General Partner and its Affiliates) own beneficially or ofrecord or control at least 50% of the Outstanding Units.  The withdrawal of the General Partner fromthe Partnership upon the occurrence of an Event of Withdrawal shall alsoconstitute the withdrawal of the General Partner as general partner or managingmember, if any, to the extent applicable, of the other Group Members.  If the General Partner gives a notice ofwithdrawal pursuant to Section 11.01(a)(i), the holders of a UnitMajority, may, prior to the effective date of such withdrawal, elect asuccessor General Partner.  The Person soelected as successor General Partner shall automatically become the successorgeneral partner or managing member, to the extent applicable, of the otherGroup Members of which the General Partner is a general partner or a managingmember.  If, prior to the effective dateof the General Partner’s withdrawal, a successor is not selected by theUnitholders as provided herein or, if applicable, the Partnership does notreceive a Withdrawal Opinion of Counsel, the Partnership shall be dissolved inaccordance with Section 12.01.  Anysuccessor General Partner elected in accordance with the terms of this Section 11.01shall be subject to the provisions of Section 10.03.

 

SECTION 11.02.  Removal of the General Partner.  The General Partner may be removed if suchremoval is approved by the Unitholders holding at least 662⁄3% of theOutstanding Units (including Units held by the General Partner and itsAffiliates) voting as a single class. Any such action by such holders for removal of the General Partner mustalso provide for the election of a successor General Partner by the Unitholdersholding a majority of the outstanding Common Units and Class B Units, ifany, voting as a single class and a majority of the outstanding SubordinatedUnits (if any Subordinated Units are then Outstanding) voting as a class(including, in each case, Units held by the General Partner and itsAffiliates).  Such removal shall beeffective immediately following the admission of a successor General Partnerpursuant to Section 10.03.  Theremoval of the General Partner shall also automatically constitute the removalof the General Partner as general partner or managing member, to the extentapplicable, of the other Group Members of which the General Partner is ageneral partner or a managing member.  Ifa Person is elected as a successor General Partner in accordance with the termsof this Section 11.02, such Person shall, upon admission

 

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pursuant to Section 10.03,automatically become a successor general partner or managing member, to theextent applicable, of the other Group Members of which the General Partner is ageneral partner or a managing member. The right of the holders of Outstanding Units to remove the GeneralPartner shall not exist or be exercised unless the Partnership has received anopinion opining as to the matters covered by a Withdrawal Opinion ofCounsel.  Any successor General Partnerelected in accordance with the terms of this Section 11.02 shall besubject to the provisions of Section 10.03.

 

SECTION 11.03.  Interest of Departing General Partnerand Successor General Partner.  (a) In the event of (i) withdrawal of the General Partner under circumstanceswhere such withdrawal does not violate this Agreement or (ii) removal ofthe General Partner by the holders of Outstanding Units under circumstanceswhere Cause does not exist, if the successor General Partner is elected inaccordance with the terms of Section 11.01 or Section 11.02, theDeparting General Partner shall have the option, exercisable prior to theeffective date of the departure of such Departing General Partner, to requireits successor to purchase its General Partner Interest (represented by GeneralPartner Units) and its general partner interest (or equivalent interest), ifany, in the other Group Members and all of its Incentive Distribution Rights(collectively, the “Combined Interest”) in exchange for an amount incash equal to the fair market value of such Combined Interest, such amount tobe determined and payable as of the effective date of its departure.  If the General Partner is removed by theUnitholders under circumstances where Cause exists or if the General Partnerwithdraws under circumstances where such withdrawal violates this Agreement,and if a successor General Partner is elected in accordance with the terms of Section 11.01or Section 11.02 (or if the business of the Partnership is continuedpursuant to Section 12.02 and the successor General Partner is not theformer General Partner), such successor shall have the option, exercisableprior to the effective date of the departure of such Departing General Partner(or, in the event the business of the Partnership is continued, prior to thedate the business of the Partnership is continued), to purchase the CombinedInterest for such fair market value of such Combined Interest of the DepartingGeneral Partner.  In either event, theDeparting General Partner shall be entitled to receive all reimbursements duesuch Departing General Partner pursuant to Section 7.04, including anyemployee-related liabilities (including severance liabilities), incurred inconnection with the termination of any employees employed by the DepartingGeneral Partner or its Affiliates (other than any Group Member for the benefitof the Partnership or the other Group Members.

 

For purposes of this Section 11.03(a), the fair market value ofthe Departing General Partner’s Combined Interest shall be determined byagreement between the Departing General Partner and its successor or, failingagreement within 30 days after the effective date of such DepartingGeneral Partner’s departure, by an independent investment banking firm or otherindependent expert selected by the Departing General Partner and itssuccessor.  If such parties cannot agreeupon one independent investment banking firm or other independent expert within45 days after the effective date of such departure, then the DepartingGeneral Partner shall designate an independent investment banking firm or otherindependent expert, the Departing General Partner’s successor shall designatean independent investment banking firm or other independent expert, and suchfirms or experts shall mutually select a third independent

 

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investment banking firm orindependent expert, which third independent investment banking firm or otherindependent expert shall determine the fair market value of the CombinedInterest of the Departing General Partner. In making its determination, such independent investment banking firm orother independent expert may consider the then current trading price of Unitson any National Securities Exchange on which Units are then listed or admittedto trading, the value of the Partnership’s assets, the rights and obligationsof the Departing General Partner, other factors it may deem relevant and relyon other experts, and the determination of which shall be conclusive as to suchmatter.

 

(b)  If the Combined Interest is not purchased in the mannerset forth in Section 11.03(a), the Departing General Partner (or itstransferee) shall become a Limited Partner and its Combined Interest shall beconverted into Common Units pursuant to a valuation made by an investmentbanking firm or other independent expert selected pursuant to Section 11.03(a),without reduction in such Partnership Interest (but subject to proportionatedilution by reason of the admission of its successor).  Any successor General Partner shall indemnifythe Departing General Partner (or its transferee) as to all debts andliabilities of the Partnership arising on or after the date on which theDeparting General Partner (or its transferee) becomes a Limited Partner.  For purposes of this Agreement, conversion ofthe Combined Interest of the Departing General Partner to Common Units will becharacterized as if the Departing General Partner (or its transferee)contributed its Combined Interest to the Partnership in exchange for the newlyissued Common Units.

 

(c)  If a successor General Partner is elected in accordancewith the terms of Section 11.01 or Section 11.02 (or if the businessof the Partnership is continued pursuant to Section 12.02 and thesuccessor General Partner is not the former General Partner) and the optiondescribed in Section 11.03(a) is not exercised by the party entitledto do so, the successor General Partner shall, at the effective date of itsadmission to the Partnership, contribute to the Partnership cash in the amountequal to the product of (i) the quotient obtained by dividing (A) thePercentage Interest of the General Partner Interest of the Departing GeneralPartner by (B) a percentage equal to 100% less such Percentage Interest ofthe Departing General Partner, multiplied by (ii) the Net Agreed Value ofthe Partnership’s assets on such date. In such event, such successor General Partner shall, subject to thefollowing sentence, be entitled to its Percentage Interest of all Partnershipallocations and distributions to which the Departing General Partner wasentitled.  In addition, the successorGeneral Partner shall cause this Agreement to be amended to reflect that, fromand after the date of such successor General Partner’s admission, the successorGeneral Partner’s interest in all Partnership distributions and allocationsshall be its Percentage Interest.

 

SECTION 11.04.  Termination of Subordination Period,Conversion of Subordinated Units and Extinguishment of Cumulative Common UnitArrearages.  Notwithstanding anyprovision of this Agreement, if the General Partner is removed as generalpartner of the Partnership under circumstances where Cause does not exist andUnits held by the General Partner and its Affiliates are not voted in favor ofsuch removal, (i) the Subordination Period will end and all OutstandingSubordinated Units will immediately and automatically convert into Common Unitson a one-for-one basis,

 

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(provided, however,that such converted Subordinated Units shall remain subject to the provisionsof Section 5.05(c)(ii) and Section 6.01(d)(x)), (ii) allCumulative Common Unit Arrearages on the Common Units will be extinguished and (iii) theGeneral Partner will have the right to convert its General Partner Interest(represented by General Partner Units) and its Incentive Distribution Rightsinto Common Units or to receive cash in exchange therefor in accordance with Section 11.03.

 

SECTION 11.05.  Withdrawal of Limited Partners.  No Limited Partner shall have any right towithdraw from the Partnership; provided, however, that when atransferee of a Limited Partner’s Limited Partner Interest becomes a RecordHolder of the Limited Partner Interest so transferred, such transferringLimited Partner shall cease to be a Limited Partner with respect to the LimitedPartner Interest so transferred.

 

# ARTICLE XII

#  

# Dissolution and Liquidation

#  

SECTION 12.01.  Dissolution.  The Partnership shall not be dissolved by theadmission of additional Limited Partners or by the admission of a successorGeneral Partner in accordance with the terms of this Agreement.  Upon the removal or withdrawal of the GeneralPartner, if a successor General Partner is elected pursuant to Section 11.01or Section 11.02, the Partnership shall not be dissolved and suchsuccessor General Partner shall continue the business of the Partnership.  The Partnership shall dissolve, and (subjectto Section 12.02) its affairs shall be wound up, upon:

 

##### (a)  an election to dissolve the Partnership by the GeneralPartner that is approved by the holders of a Unit Majority;

#####  

##### (b)  the entry of a decree of judicial dissolution of thePartnership pursuant to the provisions of the Delaware Act; or

#####  

##### (c)  an Event of Withdrawal of the General Partner asprovided in Section 11.01(a) (other than Section 11.01(a)(ii)),unless a successor is elected and a Withdrawal Opinion of Counsel is receivedas provided in Section 11.01(b) or Section 11.02 and suchsuccessor is admitted to the Partnership pursuant to Section 10.03.

 

SECTION 12.02.  Continuation of the Business of thePartnership After Dissolution.  Upon (a) dissolutionof the Partnership following an Event of Withdrawal caused by the withdrawal orremoval of the General Partner as provided in Section 11.01(a)(i) or Section 11.01(a)(iii) andthe failure of the Partners to select a successor to such Departing GeneralPartner pursuant to Section 11.01 or Section 11.02, then within 90days thereafter, or (b) dissolution of the Partnership upon an eventconstituting an Event of Withdrawal as defined in Section 11.01(a)(iv),(a)(v) or (a)(vi), then, to the maximum extent permitted by law, within180 days thereafter, the holders of a Unit Majority may elect to continue thebusiness of the Partnership on the same terms and conditions set forth in thisAgreement by appointing as a successor General Partner a

 

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Person approved by the holdersof a Unit Majority.  Unless such anelection is made within the applicable time period as set forth above, thePartnership shall conduct only activities necessary to wind up itsaffairs.  If such an election is so made,then:

 

##### (i)  the Partnership shall continue without dissolutionunless earlier dissolved in accordance with this Article XII;

 

##### (ii)  if the successor General Partner is not the formerGeneral Partner, then the interest of the former General Partner shall betreated in the manner provided in Section 11.03; and

 

##### (iii)  the successor General Partner shall be admitted to thePartnership as General Partner, effective as of the Event of Withdrawal, byagreeing in writing to be bound by this Agreement; provided, however,that the right of the holders of a Unit Majority to approve a successor GeneralPartner and to continue the business of the Partnership shall not exist and maynot be exercised unless the Partnership has received an Opinion of Counsel that(A) the exercise of the right would not result in the loss of limitedliability of any Limited Partner and (B) neither the Partnership nor anyGroup Member would be treated as an association taxable as a corporation orotherwise be taxable as an entity for federal income tax purposes upon theexercise of such right to continue (to the extent not already so treated ortaxed).

 

SECTION 12.03.  Liquidator.  Upon dissolution of the Partnership, unlessthe business of the Partnership is continued pursuant to Section 12.02,the General Partner shall select one or more Persons to act as Liquidator.  The Liquidator (if other than the GeneralPartner) shall be entitled to receive such compensation for its services as maybe approved by holders of at least a majority of the Outstanding Common Units, Class BUnits, if any, and Subordinated Units voting as a single class.  The Liquidator (if other than the GeneralPartner) shall agree not to resign at any time without 15 days’ priornotice and may be removed at any time, with or without cause, by notice ofremoval approved by holders of at least a majority of the Outstanding CommonUnits, Class B Units, if any, and Subordinated Units voting as a singleclass.  Upon dissolution, removal orresignation of the Liquidator, a successor and substitute Liquidator (who shallhave and succeed to all rights, powers and duties of the original Liquidator)shall within 30 days thereafter be approved by holders of at least amajority of the Outstanding Common Units, Class B Units, if any, andSubordinated Units voting as a single class. The right to approve a successor or substitute Liquidator in the mannerprovided herein shall be deemed to refer also to any such successor or substituteLiquidator 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 mayexercise, without further authorization or consent of any of the parties hereto,all of the powers conferred upon the General Partner under the terms of thisAgreement (but subject to all of the applicable limitations, contractual andotherwise, upon the exercise of such powers, other than the limitation on saleset forth in Section 7.03) necessary or appropriate to carry out theduties and functions of the Liquidator hereunder for and during the period oftime

 

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required to complete thewinding up and liquidation of the Partnership as provided for herein.

 

SECTION 12.04.  Liquidation.  The Liquidator shall proceed to dispose ofthe assets of the Partnership, discharge its liabilities, and otherwise wind upits affairs in such manner and over such period as determined by the Liquidator,subject to Section 17-804 of the Delaware Act and the following:

 

##### (a)  The assets may be disposed of by public or private saleor by distribution in kind to one or more Partners on such terms as theLiquidator and such Partner or Partners may agree.  If any property is distributed in kind, thePartner receiving the property shall be deemed for purposes of Section 12.04(b) tohave received cash equal to its fair market value, and contemporaneouslytherewith, appropriate cash distributions must be made to the otherPartners.  The Liquidator may deferliquidation or distribution of the Partnership’s assets for a reasonable timeif it determines that an immediate sale or distribution of all or some of thePartnership’s assets would be impractical or would cause undue loss to thePartners.  The Liquidator may distributethe Partnership’s assets, in whole or in part, in kind if it determines that asale would be impractical or would cause undue loss to the Partners.

 

##### (b)  Liabilities of the Partnership include amounts owed tothe Liquidator as compensation for serving in such capacity (subject to theterms of Section 12.03) and amounts to Partners otherwise than in respectof their distribution rights under Article VI.  With respect to any liability that is contingent,conditional or unmatured or is otherwise not yet due and payable, theLiquidator shall either settle such claim for such amount as it thinksappropriate or establish a reserve of cash or other assets to provide for itspayment.  When paid, any unused portionof the reserve shall be distributed as additional liquidation proceeds.

 

##### (c)  All property and all cash in excess of that required todischarge liabilities as provided in Section 12.04(b) shall bedistributed to the Partners in accordance with, and to the extent of, thepositive balances in their respective Capital Accounts, as determined aftertaking into account all Capital Account adjustments (other than those made byreason of distributions pursuant to this Section 12.04(c)) for the taxableyear 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, iflater, within 90 days after said date of such occurrence).

 

SECTION 12.05.  Cancellation of Certificate ofLimited Partnership.  Upon thecompletion of the distribution of Partnership cash and property as provided in Section 12.04in connection with the liquidation of the Partnership, the Certificate ofLimited Partnership and all qualifications of the Partnership as a foreignlimited

 

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partnership in jurisdictionsother than the State of Delaware shall be canceled and such other actions asmay be necessary to terminate the Partnership shall be taken.

 

SECTION 12.06.  Return of Contributions.  The General Partner shall not be personallyliable for, and shall have no obligation to contribute or loan any moneys orproperty to the Partnership to enable it to effectuate, the return of theCapital Contributions of the Limited Partners or Unitholders, or any portionthereof, it being expressly understood that any such return shall be madesolely from Partnership assets.

 

SECTION 12.07.  Waiver of Partition.  To the maximum extent permitted by law, eachPartner hereby waives any right to partition of the Partnership property.

 

SECTION 12.08.  Capital Account Restoration.  No Limited Partner shall have any obligationto restore any negative balance in its Capital Account upon liquidation of thePartnership. The General Partner shall be obligated to restore any negativebalance in its Capital Account upon liquidation of its interest in thePartnership by the end of the taxable year of the Partnership during which suchliquidation occurs, or, if later, within 90 days after the date of suchliquidation.

 

# ARTICLE XIII

#  

# Amendment of Partnership Agreement; Meetings;Record Date

#  

## SECTION 13.01.  Amendments to be Adopted Solely bythe General Partner.  Each Partneragrees that the General Partner, without the approval of any Partner, may amendany provision of this Agreement and execute, swear to, acknowledge, deliver,file and record whatever documents may be required in connection therewith, toreflect:

##  

##### (a)  a change in the name of the Partnership, the location ofthe principal place of business of the Partnership, the registered agent of thePartnership or the registered office of the Partnership;

#####  

##### (b)  admission, substitution, withdrawal or removal ofPartners in accordance with this Agreement;

#####  

##### (c)  a change that the General Partner determines to benecessary or appropriate to qualify or continue the qualification of thePartnership as a limited partnership or a partnership in which the LimitedPartners have limited liability under the laws of any state or to ensure thatthe Group Members will not be treated as associations taxable as corporationsor otherwise taxed as entities for federal income tax purposes;

#####  

##### (d)  a change that the General Partner determines (i) doesnot adversely affect the Limited Partners (including any particular class ofPartnership Interests as compared to other classes of Partnership Interests) inany material respect, (ii) to be necessary or appropriate to (A) satisfyany requirements, conditions or guidelines contained in any opinion, directive,order, ruling or regulation of any

 

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##### federal or state agency or judicial authority or contained in anyfederal or state statute (including the Delaware Act) or (B) facilitatethe trading of the Units (including the division of any class or classes ofOutstanding Units into different classes to facilitate uniformity of taxconsequences within such classes of Units) or comply with any rule, regulation,guideline or requirement of any National Securities Exchange on which the Unitsare or will be listed or admitted to trading, (iii) to be necessary orappropriate in connection with action taken by the General Partner pursuant to Section 5.10or (iv) is required to effect the intent expressed in the RegistrationStatement or the intent of the provisions of this Agreement or is otherwisecontemplated by this Agreement;

 

##### (e)  a change in the fiscal year or taxable year of thePartnership and any other changes that the General Partner determines to benecessary or appropriate as a result of a change in the fiscal year or taxableyear of the Partnership including, if the General Partner shall so determine, achange in the definition of “Quarter” and the dates on which distributions areto be made by the Partnership;

 

##### (f)  an amendment that is necessary, in the Opinion ofCounsel, to prevent the Partnership, or the General Partner or its directors,officers, trustees or agents from in any manner being subjected to theprovisions of the Investment Company Act of 1940, as amended, the InvestmentAdvisers Act of 1940, as amended, or “plan asset” regulations adopted under theEmployee Retirement Income Security Act of 1974, as amended, regardless ofwhether such regulations are substantially similar to plan asset regulationscurrently applied or proposed by the United States Department of Labor;

 

##### (g)  an amendment that the General Partner determines to benecessary or appropriate in connection with the authorization of the issuanceof any class or series of Partnership Securities pursuant to Section 5.06,including any amendment that the General Partner determines is necessary orappropriate in connection with (i) the adjustments of the MinimumQuarterly Distribution, First Target Distribution, Second Target Distributionand Third Target Distribution pursuant to the provisions of Section 5.11, (ii) theimplementation of the provisions of Section 5.11 or (iii) any modificationsto the Incentive Distribution Rights made in connection with the issuance ofPartnership Securities pursuant to Section 5.06, provided that,with respect to this clause (iii), the modifications to the IncentiveDistribution Rights and the related issuance of Partnership Securities havereceived Special Approval;

 

##### (h)  any amendment expressly permitted in this Agreement tobe made by the General Partner acting alone;

 

##### (i)  an amendment effected, necessitated or contemplated by aMerger Agreement approved in accordance with Section 14.03;

 

##### (j)  an amendment that the General Partner determines to benecessary or appropriate to reflect and account for the formation by thePartnership of, or

 

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##### investment by the Partnership in, any corporation, partnership, jointventure, limited liability company or other Person, in connection with theconduct by the Partnership of activities permitted by the terms of Section 2.04;

 

##### (k)  a conversion, merger orconveyance pursuant to Section 14.03(d); or

 

##### (l)  any other amendments substantially similar to theforegoing.

 

## SECTION 13.02.  Amendment Procedures.  Except as provided in Section 13.01 and Section 13.03,all amendments to this Agreement shall be made in accordance with therequirements contained in this Section 13.02.  Amendments to this Agreement may be proposedonly by the General Partner; provided, however, that the GeneralPartner shall have no duty or obligation to propose any amendment to thisAgreement and may decline to do so free of any fiduciary duty or obligationwhatsoever to the Partnership or any Limited Partner and, in declining topropose an amendment, to the fullest extent permitted by law shall not berequired to act in good faith or pursuant to any other standard imposed by thisAgreement, any Group Member Agreement, any other agreement contemplated herebyor under the Delaware Act or any other law, rule or regulation or atequity.  A proposed amendment shall beeffective upon its approval by the General Partner and the holders of a UnitMajority, unless a greater or different percentage is required under thisAgreement or by the Delaware Act.  Eachproposed amendment that requires the approval of the holders of a specifiedpercentage of Outstanding Units shall be set forth in a writing that containsthe text of the proposed amendment.  Ifsuch an amendment is proposed, the General Partner shall seek the writtenapproval of the requisite percentage of Outstanding Units or call a meeting ofthe Unitholders to consider and vote on such proposed amendment.  The General Partner shall notify all RecordHolders upon final adoption of any such proposed amendments.

 

## SECTION 13.03.  Amendment Requirements.  (a)  Notwithstanding the provisions of Section 13.01and Section 13.02, no provision of this Agreement that establishes apercentage of Outstanding Units (including Units deemed owned by the GeneralPartner) required to take any action shall be amended, altered, changed,repealed or rescinded in any respect that would have the effect of reducingsuch voting percentage unless such amendment is approved by the written consentor the affirmative vote of holders of Outstanding Units whose aggregateOutstanding Units constitute not less than the voting requirement sought to bereduced.

 

## (b)  Notwithstanding the provisions of Section 13.01 andSection 13.02, no amendment to this Agreement may (i) enlarge theobligations of any Limited Partner without its consent, unless such enlargementshall be deemed to have occurred as a result of an amendment approved pursuantto Section 13.03(c), (ii) enlarge the obligations of, restrict in anyway any action by or rights of, or reduce in any way the amounts distributable,reimbursable or otherwise payable to, the General Partner or any of itsAffiliates without its consent, which consent may be given or withheld at theGeneral Partner’s option, (iii) change Section 12.01(a), or (iv) changethe term of the Partnership or, except as set forth in Section 12.01(a),give any Person the right to dissolve the Partnership.

 

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## (c)  Except as provided in Section 14.03, and withoutlimitation of the General Partner’s authority to adopt amendments to thisAgreement without the approval of any Partners as contemplated in Section 13.01,any amendment that would have a material adverse effect on the rights orpreferences of any class of Partnership Interests in relation to other classesof Partnership Interests must be approved by the holders of not less than amajority of the Outstanding Partnership Interests of the class affected.

 

## (d)  Notwithstanding any other provision of this Agreement,except for amendments pursuant to Section 13.01 and except as otherwiseprovided by Section 14.03(b), no amendments shall become effective withoutthe approval of the holders of at least 90% of the Outstanding Units voting asa single class unless the Partnership obtains an Opinion of Counsel to theeffect that such amendment will not affect the limited liability of any LimitedPartner under applicable partnership law of the state under whose law thePartnership is organized.

 

## (e)  Except as provided in Section 13.01, this Section 13.03shall only be amended with the approval of the holders of at least 90% of theOutstanding Units.

 

## SECTION 13.04.  Special Meetings.  All acts of Limited Partners to be takenpursuant to this Agreement shall be taken in the manner provided in this Article XIII.  Special meetings of the Limited Partners maybe called by the General Partner or by Limited Partners owning 20% or more ofthe Outstanding Units of the class or classes for which a meeting isproposed.  Limited Partners shall call aspecial meeting by delivering to the General Partner one or more requests inwriting stating that the signing Limited Partners wish to call a specialmeeting and indicating the general or specific purposes for which the specialmeeting is to be called, it being understood that the purposes of such specialmeeting may only be to vote on matters that require the vote of Unitholderspursuant to this Agreement.  Within60 days after receipt of such a call from Limited Partners or within suchgreater time as may be reasonably necessary for the Partnership to comply withany statutes, rules, regulations, listing agreements or similar requirementsgoverning the holding of a meeting or the solicitation of proxies for use atsuch a meeting, the General Partner shall send a notice of the meeting to theLimited Partners either directly or indirectly through the Transfer Agent.  A meeting shall be held at a time and placedetermined by the General Partner on a date not less than 10 days nor morethan 60 days after the mailing of notice of the meeting.  Limited Partners shall not vote on mattersthat would cause the Limited Partners to be deemed to be taking part in themanagement and control of the business and affairs of the Partnership so as tojeopardize the Limited Partners’ limited liability under the Delaware Act orthe law of any other state in which the Partnership is qualified to dobusiness.

 

## SECTION 13.05.  Notice of a Meeting.  Notice of a meeting called pursuant to Section 13.04shall be given to the Record Holders of the class or classes of Units for whicha meeting is proposed in writing by mail or other means of writtencommunication in accordance with Section 16.01.  The notice shall be deemed to have been givenat the time when deposited in the mail or sent by other means of writtencommunication.

 

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SECTION 13.06.  Record Date.  For purposes of determining the LimitedPartners entitled to notice of or to vote at a meeting of the Limited Partnersor to give approvals without a meeting as provided in Section 13.11, theGeneral Partner may set a Record Date, which shall not be less than 10 nor morethan 60 days before (a) the date of the meeting (unless suchrequirement conflicts with any rule, regulation, guideline or requirement ofany National Securities Exchange on which the Units are listed or admitted totrading, in which case the rule, regulation, guideline or requirement of suchNational Securities Exchange shall govern) or (b) in the event thatapprovals are sought without a meeting, the date by which Limited Partners arerequested in writing by the General Partner to give such approvals.  If the General Partner does not set a RecordDate, then (a) the Record Date for determining the Limited Partnersentitled to notice of or to vote at a meeting of the Limited Partners shall bethe close of business on the day next preceding the day on which notice isgiven, and (b) the Record Date for determining the Limited Partnersentitled to give approvals without a meeting shall be the date the firstwritten approval is deposited with the Partnership in care of the GeneralPartner in accordance with Section 13.11.

 

SECTION 13.07.  Adjournment.  When a meeting is adjourned to another timeor place, notice need not be given of the adjourned meeting and a new RecordDate need not be fixed, if the time and place thereof are announced at themeeting at which the adjournment is taken, unless such adjournment shall be formore than 45 days.  At the adjournedmeeting, the Partnership may transact any business which might have beentransacted at the original meeting.  Ifthe adjournment is for more than 45 days or if a new Record Date is fixedfor the adjourned meeting, a notice of the adjourned meeting shall be given inaccordance with this Article XIII.

 

SECTION 13.08.  Waiver of Notice; Approval ofMeeting.  The transactions of anymeeting of Limited Partners, however called and noticed, and whenever held,shall be as valid as if it had occurred at a meeting duly held after regularcall and notice, if a quorum is present either in person or by proxy.  Attendance of a Limited Partner at a meetingshall constitute a waiver of notice of the meeting, except when the LimitedPartner attends the meeting for the express purpose of objecting, at thebeginning of the meeting, to the transaction of any business because the meetingis not lawfully called or convened; and except that attendance at a meeting isnot a waiver of any right to disapprove the consideration of matters requiredto be included in the notice of the meeting, but not so included, if thedisapproval is expressly made at the meeting.

 

SECTION 13.09.  Quorum and Voting.  The holders of a majority of the OutstandingUnits of the class or classes for which a meeting has been called (includingOutstanding Units deemed owned by the General Partner) represented in person orby proxy shall constitute a quorum at a meeting of Limited Partners of suchclass or classes unless any such action by the Limited Partners requiresapproval by holders of a greater percentage of such Units, in which case thequorum shall be such greater percentage. At any meeting of the Limited Partners duly called and held inaccordance with this Agreement at which a quorum is present, the act of LimitedPartners holding Outstanding Units that in the aggregate represent a majorityof the Outstanding Units entitled to vote and be present in person or by proxyat such meeting shall be deemed to constitute the act

 

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of all Limited Partners, unlessa greater or different percentage is required with respect to such action underthe provisions of this Agreement, in which case the act of the Limited Partnersholding Outstanding Units that in the aggregate represent at least such greateror different percentage shall be required. The Limited Partners present at a duly called or held meeting at which aquorum is present may continue to transact business until adjournment,notwithstanding the withdrawal of enough Limited Partners to leave less than aquorum, if any action taken (other than adjournment) is approved by therequired percentage of Outstanding Units specified in this Agreement (includingOutstanding Units deemed owned by the General Partner).  In the absence of a quorum, any meeting ofLimited Partners may be adjourned from time to time by the affirmative vote ofholders of at least a majority of the Outstanding Units entitled to vote atsuch meeting (including Outstanding Units deemed owned by the General Partner)represented either in person or by proxy, but no other business may be transacted,except as provided in Section 13.07.

 

SECTION 13.10.  Conduct of a Meeting.  The General Partner shall have full power andauthority concerning the manner of conducting any meeting of the LimitedPartners or solicitation of approvals in writing, including the determinationof Persons entitled to vote, the existence of a quorum, the satisfaction of therequirements of Section 13.04, the conduct of voting, the validity andeffect of any proxies and the determination of any controversies, votes orchallenges arising in connection with or during the meeting or voting.  The General Partner shall designate a Personto serve as chairman of any meeting and shall further designate a Person totake the minutes of any meeting.  Allminutes shall be kept with the records of the Partnership maintained by theGeneral Partner.  The General Partner maymake such other regulations consistent with applicable law and this Agreementas it may deem advisable concerning the conduct of any meeting of the LimitedPartners or solicitation of approvals in writing, including regulations inregard to the appointment of proxies, the appointment and duties of inspectorsof votes and approvals, the submission and examination of proxies and otherevidence of the right to vote, and the revocation of approvals in writing.

 

SECTION 13.11.  Action Without a Meeting.  If authorized by the General Partner, anyaction that may be taken at a meeting of the Limited Partners may be takenwithout a meeting if an approval in writing setting forth the action so takenis signed by Limited Partners owning not less than the minimum percentage ofthe Outstanding Units (including Units deemed owned by the General Partner)that would be necessary to authorize or take such action at a meeting at whichall the Limited Partners were present and voted (unless such provisionconflicts with any rule, regulation, guideline or requirement of any NationalSecurities Exchange on which the Units are listed or admitted to trading, inwhich case the rule, regulation, guideline or requirement of such NationalSecurities Exchange shall govern). Prompt notice of the taking of action without a meeting shall be givento the Limited Partners who have not approved the action in writing.  The General Partner may specify that any writtenballot submitted to Limited Partners for the purpose of taking any actionwithout a meeting shall be returned to the Partnership within the time period,which shall be not less than 20 days, specified by the General Partner.  If a ballot returned to the Partnership doesnot vote all of the Units held by the Limited Partners, the Partnership shallbe deemed to have failed to

 

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receive a ballot for the Unitsthat were not voted.  If approval of thetaking of any action by the Limited Partners is solicited by any Person otherthan by or on behalf of the General Partner, the written approvals shall haveno force and effect unless and until (a) they are deposited with thePartnership in care of the General Partner, (b) approvals sufficient totake the action proposed are dated as of a date not more than 90 daysprior to the date sufficient approvals are deposited with the Partnership and (c) anOpinion of Counsel is delivered to the General Partner to the effect that theexercise of such right and the action proposed to be taken with respect to anyparticular matter (i) will not cause the Limited Partners to be deemed tobe taking part in the management and control of the business and affairs of thePartnership so as to jeopardize the Limited Partners’ limited liability, and (ii) isotherwise permissible under the applicable statutes then governing the rights,duties and liabilities of the Partnership and the Partners.

 

SECTION 13.12.  Right to Vote and Related Matters.  (a)  Only those Record Holders of theUnits on the Record Date set pursuant to Section 13.06 (and also subjectto the limitations contained in the definition of “Outstanding”) shall beentitled to notice of, and to vote at, a meeting of Limited Partners or to actwith respect to matters as to which the holders of the Outstanding Units havethe right to vote or to act.  Allreferences in this Agreement to votes of, or other acts that may be taken by,the Outstanding Units shall be deemed to be references to the votes or acts ofthe Record Holders of such Outstanding Units.

 

(b)  With respect to Units that are held for a Person’saccount by another Person (such as a broker, dealer, bank, trust company orclearing corporation, or an agent of any of the foregoing), in whose name suchUnits are registered, such other Person shall, in exercising the voting rightsin respect of such Units on any matter, and unless the arrangement between suchPersons provides otherwise, vote such Units in favor of, and at the directionof, the Person who is the beneficial owner, and the Partnership shall beentitled to assume it is so acting without further inquiry.  The provisions of this Section 13.12(b) (aswell as all other provisions of this Agreement) are subject to the provisionsof Section 4.03.

 

# ARTICLE XIV

 

# Merger, Consolidation or Conversion

#  

SECTION 14.01.  Authority.  The Partnership may merge or consolidate withor into one or more corporations, limited liability companies, statutory trustsor associations, real estate investment trusts, common law trusts orunincorporated businesses, including a partnership (whether general or limited(including a limited liability partnership)), or convert into any such entity,whether such entity is formed under the laws of the State of Delaware or anyother state of the United States, pursuant to a written plan of merger orconsolidation (“Merger Agreement”) or a written plan of conversion (“Planof Conversion”), as the case may be, in accordance with this Article XIV.

 

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SECTION 14.02.  Procedure for Merger or Consolidationor Conversion.  (a)  Merger,consolidation or conversion of the Partnership pursuant to this Article XIVrequires the prior consent of the General Partner; provided, however,that, to the fullest extent permitted by law, the General Partner shall have noduty or obligation to consent to any merger, consolidation or conversion of thePartnership and may decline to do so free of any fiduciary duty or obligationwhatsoever to the Partnership or any Limited Partner and, in declining toconsent to a merger, consolidation or conversion, shall not be required to actin good faith or pursuant to any other standard imposed by this Agreement, anyGroup Member Agreement, any other agreement contemplated hereby or under theDelaware Act or any other law, rule or regulation or at equity.

 

(b)  If the General Partner shall determine to consent to themerger or consolidation, the General Partner shall approve the Merger Agreement,which shall set forth:

###  

#### (i)  name, jurisdiction of formation and state of domicile ofeach of the business entities proposing to merge or consolidate;

####  

#### (ii)  the name, jurisdiction of formation and state ofdomicile of the business entity that is to survive the proposed merger orconsolidation (the “Surviving Business Entity”);

####  

#### (iii)  the terms and conditions of the proposed merger orconsolidation;

####  

#### (iv)  the manner and basis of exchanging or converting theequity securities of each constituent business entity for, or into, cash,property or interests, rights, securities or obligations of the SurvivingBusiness Entity; and (i) if any general or limited partner interests,securities or rights of any constituent business entity are not to be exchangedor converted solely for, or into, cash, property or general or limited partnerinterests, rights, securities or obligations of the Surviving Business Entity,the cash, property or interests, rights, securities or obligations of anygeneral or limited partnership, corporation, trust, limited liability company,unincorporated business or other entity (other than the Surviving BusinessEntity) which the holders of such general or limited partner interests,securities or rights are to receive in exchange for, or upon conversion oftheir interests, securities or rights, and (ii) in the case of securitiesrepresented by certificates, upon the surrender of such certificates, whichcash, property or general or limited partner interests, rights, securities orobligations of the Surviving Business Entity or any general or limitedpartnership, corporation, trust, limited liability company, unincorporatedbusiness or other entity (other than the Surviving Business Entity), orevidences thereof, are to be delivered;

####  

#### (v)  a statement of any changes in the constituent documentsor the adoption of new constituent documents (the articles or certificate ofincorporation, articles of trust, declaration of trust, certificate oragreement of limited partnership, limited liability company agreement or othersimilar charter or

 

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#### governing document) of the Surviving Business Entity to be effected bysuch merger or consolidation;

####  

#### (vi)  the effective time of the merger or consolidation,which may be the date of the filing of the certificate of merger pursuant to Section 14.04or a later date specified in or determinable in accordance with the MergerAgreement (provided, that if the effective time of the merger orconsolidation is to be later than the date of the filing of such certificate ofmerger, the effective time shall be fixed at a date or time certain at or priorto the time of the filing of such certificate of merger and stated therein);and

 

#### (vii)  such other provisions with respect to the proposedmerger or consolidation that the General Partner determines to be necessary orappropriate.

 

(c)  If the General Partner shall determine to consent to theconversion, the General Partner shall approve the Plan of Conversion, whichshall set forth:

###  

#### (i) the name of the converting entity and the converted entity;

####  

#### (ii) a statement that the Partnership is continuing its existencein the organizational form of the converted entity;

####  

#### (iii) a statement as to the type of entity that the convertedentity is to be and the state or country under the laws of which the convertedentity is to be incorporated, formed or organized;

####  

#### (iv) the manner and basis of exchanging or converting the equitysecurities of each constituent business entity for, or into, cash, property orinterests, rights, securities or obligations of the converted entity;

####  

#### (v) in an attachment or exhibit, the certificate of limitedpartnership of the Partnership; and

####  

#### (vi) in an attachment or exhibit, the certificate of limitedpartnership, articles of incorporation, or other organizational documents ofthe converted entity;

####  

#### (vii) the effective time of the conversion, which may be the dateof the filing of the articles of conversion or a later date specified in ordeterminable in accordance with the Plan of Conversion (provided, however,that if the effective time of the conversion is to be later than the date ofthe filing of such articles of conversion, the effective time shall be fixed ata date or time certain at or prior to the time of the filing of such articlesof conversion and stated therein); and

####  

#### (viii) such other provisions with respect to the proposedconversion that the General Partner determines to be necessary or appropriate.

 

107

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SECTION 14.03. Approval by Limited Partners of MergerAgreement or Plan of Conversion.  (a) Except as provided in Section 14.03(d) and Section 14.03(e), theGeneral Partner, upon its approval of the Merger Agreement or Plan ofConversion, as the case may be, shall direct that the Merger Agreement or Planof Conversion, as applicable, be submitted to a vote of Limited Partners,whether at a special meeting or by written consent, in either case inaccordance with the requirements of Article XIII.  A copy or a summary of the Merger Agreementor Plan of Conversion, as the case may be, shall be included in or enclosedwith the notice of a special meeting or the written consent.

 

(b)  Except as provided in Section 14.03(d) and Section 14.03(e),the Merger Agreement or Plan of Conversion, as the case may be, shall beapproved upon receiving the affirmative vote or consent of the holders of aUnit Majority.

 

(c)  Except as provided in Section 14.03(d) and Section 14.03(e),after such approval by vote or consent of the Limited Partners, and at any timeprior to the filing of the certificate of merger or articles of conversionpursuant to Section 14.04, the merger, consolidation or conversion may beabandoned pursuant to provisions therefor, if any, set forth in the MergerAgreement or Plan of Conversion, as the case may be.

 

(d)  Notwithstanding anything else contained in this Article XIVor in this Agreement, the General Partner is permitted, without Limited Partnerapproval, to convert the Partnership or any Group Member into a new limitedliability entity, to merge the Partnership or any Group Member into, or conveyall of the Partnership’s assets to, another limited liability entity that shallbe newly formed and shall have no assets, liabilities or operations at the timeof such conversion, merger or conveyance other than those it receives from thePartnership or other Group Member if (i) the General Partner has receivedan Opinion of Counsel that the conversion, merger or conveyance, as the case maybe, would not result in the loss of the limited liability of any LimitedPartner or cause the Partnership to be treated as an association taxable as acorporation or otherwise to be taxed as an entity for federal income taxpurposes (to the extent not previously treated as such), (ii) the solepurpose of such conversion, merger or conveyance is to effect a mere change inthe legal form of the Partnership into another limited liability entity and (iii) thegoverning instruments of the new entity provide the Limited Partners and theGeneral Partner with the same rights and obligations as are herein contained.

 

(e)  Additionally, notwithstanding anything else contained inthis Article XIV or in this Agreement, the General Partner is permitted,without Limited Partner approval, to merge or consolidate the Partnership withor into another entity if (i) the General Partner has received an Opinionof Counsel that the merger or consolidation, as the case may be, would notresult in the loss of the limited liability of any Limited Partner or cause thePartnership to be treated as an association taxable as a corporation orotherwise to be taxed as an entity for federal income tax purposes (to theextent not previously treated as such), (ii) the merger or consolidationwould not result in an amendment to this Agreement, other than any amendmentsthat could be adopted pursuant to Section 13.01, (iii) thePartnership is the Surviving Business Entity in such merger or consolidation, (iv) eachUnit outstanding immediately prior to the effective

 

108

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date of the merger orconsolidation is to be an identical Unit of the Partnership after the effectivedate of the merger or consolidation, and (v) the number of PartnershipSecurities to be issued by the Partnership in such merger or consolidation doesnot exceed 20% of the Partnership Securities Outstanding immediately prior tothe effective date of such merger or consolidation.

 

(f)  Pursuant to Section 17-211(g) of the Delaware Act,an agreement of merger or consolidation approved in accordance with this Article XIVmay (a) effect any amendment to this Agreement or (b) effect theadoption of a new partnership agreement for the Partnership if it is theSurviving Business Entity.  Any suchamendment or adoption made pursuant to this Section 14.03 shall beeffective at the effective time or date of the merger or consolidation.

 

SECTION 14.04.  Certificateof Merger or Articles of Conversion. Upon the required approval by the General Partner and the Unitholders ofa Merger Agreement, a certificate of merger or articles of conversion, asapplicable, shall be executed and filed with the Secretary of State of theState of Delaware in conformity with the requirements of the Delaware Act.

##  

SECTION 14.05.  Effect of Merger, Consolidation orConversion.  (a)  At theeffective time of the certificate of merger:

 

#### (i) all of the rights, privileges and powers of each of the businessentities that has merged or consolidated, and all property, real, personal andmixed, and all debts due to any of those business entities and all other thingsand causes of action belonging to each of those business entities, shall bevested in the Surviving Business Entity and after the merger or consolidationshall be the property of the Surviving Business Entity to the extent they wereof each constituent business entity;

####  

#### (ii) the title to any real property vested by deed or otherwise in anyof those constituent business entities shall not revert and is not in any wayimpaired because of the merger or consolidation;

####  

#### (iii) all rights of creditors and all liens on or securityinterests in property of any of those constituent business entities shall bepreserved unimpaired; and

####  

#### (iv) all debts, liabilities and duties of those constituent businessentities shall attach to the Surviving Business Entity and may be enforcedagainst it to the same extent as if the debts, liabilities and duties had beenincurred or contracted by it.

####  

#### (b) At the effective time of the articles of conversion:

####  

#### (i) the Partnership shall continue to exist, without interruption, butin the organizational form of the converted entity rather than in its priororganizational form;

 

109

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#### (ii) all rights, title, and interests to all real estate and otherproperty owned by the Partnership shall continue to be owned by the convertedentity in its new organizational form without reversion or impairment, withoutfurther act or deed, and without any transfer or assignment having occurred,but subject to any existing liens or other encumbrances thereon;

####  

#### (iii) all liabilities and obligations of the Partnership shall continueto be liabilities and obligations of the converted entity in its neworganizational form without impairment or diminution by reason of theconversion;

####  

#### (iv) all rights of creditors or other parties with respect to oragainst the prior interest holders or other owners of the Partnership in theircapacities as such in existence as of the effective time of the conversion willcontinue in existence as to those liabilities and obligations and may bepursued by such creditors and obligees as if the conversion did not occur;

####  

#### (v) a proceeding pending by or against the Partnership or by or againstany of Partners in their capacities as such may be continued by or against theconverted entity in its new organizational form and by or against the priorpartners without any need for substitution of parties; and

####  

#### (vi) Partnership Securities that are to be converted into partnershipinterests, shares, evidences of ownership, or other securities in the convertedentity as provided in the Plan of Conversion shall be so converted, andPartners shall be entitled only to the rights provided in the Plan of Conversion.

####  

# ARTICLE XV

#  

# Right to Acquire Limited Partner Interests

#  

SECTION 15.01.  Right to Acquire Limited PartnerInterests.  (a)  Notwithstandingany other provision of this Agreement, if at any time the General Partner andits Affiliates hold more than 80% of the total Limited Partner Interests of anyclass then Outstanding, the General Partner shall then have the right, whichright it may assign and transfer in whole or in part to the Partnership or anyAffiliate of the General Partner, exercisable at its option, to purchase all,but not less than all, of such Limited Partner Interests of such class thenOutstanding held by Persons other than the General Partner and its Affiliates,at the greater of (x) the Current Market Price as of the date three daysprior to the date that the notice described in Section 15.01(b) ismailed and (y) the highest price paid by the General Partner or any of itsAffiliates for any such Limited Partner Interest of such class purchased duringthe 90-day period preceding the date that the notice described in Section 15.01(b) ismailed.

 

(b) If the General Partner, any Affiliate of the General Partner or thePartnership elects to exercise the right to purchase Limited Partner Interestsgranted pursuant to Section 15.01(a), the General Partner shall deliver tothe Transfer Agent notice of such election to purchase (the “Notice ofElection to Purchase”) and shall cause

 

110

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the Transfer Agent to mail acopy of such Notice of Election to Purchase to the Record Holders of LimitedPartner Interests of such class (as of a Record Date selected by the GeneralPartner) at least 10, but not more than 60, days prior to the PurchaseDate.  Such Notice of Election toPurchase shall also be published for a period of at least three consecutivedays in at least two daily newspapers of general circulation printed in theEnglish language and published in the Borough of Manhattan, New York.  The Notice of Election to Purchase shallspecify the Purchase Date and the price (determined in accordance with Section 15.01(a))at which Limited Partner Interests will be purchased and state that the GeneralPartner, its Affiliate or the Partnership, as the case may be, elects topurchase such Limited Partner Interests, upon surrender of Certificatesrepresenting such Limited Partner Interests in exchange for payment, at suchoffice or offices of the Transfer Agent as the Transfer Agent may specify, oras may be required by any National Securities Exchange on which such LimitedPartner Interests are listed.  Any suchNotice of Election to Purchase mailed to a Record Holder of Limited PartnerInterests at his address as reflected in the records of the Transfer Agentshall be conclusively presumed to have been given regardless of whether theowner receives such notice.  On or priorto the Purchase Date, the General Partner, its Affiliate or the Partnership, asthe case may be, shall deposit with the Transfer Agent cash in an amount sufficientto pay the aggregate purchase price of all of such Limited Partner Interests tobe purchased in accordance with this Section 15.01.  If the Notice of Election to Purchase shallhave been duly given as aforesaid at least 10 days prior to the PurchaseDate, and if on or prior to the Purchase Date the deposit described in thepreceding sentence has been made for the benefit of the holders of LimitedPartner Interests subject to purchase as provided herein, then from and afterthe Purchase Date, notwithstanding that any Certificate shall not have beensurrendered for purchase, all rights of the holders of such Limited PartnerInterests (including any rights pursuant to Article IV, Article V, Article VIand Article XII) shall thereupon cease, except the right to receive theapplicable purchase price (determined in accordance with Section 15.01(a))for Limited Partner Interests therefor, without interest, upon surrender to theTransfer Agent of the Certificates representing such Limited Partner Interests,and such Limited Partner Interests shall thereupon be deemed to be transferredto the General Partner, its Affiliate or the Partnership, as the case may be,on the record books of the Transfer Agent and the Partnership, and the GeneralPartner or any Affiliate of the General Partner, or the Partnership, as thecase may be, shall be deemed to be the owner of all such Limited PartnerInterests from and after the Purchase Date and shall have all rights as theowner of such Limited Partner Interests (including all rights as owner of suchLimited Partner Interests pursuant to Article IV, Article V, Article VIand Article XII).

 

(c)  At any time from and after the Purchase Date, a holderof an Outstanding Limited Partner Interest subject to purchase as provided inthis Section 15.01 may surrender his Certificate evidencing such LimitedPartner Interest to the Transfer Agent in exchange for payment of the amountdescribed in Section 15.01(a), without interest thereon.

 

111

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# ARTICLE XVI

 

# General Provisions

#  

SECTION 16.01.  Addresses and Notices.  Any notice, demand, request, report or proxymaterials required or permitted to be given or made to a Partner under thisAgreement shall be in writing and shall be deemed given or made when deliveredin person or when sent by first class United States mail or by other means ofwritten communication to the Partner at the address described below.  Any notice, payment or report to be given ormade to a Partner hereunder shall be deemed conclusively to have been given ormade, and the obligation to give such notice or report or to make such paymentshall be deemed conclusively to have been fully satisfied, upon sending of suchnotice, payment or report to the Record Holder of such Partnership Securitiesat his address as shown on the records of the Transfer Agent or as otherwiseshown on the records of the Partnership, regardless of any claim of any Personwho may have an interest in such Partnership Securities by reason of anyassignment or otherwise.  An affidavit orcertificate of making of any notice, payment or report in accordance with theprovisions of this Section 16.01 executed by the General Partner, theTransfer Agent or the mailing organization shall be prima facie evidence of thegiving or making of such notice, payment or report.  If any notice, payment or report addressed toa Record Holder at the address of such Record Holder appearing on the books andrecords of the Transfer Agent or the Partnership is returned by the UnitedStates Postal Service marked to indicate that the United States Postal Serviceis unable to deliver it, such notice, payment or report and any subsequentnotices, payments and reports shall be deemed to have been duly given or madewithout further mailing (until such time as such Record Holder or anotherPerson notifies the Transfer Agent or the Partnership of a change in hisaddress) if they are available for the Partner at the principal office of thePartnership for a period of one year from the date of the giving or making ofsuch notice, payment or report to the other Partners.  Any notice to the Partnership shall be deemedgiven if received by the General Partner at the principal office of thePartnership designated pursuant to Section 2.03.  The General Partner may rely and shall beprotected in relying on any notice or other document from a Partner or otherPerson if believed by it to be genuine.

 

SECTION 16.02.  Further Action.  The parties shall execute and deliver alldocuments, provide all information and take or refrain from taking action asmay be necessary or appropriate to achieve the purposes of this Agreement.

 

SECTION 16.03.  Binding Effect.  This Agreement shall be binding upon andinure to the benefit of the parties hereto and their respective heirs,executors, administrators, successors, legal representatives and permittedassigns.

 

SECTION 16.04.  Integration.  This Agreement constitutes the entireagreement among the parties hereto pertaining to the subject matter hereof andsupersedes all prior agreements and understandings pertaining thereto.

 

SECTION 16.05.  Creditors.  None of the provisions of this Agreementshall be for the benefit of, or shall be enforceable by, any creditor of thePartnership.

 

112

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SECTION 16.06.  Waiver.  No failure by any party to insist upon thestrict performance of any covenant, duty, agreement or condition of thisAgreement or to exercise any right or remedy consequent upon a breach thereofshall constitute waiver of any such breach of any other covenant, duty,agreement or condition.

 

SECTION 16.07.  Counterparts.  This Agreement may be executed incounterparts, all of which together shall constitute an agreement binding onall the parties hereto, notwithstanding that all such parties are not signatoriesto the original or the same counterpart. Each party shall become bound by this Agreement immediately uponaffixing its signature hereto or, in the case of a Person acquiring a LimitedPartner Interest, pursuant to Section 10.02(a) without execution hereof.

 

SECTION 16.08.  ApplicableLaw.  This Agreement shall beconstrued in accordance with and governed by the laws of the State of Delaware,without regard to the principles of conflicts of law.

 

SECTION 16.09.  Invalidityof Provisions.  If any provision ofthis Agreement is or becomes invalid, illegal or unenforceable in any respect,the validity, legality and enforceability of the remaining provisions containedherein shall not be affected thereby.

 

SECTION 16.10.  Consentof Partners.  Each Partner herebyexpressly consents and agrees that, whenever in this Agreement it is specifiedthat an action may be taken upon the affirmative vote or consent of less thanall of the Partners, such action may be so taken upon the concurrence of lessthan all of the Partners and each Partner shall be bound by the results of suchaction.

 

SECTION 16.11.  FacsimileSignatures.  The use of facsimilesignatures affixed in the name and on behalf of the transfer agent andregistrar of the Partnership on certificates representing Common Units isexpressly permitted by this Agreement.

 

SECTION 16.12.  Third-PartyBeneficiaries.  Each Partner agreesthat any Indemnitee shall be entitled to assert rights and remedies hereunderas a third-party beneficiary hereto with respect to those provisions of thisAgreement affording a right, benefit or privilege to such Indemnitee.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFTBLANK]

 

113

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IN WITNESS WHEREOF, the parties hereto have executed this Amended andRestated Agreement of Limited Partnership as of the date first written above.

 
|   | GENERAL PARTNER:             |
|--------|------------------------------|
|   |                         |
|   | OSG AMERICA LLC              |
|   |                         |
|   | by                      |   |
|   |                         |   /s/ Myles R. Itkin |
|   |                         |   Name: Myles R. Itkin |
|   |                         |   Title: Chief Financial Officer |
|   |                         |   |
|   |                         |   |
|   | ORGANIZATIONAL LIMITED       |
|   | PARTNER:                     |
|   |                         |   |
|   | OSG BULK SHIPS, INC.         |
|   |                         |   |
|   | by                      |   |
|   |                         |   /s/ Myles R. Itkin |
|   |                         |   Name: Myles R. Itkin |
|   |                         |   Title: Senior Vice President & Treasurer |
|   |                         |   |
|   |                         |   |
|   | LIMITED PARTNERS:            |
|   |                         |   |
|   | OSGAMLP ONE PERCENT INTEREST |
|   | CORPORATION.                 |
|   |                         |   |
|   | by                      |   |
|   |                         |   /s/ Jerry Miller |
|   |                         |   Name: Jerry Miller |
|   |                         |   Title: Vice President & Treasurer |

 

114

----

 
|   | All Limited Partners now and hereafter admitted as Limited Partners  of the Partnership, pursuant to powers of attorney now and hereafter executed  in favor of, and granted and delivered to the General Partner, or without  execution pursuant to Section 10.02(a) hereof. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                    |   |
|   | OSG AMERICA LLC                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                    |   |
|   | by                                                                                                                                                                                                                                                                                 |   |
|   |                                                                                                                                                                                                                                                                                    |   /s/ Myles R. Itkin |
|   |                                                                                                                                                                                                                                                                                    |   Name: Myles R. Itkin |
|   |                                                                                                                                                                                                                                                                                    |   Title: Chief Financial Officer |

 

115

----

 

**EXHIBIT A**

 

**to the Amended and RestatedAgreement of Limited Partnership ofOSG America L.P.**

 

**Certificate Evidencing Common UnitsRepresenting Limited Partner Interests inOSG America L.P.**

 
| No. | Common Units |
|-----|--------------|

 

In accordance with Section 4.01 of the Amended and RestatedAgreement of Limited Partnership of OSG America L.P., as amended, supplementedor restated from time to time (the “Partnership Agreement”), OSG AmericaL.P., a Delaware limited partnership (the “Partnership”), herebycertifies that               (the “Holder”) is the registered owner of Common Units representinglimited partner interests in the Partnership (the “Common Units”)transferable on the books of the Partnership, in person or by duly authorizedattorney, upon surrender of this Certificate properly endorsed and accompaniedby a properly executed application for transfer of the Common Units representedby this Certificate.  The rights,preferences and limitations of the Common Units are set forth in, and thisCertificate and the Common Units represented hereby are issued and shall in allrespects be subject to the terms and provisions of, the PartnershipAgreement.  Copies of the Partnership Agreementare on file at, and will be furnished without charge on delivery of writtenrequest to the Partnership at, the principal office of the Partnership locatedat Two Harbour Place, 302 Knights Run Avenue, Suite 1200, Tampa, Florida33602.  Capitalized terms used herein butnot defined shall have the meanings given them in the Partnership Agreement.

 

The Holder, by accepting this Certificate, is deemed to have (i) requestedadmission as, and agreed to become, a Limited Partner and to have agreed tocomply with and be bound by and to have executed the Partnership Agreement, (ii) representedand warranted that the Holder has all right, power and authority and, if anindividual, the capacity necessary to enter into the Partnership Agreement, (iii) grantedthe powers of attorney provided for in the Partnership Agreement and (iv) madethe waivers and given the consents and approvals contained in the PartnershipAgreement.

 

This Certificate shall not be valid for any purpose unless it has beencountersigned and registered by the Transfer Agent and Registrar.

 
| Dated:                           |   | OSG America L.P. |
|----------------------------------|--------|------------------|
|                             |   |             |
| Countersigned and Registered by: |   | By:              | OSG America LLC, |
|                             |   |             | its General Partner |
|                             |   |             |   |
|                             |   | By:              |
| as Transfer Agent and Registrar  |   |             | Title: |
|                             |   |             |   |
| By:                              |   | By:              |
| Authorized Signature             |   |             | Secretary |

 

----

 

[Reverse of Certificate]

 

**ABBREVIATIONS**

 

Thefollowing abbreviations, when used in the inscription on the face of thisCertificate, shall be construed as follows according to applicable laws orregulations:

 
| TEN  COM | — | as  tenants in common                                                       | UNIF  GIFT/TRANSFERS MIN ACT                                                                                                                        |
|----------|--------|-----------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|
|     |   |                                                                        | Custodian                        |
| TEN  ENT | — | as  tenants by the entireties                                               | (Cust)                                                                                                                                              | (Minor) |
| JT  TEN  | — | as  joint tenants with right of  survivorship and not as  tenants in common | under  Uniform Gifts /Transfers to CD Minors Act (State)                                                                                            |

 

Additional abbreviations,though not in the above list, may also be used.

 

**ASSIGNMENT OF COMMON UNITSinOSG AMERICA L.P.**

 

FORVALUE RECEIVED,                       herebyassigns, conveys, sells and transfers unto

 
|                                                      |   |                                                                      |
|-----------------------------------------------------------|--------|---------------------------------------------------------------------------|
| (Please  print or typewrite name and address of assignee) |   | (Please  insert Social Security or other identifying  number of assignee) |

 

                   CommonUnits representing limited partner interests evidenced by this Certificate,subject to the Partnership Agreement, and does hereby irrevocably constituteand appoint                               asits attorney-in-fact with full power of substitution to transfer the same onthe books of OSG America L.P.

 
| Date:                                   | NOTE:  | The  signature to any endorsement hereon must correspond with the name as written  upon the face of this Certificate in every particular, without alteration,  enlargement or change. |
|-----------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **THE SIGNATURE(S) MUST BE**       |   |                                                                                                                                                                                  |
| **GUARANTEED BY AN ELIGIBLE**           |   |                                                                                                                                                                                  |
| **GUARANTOR INSTITUTION (BANKS,**       |   |                                                                                                                                                                                  |
| **STOCKBROKERS, SAVINGS AND LOAN**      |   | (Signature)                                                                                                                                                                           |
| **ASSOCIATIONS AND CREDIT UNIONS WITH** |   |                                                                                                                                                                                  |
| **MEMBERSHIP IN AN APPROVED SIGNATURE** |   |                                                                                                                                                                                  |
| **GUARANTEE MEDALLION PROGRAM),**       |   |                                                                                                                                                                                  |
| **PURSUANT TO S.E.C. RULE 17Ad-15**     |   | (Signature)                                                                                                                                                                           |

 

Notransfer of the Common Units evidenced hereby will be registered on the booksof the Partnership, unless the Certificate evidencing the Common Units to betransferred is surrendered for registration or transfer.

 

----

 

**EXHIBIT B**

 

**to the Amended and RestatedAgreement of Limited Partnership ofOSG America L.P.**

 

**APPLICATION FOR TRANSFER OF COMMON UNITS**

 

The undersigned (“Assignee”)**herebyapplies for transfer to the name of the Assignee of the Common Units evidencedhereby.

 

The Assignee (a) requests admission as a Limited Partner andagrees to comply with and be bound by, and hereby executes, the Amended andRestated Agreement of Limited Partnership of OSG America L.P. (the “Partnership”)*,*as amended, supplemented or restated tothe date hereof (the “Partnership Agreement”*),*(b) represents and warrants that the Assignee hasall right, power and authority and, if an individual, the capacity necessary toenter into the Partnership Agreement, (c) appoints the General Partner ofthe Partnership and, if a Liquidator shall be appointed, the Liquidator of thePartnership as the Assignee’s attorney-in-fact to execute, swear to,acknowledge and file any document, including, without limitation, thePartnership Agreement and any amendment thereto and the Certificate of LimitedPartnership of the Partnership and any amendment thereto, necessary orappropriate for the Assignee’s admission as a Limited Partner and as a party tothe Partnership Agreement, (d) gives the powers of attorney provided forin the Partnership Agreement, and (e) makes the waivers and gives theconsents and approvals contained in the Partnership Agreement. Capitalizedterms not defined herein have the meanings assigned to such terms in thePartnership Agreement.

 
| Date:                                                    |   |                                     |
|----------------------------------------------------------|--------|------------------------------------------|
|                                                     |   |                                     |
|                                                     |   |                                     |
|   Social Security or other Identifying number  |   |   Signature of Assignee        |
|                                                     |   |                                     |
|                                                     |   |                                     |
|   Purchase Price including commissions, if any |   |   Name and Address of Assignee |

 

Type of Entity (check one):

 
| o      | Individual | o      | Partnership     | o      | Corporation |
|--------|------------|--------|-----------------|--------|-------------|
|   |       |   |            |   |        |
| o      | Trust      | o      | Other (specify) |   |        |

 

Nationality (for taxation purposes) (check one):

 
| o      | U.S. Citizen, Resident or Domestic Entity |   |               |
|--------|-------------------------------------------|--------|--------------------|
|   |                                      |   |               |   |   |
| o      | Foreign Corporation                       | o      | Non-resident Alien |   |   |

 

If the U.S. Citizen, Resident or Domestic Entity box is checked,Certification B-1 must be completed.

 

B-1

----

 

Under Section 1445(e) of the Internal Revenue Code of 1986,as amended (the “Code”*),*thePartnership must withhold tax with respect to certain transfers of property ifa holder of an interest in the Partnership is a foreign person. To inform thePartnership that no withholding is required with respect to the undersignedinterestholder’s interest in it, the undersigned hereby certifies as set forthin Certification B-1 (or, if applicable, certifies the following on behalf ofthe interestholder).

 

Citizenship (for Maritime purposes—see Maritime Citizenship definitionsbelow) (check one):

 

o                                    Citizenof the United States

 

o                                    Non-Citizenof the United States

 

If a Citizen of the United States box is checked, Certification B-2must be completed.

 

Under Part 67 of Title 46 of the Code of Federal Regulations(CFR), if the undersigned is an individual, the undersigned is deemed a Citizenof the United States (for maritime purposes) if the undersigned is:

 

·                  native born, or

 

·                  naturalized, or

 

·                  a derivative Citizen of the UnitedStates, or

 

·                  otherwise qualifies as a UnitedStates Citizen.

 

If the undersigned is a General Partnership or Limited Partnership theentity is deemed a Citizen of the United States (for maritime purposes) if theundersigned is:

 

·                  organized underthe laws of the United States or a State, and

 

·                  if a general partnership, allpartners are Citizens of the United States, and

 

·                  if a limited partnership, all generalpartners are Citizens of the United States and not less than 75.0% of theinterest and voting power of the partnership, limited liability company orlimited partnership is ultimately held by Citizens of the United States free ofany voting trust, fiduciary arrangement or other agreement, arrangement orunderstanding whereby non-citizens may directly or indirectly assert control.

 

If the undersigned is a Corporation, the undersigned is deemed aCitizen of the United States (for maritime purposes) if the undersigned is:

 

·                  organized underthe laws of the United States or a State, and

 

·                  each of its president or other chiefexecutive and the chairman of its board of directors is a Citizen of the UnitedStates, and

 

·                  no more than a minority of the numberof its directors necessary to constitute a quorum for the transaction ofbusiness are non-Citizens of the United States, and

 

B-2

----

 

·                  not less than 75.0% of the shares(beneficially and of record) are owned by Citizens of the United States free ofany voting trust, fiduciary arrangement or other agreement, arrangement orunderstanding whereby non-citizens may directly or indirect assert control(1).

 

If the undersigned is a trust, joint venture, association or otherentity, the undersigned is deemed a Citizen of the United States for maritimepurposes if:

 

·                  all of themembers and beneficiaries of the trust, joint venture, association or otherentity are Citizens of the United States,

 

·                  the trustee or other representativeof the undersigned is a Citizen of the United States, and

 

·                  not less than 75.0% of the interestand voting power of the trust, joint venture, association or entity areultimately held by Citizens of the United States.

 

If the undersigned is a limited liability company, the undersigned isdeemed a Citizen of the United States (for maritime purposes):

 

·                  if membermanaged, all members of the limited liability company are citizens of theUnited States, and

 

·                  if not member managed, any Personelected to manage the limited liability company or who is authorized to bindthe limited liability company and any Person who holds a position equivalent tothe chief executive officer, by whatever title, and the chairman of the boardof directors in a corporation and any Person authorized to act in their absenceare Citizens of the United States; non-U.S. citizens do not have authoritywithin a management group whether through veto power, combined voting, orotherwise to exercise control over the limited liability company and 75.0% ofthe equity interest at each tier is owned by Citizens of the United States.

 

----

(1)                                  Ifthe stock, partnership interest, limited liability company interest or anyother interest is owned by a corporation, partnership, limited liabilitycompany or other entity, each such entity must qualify as a Citizen of theUnited States and must complete an Application for Transfer of Common Units.Correspondingly, if the ownership interest is divided into classes, groups,etc., the U.S. citizenship requirements will apply to each such class or groupof partnership interest and Application for Transfer of Common Units.

 

B-3

----

 
|   | **Certification B-1**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | Check  and complete either A or B:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| o      | A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Individual  Interestholder |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 1. | I  am not a non-resident alien for purposes of U.S. income taxation. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 2. | My  U.S. taxpayer identification number (Social Security Number) is |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 3. | My  home address is |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
| o      | B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Partnership,  Corporation or Other Interestholder |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 1. | Is  not a foreign corporation, foreign partnership, foreign trust or foreign  estate (as those terms are defined in the Code and Treasury Regulations). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 2. | The  interestholder’s U.S. employer identification number is |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 3. | The  interestholder’s office address and place of incorporation (if applicable) is |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   | The  interestholder agrees to notify the Partnership within 60 days of the date  the interestholder becomes a foreign person.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | The  interestholder understands that this certificate may be disclosed to the  Internal Revenue Service by the Partnership and that any false statement  contained herein could be punishable by fine, imprisonment or both.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | Under  penalties of perjury, I declare that I have examined this certification and  to the best of my knowledge and belief it is true, correct and complete and,  if applicable, I further declare that I have authority to sign this document  on behalf of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   | Name of Assignee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   | Signature and Date                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   | Title (if applicable)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|   | Note:  If the Assignee is a broker, dealer, bank, trust company, clearing corporation,  other nominee holder or an agent of any of the foregoing, and is holding for  the account of any other person, this application should be completed by an  officer thereof or, in the case of a broker or dealer, by a registered  representative who is a member of a registered national securities exchange  or a member of the National Association of Securities Dealers, Inc., or,  in the case of any other nominee holder, a person performing a similar  function. If the Assignee is a broker, dealer, bank, trust company, clearing  corporation, other nominee owner or an agent of any of the foregoing, the  above certification as to any person for whom the Assignee will hold the  Common Units shall be made to the best of the Assignee’s knowledge. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |  |  |

 

B-4

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|   | **Certification B-2**                             |
|--------|---------------------------------------------------|
|   | ** **                                        |
|   | Check  and complete either A or B or C or D or E: |
|   |                                              |   |
| o      | A.                                                | Individual  Interestholder |
|   |                                              |   |
|   |                                              | I  certify that I qualify as a United States Citizen (as defined in the  Application for Transfer of Common Units to which this Certification is  attached) because: |
|   |                                              |   |
|   |                                              | 1. | I  am native born, or |
|   |                                              |   |   |
|   |                                              | 2. | I  am naturalized, or |
|   |                                              |   |   |
|   |                                              | 3. | I  am a derivative citizen, or |
|   |                                              |   |   |
|   |                                              | 4. | I  otherwise qualify as a United States Citizen. |
|   |                                              |   |   |
| o      | B.                                                | General  Partnership or Limited Partnership |
|   |                                              |   |   |
|   |                                              | 1. | is  a United States Citizen (as defined in the Application for Transfer of Common  Units to which this Certification is attached), and |
|   |                                              |   |   |
|   |                                              | 2. | is  organized under the laws of the United States or a State, and |
|   |                                              |   |   |
|   |                                              | 3. | if  a general partnership, all partners are United States Citizens, and |
|   |                                              |   |   |
|   |                                              | 4. | if  a limited partnership, all general partners are United States Citizens and  not less than 75.0% of the interest and voting power in the partnership are  ultimately held by United States Citizens. |
|   |                                              |   |   |
| o      | C.                                                | Corporation |
|   |                                              |   |   |
|   |                                              | 1. | is  a United States Citizen (as defined in the Application for Transfer of Common  Units to which this Certification is attached), and |
|   |                                              |   |   |
|   |                                              | 2. | is  organized under the laws of the United States or a State, and |
|   |                                              |   |   |
|   |                                              | 3. | the  president or other chief executive and the chairman of the board of directors  is a United States Citizen (if relevant), and |
|   |                                              |   |   |
|   |                                              | 4. | no  more than a minority of directors necessary to constitute a quorum for the  transaction of business are non-citizens of the United States, and |
|   |                                              |   |   |
|   |                                              | 5. | not  less than 75.0% of the interest and voting power in the corporation is  ultimately held by United States Citizens free of any voting trust, fiduciary  arrangement or other agreement, arrangement or understanding whereby  non-citizens may directly or indirectly assert control. |

 

B-5

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| o      | D.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Trust                      |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 1.                         | is a United States Citizen (as defined in the Application for  Transfer of Common Units to which this Certification is attached), and |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 2.                         | all beneficiaries of the trust are United States Citizens, and |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 3.                         | the trustee or other representative of the trust is a United States  Citizen, and |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 4.                         | not less than 75.0% of the interest and voting power in the trust is  ultimately held by United States Citizens. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |   |
| o      | E.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Limited Liability Company: |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 1.                         | if member managed, all members of the limited liability company are  United States Citizens, and |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 2.                         | if not member managed, any Person elected to manage the limited  liability company or who is authorized to bind the limited liability company  to any Person who holds a position equivalent to the chief executive officer,  by whatever title, and the chairman of the board of directors in a corporation  and any Person authorized to act in their absence are United States Citizens;  non-U.S. citizens do not have authority within a management group whether  through veto power, combined voting, or otherwise to exercise control over  the limited liability company and 75.0% of the equity interest at each tier  is owned by United States Citizens. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |   |
|   | Under penalties of  perjury, I declare that I have examined this certification and, to the best  of my knowledge and belief, it is true, correct and complete and, if applicable,  I further declare that I have authority to sign this document on behalf of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |
|   | Name of Assignee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |
|   | Signature and Date                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |
|   | Title (if applicable)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                       |
|   | *Note:*If the Assignee is a broker, dealer, bank,  trust company, clearing corporation, other nominee holder or an agent of any  of the foregoing, and is holding for the account of any other person, this  application should be completed by an officer thereof or, in the case of a  broker or dealer, by a registered representative who is a member of a  registered national securities exchange or a member of the National  Association of Securities Dealers, Inc., or, in the case of any other  nominee holder, a person performing a similar function. If the Assignee is a  broker, dealer, bank, trust company, clearing corporation, other nominee  owner or agent of any of the foregoing, the above certification shall be made  both as to (a) such broker, dealer, bank, trust company, clearing  corporation, other nominee owner or agent and (b) any person for whom  the Assignee will hold the Common Units based on a similar certification from  such beneficial owner. |
|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                            |  |  |  |

 

B-6

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