Document:

tkcex-415q42020

Execution Version 1. 2. 2.1 Registration 

 

2.2 Ineligible Issuer bona fide 2.3 Form of Documents 

 

2.4 No Material Misstatements or Omissions in the Registration Statement provided 2.5 No Material Misstatements or Omissions in the Prospectus provided 2.6 No Material Misstatements or Omissions in Documents Incorporated by Reference 2.7 Proceedings Under the Act 

 

2.8 Regulation M Exceptions 2.9 Other Sales Agency Agreements 2.10 Formation and Qualification 2.11 Valid Issuance of the Shares 2.12 Ownership of Teekay Holdings 2.13 Ownership of General Partner 

 

2.14 Ownership of GP Interest in TGP 2.15 Ownership of Sponsor Interests in TGP and Tankers a) b) 2.16 Ownership of TGP Operating Company 

 

2.17 Ownership of Operating Subsidiaries a) b) 

 

c) 2.18 No Other Subsidiaries 2.19 No Preemptive Rights or Options 2.20 No Registration Rights 

 

2.21 Capitalization 2.22 Authority 2.23 Execution and Delivery of this Agreement 2.24 No Conflicts 

 

2.25 No Consents 2.26 No Default 2.27 Conformity of Securities to Description 2.28 No Material Adverse Change 

 

2.29 Financial Statements 2.30 Independent Registered Public Accounting Firm 2.31 Transfer Taxes 2.32 Title to Properties 

 

2.33 Vessel Registration 2.34 Permits 

 

2.35 Insurance 2.36 Contracts to be Described or Filed 2.37 Litigation 2.38 Summaries 

 

2.39 Certain Relationships and Related Transactions 2.40 Sarbanes-Oxley Act of 2002 2.41 Internal Controls 2.42 Disclosure Controls 2.43 No Labor Dispute 2.44 Tax Returns 

 

2.45 Environmental Compliance 2.46 Effect of Environmental Laws 2.47 Intellectual Property 

 

2.48 No Distribution of Other Offering Materials 2.49 NYSE Listing 2.50 Investment Company 2.51 Passive Foreign Investment Company 2.52 Foreign Corrupt Practices Act 

 

2.53 Sanctions Laws and Regulations 2.54 Sanctions Authorities 2.55 Money Laundering Laws 2.56 Brokers 

 

2.57 Market Stabilization 2.58 No Restrictions on Subsidiaries 2.59 Cybersecurity; Data Protection 

 

2.60 Statistical and Market Data 2.61 XBRL Information 2.62 Immunity 3. 3.1 Sale of Shares by Manager, as Sales Agent a) 

 

b) c) d) 

 

e) f) g) 

 

h) 3.2 Sale of Shares by Manager, as Principal 3.3 Terms Agreement 

 

3.4 Limitation on Number and Amount of Shares Sold 3.5 Regulation M Exemption 4. 4.1 Filing of Amendment or Supplement 

 

4.2 Notice of Material Change 4.3 Material Misstatements or Omissions in Prospectus 

 

4.4 Reports to Security Holders and Manager 4.5 Signed Copies of Registration Statement 4.6 Qualifications 4.7 No Issuer Free Writing Prospectus 4.8 Limitation on Sale of Common Stock 

 

4.9 Market Stabilization 4.10 Notifications to Manager 4.11 Certificates 

 

4.12 Opinion of Company Counsel 4.13 Opinion of Watson Farley & Williams LLP 

 

4.14 Opinion of Alexanders 4.15 Opinion of PwC Legal 4.16 Opinion of Houthoff. 4.17 Opinion of Watson Farley & Williams LLP. 4.18 Opinion of Watson Farley & Williams LLP. 

 

4.19 Opinion of Manager Counsel 4.20 Letters of Independent Accountant 4.21 Due Diligence 

 

4.22 Manager Trading 4.23 Disclosures in Periodic Reports 4.24 Failure of Certain Conditions 4.25 Affirmation of Representations and Warranties 

 

4.26 Sufficient Common Stock for Issuance 4.27 Delivery of Prospectus 4.28 DTC 4.29 Use of Proceeds 4.30 Investment Company; PFIC 4.31 PFIC Notice to Shareholders 4.32 Sanctions Laws and Regulations 

 

5. 6. 

 

6.1 6.2 6.3 6.4 a) b) c) 

 

d) 6.5 6.6 6.7 6.8 6.9 6.10 

 

7. 7.1 7.2 7.3 

 

7.4 

 

8. 8.1 

 

8.2 8.3 8.4 8.5 9. 

 

10. 11. 12. 13. 14. 15. 

 

16. 17. 18. 19. 

 

 

 

 

 

 

 

The foregoing Agreement is hereby  confirmed and accepted as of the  date first written above.      By: CITIGROUP GLOBAL MARKETS INC.      By:     Name: Christa T. Volpicelli  Title: Managing Director                                                                                            

 

TGP OPERATING SUBSIDIARIES Company Name Ownership % Country 

 

 

 

 

 

TANKERS OPERATING SUBSIDIARIES Company Name Ownership % Country 

 

 

 

COMPANY OPERATING SUBSIDIARIES Company Name Ownership % Country Reference is made to the TGP Operating Subsidiaries on Schedule I-A Reference is made to the Tankers Operating Subsidiaries on Schedule 1-B 

 

 

 

TEEKAY CORPORATION. - FLEET LIST Fixed-Rate Floating Production Storage Offtake Vessels - Owned Percent Ownership Flag Year Built TEEKAY LNG PARTNERS L.P. - FLEET LIST Fixed-Rate LNG Carriers Percent Ownership Flag Year Built 

 

Yamal Spirit LPG Carrier - In-chartered Percent Ownership Flag Year Built LPG Carrier - Owned Percent Ownership Flag Year Built Kapellen 50% Belgium 2018 Koksijde 50% Belgium 2018 Wepion 50% Belgium 2018 

 

TEEKAY TANKERS LTD. - FLEET LIST Conventional Tankers - Owned Percent Ownership Flag Year Built Product Tanker Aframax Suezmax 

 

VLCC Conventional Tankers - In-chartered Percent Ownership Flag Year Built Aframax 

 

 

 

 

 

 

 

[Form of Terms Agreement] 

 

 

 

 

 

 

 

Teekay Holdings TGP GP 

 

TGP TGP LPA Claim Exceptions Teekay Finance TGP Operating Company TNK 

 

Marshall Islands Operating Subsidiaries Marshall Islands Entities Permitstkcex-416q42020

Execution Version    EXCHANGE AGREEMENT   between  TEEKAY LNG PARTNERS L.P.   and   TEEKAY GP L.L.C.   Dated as of May 9, 2020    

 

  1  EXCHANGE AGREEMENT  THIS EXCHANGE AGREEMENT (this “Agreement”), dated as of May 9, 2020,  is entered into by and between Teekay LNG Partners L.P., a limited partnership organized under  the laws of the Republic of the Marshall Islands (the “Partnership”), and Teekay GP L.L.C., a  limited liability company organized under the laws of the Republic of the Marshall Islands (the  “General Partner”).  RECITALS  A. The General Partner is the general partner of the Partnership and owns (i) all  of the General Partner Interest (as defined in the Current Partnership Agreement (as defined  below)) in the Partnership and (ii) all of the Incentive Distribution Rights (as defined in the  Current Partnership Agreement) in the Partnership (“IDRs”).  B. The General Partner has agreed to contribute to the Partnership all of the IDRs  held by it in exchange for the issuance by the Partnership to the General Partner of 10,750,000  new Common Units (as defined in the Current Partnership Agreement) (the “New Common  Units”) to be issued by the Partnership under the Revised Partnership Agreement (as defined  below), having the rights, preferences, privileges and restrictions set forth therein, and the  Partnership has agreed to issue the New Common Units to the General Partner as consideration  for the contribution of the IDRs to the Partnership (collectively, including the amendment and  restatement of the Current Partnership Agreement as provided herein, the “Transactions”).  C. The conflicts committee (the “Conflicts Committee”) of the board of directors  (the “Board”) of the General Partner has (i) received the opinion of Houlihan Lokey Capital,  Inc., the financial advisor to the Conflicts Committee, as to the fairness, from a financial point of  view, to the Partnership and the holders of the Common Units (other than the General Partner  and its Affiliates (as defined below)) (such holders, the “TGP Public Unitholders”) of the New  Common Units to be issued by the Partnership as consideration for the IDRs held by the General  Partner pursuant to this Agreement, (ii) determined that this Agreement, the Revised Partnership  Agreement and the Transactions are advisable, fair and reasonable to (taking into account the  totality of the relationships between the parties involved) and in the best interests of the  Partnership and the TGP Public Unitholders, (iii) approved this Agreement, the Revised  Partnership Agreement and the Transactions, such approval constituting “Special Approval” of  this Agreement, the Revised Partnership Agreement and the Transactions for all purposes under  the Current Partnership Agreement, including without limitation, Section 7.9(a) thereof, and (iv)  recommended that the Board approve this Agreement, the Revised Partnership Agreement and  the Transactions.  D. The Conflicts Committee, in making its determinations, approvals and  recommendations with respect to this Agreement, the Revised Partnership Agreement and the  Transactions, did not take any position or make any recommendation with respect to the  amendments set forth in Section 14.3(d) of the Revised Partnership Agreement.  E. (i) Based upon the Conflicts Committee’s recommendation referenced above,  the Board has determined that this Agreement, the Revised Partnership Agreement, and the  

 

  2  Transactions are fair and reasonable to and in the best interests of the Partnership and the TGP  Public Unitholders, (ii) the Board has determined that this Agreement, the Revised Partnership  Agreement and the Transactions are fair and reasonable to and in the best interests of the General  Partner, acting in its individual capacity and not as the general partner of the Partnership  (including in the General Partner’s capacity as the sole holder of the General Partner Interest and  the IDRs), and (iii) the Board has determined that this Agreement, the Revised Partnership  Agreement and the Transactions are approved, authorized and adopted in all respects.  F. The parties hereto have agreed that the Fourth Amended and Restated  Agreement of Limited Partnership of the Partnership, dated as of January 1, 2019 (the “Current  Partnership Agreement”), shall be amended and restated so as to reflect the cancellation of the  IDRs and the issuance of the New Common Units and to make certain other related changes to  the Current Partnership Agreement, as permitted under Sections 13.1(d)(i) and 13.1(g) of the  Current Partnership Agreement (such amended and restated agreement being referred to as the  “Revised Partnership Agreement”).  G. The effectiveness of the Revised Partnership Agreement, the contribution by  the General Partner to the Partnership of the IDRs and the issuance by the Partnership of the  New Common Units are conditioned on each other and shall occur simultaneously at the  Effective Time (as defined below).  NOW, THEREFORE, in consideration of their mutual undertakings and  agreements hereunder, the parties hereto undertake and agree as follows:  ARTICLE I  DEFINITIONS  “Affiliate” means, with respect to any Person, any other Person that directly or indirectly  through one or more intermediaries’ controls, is controlled by, or is under common control with,  the Person in question.  For purposes of this definition, the term “control” (including the  correlative meanings of the terms “controlled by” and “under common control with”), as used  with respect to any Person, means the possession, direct or indirect, of the power to direct or  cause the direction of the management and policies of a Person, whether through the ownership  of voting securities, by contract or otherwise. Notwithstanding anything in this definition to the  contrary, for the purposes of this Agreement, (a) with respect to the General Partner, “Affiliate”  excludes at all times the Partnership and its Subsidiaries, and (b) with respect to the Partnership  and its Subsidiaries, “Affiliate” excludes at all times the General Partner and any other Person  that directly or indirectly controls or is under common control with the General Partner other  than the Partnership and its Subsidiaries.  “Agreement” has the meaning given such term in the Preamble.  “Board” has the meaning given such term in the Recitals.  “Conflicts Committee” has the meaning given such term in the Recitals.  “Current Partnership Agreement” has the meaning given such term in the Recitals.  

 

  3  “Effective Time” means 8:30 A.M. Eastern time on May 11, 2020.  “General Partner” has the meaning given such term in the Preamble.  “Governmental Entity” means any federal, state, local or foreign court, tribunal,  administrative body or other governmental or quasi-governmental or regulatory entity, including  any head of a government department, body or agency, with competent jurisdiction.  “IDRs” has the meaning given such term in the Recitals.  “New Common Units” has the meaning given such term in the Recitals.  “Partnership” has the meaning given such term in the Preamble.  “Person” means an individual or a corporation, firm, limited liability company,  partnership, joint venture, trust, unincorporated organization, association, Governmental Entity  or political subdivision thereof or other entity.  “Revised Partnership Agreement” has the meaning given such term in the Recitals.  The  Revised Partnership Agreement shall be in the form attached hereto as Exhibit 1.  “Securities Act” has the meaning given such term in Section 3.02(d).  “Subsidiary” means, with respect to any Person, any other Person of which (a) more than  50% of (i) the total combined voting power of all classes of voting securities of such other  Person, (ii) the total combined equity interests or (iii) the capital or profit interests, in each case,  is beneficially owned, directly or indirectly, by such first Person or (b) the power to vote or to  direct the voting of sufficient securities to elect a majority of the board of directors or similar  governing body is held by such first Person.  “TGP Public Unitholders” has the meaning given such term in the Recitals.  “Transactions” has the meaning given such term in the Recitals.  ARTICLE II  THE TRANSACTIONS  SECTION 2.01 Contribution of IDRs.  At the Effective Time, the General Partner shall  contribute to the Partnership all of its right, title and interest in the IDRs held by it immediately  prior to the Effective Time, which IDRs represent all of the issued and outstanding IDRs under  the Current Partnership Agreement, and the IDRs shall immediately thereupon be cancelled and  shall cease to exist.  The Partnership hereby confirms that it is bound by the Current Partnership  Agreement and, upon the effectiveness of the Revised Partnership Agreement, it will be bound  by the Revised Partnership Agreement.  SECTION 2.02 Consideration.  At the Effective Time, simultaneously with and as  consideration for the contribution of the IDRs to the Partnership, the Partnership shall issue the  

 

  4  New Common Units to the General Partner.  The issuance of the New Common Units shall occur  simultaneously with the contribution and cancellation of the IDRs.  SECTION 2.03 Certificates.  The New Common Units issued in connection with the  transactions contemplated by this Agreement may, but are not required to, be evidenced by  certificates.  SECTION 2.04 Partnership Agreement.  The parties hereto acknowledge and agree  that at the Effective Time, in order to evidence (i) the contribution and cancellation of the IDRs,  (ii) the issuance of the New Common Units, and (iii) certain other related changes to the Current  Partnership Agreement, as permitted under Sections 13.1(d)(i) and 13.1(g) of the Current  Partnership Agreement, the Revised Partnership Agreement shall become effective.  SECTION 2.05 Further Assurances.  The parties hereto agree to execute and deliver,  or cause to be executed and delivered, such further instruments or documents or take such other  action as may be reasonably necessary or convenient to carry out the transactions contemplated  hereby.  ARTICLE III  REPRESENTATIONS AND WARRANTIES  SECTION 3.01 Partnership.  The Partnership represents and warrants to the General  Partner as of the date hereof and as of the Effective Time as follows:  (a) The Partnership is a limited partnership duly formed and validly existing  in good standing under the laws of the Republic of the Marshall Islands, and has the necessary  limited partnership power and authority to execute and deliver, and, subject to the terms and  conditions hereof, to perform its obligations under, this Agreement.  (b) The Partnership has taken all action as may be necessary to authorize the  Revised Partnership Agreement and for the authorization, execution and delivery of this  Agreement and the Revised Partnership Agreement, the consummation of the transactions  contemplated by this Agreement and the performance of its obligations under this Agreement  and the Revised Partnership Agreement.  This Agreement and the Revised Partnership  Agreement constitute a legal, valid and binding obligation of the Partnership, and is enforceable  against the Partnership in accordance with their terms, subject to bankruptcy, insolvency,  moratorium, receivership, reorganization, liquidation and other similar laws relating to or  affecting the rights and remedies of creditors generally from time to time in effect and to  principles of equity (including concepts of materiality, reasonableness, good faith and fair  dealing), regardless of whether considered in a proceeding in equity or at law.  (c) Neither the execution and delivery hereof nor the performance of the  Partnership’s obligations hereunder will violate or contravene any applicable law, the Current  Partnership Agreement or any of the Partnership’s material agreements.  (d) The New Common Units and the limited partner interests represented  thereby have been duly and validly authorized and, when issued and delivered in accordance  with the terms and provisions of this Agreement, will be duly and validly issued and fully paid  

 

  5  (to the extent required under the Revised Partnership Agreement) and non-assessable (except as  such nonassessability may be affected by Sections 30,  41, 51 and 60 of the Marshall Islands  Limited Partnership Act.  SECTION 3.02 General Partner.  The General Partner represents and warrants to the  Partnership as of the date hereof and as of the Effective Time as follows:  (a) The General Partner is a limited liability company duly formed and validly  existing in good standing under the laws of the Republic of the Marshall Islands and has the  necessary limited liability company power and authority to execute and deliver this Agreement  and to perform its obligations hereunder.  (b) The General Partner has taken all action as may be necessary to authorize  the Revised Partnership Agreement and for the authorization, execution and delivery of this  Agreement and the consummation of the transactions contemplated by this Agreement and the  performance of its obligations under this Agreement and the Revised Partnership Agreement.  In  accordance with Section 13.3(b)(ii) of the Current Partnership Agreement, the General Partner,  in its individual capacity as the sole holder of the General Partner Interest and the IDRs, has  consented to and approved the Revised Partnership Agreement.  This Agreement and the Revised  Partnership Agreement constitute legal, valid and binding obligations of the General Partner,  enforceable against the General Partner in accordance with their terms, subject to bankruptcy,  insolvency, moratorium, receivership, reorganization, liquidation and other similar laws relating  to or affecting the rights and remedies of creditors generally from time to time in effect and to  principles of equity (including concepts of materiality, reasonableness, good faith and fair  dealing), regardless of whether considered in a proceeding in equity or at law.    (c) The General Partner is the beneficial and record holder of all of the IDRs,  and such IDRs are owned by the General Partner free and clear of all liens; there is no  subscription, option, warrant, call, right, agreement or commitment relating to the issuance, sale,  delivery, repurchase, contribution or transfer by the General Partner of such IDRs, except as set  forth in the Current Partnership Agreement.  (d) The General Partner is an “Accredited Investor” as defined in Rule 501(a)  promulgated under the United States Securities Act of 1933, as amended (the “Securities Act”),  and is acquiring the New Common Units for its own account, and not with a view to any  distribution, resale, subdivision or fractionalization thereof in violation of the Securities Act or  any other applicable domestic or foreign securities law, and the General Partner has no present  plans to enter into any contract, undertaking, agreement or arrangement for any such distribution,  resale, subdivision or fractionalization of the New Common Units in violation of the Securities  Act or any other applicable domestic or foreign securities law.  (e) The General Partner acknowledges that the New Common Units have not  been registered under the Securities Act, or the securities laws of any state and may not be sold  except pursuant to an effective registration statement under the Securities Act or pursuant to an  exemption from registration under the Securities Act.  

 

  6  (f) The General Partner acknowledges that the New Common Units are  characterized as “restricted securities” under the federal securities laws inasmuch as they are  being acquired from the Partnership in a transaction not involving a public offering and that  under such law and applicable regulations such securities may be resold under the Securities Act  only in certain limited circumstances.  (g) The General Partner acknowledges that the New Common Units are  subject to certain restrictions on transfer set forth in the Revised Partnership Agreement.  ARTICLE IV  CONDITIONS  SECTION 4.01 Conditions to Obligations of Each Party.  Notwithstanding any other  provision of this Agreement, the respective obligations of each party to consummate the  transactions contemplated by this Agreement shall be subject to the fulfillment of the following  conditions:  (a) that the agreements and covenants of the other party hereto to be complied  with or performed pursuant to the terms hereof shall have been duly complied with or performed;  (b) no order shall have been entered and remained in effect in any action or  proceeding before any Governmental Entity that would prevent or make illegal the  consummation of the transactions contemplated herein; and  (c) the representations and warranties of the other party shall remain true and  correct at the Effective Time.   ARTICLE V  MISCELLANEOUS  SECTION 5.01 Governing Law.  The laws of the State of Delaware shall govern the  construction, interpretation and effect of this Agreement, without giving effect to principles of  conflicts of law, and the obligations, rights, and remedies of the parties shall be determined in  accordance with such laws.  SECTION 5.02 Jurisdiction.  Each party hereby consents to submit to the jurisdiction  of the Court of Chancery of the State of Delaware or, if such court shall not have jurisdiction,  any federal court located in the State of Delaware or other Delaware state court for any actions,  suits or proceedings arising out of or relating to this Agreement and the Transactions (and each  party agrees not to commence any action, suit or proceeding relating thereto except in such  courts), and further agrees that service of any process, summons, notice or document by  registered mail to the address set forth in Section 5.08 shall be effective service of process for  any action, suit or proceeding brought against such party in any such court.  Each party hereby  irrevocably and unconditionally waives any objection to the laying of venue of action, suit or  proceeding arising out of this Agreement or the Transactions in the Court of Chancery of the  State of Delaware or any state and federal courts located in the State of Delaware and hereby  further waives and agrees not to plead or claim in any such court that any such action, suit or  proceeding brought in any such court has been brought in an inconvenient forum.  

 

  7  SECTION 5.03 WAIVER OF JURY TRIAL.  EACH PARTY ACKNOWLEDGES  AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS  AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND  THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND  UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY  JURY IN RESPECT OF ANY ACTION OR PROCEEDING DIRECTLY OR INDIRECTLY  ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS  CONTEMPLATED BY THIS AGREEMENT.  EACH PARTY CERTIFIES AND  ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY  OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH  OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION OR PROCEEDING,  SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS  AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY  MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED  TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL  WAIVERS AND CERTIFICATIONS IN THIS SECTION 5.02  SECTION 5.04 Counterparts.  This Agreement may be executed in one or more  counterparts, each of which shall constitute an original, and all of which simultaneously shall  constitute one and the same instrument. A signature delivered on any counterpart by facsimile or  other electronic means shall for all purposes be deemed to be an original signature to this  Agreement.  SECTION 5.05 Amendments.  All waivers, modifications, amendments or alterations  of this Agreement shall require the written approval of each of the parties to this Agreement;  provided, however, that this Agreement may not be waived, modified, amended or altered by or  on behalf of the Partnership unless such waiver, modification, amendment or alteration is  approved by the Conflicts Committee.  SECTION 5.06 Assignment.  This Agreement shall be binding upon and inure to the  benefit of the parties and the respective successors and assigns.  This Agreement shall not be  assignable except with the prior written consent of the other party.  Any purported assignment in  violation of this Agreement shall be null and void.   SECTION 5.07 Benefits of Agreement Restricted to Parties.  This Agreement is made  solely for the benefit of the parties to this Agreement, and no other person or entity (including  employees and partners of the Partnership) shall have any right, claim or cause of action under or  by virtue of this Agreement.  SECTION 5.08 Notices.  Any notice, claim or demand in connection with this  Agreement shall be delivered to the parties at the following addresses (or at such other address or  facsimile number for a party as may be designated by notice by such party to the other party):  If to the Partnership, at   Teekay LNG Partners L.P.  4th Floor, Belvedere Building  

 

  8  69 Pitts Bay Road   Hamilton, HM 08, Bermuda  E-Mail:  Anne.liversedge@teekay.com  Attn:  Anne Liversedge  and  The Conflicts Committee of the   Board of Directors of Teekay GP, L.L.C.  4th Floor, Belvedere Building  69 Pitts Bay Road   Hamilton, HM 08, Bermuda  E-Mail: rich.d.paterson@gmail.com   Attn: Rich Paterson    If to the General Partner, at  Teekay GP L.L.C.  c/o Teekay Corporation  4th Floor, Belvedere Building  69 Pitts Bay Road   Hamilton, HM 08, Bermuda  E-Mail:  Anne.liversedge@teekay.com  Attn:  Anne Liversedge  and any such notice shall be deemed to have been received (i) forty eight (48) hours from the  time of dispatch, if sent by courier or (ii) on the date received by the recipient if sent by e-mail if  sent during normal business hours of the recipient or on the next business day if sent after normal  business hours of the recipient.  SECTION 5.09 Severability.  In the event that any provision of this Agreement shall  finally be determined to be unlawful, such provision shall, so long as the economic and legal  substance of the transactions contemplated hereby is not affected in any materially adverse  manner as to any of the parties to this Agreement, be deemed severed from this Agreement and  every other provision of this Agreement shall remain in full force and effect.  SECTION 5.10 Entire Agreement.  Except for the Revised Partnership Agreement, this  Agreement sets forth the entire agreement and understanding of the parties relating to the subject  matter herein and supersedes all prior or contemporaneous discussions between the parties.   SECTION 5.11 Titles.  The article, section and paragraph titles in this Agreement are  only for purposes of convenience and do not form a part of this Agreement and will not be taken  to qualify, explain, or affect any provision thereof.  [Signature page follows.]  

 

  [Signature Page to the Exchange Agreement]  IN WITNESS WHEREOF, this Exchange Agreement has been executed on  behalf of each of the parties hereto effective as of the day and year first above written.  TEEKAY LNG PARTNERS L.P.  By:  TEEKAY GP L.L.C., its general partner  By:      Name: Anne Liversedge  Title: Secretary      TEEKAY GP L.L.C.  By:      Name: Anne Liversedge  Title: Secretary   (Place of execution: Hamilton, Bermuda)       

 

    Exhibit 1  Revised Partnership Agreement    (See attached.)  

 

Execution Version  Active 45747546.8  FIFTH AMENDED AND RESTATED   AGREEMENT OF LIMITED PARTNERSHIP   OF   TEEKAY LNG PARTNERS L.P.  

 

  TEEKAY LNG PARTNERS L.P.  FIFTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP  i  TABLE OF CONTENTS   ARTICLE I    DEFINITIONS  Section 1.1 Definitions........................................................................................................... 1  Section 1.2 Construction. ..................................................................................................... 14  ARTICLE II    ORGANIZATION  Section 2.1 Formation. ......................................................................................................... 15  Section 2.2 Name. ................................................................................................................ 15  Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices ............ 15  Section 2.4 Purpose and Business. ....................................................................................... 15  Section 2.5 Powers. .............................................................................................................. 16  Section 2.6 Power of Attorney. ............................................................................................ 16  Section 2.7 Term. ................................................................................................................. 17  Section 2.8 Title to Partnership Assets. ............................................................................... 17  ARTICLE III    RIGHTS OF LIMITED PARTNERS  Section 3.1 Limitation of Liability....................................................................................... 18  Section 3.2 Management of Business. ................................................................................. 18  Section 3.3 Outside Activities of the Limited Partners. ....................................................... 18  Section 3.4 Rights of Limited Partners. ............................................................................... 19  ARTICLE IV    CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;   REDEMPTION OF PARTNERSHIP INTERESTS  Section 4.1 Certificates. ....................................................................................................... 19  Section 4.2 Mutilated, Destroyed, Lost or Stolen Certificates. ........................................... 20  Section 4.3 Record Holders. ................................................................................................ 21  Section 4.4 Transfer Generally. ........................................................................................... 21  Section 4.5 Registration and Transfer of Limited Partner Interests..................................... 21  Section 4.6 Transfer of the General Partner’s General Partner Interest. ............................. 22  

 

  TEEKAY LNG PARTNERS L.P.  FIFTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP  ii  Section 4.7 [Reserved]. ........................................................................................................ 22  Section 4.8 Restrictions on Transfers. ................................................................................. 22  ARTICLE V    CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS  Section 5.1 Exchange of Incentive Distribution Rights. ...................................................... 23  Section 5.2 [Reserved]. ........................................................................................................ 23  Section 5.3 [Reserved]. ........................................................................................................ 23  Section 5.4 Interest and Withdrawal. ................................................................................... 23  Section 5.5 [Reserved]. ........................................................................................................ 23  Section 5.6 Issuances of Additional Partnership Securities. ................................................ 24  Section 5.7 Limitations on Issuance of Additional Partnership Securities. ......................... 24  Section 5.8 Limited Preemptive Right. ................................................................................ 24  Section 5.9 Splits and Combinations. .................................................................................. 25  Section 5.10 Fully Paid and Non-Assessable Nature of Limited Partner Interests. .............. 26  ARTICLE VI    DISTRIBUTIONS  Section 6.1 Allocations. ....................................................................................................... 26  Section 6.2 [Reserved]. ........................................................................................................ 26  Section 6.3 Distributions to Record Holders. ...................................................................... 26  Section 6.4 [Reserved]. ........................................................................................................ 27  Section 6.5 [Reserved]. ........................................................................................................ 27  Section 6.6 [Reserved]. ........................................................................................................ 27  Section 6.7 [Reserved]. ........................................................................................................ 27  Section 6.8 [Reserved]. ........................................................................................................ 27  ARTICLE VII    MANAGEMENT AND OPERATION OF BUSINESS  Section 7.1 Management. ..................................................................................................... 27  Section 7.2 Certificate of Limited Partnership. ................................................................... 29  Section 7.3 Restrictions on the General Partner’s Authority. .............................................. 29  Section 7.4 Reimbursement of the General Partner. ............................................................ 30  Section 7.5 Outside Activities.............................................................................................. 31  

 

  TEEKAY LNG PARTNERS L.P.  FIFTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP  iii  Section 7.6 Loans from the General Partner; Loans or Contributions from the  Partnership or Group Members. ....................................................................... 32  Section 7.7 Indemnification. ................................................................................................ 33  Section 7.8 Liability of Indemnitees. ................................................................................... 34  Section 7.9 Resolution of Conflicts of Interest; Standards of Conduct and  Modification of Duties. .................................................................................... 35  Section 7.10 Other Matters Concerning the General Partner. ............................................... 37  Section 7.11 Purchase or Sale of Partnership Securities........................................................ 37  Section 7.12 Registration Rights of the General Partner and its Affiliates. .......................... 37  Section 7.13 Reliance by Third Parties. ................................................................................. 40  ARTICLE VIII    BOOKS, RECORDS, ACCOUNTING AND REPORTS  Section 8.1 Records and Accounting. .................................................................................. 40  Section 8.2 Fiscal Year. ....................................................................................................... 40  Section 8.3 Reports. ............................................................................................................. 41  ARTICLE IX    TAX MATTERS  Section 9.1 Tax Returns and Information. ........................................................................... 41  Section 9.2 Tax Elections. ................................................................................................... 41  Section 9.3 Tax Controversies. ............................................................................................ 41  Section 9.4 Withholding. ..................................................................................................... 42  Section 9.5 Conduct of Operations. ..................................................................................... 42  ARTICLE X    ADMISSION OF PARTNERS  Section 10.1 [Reserved]. ........................................................................................................ 42  Section 10.2 Admission of Additional Limited Partners. ...................................................... 42  Section 10.3 Admission of Successor General Partner. ......................................................... 43  Section 10.4 Amendment of Agreement and Certificate of Limited Partnership. ................. 43  ARTICLE XI    WITHDRAWAL OR REMOVAL OF PARTNERS  

 

  TEEKAY LNG PARTNERS L.P.  FIFTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP  iv  Section 11.1 Withdrawal of the General Partner. .................................................................. 44  Section 11.2 Removal of the General Partner. ....................................................................... 45  Section 11.3 Interest of Departing Partner and Successor General Partner. .......................... 45  Section 11.4 Withdrawal of Limited Partners........................................................................ 47  ARTICLE XII    DISSOLUTION AND LIQUIDATION  Section 12.1 Dissolution. ....................................................................................................... 47  Section 12.2 Continuation of the Business of the Partnership After Dissolution. ................. 47  Section 12.3 Liquidator. ......................................................................................................... 48  Section 12.4 Liquidation. ....................................................................................................... 49  Section 12.5 Cancellation of Certificate of Limited Partnership. .......................................... 49  Section 12.6 Return of Contributions. ................................................................................... 50  Section 12.7 Waiver of Partition. ........................................................................................... 50  ARTICLE XIII    AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE  Section 13.1 Amendments to be Adopted Solely by the General Partner. ............................ 50  Section 13.2 Amendment Procedures. ................................................................................... 51  Section 13.3 Amendment Requirements................................................................................ 52  Section 13.4 Special Meetings. .............................................................................................. 52  Section 13.5 Notice of a Meeting. ......................................................................................... 53  Section 13.6 Record Date. ..................................................................................................... 53  Section 13.7 Adjournment. .................................................................................................... 53  Section 13.8 Waiver of Notice; Approval of Meeting; Approval of Minutes. ...................... 53  Section 13.9 Quorum and Voting. ......................................................................................... 54  Section 13.10 Conduct of a Meeting........................................................................................ 54  Section 13.11 Action Without a Meeting. ............................................................................... 55  Section 13.12 Right to Vote and Related Matters.................................................................... 55  ARTICLE XIV    MERGER  Section 14.1 Authority. .......................................................................................................... 56  Section 14.2 Procedure for Merger or Consolidation. ........................................................... 56  

 

  TEEKAY LNG PARTNERS L.P.  FIFTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP  v  Section 14.3 Approval by Limited Partners of Merger or Consolidation. ............................. 57  Section 14.4 Certificate of Merger......................................................................................... 58  Section 14.5 Amendment of Partnership Agreement. ........................................................... 58  Section 14.6 Effect of Merger. ............................................................................................... 58  ARTICLE XV    RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS  Section 15.1 Right to Acquire Limited Partner Interests. ...................................................... 59  ARTICLE XVI    PREFERRED UNITS  Section 16.1 Designation. ...................................................................................................... 61  Section 16.2 Units. ................................................................................................................. 61  Section 16.3 Distributions. ..................................................................................................... 61  Section 16.4 [Reserved]. ........................................................................................................ 63  Section 16.5 Voting Rights. ................................................................................................... 63  Section 16.6 Optional Redemption. ....................................................................................... 65  Section 16.7 Rank. ................................................................................................................. 67  Section 16.8 No Sinking Fund. .............................................................................................. 68  Section 16.9 Record Holders. ................................................................................................ 68  Section 16.10 Notices. ............................................................................................................. 68  Section 16.11 Other Rights; Fiduciary Duties. ........................................................................ 68  ARTICLE XVII    GENERAL PROVISIONS  Section 17.1 Addresses and Notices. ..................................................................................... 69  Section 17.2 Further Action. .................................................................................................. 69  Section 17.3 Binding Effect. .................................................................................................. 69  Section 17.4 Integration. ........................................................................................................ 69  Section 17.5 Creditors. ........................................................................................................... 70  Section 17.6 Waiver. .............................................................................................................. 70  Section 17.7 Counterparts. ..................................................................................................... 70  Section 17.8 Applicable Law. ................................................................................................ 70  Section 17.9 Invalidity of Provisions. .................................................................................... 70  

 

  TEEKAY LNG PARTNERS L.P.  FIFTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP  vi  Section 17.10 Consent of Partners. .......................................................................................... 70  Section 17.11 Facsimile Signatures. ........................................................................................ 70      

 

  Active 45747546.8  FIFTH AMENDED AND RESTATED AGREEMENT OF LIMITED   PARTNERSHIP OF TEEKAY LNG PARTNERS L.P.  THIS FIFTH AMENDED AND RESTATED AGREEMENT OF LIMITED  PARTNERSHIP OF TEEKAY LNG PARTNERS L.P. dated as of May 11, 2020 (the “Effective  Date”), is entered into by Teekay GP L.L.C., a Marshall Islands limited liability company, as the  General Partner, and, solely with respect to Section 16.5(b), Teekay Holdings Limited, a  Bermuda company, together with any other Persons who become Partners in the Partnership or  parties hereto as provided herein.  In consideration of the covenants, conditions and agreements  contained herein, the parties hereto hereby agree as follows:  ARTICLE I    DEFINITIONS  Section 1.1 Definitions.  The following definitions shall be for all purposes, unless otherwise clearly indicated to  the contrary, applied to the terms used in this Agreement.  “Affiliate” means, with respect to any Person, any other Person that directly or indirectly  through one or more intermediaries’ controls, is controlled by or is under common control with,  the Person in question.  As used herein, the term “control” means the possession, direct or  indirect, of the power to direct or cause the direction of the management and policies of a Person,  whether through ownership of voting securities, by contract or otherwise.  “Agreed Value” of any Contributed Property or distributed property means the fair  market value of such property or other consideration at the time of contribution or distribution as  determined by the General Partner.  The General Partner shall use such method as it determines  to be appropriate to allocate the aggregate Agreed Value of Contributed Properties contributed to  or distributed by the Partnership in a single or integrated transaction among each separate  property on a basis proportional to the fair market value of each Contributed Property or  distributed property.  “Agreement” means this Fifth Amended and Restated Agreement of Limited Partnership  of Teekay LNG Partners L.P., as it may be amended, supplemented or restated from time to time.  “arrears” means, with respect to Preferred Unit Distributions for a particular series of  Preferred Units for any applicable Preferred Unit Distribution Period, that the full cumulative  Preferred Unit Distributions for such series to and including the last day of the most recently  completed Preferred Unit Distribution Period of such series through the most recent Preferred  Unit Distribution Payment Date for such series have not been paid on all Outstanding Preferred  Units of such series.  “Associate” means, when used to indicate a relationship with any Person, (a) any  corporation or organization of which such Person is a director, officer or partner or is, directly or  indirectly, the owner of 20% or more of any class of voting stock or other voting interest; (b) any  trust or other estate in which such Person has at least a 20% beneficial interest or as to which  

 

  2  such Person serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of  such Person, or any relative of such spouse, who has the same principal residence as such  Person.  “Available Cash” means, with respect to any Quarter ending prior to the Liquidation  Date:  (a) the sum of (i) all cash and cash equivalents of the Partnership Group (or the  Partnership’s proportionate share of cash and cash equivalents in the case of Subsidiaries that are  not wholly owned) on hand at the end of such Quarter, and (ii) all additional cash and cash  equivalents of the Partnership Group (or the Partnership’s proportionate share of cash and cash  equivalents in the case of Subsidiaries that are not wholly owned) on hand on the date of  determination of Available Cash with respect to such Quarter resulting from Working Capital  Borrowings made subsequent to the end of such Quarter, less  (b) the amount of any cash reserves (or the Partnership’s proportionate share of cash  reserves in the case of Subsidiaries that are not wholly owned) established by the General Partner  to (i) provide for the proper conduct of the business of the Partnership Group (including reserves  for future capital expenditures and for anticipated future credit needs of the Partnership Group)  subsequent to such Quarter, (ii) comply with applicable law or any loan agreement, security  agreement, mortgage, debt instrument or other agreement or obligation to which any Group  Member is a party or by which it is bound or its assets are subject, or (iii) provide funds for  Preferred Unit Payments; provided, however, that disbursements made by a Group Member or  cash reserves established, increased or reduced after the end of such Quarter but on or before the  date of determination of Available Cash with respect to such Quarter shall be deemed to have  been made, established, increased or reduced, for purposes of determining Available Cash,  within such Quarter if the General Partner so determines.  “Board of Directors” means the board of directors or managers of a corporation or  limited liability company, as applicable, or if a limited partnership, the board of directors or  board of managers of the general partner of such limited partnership.  “Business Day” means Monday through Friday of each week, except that a legal holiday  recognized as such by the government of the United States of America or the State of New York  shall not be regarded as a Business Day.  “Calculation Agent” means a calculation agent appointed by the General Partner prior to  the commencement of the Series B Floating Rate Period.  If the General Partner is unable to  obtain a third-party to serve as calculation agent, the calculation agent may be the General  Partner or an Affiliate of the General Partner.  “Capital Contribution” means any cash, cash equivalents or the Net Agreed Value of  Contributed Property that a Partner contributes to the Partnership.  “Cause” means a court of competent jurisdiction has entered a final, non-appealable  judgment finding the General Partner liable for actual fraud, gross negligence or willful or  wanton misconduct in its capacity as a general partner of the Partnership.  

 

  3  “Certificate” means a certificate (i) substantially in the form of Exhibit A with respect to  Common Units, Exhibit B with respect to Series A Preferred Units or Exhibit C with respect to  Series B Preferred Units, to this Agreement, (ii) issued in global or book entry form in  accordance with the rules and regulations of the Depository or (iii) in such other form as may be  adopted by the General Partner, issued by the Partnership evidencing ownership of one or more  Common Units or Preferred Units, or a certificate, in such form as may be adopted by the  General Partner, issued by the Partnership evidencing ownership of one or more other  Partnership Securities.  “Certificate of Limited Partnership” means the Certificate of Limited Partnership of the  Partnership filed with the Registrar of Corporations of the Marshall Islands as referenced in  Section 7.2 as such Certificate of Limited Partnership may be amended, supplemented or restated  from time to time.  “claim” (as used in Section 7.12(c)) has the meaning assigned to such term in Section  7.12(c).  “Closing Date” means the first date on which Common Units are sold by the Partnership  to the Underwriters pursuant to the provisions of the Underwriting Agreement.  “Closing Price” has the meaning assigned to such term in Section 15.1(a).  “Code” means the United States Internal Revenue Code of 1986, as amended and in  effect from time to time.  Any reference herein to a specific section or sections of the Code shall  be deemed to include a reference to any corresponding provision of any successor law.  “Combined Interest” has the meaning assigned to such term in Section 11.3(a).  “Commission” means the United States Securities and Exchange Commission.  “Common Unit” means a Partnership Security having the rights and obligations specified  with respect to Common Units in this Agreement.  “Conflicts Committee” means a committee of the Board of Directors of the General  Partner composed entirely of two or more directors who are not (a) security holders, officers or  employees of the General Partner, (b) officers, directors or employees of any Affiliate of the  General Partner or (c) holders of any ownership interest in the Partnership Group other than  Common Units and who also meet the independence standards required of directors who serve  on an audit committee of a board of directors established by the Securities Exchange Act of  1934, as amended, and the rules and regulations of the Commission thereunder and by the  National Securities Exchange on which the Common Units are listed.  “Contributed Property” means each property or other asset, in such form as may be  permitted by the Marshall Islands Act, but excluding cash, contributed to the Partnership.  “Contribution Agreement” means that certain Contribution, Conveyance and Assumption  Agreement, dated as of the Closing Date, among the General Partner, the Partnership, the  

 

  4  Operating Company, Teekay Corporation and the other parties named therein, together with the  additional conveyance documents and instruments contemplated or referenced thereunder.  “Current Market Price” has the meaning assigned to such term in Section 15.1(a).  “Departing Partner” means a former General Partner from and after the effective date of  any withdrawal or removal of such former General Partner pursuant to Section 11.1 or 11.2.  “Depository” means, with respect to any Partnership Securities issued in global form, The  Depository Trust Company and its successors and permitted assigns.  “Effective Date” has the meaning assigned to such term in the preamble.   “Event of Withdrawal” has the meaning assigned to such term in Section 11.1(a).  “Exchange Agreement” means that certain Exchange Agreement, dated as of the  Effective Date, by and between the Partnership and the General Partner, pursuant to which (i) the  Incentive Distribution Rights held by the General Partner were contributed to the Partnership in  exchange for Common Units and (ii) the Incentive Distribution Rights were cancelled.   “General Partner” means Teekay GP L.L.C., a Marshall Islands limited liability  company, and its successors and permitted assigns as general partner of the Partnership.  “General Partner Interest” means the ownership interest of the General Partner in the  Partnership (in its capacity as a general partner without reference to any Limited Partner Interest  held by it) which may be evidenced by Partnership Securities or a combination thereof or interest  therein, and includes any and all benefits to which the General Partner is entitled as provided in  this Agreement, together with all obligations of the General Partner to comply with the terms and  provisions of this Agreement.   “Group” means a Person that with or through any of its Affiliates or Associates has any  agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except  voting pursuant to a revocable proxy or consent given to such Person in response to a proxy or  consent solicitation made to 10 or more Persons) or disposing of any Partnership Securities with  any other Person that beneficially owns, or whose Affiliates or Associates beneficially own,  directly or indirectly, Partnership Securities.  “Group Member” means a member of the Partnership Group.  “Group Member Agreement” means the partnership agreement of any Group Member,  other than the Partnership, that is a limited or general partnership, the limited liability company  agreement of any Group Member that is a limited liability company, the certificate of  incorporation and bylaws or similar organizational documents of any Group Member that is a  corporation, the joint venture agreement or similar governing document of any Group Member  that is a joint venture and the governing or organizational or similar documents of any other  Group Member that is a Person other than a limited or general partnership, limited liability  company, corporation or joint venture, in each case as such may be amended, supplemented or  restated from time to time.  

 

  5  “Holder” as used in Section 7.12, has the meaning assigned to such term in Section  7.12(a).  “Incentive Distribution Right” means a non-voting Limited Partner Interest that, prior to  the effectiveness of the transactions contemplated by the Exchange Agreement and this  Agreement, was held by the General Partner and pursuant to which the General Partner was  entitled to certain incentive distributions under the Prior Agreement.  “Indemnified Persons” has the meaning assigned to such term in Section 7.12(c).  “Indemnitee” means (a) the General Partner, (b) any Departing Partner, (c) any Person  who is or was an Affiliate of the General Partner or any Departing Partner, (d) any Person who is  or was a member, partner, director, officer, fiduciary or trustee of any Person which any of the  preceding clauses of this definition describes, (e) any Person who is or was serving at the request  of the General Partner or any Departing Partner or any Affiliate of the General Partner or any  Departing Partner as an officer, director, member, partner, fiduciary or trustee of another Person,  provided that that Person shall not be an Indemnitee by reason of providing, on a fee-for-services  basis, trustee, fiduciary or custodial services, and (f) any Person the General Partner designates  as an “Indemnitee” for purposes of this Agreement.  “Initial Offering” means the initial offering and sale of Common Units to the public, as  described in the Registration Statement.  “Junior Securities” has the meaning assigned to such term in Section 16.7.  “Limited Partner” means, unless the context otherwise requires, each Person that is a  Limited Partner as of the Effective Date, each additional Person that becomes a Limited Partner  pursuant to the terms of this Agreement, and any Departing Partner upon the change of its status  from General Partner to Limited Partner pursuant to Section 11.3.  Limited Partners may include  custodians, nominees or any other individual entity in its own or any representative capacity.  “Limited Partner Interest” means the ownership interest of a Limited Partner in the  Partnership, which may be evidenced by Common Units, Preferred Units or other Partnership  Securities or a combination thereof or interest therein, and includes any and all benefits to which  such Limited Partner is entitled as provided in this Agreement, together with all obligations of  such Limited Partner to comply with the terms and provisions of this Agreement.  “Liquidation Date” means (a) in the case of an event giving rise to the dissolution of the  Partnership of the type described in clauses (a) and (b) of the first sentence of Section 12.2, the  date on which the applicable time period during which the holders of Outstanding Common  Units have the right to elect to continue the business of the Partnership has expired without such  an election being made, and (b) in the case of any other event giving rise to the dissolution of the  Partnership, the date on which such event occurs.  “Liquidator” means one or more Persons selected by the General Partner to perform the  functions described in Section 12.4.  

 

  6  “London Business Day” means any day on which dealings in deposits in U.S. dollars are  transacted in the London interbank market.  “Marshall Islands Act” means the Limited Partnership Act of the Republic of the  Marshall Islands, as amended, supplemented or restated from time to time, and any successor to  such statute.  “Merger Agreement” has the meaning assigned to such term in Section 14.1.  “National Securities Exchange” means an exchange registered with the Commission  under Section 6(a) of the Securities Exchange Act of 1934, as amended, supplemented or  restated from time to time, and any successor to such statute.  “Net Agreed Value” means, (a) in the case of any Contributed Property, the Agreed Value  of such property reduced by any liabilities either assumed by the Partnership upon such  contribution or to which such property is subject when contributed, and (b) in the case of any  property distributed to a Partner by the Partnership, the Partnership’s Agreed Value of such  property at the time such property is distributed, reduced by any indebtedness either assumed by  such Partner upon such distribution or to which such property is subject at the time of  distribution.  “Notice of Election to Purchase” has the meaning assigned to such term in Section  15.1(b).  “Notional General Partner Units” means notional units used solely to calculate the  General Partner’s Percentage Interest. Notional General Partner Units shall not constitute “Units”  for any purpose of this Agreement. As of the Effective Date there are 1,554,525 Notional  General Partner Units (resulting in the General Partner’s Percentage Interest being 1.76% as of  such date). If a Pro Rata distribution or a subdivision or combination of Units is made in  accordance with Section 5.9, the number of Notional General Partner Units shall be  proportionally increased or decreased, as applicable, to reflect the maintenance of such  Percentage Interest.  “Omnibus Agreement” means that Amended and Restated Omnibus Agreement, dated as  of December 19, 2006, among Teekay Corporation, the General Partner, the Partnership, the  Operating Company, Teekay Offshore GP, L.L.C., Altera Infrastructure L.P. (formerly known as  Teekay Offshore Partners L.P.), and Teekay Offshore Operating L.P.  “Operating Company” means Teekay LNG Operating L.L.C., a Marshall Islands limited  liability company, and any successors thereto.  “Operating Company Agreement” means the Second Amended and Restated Limited  Liability Company Agreement of the Operating Company, as it may be amended, supplemented  or restated from time to time.  “Opinion of Counsel” means a written opinion of counsel (who may be regular counsel to  the Partnership or the General Partner or any of its Affiliates) acceptable to the General Partner.  

 

  7  “Organizational Limited Partner” means Teekay Corporation in its capacity as the  organizational limited partner of the Partnership pursuant to this Agreement.   “Outstanding” means, with respect to Partnership Securities, all Partnership Securities  that are issued by the Partnership and reflected as outstanding on the Partnership’s books and  records as of the date of determination; provided, however, that if at any time any Person or  Group (other than the General Partner or its Affiliates) beneficially owns 20% or more of any  Outstanding Partnership Securities of any class or series then Outstanding, all Partnership  Securities owned by such Person or Group shall not be voted on any matter and shall not be  considered to be Outstanding when sending notices of a meeting of Limited Partners to vote on  any matter (unless otherwise required by law), calculating required votes, determining the  presence of a quorum or for other similar purposes under this Agreement; provided, further, that  the foregoing limitation shall not apply (i) to any Person or Group who acquired 20% or more of  any Outstanding Partnership Securities of any class or series then Outstanding directly from the  General Partner or its Affiliates, (ii) to any Person or Group who acquired 20% or more of any  Outstanding Partnership Securities of any class or series then Outstanding directly or indirectly  from a Person or Group described in clause (i) provided that the General Partner shall have  notified such Person or Group in writing that such limitation shall not apply, (iii) to any Person  or Group who acquired 20% or more of any Partnership Securities issued by the Partnership with  the prior approval of the Board of Directors of the General Partner or (iv) with respect to any  voting rights thereof, Preferred Units.  “Parity Securities” has the meaning assigned to such term in Section 16.7(b).  “Partners” means the General Partner and the Limited Partners.  “Partnership” means Teekay LNG Partners L.P., a Marshall Islands limited partnership,  and any successors thereto.  “Partnership Group” means the Partnership and its Subsidiaries treated as a single  consolidated entity.  “Partnership Interest” means an interest in the Partnership, which shall include the  General Partner Interest and Limited Partner Interests.  “Partnership Representative” has the meaning assigned to such term in Section 9.3.  “Partnership Security” means any class or series of equity interest in the Partnership (but  excluding any options, rights, warrants and appreciation rights relating to an equity interest in the  Partnership), including without limitation, Common Units and Preferred Units.   “Paying Agent” means Computershare, acting in its capacity as paying agent for the  particular series of Preferred Units, and its respective successors and assigns or any other  payment agent appointed by the General Partner; provided, however, that if no paying agent is  specifically designated for the particular series of Preferred Units, the General Partner shall act in  such capacity.  

 

  8  “Percentage Interest” means as of any date of determination as to the General Partner  with respect to the General Partner Interest (in its capacity as General Partner without reference  to any Limited Partner Interests held by it and calculated based upon the number of Notional  General Partner Units then deemed held by the General Partner), which General Partner Interest  as of the Effective Date and immediately prior to giving effect to the transactions contemplated  by the Exchange Agreement was 2.0%, and as to any Unitholder holding Units (other than  Preferred Units), the quotient obtained by dividing (a) the number of Notional General Partner  Units deemed held by the General Partner or the number of Units (other than Preferred Units)  held by such Unitholder, as the case may be, by (b) the total number of Notional General Partner  Units deemed held by the General Partner and all Outstanding Units (other than Preferred Units).   The Percentage Interest with respect to a Preferred Unit shall at all times be zero.  “Person” means an individual or a corporation, firm, limited liability company,  partnership, joint venture, trust, unincorporated organization, association, governmental agency  or political subdivision thereof or other entity.  “Preferred Unit Distribution Payment Date” means the Series A Distribution Payment  Date or Series B Distribution Payment Date, as applicable.   “Preferred Unit Distribution Period” means the Series A Distribution Period and/or the  Series B Distribution Period, as applicable.  “Preferred Unit Distributions” means Series A Distributions and/or Series B  Distributions, as applicable.  “Preferred Unit Holders” means Series A Holders and/or Series B Holders, as applicable.  “Preferred Unit Liquidation Preference” means the Series A Liquidation Preference or  the Series B Liquidation Preference, as applicable.  “Preferred Unit Payments” means Series A Payments and/or Series B Payments, as  applicable.  “Preferred Units” means a Partnership Security, designated as a “Preferred Unit,” which  entitles the holder thereof to a preference with respect to distributions over Common Units,  including the Series A Preferred Units and the Series B Preferred Units.  “Prior Agreement” means the Fourth Amended and Restated Agreement of Limited  Partnership of the Partnership dated as of January 1, 2019.  “Pro Rata” means (a) when modifying Units (other than Preferred Units) or any class or  series thereof, apportioned equally among all designated Units (other than Preferred Units) in  accordance with their relative Percentage Interests, (b) when modifying Partners or Record  Holders, apportioned among all Partners or Record Holders in accordance with their relative  Percentage Interests and (c) when modifying holders of Preferred Units (or a particular series  thereof), apportioned equally among all holders of Preferred Units (or such series thereof) in  accordance with the relative number or percentage of Preferred Units (or such series thereof), as  applicable, held by such holder.  

 

  9  “Purchase Date” means the date determined by the General Partner as the date for  purchase of all Outstanding Limited Partner Interests of a certain class or series (other than  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 the  Partnership.  “Record Date” means the date established by the General Partner for determining (a) the  identity of the Record Holders entitled to notice of, or to vote at, any meeting of Limited Partners  or entitled to vote by ballot or give approval of Partnership action in writing without a meeting or  entitled to exercise rights in respect of any lawful action of Limited Partners or (b) the identity of  Record Holders entitled to receive any report or distribution or to participate in any offer.  “Record Holder” means (a) the Person in whose name a Common Unit is registered on  the books of the Transfer Agent as of the opening of business on a particular Business Day, (b)  the Person in whose name a Preferred Unit is registered on the books of the Transfer Agent as of,  unless otherwise set forth in Article XVI, the opening of business on a particular Business Day,  or (c) with respect to other Partnership Securities, the Person in whose name any such other  Partnership Security is registered on the books that the General Partner has caused to be kept as  of the opening of business on such Business Day.  “Registrar” means the Registrar of Corporations as defined in Section 4 of the Marshall  Islands Business Corporations Act.  “Registration Statement” means the Registration Statement on Form F-1 (Registration  No. 333-120727) as it has been or as it may be amended or supplemented from time to time, filed  by the Partnership with the Commission under the Securities Act to register the offering and sale  of the Common Units in the Initial Offering.  “Reuters Page LIBOR01” means the display so designated on the Reuters 3000 Xtra (or  such other page as may succeed or replace the LIBOR01 page on that service).  “Securities Act” means the Securities Act of 1933, as amended, supplemented or restated  from time to time and any successor to such statute.  “Senior Securities” has the meaning assigned to such term in Section 16.7(c).  “Series A Distribution Payment Date” means each January 15, April 15, July 15 and  October 15, commencing January 15, 2017; provided, however, that if any Series A Distribution  Payment Date would otherwise occur on a day that is not a Business Day, such Series A  Distribution Payment Date shall instead be on the immediately succeeding Business Day.  “Series A Distribution Period” means (i) the period commencing on (and including) the  Series A Original Issue Date and ending on (and including) December 31, 2016, and (ii) any  subsequent three-month period commencing on (and including) any January 1, April 1, July 1 or  October 1 and ending on (and including) the last day in March, June, September and December,  respectively.  

 

  10  “Series A Distribution Rate” means a rate equal to 9.00% per annum of the Stated Series  A Liquidation Preference per Series A Preferred Unit.  “Series A Distribution Record Date” has the meaning assigned to such term in Section  16.3(b).  “Series A Distributions” means distributions with respect to Series A Preferred Units  pursuant to Section 16.3.  “Series A Holder” means a Record Holder of the Series A Preferred Units.  “Series A Liquidation Preference” means an amount for each Series A Preferred Unit  initially equal to $25.00 per share, which amount shall be subject to increase by the per Series A  Preferred Unit amount of any accumulated and unpaid distributions (whether or not such  distributions shall have been declared).  “Series A Original Issue Date” means October 5, 2016.  “Series A Payments” means, collectively, Series A Distributions and Series A  Redemption Payments.  “Series A Preferred Unit” means a Preferred Unit having the designations, preferences,  rights, powers and duties set forth in Article XVI.  “Series A Redemption Date” has the meaning assigned to such term in Section 16.6.  “Series A Redemption Notice” has the meaning assigned to such term in Section 16.6(c).  “Series A Redemption Payments” means payments to be made to the holders of Series A  Preferred Units to redeem Series A Preferred Units in accordance with Section 16.6.  “Series A Redemption Price” has the meaning assigned to such term in Section 16.6(a).  “Series B Distribution Payment Date” means each January 15, April 15, July 15 and  October 15, commencing January 15, 2018; provided, however, that if any Series B Distribution  Payment Date during the Series B Fixed Rate Period would otherwise occur on a day that is not a  Business Day, such Series B Distribution Payment Date shall instead be on the immediately  succeeding Business Day.  “Series B Distribution Period” means (i) the period commencing on (and including) the  Series B Original Issue Date and ending on (and including) December 31, 2017, and (ii) any  subsequent three-month period commencing on (and including) any January 1, April 1, July 1 or  October 1 and ending on (and including) the last day in March, June, September and December,  respectively.  “Series B Distribution Rate” means a rate equal to (a) during the Series B Fixed Rate  Period, 8.50% per annum of the Stated Series B Liquidation Preference per Series B Preferred  Unit and (b) during the Series B Floating Rate Period, a percentage per annum of the Series B  

 

  11  Stated Liquidation Preference per Series B Preferred Unit equal to the sum of (i) Series B Three- Month LIBOR, as calculated on each applicable Series B LIBOR Determination Date, and (ii)  6.241%.  “Series B Distribution Record Date” has the meaning assigned to such term in Section  16.3(b).  “Series B Distributions” means distributions with respect to Series B Preferred Units  pursuant to Section 16.3.  “Series B Fixed Rate Period” means the period from and including the Series B Original  Issue Date to, but not including, October 15, 2027.  “Series B Floating Rate Period” means the period from and including October 15, 2027  to, but not including, the date that all of the Series B Preferred Units are redeemed in full in  accordance with Section 16.6 below.  “Series B Holder” means a Record Holder of the Series B Preferred Units.  “Series B LIBOR Determination Date” means the London Business Day immediately  preceding the first date of the applicable Series B Distribution Period during the Series B  Floating Rate Period (or for the period from and including October 15, 2027 and ending on and  including December 31, 2027, the London Business Day immediately preceding October 15,  2027).  “Series B Liquidation Preference” means an amount for each Series B Preferred Unit  initially equal to $25.00 per share, which amount shall be subject to increase by the per Series B  Preferred Unit amount of any accumulated and unpaid distributions (whether or not such  distributions shall have been declared).  “Series B Original Issue Date” means October 23, 2017.  “Series B Payments” means, collectively, Series B Distributions and Series B  Redemption Payments.  “Series B Preferred Unit” means a Preferred Unit having the designations, preferences,  rights, powers and duties set forth in Article XVI.  “Series B Redemption Date” has the meaning assigned to such term in Section 16.6.  “Series B Redemption Notice” has the meaning assigned to such term in Section 16.6(c).  “Series B Redemption Payments” means payments to be made to the holders of Series B  Preferred Units to redeem Series B Preferred Units in accordance with Section 16.6.  “Series B Redemption Price” has the meaning assigned to such term in Section 16.6(a).  

 

  12  “Series B Three-Month LIBOR” means, in respect of each Series B Distribution Period  during the Series B Floating Rate Period (or, for the period from and including October 15, 2027  and ending on and including December 31, 2027), the following rate determined by the  Calculation Agent, as of the applicable Series B LIBOR Determination Date in accordance with  the following provisions:  (a) the rate (expressed as a percentage per year) for deposits in U.S. dollars for a  three-month period commencing on the first day of such period that appears on Reuters Page  LIBOR01 as of 11:00 a.m. (London time) on the applicable Series B LIBOR Determination  Date; or  (b) If the Calculation Agent determines that three-month LIBOR (as contemplated by  the immediately preceding clause (a)) has been discontinued, then it will determine whether to  use a substitute or successor base rate that it has determined in its sole discretion is most  comparable to three-month LIBOR, provided that if the Calculation Agent determines there is an  industry accepted successor base rate, the Calculation Agent shall use such successor base rate.   If the Calculation Agent has determined a substitute or successor base rate in accordance with  the foregoing, the Calculation Agent in its sole discretion may also implement changes to the  business day convention, the definition of business day, the Series B LIBOR Determination Date  and any method for obtaining the substitute or successor base rate if such rate is unavailable on  the relevant business day, in a manner that is consistent with industry accepted practices for such  substitute or successor base rate.  Unless the Calculation Agent determines to use a substitute or  successor base rate as so provided, the following will apply: if the rate described in the  immediately preceding clause (a) is not so published, the Calculation Agent shall select four  major banks in the London interbank market and request that the principal London offices of  those four selected banks provide their offered quotations for deposits in U.S. dollars for a period  of three months, commencing on the first day of the applicable period, to prime banks in the  London interbank market at approximately 11:00 a.m. (London time) on the Series B LIBOR  Determination Date for such period.  Offered quotations must be based on a principal amount  equal to an amount that, in the Calculation Agent’s judgment, is representative of a single  transaction in U.S. dollars in the London interbank market at the time.  If two or more quotations  are provided, Series B Three-Month LIBOR for such period will be the arithmetic mean of the  quotations.  If fewer than two quotations are provided, Series B Three-Month LIBOR for such  period will be the arithmetic mean of the rates quoted on the Series B LIBOR Determination  Date for such period by three major banks in New York City selected by the Calculation Agent,  for loans in U.S. dollars to leading European banks for a three-month period commencing on the  first day of such period.  The rates quoted must be based on an amount that, in the Calculation  Agent’s judgment, is representative of a single transaction in U.S. dollars in that market at the  time.  If fewer than three New York City banks selected by the Calculation Agent are quoting  rates in the manner described above, Series B Three-Month LIBOR for the applicable period will  be the same as for the immediately preceding period or, if the immediately preceding period was  within the Series B Fixed Rate Period, the same as for the most recent quarter for which Series B  Three-Month LIBOR can be determined.  All percentages resulting from any of the calculations described in the immediately  preceding clauses (a) and (b) will be rounded, if necessary, to the nearest one hundred- thousandth of a percentage point (with five one-millionths of a percentage point rounded  

 

  13  upwards) and all dollar amounts used in or resulting from such calculations will be rounded, if  necessary, to the nearest cent (with one-half cent being rounded upwards).  “Special Approval” means approval by a majority of the members of the Conflicts  Committee.  “Stated Preferred Unit Liquidation Preference” means the Stated Series A Liquidation  Preference or the Stated Series B Liquidation Preference, as applicable.  “Stated Series A Liquidation Preference” means an amount equal to $25.00 per Series A  Preferred Unit.   “Stated Series B Liquidation Preference” means an amount equal to $25.00 per Series B  Preferred Unit.  “Subsidiary” means, with respect to any Person, (a) a corporation of which more than  50% of the voting power of shares entitled (without regard to the occurrence of any contingency)  to vote in the election of directors or other governing body of such corporation is owned, directly  or indirectly, at the date of determination, by such Person, by one or more Subsidiaries (as  defined, but excluding subsection (d) of the definition) of such Person or a combination thereof,  (b) a partnership (whether general or limited) in which such Person or a Subsidiary (as defined,  but excluding subsection (d) of the definition) of such Person is, at the date of determination, a  general or limited partner of such partnership, but only if more than 50% of the partnership  interests of such partnership (considering all of the partnership interests of the partnership as a  single class) is owned, directly or indirectly, at the date of determination, by such Person, by one  or more Subsidiaries (as defined, but excluding subsection (d) of the definition) of such Person,  or a combination thereof, or (c) any other Person (other than a corporation or a partnership) in  which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly  or indirectly, at the date of determination, has (i) a majority ownership interest or (ii) the power  to elect or direct the election of a majority of the directors or other governing body of such  Person, or (d) any other Person in which such Person, one or more Subsidiaries (as defined, but  excluding subsection (d) of the definition) of such Person, or a combination thereof, directly or  indirectly, at the date of determination, has (i) less than a majority ownership interest or (ii) less  than the power to elect or direct the election of a majority of the directors or other governing  body of such Person, provided that (A) such Person, one or more Subsidiaries (as defined, but  excluding subsection (d) of the definition) of such Person, or a combination thereof, directly or  indirectly, at the date of the determination, has at least a 20% ownership interest in such other  Person, (B) such Person accounts for such other Person (under U.S. GAAP, as in effect on the  later of the date of investment in such other Person or material expansion of the operations of  such other Person) on a consolidated or equity accounting basis, (C) such Person has directly or  indirectly material negative control rights regarding such other Person including over such other  Person’s ability to materially expand its operations beyond that contemplated at the date of  investment in such other Person, and (D) such other Person is (i) formed and maintained for the  sole purpose of owning or leasing, operating and chartering no more than 10 vessels for a period  of no more than 40 years, and (ii) obligated under its constituent documents, or as a result of a  unanimous agreement of its owners, to distribute to its owners all of its income on at least an  annual basis (less any cash reserves that are approved by such Person).  

 

  14  “Surviving Business Entity” has the meaning assigned to such term in Section 14.2(b).  “Tax Election” has the meaning assigned to such term in Section 9.2(a).  “Tax Matters Partner” has the meaning assigned to such term in Section 9.3.  “Trading Day” has the meaning assigned to such term in Section 15.1(a).   “Transfer” has the meaning assigned to such term in Section 4.4(a).  “Transfer Agent” means such bank, trust company or other Person (including the General  Partner or one of its Affiliates) as shall be appointed from time to time by the Partnership to act  as registrar and transfer agent for the Common Units and the Preferred Units; provided, that if no  transfer agent is specifically designated for any other Partnership Securities, the General Partner  shall act in such capacity.  “Underwriter” means each Person named as an underwriter in Schedule I to the  Underwriting Agreement who purchases Common Units pursuant thereto.  “Underwriting Agreement” means the Underwriting Agreement dated May 4, 2005  among the Underwriters, the Partnership, the General Partner, the Operating Company, and  Teekay Corporation, providing for the purchase of Common Units by such Underwriters.  “Unit” means a Partnership Security that is designated as a “Unit” and shall include  Common Units and Preferred Units, but shall not include the General Partner Interest or Notional  General Partner Units.  “Unitholders” means the holders of Units.  “Unit Majority” means a majority of the Outstanding Common Units, voting as a class.  “U.S. GAAP” means United States generally accepted accounting principles consistently  applied.  “Working Capital Borrowings” means borrowings used solely for working capital  purposes or to pay distributions to Partners made pursuant to a credit facility or other  arrangement to the extent such borrowings are required to be reduced to a relatively small  amount each year for an economically meaningful period of time.  Section 1.2 Construction.  Unless the context requires otherwise: (a) any pronoun used in this Agreement shall  include the corresponding masculine, feminine or neuter forms, and the singular form of nouns,  pronouns and verbs shall include the plural and vice versa; (b) references to Articles and  Sections refer to Articles and Sections of this Agreement; and (c) the term “include” or  “includes” means includes, without limitation, and “including” means including, without  limitation.  

 

  15  ARTICLE II    ORGANIZATION  Section 2.1 Formation.  The General Partner and the Organizational Limited Partner previously formed the  Partnership as a limited partnership pursuant to the provisions of the Marshall Islands Act and  hereby amend and restate the Prior Agreement in its entirety.  This amendment and restatement  shall become effective on the Effective Date simultaneously with the effectiveness of the  transactions contemplated by the Exchange Agreement.  Except as expressly provided to the  contrary in this Agreement, the rights, duties (including fiduciary duties), liabilities and  obligations of the Partners and the administration, dissolution and termination of the Partnership  shall be governed by the Marshall Islands Act.  All Partnership Interests shall constitute personal  property of the owner thereof for all purposes and a Partner has no interest in specific Partnership  property.  Section 2.2 Name.  The name of the Partnership shall be “Teekay LNG Partners L.P.” The Partnership’s  business may be conducted under any other name or names as determined by the General  Partner, including the name of the General Partner.  The words “Limited Partnership” or the  letters “L.P.” or similar words or letters shall be included in the Partnership’s name where  necessary for the purpose of complying with the laws of any jurisdiction that so requires.  The  General Partner may change the name of the Partnership at any time and from time to time and  shall notify the Limited Partners of such change in the next regular communication to the  Limited Partners.  Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices  Unless and until changed by the General Partner, the registered office of the Partnership  in the Marshall Islands shall be located at Trust Company Complex, Ajeltake Island, Ajeltake  Road, Majuro, Marshall Islands MH 96960, and the registered agent for service of process on the  Partnership in the Marshall Islands at such registered office shall be The Trust Company of the  Marshall Islands, Inc.  The principal office of the Partnership shall be located at 4th Floor,  Belvedere Building, 69 Pitts Bay Road, Hamilton HM 08, Bermuda or such other place as the  General Partner may from time to time designate by notice to the Limited Partners.  The  Partnership may maintain offices at such other place or places within or outside the Marshall  Islands as the General Partner determines to be necessary or appropriate.  The address of the  General Partner shall be 4th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton HM 08,  Bermuda or such other place as the General Partner may from time to time designate by notice to  the Limited Partners.  Section 2.4 Purpose and Business.  The purpose and nature of the business to be conducted by the Partnership shall be to (a)  engage directly in, or enter into or form any corporation, partnership, joint venture, limited  liability company or other arrangement to engage indirectly in, any business activity that is  

 

  16  approved by the General Partner and that lawfully may be conducted by a limited partnership  organized pursuant to the Marshall Islands Act and, in connection therewith, to exercise all of the  rights and powers conferred upon the Partnership pursuant to the agreements relating to such  business activity, and (b) do anything necessary or appropriate to the foregoing, including the  making of capital contributions or loans to a Group Member.  The General Partner shall have no  duty or obligation to propose or approve, and may decline to propose or approve, the conduct by  the Partnership of any business free of any fiduciary duty or obligation whatsoever to the  Partnership or any Limited Partner and, in declining to so propose or approve, shall not be  required to act in good faith or pursuant to any other standard imposed by this Agreement, any  Group Member Agreement, any other agreement contemplated hereby or under the Marshall  Islands Act or any other law, rule or regulation.  Section 2.5 Powers.  The Partnership shall be empowered to do any and all acts and things necessary and  appropriate for the furtherance and accomplishment of the purposes and business described in  Section 2.4 and for the protection and benefit of the Partnership.  Section 2.6 Power of Attorney.  (a) Each Limited Partner hereby constitutes and appoints the General Partner and, if a  Liquidator shall have been selected pursuant to Section 12.3, the Liquidator (and any successor  to the Liquidator by merger, transfer, assignment, election or otherwise) and each of their  authorized officers and attorneys-in-fact, as the case may be, with full power of substitution, as  his true and lawful agent and attorney-in-fact, with full power and authority in his name, place  and stead, to:  (i) execute, swear to, acknowledge, deliver, file and record in the appropriate  public offices (A) all certificates, documents and other instruments (including this  Agreement and the Certificate of Limited Partnership and all amendments or restatements  hereof or thereof) that the General Partner or the Liquidator determines to be necessary or  appropriate to form, qualify or continue the existence or qualification of the Partnership  as a limited partnership (or a partnership in which the limited partners have limited  liability) in the Marshall Islands and in all other jurisdictions in which the Partnership  may conduct business or own property; (B) all certificates, documents and other  instruments that the General Partner or the Liquidator determines to be necessary or  appropriate to reflect, in accordance with its terms, any amendment, change, modification  or restatement of this Agreement; (C) all certificates, documents and other instruments  (including conveyances and a certificate of cancellation) that the General Partner or the  Liquidator determines to be necessary or appropriate to reflect the dissolution and  liquidation of the Partnership pursuant to the terms of this Agreement; (D) all certificates,  documents and other instruments relating to the admission, withdrawal, removal or  substitution of any Partner pursuant to, or other events described in, Articles IV, X, XI or  XII; (E) all certificates, documents and other instruments relating to the determination of  the rights, preferences and privileges of any class or series of Partnership Securities  issued pursuant to Section 5.6; and (F) all certificates, documents and other instruments  

 

  17  (including agreements and a certificate of merger) 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 the Liquidator determines to be necessary or appropriate to (A) make,  evidence, give, confirm or ratify any vote, consent, approval, agreement or other action  that is made or given by the Partners hereunder or is consistent with the terms of this  Agreement or (B) effectuate the terms or intent of this Agreement; provided, that when  required by Section 13.3 or any other provision of this Agreement that establishes a  percentage of the Limited Partners or of the Limited Partners of any class or series  required to take any action, the General Partner and the Liquidator may exercise the  power of attorney made in this Section 2.6(a)(ii) only after the necessary vote, consent or  approval of the Limited Partners or of the Limited Partners of such class or series, as  applicable.  Nothing contained in this Section 2.6(a) shall be construed as authorizing the General  Partner to amend this Agreement except in accordance with Article XIII or as may be otherwise  expressly provided for in this Agreement.  (b) The foregoing power of attorney is hereby declared to be irrevocable and a power  coupled with an interest, and it shall survive and, to the maximum extent permitted by law, not  be affected by the subsequent death, incompetency, disability, incapacity, dissolution,  bankruptcy or termination of any Limited Partner and the transfer of all or any portion of such  Limited Partner’s Partnership Interest and shall extend to such Limited Partner’s heirs,  successors, assigns and personal representatives.  Each such Limited Partner hereby agrees to be  bound by any representation made by the General Partner or the Liquidator acting in good faith  pursuant to such power of attorney; and each such Limited Partner, to the maximum extent  permitted by law, hereby waives any and all defenses that may be available to contest, negate or  disaffirm the action of the General Partner or the Liquidator taken in good faith under such  power of attorney.  Each Limited Partner shall execute and deliver to the General Partner or the  Liquidator, within 15 days after receipt of the request therefor, such further designation, powers  of attorney and other instruments as the General Partner or the Liquidator determines to be  necessary or appropriate to effectuate this Agreement and the purposes of the Partnership.  Section 2.7 Term.  The term of the Partnership commenced upon the filing of the Certificate of Limited  Partnership in accordance with the Marshall Islands Act and shall continue in existence until the  dissolution of the Partnership in accordance with the provisions of Article XII.  The existence of  the Partnership as a separate legal entity shall continue until the cancellation of the Certificate of  Limited Partnership as provided in the Marshall Islands Act.  Section 2.8 Title to Partnership Assets.  Title to Partnership assets, whether real, personal or mixed and whether tangible or  intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner,  

 

  18  individually or collectively, shall have any ownership interest in such Partnership assets or any  portion thereof.  Title to any or all of the Partnership assets may be held in the name of the  Partnership, the General Partner, one or more of its Affiliates or one or more nominees, as the  General Partner may determine.  The General Partner hereby declares and warrants that any  Partnership assets for which record title is held in the name of the General Partner or one or more  of its Affiliates or one or more nominees shall be held by the General Partner or such Affiliate or  nominee for the use and benefit of the Partnership in accordance with the provisions of this  Agreement; provided, however, that the General Partner shall use reasonable efforts to cause  record title to such assets (other than those assets in respect of which the General Partner  determines that the expense and difficulty of conveyancing makes transfer of record title to the  Partnership impracticable) to be vested in the Partnership as soon as reasonably practicable;  provided, further, that, prior to the withdrawal or removal of the General Partner or as soon  thereafter as practicable, the General Partner shall use reasonable efforts to effect the transfer of  record title to the Partnership and, prior to any such transfer, will provide for the use of such  assets in a manner satisfactory to the General Partner.  All Partnership assets shall be recorded as  the property of the Partnership in its books and records, irrespective of the name in which record  title to such Partnership assets is held.  ARTICLE III    RIGHTS OF LIMITED PARTNERS  Section 3.1 Limitation of Liability.  The Limited Partners shall have no liability under this Agreement except as expressly  provided in this Agreement or the Marshall Islands Act.    Section 3.2 Management of Business.  No Limited Partner, in its capacity as such, shall participate in the operation, management  or control (within the meaning of the Marshall Islands Act) of the Partnership’s business,  transact any business in the Partnership’s name or have the power to sign documents for or  otherwise bind the Partnership.  Any action taken by any Affiliate of the General Partner or any  officer, director, employee, manager, member, general partner, agent or trustee of the General  Partner or any of its Affiliates, or any officer, director, employee, member, general partner, agent  or trustee of a Group Member, in its capacity as such, shall not be deemed to be participation in  the control of the business of the Partnership by a limited partner of the Partnership (within the  meaning of Section 30 of the Marshall Islands Act) and shall not affect, impair or eliminate the  limitations on the liability of the Limited Partners under this Agreement.  Section 3.3 Outside Activities of the Limited Partners.  Subject to the provisions of Section 7.5 and the Omnibus Agreement, which shall  continue to be applicable to the Persons referred to therein, regardless of whether such Persons  shall also be Limited Partners, any Limited Partner shall be entitled to and may have business  interests and engage in business activities in addition to those relating to the Partnership,  including business interests and activities in direct competition with the Partnership Group.   

 

  19  Neither the Partnership nor any of the other Partners shall have any rights by virtue of this  Agreement in any business ventures of any Limited Partner.  Section 3.4 Rights of Limited Partners.  (a) In addition to other rights provided by this Agreement or by applicable law, and  except as limited by Section 3.4(b), each Limited Partner shall have the right, for a purpose  reasonably related to such Limited Partner’s interest as a Limited Partner in the Partnership,  upon reasonable written demand and at such Limited Partner’s own expense:  (i) for taxable years ending on or prior to date immediately prior to the  Effective Date, promptly after becoming available, to obtain a copy of the Partnership’s  foreign, federal, state and local income tax returns for each year;  (ii) to have furnished to him a current list of the name and last known  business, residence or mailing address of each Partner;  (iii) to obtain true and full information regarding the amount of cash and a  description and statement of the Net Agreed Value of any other Capital Contribution by  each Partner and which each Partner has agreed to contribute in the future, and the date  on which each became a Partner;  (iv) to have furnished to him a copy of this Agreement and the Certificate of  Limited Partnership and all amendments thereto, together with a copy of the executed  copies of all powers of attorney pursuant to which this Agreement, the Certificate of  Limited Partnership and all amendments thereto have been executed;  (v) to obtain true and full information regarding the status of the business and  financial condition of the Partnership Group; and  (vi) to obtain such other information regarding the affairs of the Partnership as  is just and reasonable.  (b) The General Partner may keep confidential from the Limited Partners, for such  period of time as the General Partner deems reasonable, (i) any information that the General  Partner reasonably believes to be in the nature of trade secrets or (ii) other information the  disclosure of which the General Partner in good faith believes (A) is not in the best interests of  the Partnership Group, (B) could damage the Partnership Group or (C) that any Group Member  is required by law or by agreement with any third party to keep confidential (other than  agreements with Affiliates of the Partnership the primary purpose of which is to circumvent the  obligations set forth in this Section 3.4).  ARTICLE IV    CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;   REDEMPTION OF PARTNERSHIP INTERESTS  Section 4.1 Certificates.  

 

  20  Upon the Partnership’s issuance of Common Units or Preferred Units to any Person and  subject to Section 16.2(b) with respect to any series of Preferred Units described therein, the  Partnership shall issue, upon the request of such Person, one or more Certificates in the name of  such Person evidencing the number of such Units being so issued.  In addition, (a) upon the  General Partner’s request, the Partnership shall issue to it one or more Certificates in the name of  the General Partner evidencing its interests in the Partnership and (b) upon the request of any  Person owning any Partnership Securities other than Common Units or Preferred Units, the  Partnership shall issue to such Person one or more certificates evidencing such Partnership  Securities other than Common Units or Preferred Units.  Certificates shall be executed on behalf  of the Partnership by the Chairman of the Board, President or any Executive Vice President or  Vice President and the Chief Financial Officer or the Secretary or any Assistant Secretary of the  General Partner.  No Common Unit Certificate or Preferred Unit Certificate shall be valid for any  purpose until it has been countersigned by the Transfer Agent; provided, however, that if the  General Partner elects to issue Common Units or Preferred Units in global form, the Common  Unit Certificates or the Preferred Unit Certificates shall be valid upon receipt of a certificate  from the Transfer Agent certifying that the Common Units or Preferred Units have been duly  registered in accordance with the directions of the Partnership.  Section 4.2 Mutilated, Destroyed, Lost or Stolen Certificates.  (a) If any mutilated Certificate is surrendered to the Transfer Agent, the appropriate  officers of the General Partner on behalf of the Partnership shall execute, and the Transfer Agent  shall countersign and deliver in exchange therefor, a new Certificate evidencing the same  number and type of Partnership Securities as the Certificate so surrendered.  (b) The appropriate officers of the General Partner on behalf of the Partnership shall  execute and deliver, and the Transfer Agent shall countersign, a new Certificate in place of any  Certificate previously issued if the Record Holder of the Certificate:  (i) makes proof by affidavit, in form and substance satisfactory to the General  Partner, that a previously issued Certificate has been lost, destroyed or stolen;  (ii) requests the issuance of a new Certificate before the General Partner has  notice that the Certificate has been acquired by a purchaser for value in good faith and  without notice of an adverse claim;  (iii) if requested by the General Partner, delivers to the General Partner a bond,  in form and substance satisfactory to the General Partner, with surety or sureties and with  fixed or open penalty as the General Partner may direct to indemnify the Partnership, the  Partners, the General Partner and the Transfer Agent against any claim that may be made  on account of the alleged loss, destruction or theft of the Certificate; and  (iv) satisfies any other reasonable requirements imposed by the General  Partner.  If a Limited Partner fails to notify the General Partner within a reasonable period of time  after he has notice of the loss, destruction or theft of a Certificate, and a transfer of the Limited  Partner Interests represented by the Certificate is registered before the Partnership, the General  

 

  21  Partner or the Transfer Agent receives such notification, the Limited Partner shall be precluded  from making any claim against the Partnership, the General Partner or the Transfer Agent for  such transfer or for a new Certificate.  (c) As a condition to the issuance of any new Certificate under this Section 4.2, the  General Partner may require the payment of a sum sufficient to cover any tax or other  governmental charge that may be imposed in relation thereto and any other expenses (including  the fees and expenses of the Transfer Agent) reasonably connected therewith.  Section 4.3 Record Holders.  The Partnership shall be entitled to recognize the applicable Record Holder as the Partner  with respect to any Partnership Interest and, accordingly, shall not be bound to recognize any  equitable or other claim to, or interest in, such Partnership Interest on the part of any other  Person, regardless of whether the Partnership shall have actual or other notice thereof, except as  otherwise provided by law or any applicable rule, regulation, guideline or requirement of any  National Securities Exchange on which such Partnership Interests are listed.  Without limiting  the foregoing, when a Person (such as a broker, dealer, bank, trust company or clearing  corporation or an agent of any of the foregoing) is acting as nominee, agent or in some other  representative capacity for another Person in acquiring and/or holding Partnership Interests, as  between the Partnership on the one hand, and such other Persons on the other hand, such  representative shall be the Record Holder of such Partnership Interest.  Section 4.4 Transfer Generally.  (a) The term “transfer,” when used in this Agreement with respect to a Partnership  Interest, shall be deemed to refer to a transaction (i) by which the General Partner assigns its  General Partner Interest to another Person, and includes a sale, assignment, gift, pledge,  encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise  or (ii) by which the holder of a Limited Partner Interest assigns such Limited Partner Interest to  another Person who is or becomes a Limited Partner, and includes a sale, assignment, gift,  exchange or any other disposition by law or otherwise, including any transfer upon foreclosure  of any pledge, encumbrance, hypothecation or mortgage.  (b) No Partnership Interest shall be transferred, in whole or in part, except in  accordance with the terms and conditions set forth in this Article IV.  Any transfer or purported  transfer of a Partnership Interest not made in accordance with this Article IV shall be null and  void.  (c) Nothing contained in this Agreement shall be construed to prevent a disposition  by any stockholder, member, partner or other owner of the General Partner of any or all of the  shares of stock, membership interests, partnership interests or other ownership interests in the  General Partner.  Section 4.5 Registration and Transfer of Limited Partner Interests.  (a) The General Partner shall keep or cause to be kept on behalf of the Partnership a  register in which, subject to such reasonable regulations as it may prescribe and subject to the  

 

  22  provisions of Section 4.5(b), the Partnership will provide for the registration and transfer of  Limited Partner Interests.  The Transfer Agent is hereby appointed registrar and transfer agent  for the purpose of registering Common Units and Preferred Units and transfers of such Common  Units and Preferred Units as herein provided.  The Partnership shall not recognize transfers of  Certificates evidencing Limited Partner Interests unless such transfers are effected in the manner  described in this Section 4.5.  Upon surrender of a Certificate for registration of transfer of any  Limited Partner Interests evidenced by a Certificate, and subject to the provisions of Section  4.5(b), the appropriate officers of the General Partner on behalf of the Partnership shall execute  and deliver, and in the case of Common Units, the Transfer Agent shall countersign and deliver,  in the name of the holder or the designated transferee or transferees, as required pursuant to the  holder’s instructions, one or more new Certificates evidencing the same aggregate number and  type of Limited Partner Interests as was evidenced by the Certificate so surrendered.  (b) The General Partner shall not recognize any transfer of Limited Partner Interests  until the Certificates evidencing such Limited Partner Interests are surrendered for registration of  transfer.  No charge shall be imposed by the General Partner for such transfer; provided, that as a  condition to the issuance of any new Certificate under this Section 4.5, the General Partner may  require the payment of a sum sufficient to cover any tax or other governmental charge that may  be imposed with respect thereto.  (c) The General Partner and its Affiliates shall have the right at any time to transfer  their Common Units or Preferred Units to one or more Persons.  Section 4.6 Transfer of the General Partner’s General Partner Interest.  (a) [Reserved].  (b) Subject to Section 4.6(c) below, the General Partner may transfer all or any of its  General Partner Interest without Unitholder approval.  (c) Notwithstanding anything herein to the contrary, no transfer by the General  Partner of all or any part of its General Partner Interest to another Person shall be permitted  unless (i) the transferee agrees to assume the rights and duties of the General Partner under this  Agreement and to be bound by the provisions of this Agreement, (ii) the Partnership receives an  Opinion of Counsel that such transfer would not result in the loss of limited liability of any  Limited Partner or of any limited partner or member of any other Group Member and (iii) such  transferee also agrees to purchase all (or the appropriate portion thereof, if applicable) of the  partnership or membership interest of the General Partner as the general partner or managing  member, if any, of each other Group Member.  In the case of a transfer pursuant to and in  compliance with this Section 4.6, the transferee or successor (as the case may be) shall, subject  to compliance with the terms of Section 10.3, be admitted to the Partnership as the General  Partner immediately prior to the transfer of the General Partner Interest, and the business of the  Partnership shall continue without dissolution.  Section 4.7 [Reserved].  Section 4.8 Restrictions on Transfers.  

 

  23  (a) Except as provided in Section 4.8(c) below, but notwithstanding the other  provisions of this Article IV, no transfer of any Partnership Interests shall be made if such  transfer would (i) violate the then applicable federal or state securities laws, laws of the Republic  of the Marshall Islands, or rules and regulations of the Commission, any state securities  commission or any other governmental authority with jurisdiction over such transfer, or (ii)  terminate the existence or qualification of the Partnership or any Group Member under the laws  of the jurisdiction of its formation.  (b) The General Partner may impose such restrictions by amending this Agreement;  provided, however, that any amendment that would result in the delisting or suspension of  trading of any class of Limited Partner Interests on the principal National Securities Exchange on  which such class of Limited Partner Interests is then listed must be approved, prior to such  amendment being effected, by the holders of a majority of the Outstanding Limited Partner  Interests of such class.  (c) Nothing contained in this Article IV, or elsewhere in this Agreement, shall  preclude the settlement of any transactions involving Partnership Interests entered into through  the facilities of any National Securities Exchange on which such Partnership Interests are listed  for trading.  ARTICLE V    CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS  Section 5.1 Exchange of Incentive Distribution Rights.  As of the Effective Date, pursuant to the Exchange Agreement, the Incentive Distribution  Rights that were held by the General Partner and were outstanding prior to the execution of this  Agreement were contributed to the Partnership in exchange for 10,750,000 Common Units.  Effective immediately following the aforementioned transactions, the Incentive Distribution  Rights shall be cancelled and no longer exist.   Section 5.2 [Reserved].  Section 5.3 [Reserved].  Section 5.4 Interest and Withdrawal.  No interest shall be paid by the Partnership on Capital Contributions.  No Partner shall be  entitled to the withdrawal or return of its Capital Contribution, except to the extent, if any, that  distributions made pursuant to this Agreement or upon termination of the Partnership may be  considered and permitted as such by law and then only to the extent provided for in this  Agreement.  Except to the extent expressly provided in this Agreement, no Partner shall have  priority over any other Partner either as to the return of Capital Contributions or as to profits,  losses or distributions.  Section 5.5 [Reserved].  

 

  24  Section 5.6 Issuances of Additional Partnership Securities.  (a) Subject to any approvals required by Preferred Unit Holders pursuant to Section  16.5(c)(ii), the Partnership may issue additional Partnership Securities and options, rights,  warrants and appreciation rights relating to the Partnership Securities for any Partnership purpose  at any time and from time to time to such Persons for such consideration and on such terms and  conditions as the General Partner shall determine, all without the approval of any Limited  Partners.  (b) Each additional Partnership Security authorized to be issued by the Partnership  pursuant to Section 5.6(a) may be issued in one or more classes, or one or more series of any  such classes, with such designations, preferences, rights, powers and duties (which may be senior  to existing classes and series of Partnership Securities), as shall be fixed by the General Partner,  including (i) the right to share Partnership profits and losses or items thereof; (ii) the right to  share in Partnership distributions; (iii) the rights upon dissolution and liquidation of the  Partnership; (iv) whether, and the terms and conditions upon which, the Partnership may redeem  the Partnership Security; (v) whether such Partnership Security is issued with the privilege of  conversion or exchange and, if so, the terms and conditions of such conversion or exchange; (vi)  the terms and conditions upon which each Partnership Security will be issued, evidenced by  certificates and assigned or transferred; (vii) the method for determining the Percentage Interest  as to such Partnership Security; and (viii) the right, if any, of each such Partnership Security to  vote on Partnership matters, including matters relating to the relative rights, preferences and  privileges of such Partnership Security.  (c) The General Partner shall take all actions that it determines to be necessary or  appropriate in connection with (i) each issuance of Partnership Securities and options, rights,  warrants and appreciation rights relating to Partnership Securities pursuant to this Section 5.6,  (ii) the conversion of the General Partner Interest into Units pursuant to the terms of this  Agreement, (iii) the admission of additional Limited Partners and (iv) all additional issuances of  Partnership Securities.  The General Partner shall determine the relative rights, powers and duties  of the holders of the Units or other Partnership Securities being so issued.  The General Partner  shall do all things necessary to comply with the Marshall Islands Act and is authorized and  directed to do all things that it determines to be necessary or appropriate in connection with any  future issuance of Partnership Securities or in connection with the conversion of the General  Partner Interest into Units pursuant to the terms of this Agreement, including compliance with  any statute, rule, regulation or guideline of any federal, state or other governmental agency or  any National Securities Exchange on which the Units or other Partnership Securities are listed.  Section 5.7 Limitations on Issuance of Additional Partnership Securities.  The Partnership may issue an unlimited number of Partnership Securities (or options,  warrants or appreciation rights related thereto) pursuant to Section 5.6 without the approval of  the Limited Partners; provided, however, that no fractional units shall be issued by the  Partnership.  Section 5.8 Limited Preemptive Right.  

 

  25  Except as provided in this Section 5.8, no Person shall have any preemptive, preferential  or other similar right with respect to the issuance of any Partnership Security, whether unissued,  held in the treasury or hereafter created.  The General Partner shall have the right, which it may  from time to time assign in whole or in part to any of its Affiliates, to purchase Partnership  Securities from the Partnership whenever, and on the same terms that, the Partnership issues  Partnership Securities to Persons other than the General Partner and its Affiliates, to the extent  necessary to maintain the Percentage Interests of the General Partner and its Affiliates equal to  that which existed immediately prior to the issuance of such Partnership Securities; provided,  however, that the amount of any series of Preferred Units issued by the Partnership from time to  time that the General Partner shall have a right to purchase pursuant to this Section 5.8 shall  equal the product of (a) the aggregate Percentage Interest of the General Partner and its Affiliates  multiplied by (b) the number of such series of Preferred Units so issued. Except as set forth in  Article XII, the General Partner shall not be obligated to make any Capital Contributions to the  Partnership.  Section 5.9 Splits and Combinations.  (a) Subject to Section 5.9(d), the Partnership may make a Pro Rata distribution of  Partnership Securities (other than Series A Preferred Units or Series B Preferred Units) to all  Record Holders of the same class or series of Partnership Securities or may effect a subdivision  or combination of the same class or series of Partnership Securities so long as, after any such  event, each Partner holding such class or series of such Partnership Securities shall have the  same Percentage Interest in the Partnership as before such event, and any amounts calculated on  a per Unit basis (including those based on the applicable Stated Preferred Unit Liquidation  Preference) or stated as a number of Units are proportionately adjusted.  (b) Whenever such a distribution, subdivision or combination of Partnership  Securities is declared, the General Partner shall select a Record Date as of which the distribution,  subdivision or combination shall be effective and shall send notice thereof at least 20 days prior  to such Record Date to each Record Holder as of a date not less than 10 days prior to the date of  such notice.  The General Partner also may cause a firm of independent public accountants  selected by it to calculate the number of Partnership Securities to be held by each Record Holder  after giving effect to such distribution, subdivision or combination.  The General Partner shall be  entitled to rely on any certificate provided by such firm as conclusive evidence of the accuracy of  such calculation.  (c) Promptly following any such distribution, subdivision or combination, the  Partnership may issue Certificates to the Record Holders of Partnership Securities as of the  applicable Record Date representing the new number of Partnership Securities held by such  Record Holders, or the General Partner may adopt such other procedures that it determines to be  necessary or appropriate to reflect such changes.  If any such combination results in a smaller  total number of Partnership Securities Outstanding, the Partnership shall require, as a condition  to the delivery to a Record Holder of such new Certificate, the surrender of any Certificate held  by such Record Holder immediately prior to such Record Date.  (d) The Partnership shall not issue fractional Units upon any distribution, subdivision  or combination of Units.  If a distribution, subdivision or combination of Units would result in  

 

  26  the issuance of fractional Units but for the provisions of this Section 5.9(d), each fractional Unit,  as applicable, shall be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to the  next higher Unit).  Section 5.10 Fully Paid and Non-Assessable Nature of Limited Partner Interests.  All Limited Partner Interests issued pursuant to, and in accordance with the requirements  of, this Article V shall be fully paid and non-assessable Limited Partner Interests in the  Partnership, except as such non-assessability may be affected by Section 51 of the Marshall  Islands Act.  ARTICLE VI    DISTRIBUTIONS  Section 6.1 Allocations.  The profits and losses of the Partnership shall be allocated among the Partners by the  General Partner in such manner as the General Partner determines in good faith most accurately  reflects the rights of the Partners as set forth elsewhere in this Agreement.  Section 6.2 [Reserved].  Section 6.3 Distributions to Record Holders.  (a) Subject to Section 16.3 and except as otherwise required by Section 5.6(b) in  respect of other Partnership Securities issued pursuant thereto, within 45 days following the end  of each Quarter commencing with the Quarter ending on June 30, 2005, an amount equal to  100% of Available Cash with respect to such Quarter shall, subject to Section 51 of the Marshall  Islands Act, be distributed in accordance with this Article VI by the Partnership to (a) the  General Partner in accordance with its Percentage Interest and (b) to all Unitholders holding  Common Units, Pro Rata, a percentage equal to 100% less the General Partner’s Percentage  Interest as of the Record Date selected by the General Partner. All distributions required to be  made under this Agreement shall be made subject to Section 51 of the Marshall Islands Act.   This Section 6.3(a) shall not apply to Preferred Units.  (b) Notwithstanding Section 6.3(a), in the event of the dissolution and liquidation of  the Partnership, all receipts received during or after the Quarter in which the Liquidation Date  occurs, other than from borrowings described in (a)(ii) of the definition of Available Cash, shall  be applied and distributed solely in accordance with, and subject to the terms and conditions of,  Section 12.4.  (c) The General Partner may treat taxes required or elected to be withheld with  respect to, all or less than all of the Partners, as a distribution of Available Cash to such Partners.  (d) Each distribution in respect of a Partnership Interest shall be paid by the  Partnership, directly or through the Transfer Agent or through any other Person or agent, only to  the Record Holder of such Partnership Interest as of the Record Date set for such distribution.   

 

  27  Such payment shall constitute full payment and satisfaction of the Partnership’s liability in  respect of such payment, regardless of any claim of any Person who may have an interest in such  payment by reason of an assignment or otherwise  Section 6.4 [Reserved].  Section 6.5 [Reserved].  Section 6.6 [Reserved].  Section 6.7 [Reserved].  Section 6.8 [Reserved].  ARTICLE VII    MANAGEMENT AND OPERATION OF BUSINESS  Section 7.1 Management.  (a) The General Partner shall conduct, direct and manage all activities of the  Partnership.  Except as otherwise expressly provided in this Agreement, all management powers  over the business and affairs of the Partnership shall be exclusively vested in the General Partner,  and no Limited Partner shall have any management power over the business and affairs of the  Partnership.  In addition to the powers now or hereafter granted a general partner of a limited  partnership under applicable law or that are granted to the General Partner under any other  provision of this Agreement, the General Partner, subject to Section 7.3, shall have full power  and authority to do all things and on such terms as it determines to be necessary or appropriate to  conduct the business of the Partnership, to exercise all powers set forth in Section 2.5 and to  effectuate the purposes set forth in Section 2.4, including the following:  (i) the making of any expenditures, the lending or borrowing of money, the  assumption or guarantee of, or other contracting for, indebtedness and other liabilities,  the issuance of evidences of indebtedness, including indebtedness that is convertible into  Partnership Securities (subject to Section 16.5 with respect to any Senior Securities), and  the incurring of any other obligations;  (ii) the making of tax, regulatory and other filings, or rendering of periodic or  other reports to governmental or other agencies having jurisdiction over the business or  assets of the Partnership;  (iii) the acquisition, disposition, mortgage, pledge, encumbrance,  hypothecation or exchange of any or all of the assets of the Partnership or the merger or  other combination of the Partnership with or into another Person (the matters described in  this clause (iii) being subject, however, to any prior approval that may be required by  Section 7.3 and Article XIV);  

 

  28  (iv) the use of the assets of the Partnership (including cash on hand) for any  purpose consistent with the terms of this Agreement, including the financing of the  conduct of the operations of the Partnership Group; subject to Section 7.6(a), the lending  of funds to other Persons (including other Group Members); the repayment or guarantee  of obligations of the Partnership Group; and the making of capital contributions to any  member of the Partnership Group;  (v) the negotiation, execution and performance of any contracts, conveyances  or other instruments (including instruments that limit the liability of the Partnership under  contractual arrangements to all or particular assets of the Partnership, with the other party  to the contract to have no recourse against the General Partner or its assets other than its  interest in the Partnership, even if same results in the terms of the transaction being less  favorable to the Partnership than would otherwise be the case);  (vi) the distribution of Partnership cash;  (vii) the selection and dismissal of employees (including employees having  titles such as “president,” “vice president,” “secretary” and “treasurer”) and agents,  outside attorneys, accountants, consultants and contractors and the determination of their  compensation and other terms of employment or hiring;  (viii) the maintenance of insurance for the benefit of the Partnership Group, the  Partners and Indemnitees;  (ix) the formation of, or acquisition of an interest in, and the contribution of  property and the making of loans to, any further limited or general partnerships, joint  ventures, corporations, limited liability companies or other relationships (including the  acquisition of interests in, and the contributions of property to, any Group Member from  time to time) subject to the restrictions set forth in Section 2.4;  (x) the control of any matters affecting the rights and obligations of the  Partnership, including the bringing and defending of actions at law or in equity and  otherwise engaging in the conduct of litigation, arbitration or mediation and the incurring  of legal expense and the settlement of claims and litigation;  (xi) the indemnification of any Person against liabilities and contingencies to  the extent permitted by law;  (xii) the entering into of listing agreements with any National Securities  Exchange and the delisting of some or all of the Limited Partner Interests from, or  requesting that trading be suspended on, any such exchange (subject to any prior approval  that may be required under Section 4.8);  (xiii) the purchase, sale or other acquisition or disposition of Partnership  Securities (subject to Section 16.6(g)), or the issuance of options, rights, warrants and  appreciation rights relating to Partnership Securities;  

 

  29  (xiv) the undertaking of any action in connection with the Partnership’s  participation in any Group Member; and  (xv) the entering into of agreements with any of its Affiliates to render services  to a Group Member or to itself in the discharge of its duties as General Partner of the  Partnership.  (b) Notwithstanding any other provision of this Agreement, any Group Member  Agreement, the Marshall Islands Act or any applicable law, rule or regulation, each of the  Partners and each other Person who may acquire an interest in Partnership Securities hereby (i)  approves, ratifies and confirms the execution, 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  agreements described in or filed as exhibits to the Registration Statement that are related to the  transactions contemplated by the Registration Statement; (ii) agrees that the General Partner (on  its own or through any officer of the Partnership) is authorized to execute, deliver and perform  the agreements referred to in clause (i) of this sentence and the other agreements, acts,  transactions and matters described in or contemplated by the Registration Statement on behalf of  the Partnership without any further act, approval or vote of the Partners or the other Persons who  may acquire an interest in Partnership Securities; and (iii) agrees that the execution, delivery or  performance by the General Partner, any Group Member or any Affiliate of any of them of this  Agreement or any agreement authorized or permitted under this Agreement (including the  exercise by the General Partner or any Affiliate of the General Partner of the rights accorded  pursuant to Article XV) shall not constitute a breach by the General Partner of any duty that the  General Partner may owe the Partnership or the Limited Partners or any other Persons under this  Agreement (or any other agreements) or of any duty stated or implied by law or equity.  Section 7.2 Certificate of Limited Partnership.  The General Partner caused the Certificate of Limited Partnership to be filed with the  Registrar of Corporations of the Marshall Islands as required by the Marshall Islands Act.  The  General Partner shall use all reasonable efforts to cause to be filed such other certificates or  documents that the General Partner determines to be necessary or appropriate for the formation,  continuation, qualification and operation of a limited partnership (or a partnership in which the  limited partners have limited liability) in the Marshall Islands or any other jurisdiction in which  the Partnership may elect to do business or own property.  To the extent the General Partner  determines such action to be necessary or appropriate, the General Partner shall file amendments  to and restatements of the Certificate of Limited Partnership and do all things to maintain the  Partnership as a limited partnership (or a partnership or other entity in which the limited partners  have limited liability) under the laws of the Marshall Islands or of any other jurisdiction in which  the Partnership may elect to do business or own property.  Subject to the terms of Section 3.4(a),  the General Partner shall not be required, before or after filing, to deliver or mail a copy of the  Certificate of Limited Partnership, any qualification document or any amendment thereto to any  Limited Partner.  Section 7.3 Restrictions on the General Partner’s Authority.  

 

  30  (a) Except as otherwise provided in this Agreement, the General Partner may not,  without written approval of the specific act by holders of all of the Outstanding Limited Partner  Interests or by other written instrument executed and delivered by holders of all of the  Outstanding Limited Partner Interests subsequent to the date of this Agreement, take any action  in contravention of this Agreement, including, (i) committing any act that would make it  impossible to carry on the ordinary business of the Partnership; (ii) possessing Partnership  property, or assigning any rights in specific Partnership property, for other than a Partnership  purpose; (iii) admitting a Person as a Partner; (iv) amending this Agreement in any manner; or  (v) transferring its interest as a general partner of the Partnership.  (b) Except as provided in Articles XII and XIV, the General Partner may not sell,  exchange or otherwise dispose of all or substantially all of the assets of the Partnership Group,  taken as a whole, in a single transaction or a series of related transactions (including by way of  merger, consolidation, other combination or sale of ownership interests of the Partnership’s  Subsidiaries) without the approval of holders of a Unit Majority; provided, however, that this  provision shall not preclude or limit the General Partner’s ability to mortgage, pledge,  hypothecate or grant a security interest in all or substantially all of the assets of the Partnership  Group and shall not apply to any forced sale of any or all of the assets of the Partnership Group  pursuant to the foreclosure of, or other realization upon, any such encumbrance.  Without the  approval of holders of a Unit Majority, the General Partner shall not, on behalf of the  Partnership, (i) consent to any amendment to the Operating Company Agreement or, except as  expressly permitted by Section 7.9(e), take any action permitted to be taken by a member of the  Operating Company, in either case, that would adversely affect the Limited Partners (including  any particular class of Partnership Interests as compared to any other class of Partnership  Interests) in any material respect or (ii) except as permitted under Sections 4.6, 11.1 and 11.2,  elect or cause the Partnership to elect a successor general partner of the Partnership.  Section 7.4 Reimbursement of the General Partner.  (a) Except as provided in this Section 7.4 and elsewhere in this Agreement, the  General Partner shall not be compensated for its services as a general partner or managing  member of any Group Member.  (b) The General Partner shall be reimbursed on a monthly basis, or such other basis  as the General Partner may determine, for (i) all direct and indirect expenses it incurs or  payments it makes on behalf of the Partnership (including salary, bonus, incentive compensation  and other amounts paid to any Person including Affiliates of the General Partner to perform  services for the Partnership or for the General Partner in the discharge of its duties to the  Partnership), and (ii) all other expenses allocable to the Partnership or otherwise incurred by the  General Partner in connection with operating the Partnership’s business (including expenses  allocated to the General Partner by its Affiliates).  The General Partner shall determine the  expenses that are allocable to the Partnership.  Reimbursements pursuant to this Section 7.4 shall  be in addition to any reimbursement to the General Partner as a result of indemnification  pursuant to Section 7.7.  (c) The General Partner, without the approval of the Limited Partners (who shall have  no right to vote in respect thereof), may propose and adopt on behalf of the Partnership employee  

 

  31  benefit plans, employee programs and employee practices (including plans, programs and  practices involving the issuance of Partnership Securities or options to purchase or rights,  warrants or appreciation rights relating to Partnership Securities), or cause the Partnership to  issue Partnership Securities in connection with, or pursuant to, any employee benefit plan,  employee program or employee practice maintained or sponsored by the General Partner or any  of its Affiliates, in each case for the benefit of employees of the General Partner, any Group  Member or any Affiliate, or any of them, in respect of services performed, directly or indirectly,  for the benefit of the Partnership Group.  The Partnership agrees to issue and sell to the General  Partner or any of its Affiliates any Partnership Securities that the General Partner or such  Affiliates are obligated to provide to any employees pursuant to any such employee benefit  plans, employee programs or employee practices.  Expenses incurred by the General Partner in  connection with any such plans, programs and practices (including the net cost to the General  Partner or such Affiliates of Partnership Securities purchased by the General Partner or such  Affiliates from the Partnership to fulfill options or awards under such plans, programs and  practices) shall be reimbursed in accordance with Section 7.4(b).  Any and all obligations of the  General Partner under any employee benefit plans, employee programs or employee practices  adopted by the General Partner as permitted by this Section 7.4(c) shall constitute obligations of  the General Partner hereunder and shall be assumed by any successor General Partner approved  pursuant to Section 11.1 or 11.2 or the transferee of or successor to all of the General Partner’s  General Partner Interest pursuant to Section 4.6.  Section 7.5 Outside Activities.  (a) After the Closing Date, the General Partner, for so long as it is the General  Partner of the Partnership (i) agrees that its sole business will be to act as a general partner or  managing member, as the case may be, of the Partnership and any other partnership or limited  liability company of which the Partnership or the Operating Company is, directly or indirectly, a  partner or member and to undertake activities that are ancillary or related thereto (including  being a limited partner in the Partnership), (ii) shall not engage in any business or activity or  incur any debts or liabilities except in connection with or incidental to (A) its performance as  general partner or managing member, if any, of one or more Group Members or as described in  or contemplated by the Registration Statement or (B) the acquiring, owning or disposing of debt  or equity securities in any Group Member and (iii) except to the extent permitted in the Omnibus  Agreement, shall not, and shall cause its controlled Affiliates not to, engage in any Offshore  Restricted Business or Crude Oil Restricted Business (as such terms are defined in the Omnibus  Agreement).  (b) Teekay Corporation and certain of its Affiliates have entered into the Omnibus  Agreement, which agreement sets forth certain restrictions on the ability of Teekay Corporation  and its Affiliates to engage in any LNG Restricted Businesses (as such term is defined in the  Omnibus Agreement).  (c) Except as specifically restricted by Section 7.5(a) or the Omnibus Agreement,  each Indemnitee (other than the General Partner) shall have the right to engage in businesses of  every type and description and other activities for profit and to engage in and possess an interest  in other business ventures of any and every type or description, whether in businesses engaged in  or anticipated to be engaged in by any Group Member, independently or with others, including  

 

  32  business interests and activities in direct competition with the business and activities of any  Group Member, and none of the same shall constitute a breach of this Agreement or any duty  expressed or implied by law to any Group Member or any Partner.  None of any Group Member,  any Limited Partner or any other Person shall have any rights by virtue of this Agreement, any  Group Member Agreement, or the partnership relationship established hereby in any business  ventures of any Indemnitee.  (d) Subject to the terms of Section 7.5(a), Section 7.5(b), Section 7.5(c) and the  Omnibus Agreement, but otherwise notwithstanding anything to the contrary in this Agreement,  (i) the engaging in competitive activities by any Indemnitees (other than the General Partner) in  accordance with the provisions of this Section 7.5 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 other obligation of  any type whatsoever of the General Partner or of any Indemnitee for the Indemnitees (other than  the General Partner) to engage in such business interests and activities in preference to or to the  exclusion of the Partnership and (iii) except as set forth in the Omnibus Agreement, the General  Partner and the Indemnitees shall have no obligation hereunder or as a result of any duty  expressed or implied by law to present business opportunities to the Partnership.  (e) The General Partner and each of its Affiliates may acquire Units or other  Partnership Securities in addition to those acquired on the Closing Date and, except as otherwise  provided in this Agreement, shall be entitled to exercise, at their option, all rights relating to all  Units or other Partnership Securities acquired by them.  (f) The term “Affiliates” when used in Section 7.5(a) and Section 7.5(e) with respect  to the General Partner shall not include any Group Member.  (g) Notwithstanding anything to the contrary in this Agreement, to the extent that any  provision of this Agreement purports or is interpreted to have the effect of restricting the  fiduciary duties that might otherwise, as a result of Marshall Islands law or other applicable law,  be owed by the General Partner to the Partnership and its Limited Partners, or to constitute a  waiver or consent by the Limited Partners to any such restriction, such provisions shall be  inapplicable and have no effect in determining whether the General Partner has complied with its  fiduciary duties in connection with determinations made by it under this Section 7.5.  Section 7.6 Loans from the General Partner; Loans or Contributions from the Partnership or  Group Members.  (a) The General Partner or any of its Affiliates may lend to any Group Member, and  any Group Member may borrow from the General Partner or any of its Affiliates, funds needed  or desired by the Group Member for such periods of time and in such amounts as the General  Partner may determine; provided, however, that in any such case the lending party may not  charge the borrowing party interest at a rate greater than the rate that would be charged the  borrowing party or impose terms less favorable to the borrowing party than would be charged or  imposed on the borrowing party by unrelated lenders on comparable loans made on an arm’s- length basis (without reference to the lending party’s financial abilities or guarantees), all as  determined by the General Partner.  The borrowing party shall reimburse the lending party for  any costs (other than any additional interest costs) incurred by the lending party in connection  

 

  33  with the borrowing of such funds.  For purposes of this Section 7.6(a) and Section 7.6(b), the  term “Group Member” shall include any Affiliate of a Group Member that is controlled by the  Group Member.  (b) The Partnership may lend or contribute to any Group Member, and any Group  Member may borrow from the Partnership, funds on terms and conditions determined by the  General Partner.  No Group Member may lend funds to the General Partner or any of its  Affiliates (other than another Group Member).  (c) No borrowing by any Group Member or the approval thereof by the General  Partner shall be deemed to constitute a breach of any duty, expressed or implied, of the General  Partner or its Affiliates to the Partnership or the Limited Partners by reason of the fact that the  purpose or effect of such borrowing is directly or indirectly to enable distributions to the General  Partner or its Affiliates (including in their capacities as Limited Partners) to exceed the General  Partner’s Percentage Interest of the total amount distributed to all partners.  Section 7.7 Indemnification.  (a) To the fullest extent permitted by law but subject to the limitations expressly  provided in this Agreement, all Indemnitees shall be indemnified and held harmless by the  Partnership from and against any and all losses, claims, damages, liabilities, joint or several,  expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or  other amounts arising from any and all claims, demands, actions, suits or proceedings, whether  civil, criminal, administrative or investigative, in which any Indemnitee may be involved, or is  threatened to be involved, as a party or otherwise, by reason of its status as an Indemnitee;  provided, that the Indemnitee shall not be indemnified and held harmless if there has been a final  and non-appealable judgment entered by a court of competent jurisdiction determining that, in  respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section  7.7, the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or gross negligence  or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was  unlawful; provided, further, no indemnification pursuant to this Section 7.7 shall be available to  the General Partner or its Affiliates (other than a Group Member) with respect to its or their  obligations incurred pursuant to the Underwriting Agreement, the Omnibus Agreement or the  Contribution Agreement (other than obligations incurred by the General Partner on behalf of the  Partnership).  Any indemnification pursuant to this Section 7.7 shall be made only out of the  assets of the Partnership, it being agreed that the General Partner shall not be personally liable  for such indemnification and shall have no obligation to contribute or loan any monies or  property to the Partnership to enable it to effectuate such indemnification.  (b) To the fullest extent permitted by law, expenses (including legal fees and  expenses) incurred by an Indemnitee who is indemnified pursuant to Section 7.7(a) in defending  any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the  Partnership prior to a determination that the Indemnitee is not entitled to be indemnified upon  receipt by the Partnership of any undertaking by or on behalf of the Indemnitee to repay such  amount if it shall be determined that the Indemnitee is not entitled to be indemnified as  authorized in this Section 7.7.  

 

  34  (c) The indemnification provided by this Section 7.7 shall be in addition to any other  rights to which an Indemnitee may be entitled under any agreement, pursuant to any vote of the  holders of Outstanding Limited Partner Interests, as a matter of law or otherwise, both as to  actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity  (including any capacity under the Underwriting Agreement), and shall continue as to an  Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs,  successors, assigns and administrators of the Indemnitee.  (d) The Partnership may purchase and maintain (or reimburse the General Partner or  its Affiliates for the cost of) insurance, on behalf of the General Partner, its Affiliates and such  other Persons as the General Partner shall determine, against any liability that may be asserted  against, or expense that may be incurred by, such Person in connection with the Partnership’s  activities or such Person’s activities on behalf of the Partnership, regardless of whether the  Partnership would have the power to indemnify such Person against such liability under the  provisions of this Agreement.  (e) For purposes of this Section 7.7, the Partnership shall be deemed to have  requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the  performance by it of its duties to the Partnership also imposes duties on, or otherwise involves  services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an  Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute  “fines” within the meaning of Section 7.7(a); and action taken or omitted by it with respect to  any employee benefit plan in the performance of its duties for a purpose reasonably believed by  it to be in the best interest of the participants and beneficiaries of the plan shall be deemed to be  for a purpose that is in the best interests of the Partnership.  (f) In no event may an Indemnitee subject the Limited Partners to personal liability  by reason of the indemnification provisions set forth in this Agreement.  (g) An Indemnitee shall not be denied indemnification in whole or in part under this  Section 7.7 because the Indemnitee had an interest in the transaction with respect to which the  indemnification applies if the transaction was otherwise permitted by the terms of this  Agreement.  (h) The provisions of this Section 7.7 are for the benefit of the Indemnitees, their  heirs, successors, assigns and administrators and shall not be deemed to create any rights for the  benefit of any other Persons.  (i) No amendment, modification or repeal of this Section 7.7 or any provision hereof  shall in any manner terminate, reduce or impair the right of any past, present or future  Indemnitee to be indemnified by the Partnership, nor the obligations of the Partnership to  indemnify any such Indemnitee under and in accordance with the provisions of this Section 7.7  as in effect immediately prior to such amendment, modification or repeal with respect to claims  arising from or relating to matters occurring, in whole or in part, prior to such amendment,  modification or repeal, regardless of when such claims may arise or be asserted.  Section 7.8 Liability of Indemnitees.  

 

  35  (a) Notwithstanding anything to the contrary set forth in this Agreement, no  Indemnitee shall be liable for monetary damages to the Partnership, the Limited Partners or any  other Persons who have acquired interests in the Partnership Securities, for losses sustained or  liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a  final and non-appealable judgment entered by a court of competent jurisdiction determining that,  in respect of the matter in question, the Indemnitee acted in bad faith or engaged in fraud, willful  misconduct or gross negligence or, in the case of a criminal matter, acted with knowledge that  the Indemnitee’s conduct was criminal.  (b) Subject to its obligations and duties as General Partner set forth in Section 7.1(a),  the General Partner may exercise any of the powers granted to it by this Agreement and perform  any of the duties imposed upon it hereunder either directly or by or through its agents, and the  General Partner shall not be responsible for any misconduct or negligence on the part of any such  agent appointed by the General Partner in good faith.  (c) To the extent that, at law or in equity, an Indemnitee has duties (including  fiduciary duties) and liabilities relating thereto to the Partnership or to the Partners, the General  Partner and any other Indemnitee acting in connection with the Partnership’s business or affairs  shall not be liable to the Partnership or to any Partner for its good faith reliance on the provisions  of this Agreement.  (d) Any amendment, modification or repeal of this Section 7.8 or any provision  hereof shall be prospective only and shall not in any way affect the limitations on the liability of  the Indemnitees under this Section 7.8 as in effect immediately prior to such amendment,  modification or repeal with respect to claims arising from or relating to matters occurring, in  whole or in part, prior to such amendment, modification or repeal, regardless of when such  claims may arise or be asserted.  Section 7.9 Resolution of Conflicts of Interest; Standards of Conduct and Modification of  Duties.  (a) Unless otherwise expressly provided in this Agreement or any Group Member  Agreement, whenever a potential conflict of interest exists or arises between the General Partner  or any of its Affiliates, on the one hand, and the Partnership, any Group Member or any Partner,  on the other, any resolution or course of action by the General Partner or its Affiliates in respect  of such conflict of interest shall be permitted and deemed approved by all Partners, and shall not  constitute a breach of this Agreement, of any Group Member Agreement, of any agreement  contemplated herein or therein, or of any duty stated or implied by law or equity, if the resolution  or course of action in respect of such conflict of interest is (i) approved by Special Approval, (ii)  approved by the vote of a majority of the Outstanding Common Units (excluding Common Units  owned by the General Partner and its Affiliates), (iii) on terms no less favorable to the  Partnership than those generally being provided to or available from unrelated third parties or  (iv) fair and reasonable to the Partnership, taking into account the totality of the relationships  between the parties involved (including other transactions that may be particularly favorable or  advantageous to the Partnership).  The General Partner shall be authorized but not required in  connection with its resolution of such conflict of interest to seek Special Approval of such  resolution, and the General Partner may also adopt a resolution or course of action that has not  

 

  36  received Special Approval.  If Special Approval is not sought and the Board of Directors of the  General Partner determines that the resolution or course of action taken with respect to a conflict  of interest satisfies either of the standards set forth in clauses (iii) or (iv) above, then it shall be  presumed that, in making its decision, the Board of Directors of the General Partner acted in  good faith, and in any proceeding brought by any Limited Partner or by or on behalf of such  Limited Partner or any other Limited Partner or the Partnership challenging such approval, the  Person bringing or prosecuting such proceeding shall have the burden of overcoming such  presumption.  Notwithstanding anything to the contrary in this Agreement, the existence of the  conflicts of interest described in the Registration Statement are hereby approved by all Partners.  (b) Whenever the General Partner makes a determination or takes or declines to take  any other action, or any of its Affiliates causes it to do so, in its capacity as the general partner of  the Partnership as opposed to in its individual capacity, whether under this Agreement, any  Group Member Agreement or any other agreement contemplated hereby or otherwise, then,  unless another express standard is provided for in this Agreement, the General Partner, or such  Affiliates causing it to do so, shall make such determination or take or decline to take such other  action in good faith and shall not be subject to any other or different standards imposed by this  Agreement, any Group Member Agreement, any other agreement contemplated hereby or under  the Marshall Islands Act or any other law, rule or regulation.  In order for a determination or  other action to be in “good faith” for purposes of this Agreement, the Person or Persons making  such determination or taking or declining to take such other action must reasonably believe that  the determination or other action is in the best interests of the Partnership, unless the context  otherwise requires.  (c) Whenever the General Partner makes a determination or takes or declines to take  any other action, or any of its Affiliates causes it to do so, in its individual capacity as opposed to  in its capacity as the general partner of the Partnership, whether under this Agreement, any  Group Member Agreement or any other agreement contemplated hereby or otherwise, then the  General Partner, or such Affiliates causing it to do so, are entitled to make such determination or  to take or decline to take such other action free of any fiduciary duty or obligation whatsoever to  the Partnership or any Limited Partner, and the General Partner, or such Affiliates causing it to  do so, shall not be required to act in good faith or pursuant to any other standard imposed by this  Agreement, any Group Member Agreement, any other agreement contemplated hereby or under  the Marshall Islands Act or any other law, rule or regulation.  By way of illustration and not 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 that the General Partner is acting in its individual  capacity.  (d) Notwithstanding anything to the contrary in this Agreement, the General Partner  and its Affiliates shall have no duty or obligation, express or implied, to (i) sell or otherwise  dispose of any asset 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 the General Partner and its Affiliates,  except as may be provided in contracts entered into from time to time specifically dealing with  such use.  Any determination by the General Partner or any of its Affiliates to enter into such  contracts shall be at its option.  

 

  37  (e) Except as expressly set forth in this Agreement, neither the General Partner nor  any other Indemnitee shall have any duties or liabilities, including fiduciary duties, to the  Partnership or any Limited Partner and the provisions of this Agreement, to the extent that they  restrict or otherwise modify the duties and liabilities, including fiduciary duties, of the General  Partner or any other Indemnitee otherwise existing at law or in equity, are agreed by the Partners  to replace such other duties and liabilities of the General Partner or such other Indemnitee.   Notwithstanding anything to the contrary, but subject to Section 7.9(c) and without reference to  the definition of “good faith” in Section 7.9(b), neither the General Partner nor any other  Indemnitee shall owe any fiduciary duties to Preferred Unit Holders other than a contractual duty  of good faith and fair dealing.  (f) The Unitholders hereby authorize the General Partner, on behalf of the  Partnership as a partner or member of a Group Member, to approve of actions by the general  partner or managing member of such Group Member similar to those actions permitted to be  taken by the General Partner pursuant to this Section 7.9.  Section 7.10 Other Matters Concerning the General Partner.  (a) The General Partner may rely and shall be protected in acting or refraining from  acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request,  consent, order, bond, debenture or other paper or document believed by it to be genuine and to  have been signed or presented by the proper party or parties.  (b) The General Partner may consult with legal counsel, accountants, appraisers,  management consultants, investment bankers and other consultants and advisers selected by it,  and any act taken or omitted to be taken in reliance upon the opinion (including an Opinion of  Counsel) of such Persons as to matters that the General Partner reasonably believes to be within  such Person’s professional or expert competence shall be conclusively presumed to have been  done or omitted in good faith and in accordance with such opinion.  (c) The General Partner shall have the right, in respect of any of its powers or  obligations hereunder, to act through any of its duly authorized officers, a duly appointed  attorney or attorneys-in-fact or the duly authorized officers of the Partnership.  Section 7.11 Purchase or Sale of Partnership Securities.  Subject to Section 16.6(g), the General Partner may cause the Partnership to purchase or  otherwise acquire Partnership Securities.  As long as Partnership Securities are held by any  Group Member, such Partnership Securities shall not be considered Outstanding for any purpose,  except as otherwise provided herein.  The General Partner or any Affiliate of the General Partner  may also purchase or otherwise acquire and sell or otherwise dispose of Partnership Securities  for its own account, subject to the provisions of Articles IV and X and Section 16.6(g).  Section 7.12 Registration Rights of the General Partner 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 an Affiliate of the General Partner at the date  hereof notwithstanding that it may later cease to be an Affiliate of the General Partner) or any of  

 

  38  their assignees holds Partnership Securities that it desires to sell and (ii) Rule 144 of the  Securities Act (or any successor rule or regulation to Rule 144) or another exemption from  registration is not available to enable such holder of Partnership Securities (the “Holder”) to  dispose of the number of Partnership Securities it desires to sell at the time it desires to do so  without registration under the Securities Act, then at the option and upon the request of the  Holder, the Partnership shall file with the Commission as promptly as practicable after receiving  such request, and use all reasonable efforts to cause to become effective and remain effective for  a period of not less than six months following its effective date or such shorter period as shall  terminate when all Partnership Securities covered by such registration statement have been sold,  a registration statement under the Securities Act registering the offering and sale of the number  of Partnership Securities specified by the Holder; provided, however, that the Partnership shall  not be required to effect more than three registrations pursuant to this Section 7.12(a); and  provided further, however, that if the Conflicts Committee determines that a postponement of the  requested registration for up to six months would be in the best interests of the Partnership and  its Partners due to a pending transaction, investigation or other event, the filing of such  registration statement or the effectiveness thereof may be deferred for up to six months, but not  thereafter.  In connection with any registration pursuant to the immediately preceding sentence,  the Partnership shall (i) promptly prepare and file (A) such documents as may be necessary to  register or qualify the securities subject to such registration under the securities laws of such  states as the Holder shall reasonably request; provided, however, that no such qualification shall  be required in any jurisdiction where, as a result thereof, the Partnership would become subject  to general service of process or to taxation or qualification to do business as a foreign  corporation or partnership doing business in such jurisdiction solely as a result of such  registration, and (B) such documents as may be necessary to apply for listing or to list the  Partnership Securities subject to such registration on such National Securities Exchange as the  Holder shall reasonably request, and (ii) do any and all other acts and things that may be  necessary or appropriate to enable the Holder to consummate a public sale of such Partnership  Securities in such states.  Except as set forth in Section 7.12(c), all costs and expenses of any  such registration and offering (other than the underwriting discounts and commissions) shall be  paid by the Partnership, without reimbursement by the Holder.  (b) If the Partnership shall at any time propose to file a registration statement under  the Securities Act for an offering of equity securities of the Partnership for cash (other than an  offering relating solely to an employee benefit plan), the Partnership shall use all reasonable  efforts to include such number or amount of securities held by the Holder in such registration  statement as the Holder shall request; provided, that the Partnership is not required to make any  effort or take any action to so include the securities of the Holder once the registration statement  is declared effective by the Commission, including any registration statement providing for the  offering from time to time of securities pursuant to Rule 415 of the Securities Act.  If the  proposed offering pursuant to this Section 7.12(b) shall be an underwritten offering, then, in the  event that the managing underwriter or managing underwriters of such offering advise the  Partnership and the Holder in writing that in their opinion the inclusion of all or some of the  Holder’s Partnership Securities would adversely and materially affect the success of the offering,  the Partnership shall include in such offering only that number or amount, if any, of securities  held by the Holder that, in the opinion of the managing underwriter or managing underwriters,  will not so adversely and materially affect the offering.  Except as set forth in Section 7.12(c), all  

 

  39  costs and expenses of any such registration and offering (other than the underwriting discounts  and commissions) shall be paid by the Partnership, without reimbursement by the Holder.  (c) If underwriters are engaged in connection with any registration referred to in this  Section 7.12, the Partnership shall provide indemnification, representations, covenants, opinions  and other assurance to the underwriters in form and substance reasonably satisfactory to such  underwriters.  Further, in addition to and not in limitation of the Partnership’s obligation under  Section 7.7, the Partnership shall, to the fullest extent permitted by law, indemnify and hold  harmless the Holder, its officers, directors and each Person who controls the Holder (within the  meaning of the Securities Act) and any agent thereof (collectively, “Indemnified Persons”)  against any losses, claims, demands, actions, causes of action, assessments, damages, liabilities  (joint or several), costs and expenses (including interest, penalties and reasonable attorneys’ fees  and disbursements), resulting to, imposed upon, or incurred by the Indemnified Persons, directly  or indirectly, under the Securities Act or otherwise (hereinafter referred to in this Section 7.12(c)  as a “claim” and in the plural as “claims”) based upon, arising out of or resulting from any untrue  statement or alleged untrue statement of any material fact contained in any registration statement  under which any Partnership Securities were registered under the Securities Act or any state  securities or Blue Sky laws, in any preliminary prospectus (if used prior to the effective date of  such registration statement), or in any summary or final prospectus or in any amendment or  supplement thereto (if used during the period the Partnership is required to keep the registration  statement current), or arising out of, based upon or resulting from the omission or alleged  omission to state therein a material fact required to be stated therein or necessary to make the  statements made therein not misleading; provided, however, that the Partnership shall not be  liable to any Indemnified Person to the extent that any such claim arises out of, is based upon or  results from an untrue statement or alleged untrue statement or omission or alleged omission  made in such registration statement, such preliminary, summary or final prospectus or such  amendment or supplement, in reliance upon and in conformity with written information  furnished to the Partnership by or on behalf of such Indemnified Person specifically for use in  the preparation thereof.  (d) The provisions of Section 7.12(a) and Section 7.12(b) shall continue to be  applicable with respect to the General Partner (and any of the General Partner’s Affiliates and  any of the General Partner’s or its Affiliates’ assignees) after it ceases to be a Partner of the  Partnership, during a period of two years subsequent to the effective date of such cessation and  for so long thereafter as is required for the Holder to sell all of the Partnership Securities with  respect to which it has requested during such two-year period inclusion in a registration  statement otherwise filed or that a registration statement be filed; provided, however, that the  Partnership shall not be required to file successive registration statements covering the same  Partnership Securities for which registration was demanded during such two-year period.  The  provisions of Section 7.12(c) shall continue in effect thereafter.  (e) Any request to register Partnership Securities pursuant to this Section 7.12 shall  (i) specify the Partnership Securities intended to be offered and sold by the Person making the  request, (ii) express such Person’s present intent to offer such Partnership Securities for  distribution, (iii) describe the nature or method of the proposed offer and sale of Partnership  Securities, and (iv) contain the undertaking of such Person to provide all such information and  

 

  40  materials and take all action as may be required in order to permit the Partnership to comply with  all applicable requirements in connection with the registration of such Partnership Securities.  Section 7.13 Reliance by Third Parties.  Notwithstanding anything to the contrary in this Agreement, any Person dealing with the  Partnership shall be entitled to assume that the General Partner and any officer of the General  Partner authorized by the General Partner to act on behalf of and in the name of the Partnership  has full power and authority to encumber, sell or otherwise use in any manner any and all assets  of the Partnership and to enter into any authorized contracts on behalf of the Partnership, and  such Person shall be entitled to deal with the General Partner or any such officer as if it were the  Partnership’s sole party in interest, both legally and beneficially.  Each Limited Partner hereby  waives any and all defenses or other remedies that may be available against such Person to  contest, negate or disaffirm any action of the General Partner or any such officer in connection  with any such dealing.  In no event shall any Person dealing with the General Partner or any such  officer or its representatives be obligated to ascertain that the terms of this Agreement have been  complied with or to inquire into the necessity or expedience of any act or action of the General  Partner or any such officer or its representatives.  Each and every certificate, document or other  instrument executed on behalf of the Partnership by the General Partner or its representatives  shall be conclusive evidence in favor of any and every Person relying thereon or claiming  thereunder that (a) at the time of the execution and delivery of such certificate, document or  instrument, this Agreement was in full force and effect, (b) the Person executing and delivering  such certificate, document or instrument was duly authorized and empowered to do so for and on  behalf of the Partnership and (c) such certificate, document or instrument was duly executed and  delivered in accordance with the terms and provisions of this Agreement and is binding upon the  Partnership.  ARTICLE VIII    BOOKS, RECORDS, ACCOUNTING AND REPORTS  Section 8.1 Records and Accounting.  The General Partner shall keep or cause to be kept at the principal office of the  Partnership appropriate books and records with respect to the Partnership’s business, including  all books and records necessary to provide to the Limited Partners any information required to be  provided pursuant to Section 3.4(a).  Any books and records maintained by or on behalf of the  Partnership in the regular course of its business, including the record of the Record Holders of  Units or other Partnership Securities, books of account and records of Partnership proceedings,  may be kept on, or be in the form of, computer disks, hard drives, punch cards, magnetic tape,  photographs, micrographics or any other information storage device; provided, that the books  and records so maintained are convertible into clearly legible written form within a reasonable  period of time.  The books of the Partnership shall be maintained, for financial reporting  purposes, on an accrual basis in accordance with U.S. GAAP.  Section 8.2 Fiscal Year.  

 

  41  The fiscal year of the Partnership shall be a fiscal year ending December 31.   Section 8.3 Reports.  (a) As soon as practicable, but in no event later than 120 days after the close of each  fiscal year of the Partnership, the General Partner shall cause to be mailed or made available to  each Record Holder of a Unit as of a date selected by the General Partner, an annual report  containing financial statements of the Partnership for such fiscal year of the Partnership,  presented in accordance with U.S. GAAP, including a balance sheet and statements of  operations, Partnership equity and cash flows, such statements to be audited by a firm of  independent public accountants selected by the General Partner.  (b) As soon as practicable, but in no event later than 90 days after the close of each  Quarter except the last Quarter of each fiscal year, the General Partner shall cause to be mailed  or made available to each Record Holder of a Unit, as of a date selected by the General Partner, a  report containing unaudited financial statements of the Partnership and such other information as  may be required by applicable law, regulation or rule of any National Securities Exchange on  which the Units are listed, or as the General Partner determines to be necessary or appropriate.  ARTICLE IX    TAX MATTERS  Section 9.1 Tax Returns and Information.  The Partnership shall timely file all returns of the Partnership that are required for  foreign, federal, state and local income tax purposes on the basis of the accrual method and a  taxable year ending on December 31.  The tax information reasonably required by Record  Holders for federal and state income tax reporting purposes with respect to a taxable year shall  be furnished to them within 90 days of the close of the calendar year in which the Partnership’s  taxable year ends.  Section 9.2 Tax Elections.  The General Partner is authorized to make the election on Form 8832 for the Partnership  to be classified as an association taxable as a corporation for U.S. federal income tax purposes  pursuant to Treasury Regulation Section 301.7701-3(c) effective on the Effective Date, and such  election has been made (the “Tax Election”).  Section 9.3 Tax Controversies.  Subject to the provisions hereof, the General Partner is designated as the “tax matters  partner” as defined in Section 6231 the Code as in effect prior to the Bipartisan Budget Act of  2015 for taxable years of the Partnership beginning before January 1, 2018 (the “Tax Matters  Partner”).  For taxable years of the Partnership beginning after December 31, 2017, and ending  on or prior to date immediately prior to the Effective Date, the General Partner shall, in its sole  discretion, designate a “partnership representative” as defined in Section 6223 of the Code (the  “Partnership Representative”).  The Tax Matters Partner and the Partnership Representative  

 

  42  shall exercise any and all authority of a “tax matters partner” or a “partnership representative,”  respectively, under the Code, including to represent the Partnership (at the Partnership’s  expense) in connection with all examinations of the Partnership’s affairs by tax authorities,  including resulting administrative and judicial proceedings, to bind the Partnership and its  Partners with respect to any applicable tax matters, to make any available elections and to  expend Partnership funds for professional services and costs associated therewith.  Each Partner  agrees to cooperate with the Tax Matters Partner and the Partnership Representative and to do or  refrain from doing any or all things reasonably required by the Tax Matters Partner and the  Partnership Representative to conduct such proceedings.  Section 9.4 Withholding.  Notwithstanding any other provision of this Agreement, the General Partner is authorized  to take any action that may be required to cause the Partnership and other Group Members to  comply with any withholding requirements established under the Code or any other federal, state  or local law including, without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of the  Code.  To the extent that the Partnership is required or elects to withhold and pay over to any  taxing authority any amount resulting from the allocation or distribution of income to any Partner  (including, without limitation, by reason of Section 1446 of the Code), the General Partner may  treat the amount withheld as a distribution of cash pursuant to Section 6.3 in the amount of such  withholding from such Partner.  Section 9.5 Conduct of Operations.  The General Partner shall use commercially reasonable efforts to conduct the business of  the Partnership and its Affiliates in a manner that does not require a holder of Common Units or  Preferred Units to file a tax return in any jurisdiction with which the holder has no contact other  than through ownership of Common Units or Preferred Units.  For greater certainty, the General  Partner shall conduct the affairs and governance of the Partnership so that the General Partner  and the Partnership are not residents of Canada for purposes of Canada’s tax legislation and  neither the General Partner nor the Partnership is carrying on business in Canada for purposes of  such legislation.  ARTICLE X    ADMISSION OF PARTNERS  Section 10.1 [Reserved].  Section 10.2 Admission of Additional Limited Partners.  (a) By acceptance of the transfer of any Limited Partner Interests in accordance with  Article IV or the acceptance of any Limited Partner Interests issued pursuant to Article V or  pursuant to a merger or consolidation pursuant to Article XIV, each transferee of, or other such  Person acquiring, a Limited Partner Interest (including any nominee holder or an agent or  representative acquiring such Limited Partner Interests for the account of another Person) (i)  shall be admitted to the Partnership as a Limited Partner with respect to the Limited Partner  Interests so transferred or issued to such Person when any such transfer, issuance or admission is  

 

  43  reflected in the books and records of the Partnership and such Limited Partner becomes the  Record Holder of the Limited Partner Interests so transferred, (ii) shall become bound by the  terms of this Agreement, (iii) represents that the transferee has the capacity, power and authority  to enter into this Agreement, (iv) grants the powers of attorney set forth in this Agreement and  (v) makes the consents and waivers contained in this Agreement, all with or without execution of  this Agreement by such Person.  The transfer of any Limited Partner Interests and the admission  of any new Limited Partner shall not constitute an amendment to this Agreement.  A Person may  become a Limited Partner or Record Holder of a Limited Partner Interest without the consent or  approval of any of the Partners.  A Person may not become a Limited Partner until such Person  acquires a Limited Partner Interest and such Person is reflected in the books and records of the  Partnership as the Record Holder of such Limited Partner Interest.  (b) The name and mailing address of each Limited Partner shall be listed on the  books and records of the Partnership maintained for such purpose by the Partnership or the  Transfer Agent.  The General Partner shall update the books and records of the Partnership from  time to time as necessary to reflect accurately the information therein (or shall cause the Transfer  Agent to do so, as applicable).  A Limited Partner Interest may be represented by a Certificate, as  provided in Section 4.1 hereof.  (c) Any transfer of a Limited Partner Interest shall not entitle the transferee to receive  distributions or to any other rights to which the transferor was entitled until the transferee  becomes a Limited Partner pursuant to Section 10.2(a).  Section 10.3 Admission of Successor General Partner.  A successor General Partner approved pursuant to Section 11.1 or 11.2 or the transferee  of or successor to all of the General Partner Interest pursuant to Section 4.6 who is proposed to  be admitted as a successor General Partner shall be admitted to the Partnership as the General  Partner, effective immediately prior to the withdrawal or removal of the predecessor or  transferring General Partner, pursuant to Section 11.1 or 11.2 or the transfer of the General  Partner Interest pursuant to Section 4.6, provided, however, that no such successor shall be  admitted to the Partnership until compliance with the terms of Section 4.6 has occurred and such  successor has executed and delivered such other documents or instruments as may be required to  effect such admission.  Any such successor shall, subject to the terms hereof, carry on the  business of the members of the Partnership Group without dissolution.  Section 10.4 Amendment of Agreement and Certificate of Limited Partnership.  To effect the admission to the Partnership of any Partner, the General Partner shall take  all steps necessary or appropriate under the Marshall Islands Act to amend the records of the  Partnership to reflect such admission and, if necessary, to prepare as soon as practicable an  amendment to this Agreement and, if required by law, the General Partner shall prepare and file  an amendment to the Certificate of Limited Partnership and the General Partner may for this  purpose, among others, exercise the power of attorney granted pursuant to Section 2.6.  

 

  44  ARTICLE XI    WITHDRAWAL OR REMOVAL OF PARTNERS  Section 11.1 Withdrawal of the General Partner.  (a) The General Partner shall be deemed to have withdrawn from the Partnership  upon the occurrence of any one of the following events (each such event herein referred to as an  “Event of Withdrawal”);  (i) The General Partner voluntarily withdraws from the Partnership by giving  written notice to the other Partners;  (ii) The General Partner transfers all of its rights as General Partner pursuant  to Section 4.6;  (iii) The General Partner is removed pursuant to Section 11.2;  (iv) The General Partner (A) makes a general assignment for the benefit of  creditors; (B) files a voluntary petition in bankruptcy; (C) files a petition or answer  seeking for itself a liquidation, dissolution or similar relief (but not a reorganization)  under any law; (D) files an answer or other pleading admitting or failing to contest the  material allegations of a petition filed against the General Partner in a proceeding of the  type described in clauses (A)-(B) of this Section 11.1(a)(iv); or (E) seeks, consents to or  acquiesces in the appointment of a trustee, receiver or liquidator of the General Partner or  of all or any substantial part of its properties;  (v) The General Partner is adjudged bankrupt or insolvent, or has entered  against him or her an order for relief in any bankruptcy or insolvency proceeding;  (vi)  (A) in the case of a general partner that is a corporation, the filing of a  certificate of dissolution, or its equivalent, for the corporation or the revocation of its  charter and the expiration of ninety (90) days after the date of notice to the corporation of  revocation without a reinstatement of its charter; (B) in the event the General Partner is a  partnership or a limited liability company, the dissolution and commencement of winding  up of the General Partner; (C) in the event the General Partner is acting in such capacity  by virtue of being a trustee of a trust, the termination of the trust; (D) in the event the  General Partner is a natural person, his death or adjudication of incompetency; and (E)  otherwise in the event of the termination of the General Partner.  If an Event of Withdrawal specified in Section 11.1(a)(iv), or Section 11.1(a)(vi)(A), (B), or (D)  occurs, the withdrawing General Partner shall give notice to the Limited Partners within 30 days  after such occurrence.  The Partners hereby agree that only the Events of Withdrawal described  in this Section 11.1 shall result in the withdrawal of the General Partner from the Partnership.  (b) Withdrawal of the General Partner from the Partnership upon the occurrence of an  Event of Withdrawal shall not constitute a breach of this Agreement under the following  circumstances: (i) the General Partner voluntarily withdraws by giving at least 90 days’ advance  

 

  45  notice to the Unitholders, such withdrawal to take effect on the date specified in such notice; or  (ii) at any time that the General Partner ceases to be the General Partner pursuant to Section  11.1(a)(ii) or is removed pursuant to Section 11.2.  The withdrawal of the General Partner from  the Partnership upon the occurrence of an Event of Withdrawal shall also constitute the  withdrawal of the General Partner as general partner or managing member, if any, to the extent  applicable, of the other Group Members.  If the General Partner gives a notice of withdrawal  pursuant to Section 11.1(a)(i), the holders of a Unit Majority, may, prior to the effective date of  such withdrawal, elect a successor General Partner.  The Person so elected as successor General  Partner shall automatically become the successor general partner or managing member, to the  extent applicable, of the other Group Members of which the General Partner is a general partner  or a managing member.  If, prior to the effective date of the General Partner’s withdrawal, a  successor is not selected by the Unitholders as provided herein the Partnership shall be dissolved  in accordance with Section 12.1.  Any successor General Partner elected in accordance with the  terms of this Section 11.1 shall be subject to the provisions of Section 10.3.  Section 11.2 Removal of the General Partner.  The General Partner may be removed if such removal is approved by the Unitholders  holding at least 66 2/3% of the Outstanding Units (including Units held by the General Partner  and its Affiliates voting as a single class).  Any such action by such holders for removal of the  General Partner must also provide for the election of a successor General Partner by the  Unitholders holding a Unit Majority (including Units held by the General Partner and its  Affiliates).  Such removal shall be effective immediately following the admission of a successor  General Partner pursuant to Section 10.3.  The removal of the General Partner shall also  automatically constitute the removal of the General Partner as general partner or managing  member, to the extent applicable, of the other Group Members of which the General Partner is a  general partner or a managing member.  If a Person is elected as a successor General Partner in  accordance with the terms of this Section 11.2, such Person shall, upon admission pursuant to  Section 10.3, automatically become a successor general partner or managing member, to the  extent applicable, of the other Group Members of which the General Partner is a general partner  or a managing member.  The right of the holders of Outstanding Units to remove the General  Partner shall not exist or be exercised unless the Partnership has received an Opinion of Counsel  that such removal (following the selection of the successor General Partner) would not result in  the loss of the limited liability of any Limited Partner or any Group Member.  Any successor  General Partner elected in accordance with the terms of this Section 11.2 shall be subject to the  provisions of Section 10.3.  Section 11.3 Interest of Departing Partner and Successor General Partner.  (a) In the event of (i) withdrawal of the General Partner under circumstances where  such withdrawal does not violate this Agreement or (ii) removal of the General Partner by the  holders of Outstanding Units under circumstances where Cause does not exist, if the successor  General Partner is elected in accordance with the terms of Section 11.1 or 11.2, the Departing  Partner shall have the option, exercisable prior to the effective date of the departure of such  Departing Partner, to require its successor to purchase its General Partner Interest and its general  partner interest (or equivalent interest), if any, in the other Group Members (collectively, the  “Combined Interest”) in exchange for an amount in cash equal to the fair market value of such  

 

  46  Combined Interest, such amount to be determined and payable as of the effective date of its  departure.  If the General Partner is removed by the Unitholders under circumstances where  Cause exists or if the General Partner withdraws under circumstances where such withdrawal  violates this Agreement, and if a successor General Partner is elected in accordance with the  terms of Section 11.1 or 11.2 (or if the business of the Partnership is continued pursuant to  Section 12.2 and the successor General Partner is not the former General Partner), such successor  shall have the option, exercisable prior to the effective date of the departure of such Departing  Partner (or, in the event the business of the Partnership is continued, prior to the date the  business of the Partnership is continued), to purchase the Combined Interest for such fair market  value of such Combined Interest of the Departing Partner.  In either event, the Departing Partner  shall be entitled to receive all reimbursements due such Departing Partner pursuant to Section  7.4, including any employee-related liabilities (including severance liabilities), incurred in  connection with the termination of any employees employed by the Departing Partner for the  benefit of the Partnership or the other Group Members.  For purposes of this Section 11.3(a), the fair market value of the Departing Partner’s  Combined Interest shall be determined by agreement between the Departing Partner and its  successor or, failing agreement within 30 days after the effective date of such Departing  Partner’s departure, by an independent investment banking firm or other independent expert  selected by the Departing Partner and its successor, which, in turn, may rely on other experts,  and the determination of which shall be conclusive as to such matter.  If such parties cannot  agree upon one independent investment banking firm or other independent expert within 45 days  after the effective date of such departure, then the Departing Partner shall designate an  independent investment banking firm or other independent expert, the Departing Partner’s  successor shall designate an independent investment banking firm or other independent expert,  and such firms or experts shall mutually select a third independent investment banking firm or  independent expert, which third independent investment banking firm or other independent  expert shall determine the fair market value of the Combined Interest of the Departing Partner.   In making its determination, such third independent investment banking firm or other  independent expert may consider the then current trading price of Units on any National  Securities Exchange on which Units are then listed, the value of the Partnership’s assets, the  rights and obligations of the Departing Partner and other factors it may deem relevant.  (b) If the Combined Interest is not purchased in the manner set forth in Section  11.3(a), the Departing Partner (or its transferee) shall become a Limited Partner and its  Combined Interest shall be converted into Common Units pursuant to a valuation made by an  investment banking firm or other independent expert selected pursuant to Section 11.3(a),  without reduction in such Partnership Interest (but subject to proportionate dilution by reason of  the admission of its successor).  Any successor General Partner shall indemnify the Departing  Partner (or its transferee) as to all debts and liabilities of the Partnership arising on or after the  date on which the Departing Partner (or its transferee) becomes a Limited Partner.  For purposes  of this Agreement, conversion of the Combined Interest of the Departing Partner to Common  Units will be characterized as if the Departing Partner (or its transferee) contributed its  Combined Interest to the Partnership in exchange for the newly issued Common Units.  (c) If a successor General Partner is elected in accordance with the terms of Section  11.1 or 11.2 (or if the business of the Partnership is continued pursuant to Section 12.2 and the  

 

  47  successor General Partner is not the former General Partner) and the option described in Section  11.3(a) is not exercised by the party entitled to do so, the successor General Partner shall, at the  effective date of its admission to the Partnership, contribute to the Partnership cash in the amount  equal to the product of (i) the quotient obtained by dividing (A) the Percentage Interest of the  General Partner Interest of the Departing Partner by (B) a percentage equal to 100% less the  Percentage Interest of the General Partner Interest of the Departing Partner and (ii) the Net  Agreed Value of the Partnership’s assets on such date. In such event, such successor General  Partner shall, subject to the following sentence, be entitled to its Percentage Interest of all  Partnership allocations and distributions to which the Departing Partner was entitled. In addition,  the successor General Partner shall cause this Agreement to be amended to reflect that, from and  after the date of such successor General Partner’s admission, the successor General Partner’s  interest in all Partnership distributions and allocations shall be equal to its Percentage Interest.  Section 11.4 Withdrawal of Limited Partners.  No Limited Partner shall have any right to withdraw from the Partnership; provided,  however, that when a transferee of a Limited Partner’s Limited Partner Interest becomes a  Record Holder of the Limited Partner Interest so transferred, such transferring Limited Partner  shall cease to be a Limited Partner with respect to the Limited Partner Interest so transferred.  ARTICLE XII    DISSOLUTION AND LIQUIDATION  Section 12.1 Dissolution.  The Partnership shall not be dissolved by the admission of additional Limited Partners or  by the admission of a successor General Partner in accordance with the terms of this Agreement.   Upon the removal or withdrawal of the General Partner, if a successor General Partner is elected  pursuant to Sections 11.1 or 11.2, the Partnership shall not be dissolved and such successor  General Partner shall continue the business of the Partnership.  The Partnership shall dissolve,  and (subject to Section 12.2) its affairs shall be wound up, upon:  (a) an election to dissolve the Partnership by the General Partner that is approved by  the holders of a Unit Majority;  (b) the sale of all or substantially all of the assets and properties of the Partnership  Group;  (c) the entry of a decree of judicial dissolution of the Partnership pursuant to the  provisions of the Marshall Islands Act; or  (d) an Event of Withdrawal of the General Partner as provided in Section 11.1(a)  (other than Section 11.1(a)(ii)), unless a successor is elected and, if applicable, an Opinion of  Counsel is received as provided in Section 11.2 and such successor is admitted to the Partnership  pursuant to Section 10.3.  Section 12.2 Continuation of the Business of the Partnership After Dissolution.  

 

  48  Upon (a) dissolution of the Partnership following an Event of Withdrawal caused by the  withdrawal or removal of the General Partner as provided in Sections 11.1(a)(i) or 11.1(a)(iii)  and the failure of the Partners to select a successor to such Departing Partner pursuant to  Sections 11.1 or 11.2, then within 90 days thereafter, or (b) dissolution of the Partnership upon  an event constituting an Event of Withdrawal as defined in Sections 11.1(a)(iv) or 11.1(a)(vi),  then, to the maximum extent permitted by law, within 180 days thereafter, the holders of a Unit  Majority may elect to continue the business of the Partnership on the same terms and conditions  set forth in this Agreement by appointing as a successor General Partner a Person approved by  the holders of a Unit Majority.  Unless such an election is made within the applicable time period  as set forth above, the Partnership shall conduct only activities necessary to wind up its affairs.   If such an election is so made, then:  (i) the Partnership shall continue without dissolution unless earlier dissolved  in accordance with this Article XII;  (ii) if the successor General Partner is not the former General Partner, then the  interest of the former General Partner shall be treated in the manner provided in Section  11.3; and  (iii) the successor General Partner shall be admitted to the Partnership as  General Partner, effective as of the Event of Withdrawal, by agreeing in writing to be  bound by this Agreement; provided, that the right of the holders of a Unit Majority to  approve a successor General Partner and to reconstitute and to continue the business of  the Partnership shall not exist and may not be exercised unless the Partnership has  received an Opinion of Counsel that the exercise of the right would not result in the loss  of limited liability of any Limited Partner.  Section 12.3 Liquidator.  Upon dissolution of the Partnership, unless the business of the Partnership is continued  pursuant to Section 12.2, the General Partner shall select one or more Persons to act as  Liquidator.  The Liquidator (if other than the General Partner) shall be entitled to receive such  compensation for its services as may be approved by holders of a Unit Majority.  The Liquidator  (if other than the General Partner) shall agree not to resign at any time without 15 days’ prior  notice and may be removed at any time, with or without cause, by notice of removal approved by  holders of a Unit Majority.  Upon dissolution, removal or resignation of the Liquidator, a  successor and substitute Liquidator (who shall have and succeed to all rights, powers and duties  of the original Liquidator) shall within 30 days thereafter be approved by holders of a Unit  Majority.  The right to approve a successor or substitute Liquidator in the manner provided  herein shall be deemed to refer also to any such successor or substitute Liquidator approved in  the manner herein provided.  Except as expressly provided in this Article XII, the Liquidator  approved in the manner provided herein shall have and may exercise, without further  authorization or consent of any of the parties hereto, all of the powers conferred upon the  General Partner under the terms of this Agreement (but subject to all of the applicable  limitations, contractual and otherwise, upon the exercise of such powers, other than the limitation  on sale set forth in Section 7.3(b)) necessary or appropriate to carry out the duties and functions  

 

  49  of the Liquidator hereunder for and during the period of time required to complete the winding  up and liquidation of the Partnership as provided for herein.  Section 12.4 Liquidation.  The Liquidator shall proceed to dispose of the assets of the Partnership, discharge its  liabilities, and otherwise wind up its affairs in such manner and over such period as determined  by the Liquidator, subject to Section 60 of the Marshall Islands Act and the following:  (a) The assets may be disposed of by public or private sale or by distribution in kind  to one or more Partners on such terms as the Liquidator and such Partner or Partners may agree.   If any property is distributed in kind, the Partner receiving the property shall be deemed for  purposes of Section 12.4(c) to have received cash equal to its fair market value; and  contemporaneously therewith, appropriate cash distributions must be made to the other Partners.   The Liquidator may defer liquidation or distribution of the Partnership’s assets for a reasonable  time if it determines that an immediate sale or distribution of all or some of the Partnership’s  assets would be impractical or would cause undue loss to the Partners.  The Liquidator may  distribute the Partnership’s assets, in whole or in part, in kind if it determines that a sale would  be impractical or would cause undue loss to the Partners.  (b) Liabilities of the Partnership include amounts owed to the Liquidator as  compensation for serving in such capacity (subject to the terms of Section 12.3) and amounts to  Partners otherwise than in respect of their distribution rights under Article VI and XVI, as  applicable.  With respect to any liability that is contingent, conditional or unmatured or is  otherwise not yet due and payable, the Liquidator shall either settle such claim for such amount  as it thinks appropriate or establish a reserve of cash or other assets to provide for its payment.   When paid, any unused portion of the reserve shall be distributed as additional liquidation  proceeds.  (c) All property and all cash in excess of that required to discharge liabilities as  provided in Section 12.4(b) shall be distributed to the Partners as follows:  (i) First, to the Preferred Unit Holders in accordance with their respective  Preferred Unit Liquidation Preference until there has been distributed in respect of each  Preferred Unit then Outstanding an amount equal to the respective Preferred Liquidation  Preference; and  (ii) Thereafter, any remaining amount (A) to the General Partner in  accordance with its Percentage Interest and (B) to all Unitholders holding Common  Units, Pro Rata, a percentage equal to 100% less the General Partner’s Percentage  Interest.  Section 12.5 Cancellation of Certificate of Limited Partnership.  Upon the completion of the distribution of Partnership cash and property as provided in  Section 12.4 in connection with the liquidation of the Partnership, the Certificate of Limited  Partnership and all qualifications of the Partnership as a foreign limited partnership in  

 

  50  jurisdictions other than the Marshall Islands shall be canceled and such other actions as may be  necessary to terminate the Partnership shall be taken.  Section 12.6 Return of Contributions.  The General Partner shall not be personally liable for, and shall have no obligation to  contribute or loan any monies or property to the Partnership to enable it to effectuate, the return  of the Capital Contributions of the Limited Partners or Unitholders, or any portion thereof, it  being expressly understood that any such return shall be made solely from Partnership assets.  Section 12.7 Waiver of Partition.  To the maximum extent permitted by law, each Partner hereby waives any right to  partition of the Partnership property.  ARTICLE XIII    AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE  Section 13.1 Amendments to be Adopted Solely by the General Partner.  Each Partner agrees that the General Partner, without the approval of any Partner, may  amend any provision of this Agreement and execute, swear to, acknowledge, deliver, file and  record whatever documents may be required in connection therewith, to reflect:  (a) a change in the name of the Partnership, the location of the principal place of  business of the Partnership, the registered agent of the Partnership or the registered office of the  Partnership;  (b) admission, substitution, withdrawal or removal of Partners in accordance with this  Agreement;  (c) a change that the General Partner determines to be necessary or appropriate to  qualify or continue the qualification of the Partnership as a limited partnership or a partnership in  which the Limited Partners have limited liability under the laws of the Marshall Islands or to  ensure that the Group Members will not be taxed as entities for Marshall Islands income tax  purposes;  (d) subject to Section 16.5, to the extent applicable, a change that the General Partner  determines, (i) does not adversely affect the Limited Partners (including any particular class or  series of Partnership Interests as compared to other classes or series of Partnership Interests) in  any material respect, (ii) to be necessary or appropriate to (A) satisfy any requirements,  conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any  Marshall Islands authority (including the Marshall Islands Act) or (B) facilitate the trading of the  Units (including the division of any class, classes or series of Outstanding Units into different  classes to facilitate uniformity of tax consequences within such classes or series of Units) or  comply with any rule, regulation, guideline or requirement of any National Securities Exchange  on which the Units are or will be listed, (iii) to be necessary or appropriate in connection with  

 

  51  action taken by the General Partner pursuant to Section 5.9 or (iv) is required to effect the intent  expressed in the Registration Statement or the intent of the provisions of this Agreement or is  otherwise contemplated by this Agreement;  (e) a change in the fiscal year or taxable year of the Partnership and any other  changes that the General Partner determines to be necessary or appropriate as a result of a change  in the fiscal year or taxable year of the Partnership including, if the General Partner shall so  determine, a change in the definition of “Quarter” and the dates on which distributions (other  than Preferred Unit Distributions) are to be made by the Partnership;  (f) an amendment that is necessary, in the Opinion of Counsel, to prevent the  Partnership, or the General Partner or its directors, officers, trustees or agents from in any  manner being subjected to the provisions of the U.S. Investment Company Act of 1940, as  amended, the U.S. Investment Advisers Act of 1940, as amended, or “plan asset” regulations  adopted under the U.S. Employee Retirement Income Security Act of 1974, as amended,  regardless of whether such are substantially similar to plan asset regulations currently applied or  proposed by the United States Department of Labor;  (g) subject to Section 16.5, an amendment that the General Partner determines to be  necessary or appropriate in connection with the authorization of issuance of any class or series of  Partnership Securities pursuant to Section 5.6;  (h) any amendment expressly permitted in this Agreement to be made by the General  Partner acting alone;  (i) an amendment that the General Partner determines to be necessary or appropriate  to reflect and account for the formation by the Partnership of, or investment by the Partnership  in, any corporation, partnership, joint venture, limited liability company or other entity, in  connection with the conduct by the Partnership of activities permitted by the terms of Section  2.4; or  (j) any other amendments substantially similar to the foregoing.    Section 13.2 Amendment Procedures.  Except as provided in Sections 13.1 and 13.3, all amendments to this Agreement shall be  made in accordance with the following requirements.  Amendments to this Agreement may be  proposed only by the General Partner; provided, however, that the General Partner shall have no  duty or obligation to propose any amendment to this Agreement and may decline to do so free of  any fiduciary duty or obligation whatsoever to the Partnership, any Limited Partner and, in  declining to propose an amendment, shall not be required to act in good faith or pursuant to any  other standard imposed by this Agreement, any Group Member Agreement, any other agreement  contemplated hereby or under the Marshall Islands Act or any other law, rule or regulation.   Subject to Section 16.5, to the extent applicable, a proposed amendment shall be effective upon  its approval by the General Partner and the holders of a Unit Majority, unless a greater or  different percentage is required under this Agreement or by the Marshall Islands Act.  Each  proposed amendment that requires the approval of the holders of a specified percentage of  Outstanding Units shall be set forth in a writing that contains the text of the proposed  

 

  52  amendment.  If such an amendment is proposed, the General Partner shall seek the written  approval of the requisite percentage of Outstanding Units or call a meeting of the Unitholders to  consider and vote on such proposed amendment.  The General Partner shall notify all Record  Holders upon final adoption of any such proposed amendments.  Section 13.3 Amendment Requirements.  (a) Notwithstanding the provisions of Sections 13.1 and 13.2, no provision of this  Agreement that establishes a percentage of Outstanding Units (including Units deemed owned by  the General Partner) required to take any action shall be amended, altered, changed, repealed or  rescinded in any respect that would have the effect of reducing such voting percentage unless  such amendment is approved by the written consent or the affirmative vote of holders of  Outstanding Units whose aggregate Outstanding Units constitute not less than the voting  requirement sought to be reduced.  (b) Notwithstanding the provisions of Sections 13.1 and 13.2, no amendment to this  Agreement may (i) enlarge the obligations of any Limited Partner without its consent, unless  such shall be deemed to have occurred as a result of an amendment approved pursuant to Section  13.3(c), (ii) enlarge the obligations of, restrict in any way 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 its Affiliates without its consent, which consent may be given or withheld at its option,  (iii) change Section 12.1(a), or (iv) change the term of the Partnership or, except as set forth in  Section 12.1(a), give any Person the right to dissolve the Partnership.  (c) Except as provided in Section 14.3 and subject to Section 16.5(c)(i) with respect  to the applicable series of Preferred Units described therein, and without limitation of the  General Partner’s authority to adopt amendments to this Agreement without the approval of any  Partners as contemplated in Section 13.1, any amendment that would have a material adverse  effect on the rights or preferences of any class or series of Partnership Interests in relation to  other classes or series of Partnership Interests must be approved by the holders of not less than a  majority of the Outstanding Partnership Interests of the class or series affected.  (d) Notwithstanding any other provision of this Agreement, except for amendments  pursuant to Section 13.1 and except as otherwise provided in Section 14.3(b), no amendments  shall become effective without the approval of the holders of at least 90% of the Outstanding  Units voting as a single class unless the Partnership obtains an Opinion of Counsel to the effect  that such amendment will not affect the limited liability of any Limited Partner under applicable  law.  (e) Except as provided in Section 13.1, this Section 13.3 shall only be amended with  the approval of the holders of at least 90% of the Outstanding Units.  Section 13.4 Special Meetings.  All acts of Limited Partners to be taken pursuant to this Agreement shall be taken in the  manner provided in this Article XIII.  Special meetings of the Limited Partners may be called by  the General Partner or by Limited Partners owning 20% or more of the Outstanding Units of the  class, classes or series for which a meeting is proposed.  Limited Partners shall call a special  

 

  53  meeting by delivering to the General Partner one or more requests in writing stating that the  signing Limited Partners wish to call a special meeting and indicating the general or specific  purposes for which the special meeting is to be called.  Within 60 days after receipt of such a call  from Limited Partners or within such greater time as may be reasonably necessary for the  Partnership to comply with any statutes, rules, regulations, listing agreements or similar  requirements governing the holding of a meeting or the solicitation of proxies for use at such a  meeting, the General Partner shall send a notice of the meeting to the Limited Partners either  directly or indirectly through the Transfer Agent.  A meeting shall be held at a time and place  determined by the General Partner on a date not less than 10 days nor more than 60 days after the  mailing of notice of the meeting.  Limited Partners shall not vote on matters that would cause the  Limited Partners to be deemed to be taking part in the management and control of the business  and affairs of the Partnership so as to jeopardize the Limited Partners’ limited liability under the  Marshall Islands Act or the law of any other jurisdiction in which the Partnership is qualified to  do business.  Section 13.5 Notice of a Meeting.  Notice of a meeting called pursuant to Section 13.4 shall be given to the Record Holders  of the class, classes or series of Units for which a meeting is proposed in writing by mail or other  means of written communication in accordance with Section 17.1.  The notice shall be deemed to  have been given at the time when deposited in the mail or sent by other means of written  communication.  Section 13.6 Record Date.  For purposes of determining the Limited Partners entitled to notice of or to vote at a  meeting of the Limited Partners or to give approvals without a meeting as provided in Section  13.11 the General Partner may set a Record Date, which shall not be less than 10 nor more than  60 days before (a) the date of the meeting (unless such requirement conflicts with any rule,  regulation, guideline or requirement of any National Securities Exchange on which the Units are  listed for trading, in which case the rule, regulation, guideline or requirement of such exchange  shall govern) or (b) in the event that approvals are sought without a meeting, the date by which  Limited Partners are requested in writing by the General Partner to give such approvals.  Section 13.7 Adjournment.  When a meeting is adjourned to another time or place, notice need not be given of the  adjourned meeting and a new Record Date need not be fixed, if the time and place thereof are  announced at the meeting at which the adjournment is taken, unless such adjournment shall be  for more than 45 days.  At the adjourned meeting, the Partnership may transact any business  which might have been transacted at the original meeting.  If the adjournment is for more than 45  days or if a new Record Date is fixed for the adjourned meeting, a notice of the adjourned  meeting shall be given in accordance with this Article XIII.  Section 13.8 Waiver of Notice; Approval of Meeting; Approval of Minutes.  The transactions of any meeting 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 regular call and  

 

  54  notice, if a quorum is present either in person or by proxy, and if, either before or after the  meeting, Limited Partners representing such quorum who were present in person or by proxy and  entitled to vote, sign a written waiver of notice or an approval of the holding of the meeting or an  approval of the minutes thereof.  All waivers and approvals shall be filed with the Partnership  records or made a part of the minutes of the meeting.  Attendance of a Limited Partner at a  meeting shall constitute a waiver of notice of the meeting, except when the Limited Partner  attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the  transaction of any business because the meeting is not lawfully called or convened; and except  that attendance at a meeting is not a waiver of any right to disapprove the consideration of  matters required to be included in the notice of the meeting, but not so included, if the  disapproval is expressly made at the meeting.  Section 13.9 Quorum and Voting.  The holders of a majority of the Units of the class, classes or series for which a meeting  has been called (including Outstanding Units deemed owned by the General Partner) represented  in person or by proxy shall constitute a quorum at a meeting of Limited Partners of such class,  classes or series unless any such action by the Limited Partners requires approval by holders of a  greater percentage of such Units, in which case the quorum shall be such greater percentage.  At  any meeting of the Limited Partners duly called and held in accordance with this Agreement at  which a quorum is present, the act of Limited Partners holding Outstanding Units that in the  aggregate represent a majority of the Outstanding Units entitled to vote and be present in person  or by proxy at such meeting shall be deemed to constitute the act of all Limited Partners, unless a  greater or different percentage is required with respect to such action under the provisions of this  Agreement, in which case the act of the Limited Partners holding Outstanding Units that in the  aggregate represent at least such greater or different percentage shall be required.  The Limited  Partners present at a duly called or held meeting at which a quorum is present may continue to  transact business until adjournment, notwithstanding the withdrawal of enough Limited Partners  to leave less than a quorum, if any action taken (other than adjournment) is approved by the  required percentage of Outstanding Units specified in this Agreement (including Outstanding  Units deemed owned by the General Partner).  In the absence of a quorum any meeting of  Limited Partners may be adjourned from time to time by the affirmative vote of holders of a  majority of the Outstanding Units entitled to vote at such 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 13.7.  Section 13.10 Conduct of a Meeting.  The General Partner shall have full power and authority concerning the manner of  conducting any meeting of the Limited Partners or solicitation of approvals in writing, including  the determination of Persons entitled to vote, the existence of a quorum, the satisfaction of the  requirements of Section 13.4, the conduct of voting, the validity and effect of any proxies and the  determination of any controversies, votes or challenges arising in connection with or during the  meeting or voting.  The General Partner shall designate a Person to serve as chairman of any  meeting and shall further designate a Person to take the minutes of any meeting.  All minutes  shall be kept with the records of the Partnership maintained by the General Partner.  The General  Partner may make such other regulations consistent with applicable law and this Agreement as it  

 

  55  may deem advisable concerning the conduct of any meeting of the Limited Partners or  solicitation of approvals in writing, including regulations in regard to the appointment of proxies,  the appointment and duties of inspectors of votes and approvals, the submission and examination  of proxies and other evidence 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, any action that may be taken at a meeting of the  Limited Partners may be taken without a meeting if an approval in writing setting forth the action  so taken is signed by Limited Partners owning not less than the minimum percentage of the  Outstanding Units (including Units deemed owned by the General Partner) that would be  necessary to authorize or take such action at a meeting at which all the Limited Partners were  present and voted (unless such provision conflicts with any rule, regulation, guideline or  requirement of any National Securities Exchange on which the Units are listed, in which case the  rule, regulation, guideline or requirement of such exchange shall govern).  Prompt notice of the  taking of action without a meeting shall be given to the Limited Partners who have not approved  in writing.  The General Partner may specify that any written ballot submitted to Limited  Partners for the purpose of taking any action without 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 does not vote all of the Units held by the Limited  Partners, the Partnership shall be deemed to have failed to receive a ballot for the Units that were  not voted.  If approval of the taking of any action by the Limited Partners is solicited by any  Person other than by or on behalf of the General Partner, the written approvals shall have no  force and effect unless and until (a) they are deposited with the Partnership in care of the General  Partner, (b) approvals sufficient to take the action proposed are dated as of a date not more than  90 days prior to the date sufficient approvals are deposited with the Partnership and (c) an  Opinion of Counsel is delivered to the General Partner to the effect that the exercise of such right  and the action proposed to be taken with respect to any particular matter (i) will not cause the  Limited Partners to be deemed to be taking part in the management and control of the business  and affairs of the Partnership so as to jeopardize the Limited Partners’ limited liability, and (ii) is  otherwise 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 the Units on the Record Date set pursuant to  Section 13.6 (and also subject to the limitations contained in the definition of “Outstanding”)  shall be entitled to notice of, and to vote at, a meeting of Limited Partners or to act with respect  to matters as to which the holders of the Outstanding Units have the right to vote or to act.  All  references 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 of the Record Holders of such  Outstanding Units.  (b) With respect to Units that are held for a Person’s account by another Person (such  as a broker, dealer, bank, trust company or clearing corporation, or an agent of any of the  foregoing), in whose name such Units are registered, such other Person shall, in exercising the  voting rights in respect of such Units on any matter, and unless the arrangement between such  

 

  56  Persons provides otherwise, vote such Units in favor of, and at the direction of, the Person who is  the beneficial owner, and the Partnership shall be entitled to assume it is so acting without  further inquiry.  The provisions of this Section 13.12(b) (as well as all other provisions of this  Agreement) are subject to the provisions of Section 4.3.  ARTICLE XIV    MERGER  Section 14.1 Authority.  The Partnership may merge or consolidate with or into one or more corporations, limited  liability companies, statutory trusts or associations, real estate investment trusts, common law  trusts or unincorporated businesses, including a partnership (whether general or limited  (including a limited liability partnership)), formed under the laws of the Marshall Islands,  pursuant to a written agreement of merger or consolidation (“Merger Agreement”) in accordance  with this Article XIV.  Section 14.2 Procedure for Merger or Consolidation.  Merger or consolidation of the Partnership pursuant to this Article XIV requires the prior  consent of the General Partner, provided, however, that, to the fullest extent permitted by law,  the General Partner shall have no duty or obligation to consent to any merger or consolidation of  the Partnership and may decline to do so free of any fiduciary duty or obligation whatsoever to  the Partnership or any Limited Partner and, in declining to consent to a merger or consolidation,  shall not be required to act in good faith or pursuant to any other standard imposed by this  Agreement, any Group Member Agreement, any other agreement contemplated hereby or under  the Marshall Islands Act or any other law, rule or regulation or at equity.  If the General Partner  shall determine to consent to the merger or consolidation, the General Partner shall approve the  Merger Agreement, which shall set forth:  (a) the names and jurisdictions of formation or organization of each of the business  entities proposing to merge or consolidate;  (b) the name and jurisdiction of formation or organization of the business entity that  is to survive the proposed merger or consolidation (the “Surviving Business Entity”);  (c) the terms and conditions of the proposed merger or consolidation;  (d) the manner and basis of exchanging or converting the equity securities of each  constituent business entity for, or into, cash, property or interests, rights, securities or obligations  of the Surviving Business Entity; and (i) if any general or limited partner interests, securities or  rights of any constituent business entity are not to be exchanged or converted solely for, or into,  cash, property or interests, rights, securities or obligations of the Surviving Business Entity, the  cash, property or general or limited partner interests, rights, securities or obligations of any  general or limited partnership, corporation, trust, limited liability company, unincorporated  business or other entity (other than the Surviving Business Entity) which the holders of such  interests, securities or rights are to receive in exchange for, or upon conversion of their interests,  

 

  57  securities or rights, and (ii) in the case of securities represented by certificates, upon the  surrender of such certificates, which cash, property or interests, rights, securities or obligations  of the Surviving Business Entity or any general or limited partnership, corporation, trust, limited  liability company, unincorporated business or other entity (other than the Surviving Business  Entity), or evidences thereof, are to be delivered;  (e) a statement of any changes in the constituent documents or the adoption of new  constituent documents (the articles or certificate of incorporation, articles of trust, declaration of  trust, certificate or agreement of limited partnership or other similar charter or governing  document) of the Surviving Business Entity to be effected by such merger or consolidation;  (f) the effective time of the merger, which may be the date of the filing of the  certificate of merger pursuant to Section 14.4 or a later date specified in or determinable in  accordance with the Merger Agreement (provided, that if the effective time of the merger is to be  later than the date of the filing of such certificate of merger, the effective time shall be fixed at a  date or time certain at or prior to the time of the filing of such certificate of merger and stated  therein); and  (g) such other provisions with respect to the proposed merger or consolidation that  the General Partner determines to be necessary or appropriate.  Section 14.3 Approval by Limited Partners of Merger or Consolidation.  (a) Except as provided in Sections 14.3(d) and 14.3(e), the General Partner, upon its  approval of the Merger Agreement, shall direct that the Merger Agreement be submitted to a  vote of Limited Partners, whether at a special meeting or by written consent, in either case in  accordance with the requirements of Article XIII.  A copy or a summary of the Merger  Agreement shall be included in or enclosed with the notice of a special meeting or the written  consent.  (b) Except as provided in Sections 14.3(d) and 14.3(e), the Merger Agreement shall  be approved upon receiving the affirmative vote or consent of the holders of a Unit Majority.  (c) Except as provided in Sections 14.3(d) and 14.3(e), after such approval by vote or  consent of the Limited Partners, and at any time prior to the filing of the certificate of merger  pursuant to Section 14.4, the merger or consolidation may be abandoned pursuant to provisions  therefor, if any, set forth in the Merger Agreement.  (d) Notwithstanding anything else contained in this Article XIV or in this Agreement,  the General Partner is permitted, without Limited Partner approval, to convert the Partnership or  any Group Member into a new limited liability entity, to merge the Partnership or any Group  Member into, or convey all of the Partnership’s assets to, another limited liability entity which  shall be newly formed and shall have no assets, liabilities or operations at the time of such  conversion, merger or conveyance other than those it receives from the Partnership or other  Group Member if (i) the General Partner has received an Opinion of Counsel that the conversion,  merger or conveyance, as the case may be, would not result in the loss of the limited liability of  any Limited Partner, (ii) the primary purpose of such conversion, merger or conveyance is to  effect a change in the legal form of the Partnership into another limited liability entity and (iii)  

 

  58  the governing instruments of the new entity provide the Limited Partners with substantially the  same or greater rights and no greater obligations as are herein contained.  (e) Additionally, notwithstanding anything else contained in this Article XIV or in  this Agreement, the General Partner is permitted, without Limited Partner approval, to merge or  consolidate the Partnership with or into another entity if (i) the General Partner has received an  Opinion of Counsel that the merger or consolidation, as the case may be, would not result in the  loss of the limited liability of any Limited Partner, (ii) the merger or consolidation would not  result in an amendment to the Partnership Agreement, other than any amendments that could be  adopted pursuant to Section 13.1, (iii) the Partnership is the Surviving Business Entity in such  merger or consolidation, (iv) each Unit outstanding immediately prior to the effective date of the  merger or consolidation is to be an identical Unit of the Partnership after the effective date of the  merger or consolidation, and (v) the number of Partnership Securities to be issued by the  Partnership in such merger or consolidation does not exceed 20% of the Partnership Securities  Outstanding immediately prior to the effective date of such merger or consolidation.  Section 14.4 Certificate of Merger.  Upon the required approval by the General Partner and the Unitholders of a Merger  Agreement, a certificate of merger shall be executed and filed in conformity with the  requirements of the Marshall Islands Act.  Section 14.5 Amendment of Partnership Agreement.  Pursuant to Section 20(2) of the Marshall Islands Act, an agreement of merger or  consolidation approved in accordance with Section 20(2) of the Marshall Islands Act may (a)  effect any amendment to this Agreement or (b) effect the adoption of a new partnership  agreement for a limited partnership if it is the Surviving Business Entity.  Any such amendment  or adoption made pursuant to this Section 14.5 shall be effective at the effective time or date of  the merger or consolidation.  Section 14.6 Effect of Merger.  (a) At the effective time of the certificate of merger:  (i) all of the rights, privileges and powers of each of the business entities that  has merged or consolidated, and all property, real, personal and mixed, and all debts due  to any of those business entities and all other things and causes of action belonging to  each of those business entities, shall be vested in the Surviving Business Entity and after  the merger or consolidation shall be the property of the Surviving Business Entity to the  extent they were of each constituent business entity;  (ii) the title to any real property vested by deed or otherwise in any of those  constituent business entities shall not revert and is not in any way impaired because of the  merger or consolidation;  (iii) all rights of creditors and all liens on or security interests in property of  any of those constituent business entities shall be preserved unimpaired; and  

 

  59  (iv) all debts, liabilities and duties of those constituent business entities shall  attach to the Surviving Business Entity and may be enforced against it to the same extent  as if the debts, liabilities and duties had been incurred or contracted by it.  (b) A merger or consolidation effected pursuant to this Article shall not be deemed to  result in a transfer or assignment of assets or liabilities from one entity to another.  ARTICLE XV    RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS  Section 15.1 Right to Acquire Limited Partner Interests.  (a) Notwithstanding any other provision of this Agreement, if at any time the General  Partner and its Affiliates hold more than 80% of the total Limited Partner Interests of any class  or series then Outstanding, the General Partner shall then have the right, which right it may  assign and transfer in whole or in part to the Partnership or any Affiliate of the General Partner,  exercisable at its option, to purchase all, but not less than all, of such Limited Partner Interests of  such class or series then Outstanding 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 days prior to the date  that the notice described in Section 15.1(b) is mailed and (y) the highest price paid by the  General Partner or any of its Affiliates for any such Limited Partner Interest of such class or  series purchased during the 90-day period preceding the date that the notice described in Section  15.1(b) is mailed.  Notwithstanding the foregoing, the repurchase right described in this Article  XV shall not apply to Preferred Units.  As used in this Agreement, (i) “Current Market Price” as  of any date of any class or series of Limited Partner Interests means the average of the daily  Closing Prices (as hereinafter defined) per Limited Partner Interest of such class or series for the  20 consecutive Trading Days (as hereinafter defined) immediately prior to such date; (ii)  “Closing Price” for any day means the last sale price on such day, regular way, or in case no  such sale takes place on such day, the average of the closing bid and asked prices on such day,  regular way, as reported in the principal consolidated transaction reporting system with respect to  securities listed on the principal National Securities Exchange (other than the Nasdaq Stock  Market) on which such Limited Partner Interests are listed or, if such Limited Partner Interests of  such class or series are not listed on any National Securities Exchange (other than the Nasdaq  Stock Market), the last quoted price on such day or, if not so quoted, the average of the high bid  and low asked prices on such day in the over-the-counter market, as reported by the Nasdaq  Stock Market or such other system then in use, or, if on any such day such Limited Partner  Interests of such class or series are not quoted by any such organization, the average of the  closing bid and asked prices on such day as furnished by a professional market maker making a  market in such Limited Partner Interests of such class or series selected by the General Partner,  or if on any such day no market maker is making a market in such Limited Partner Interests of  such class or series, the fair value of such Limited Partner Interests on such day as determined by  the General Partner; and (iii) “Trading Day” means a day on which the principal National  Securities Exchange on which such Limited Partner Interests of any class or series are listed is  open for the transaction of business or, if Limited Partner Interests of a class or series are not  listed on any National Securities Exchange, a day on which banking institutions in New York  City generally are open.  

 

  60  (b) If the General Partner, any Affiliate of the General Partner or the Partnership  elects to exercise the right to purchase Limited Partner Interests granted pursuant to Section  15.1(a), the General Partner shall deliver to the Transfer Agent notice of such election to  purchase (the “Notice of Election to Purchase”) and shall cause the Transfer Agent to mail a  copy of such Notice of Election to Purchase to the Record Holders of Limited Partner Interests of  such class or series (as of a Record Date selected by the General Partner) at least 10, but not  more than 60, days prior to the Purchase Date.  Such Notice of Election to Purchase shall also be  published for a period of at least three consecutive days in at least two daily newspapers of  general circulation printed in the English language and published in the Borough of Manhattan,  New York.  The Notice of Election to Purchase shall specify the Purchase Date and the price  (determined in accordance with Section 15.1(a)) at which Limited Partner Interests will be  purchased and state that the General Partner, its Affiliate or the Partnership, as the case may be,  elects to purchase such Limited Partner Interests, upon surrender of Certificates representing  such Limited Partner Interests in exchange for payment, at such office or offices of the Transfer  Agent as the Transfer Agent may specify, or as may be required by any National Securities  Exchange on which such Limited Partner Interests are listed.  Any such Notice of Election to  Purchase mailed to a Record Holder of Limited Partner Interests at his address as reflected in the  records of the Transfer Agent shall be conclusively presumed to have been given regardless of  whether the owner receives such notice.  On or prior to the Purchase Date, the General Partner,  its Affiliate or the Partnership, as the case may be, shall deposit with the Transfer Agent cash in  an amount sufficient to pay the aggregate purchase price of all of such Limited Partner Interests  to be purchased in accordance with this Section 15.1.  If the Notice of Election to Purchase shall  have been duly given as aforesaid at least 10 days prior to the Purchase Date, and if on or prior to  the Purchase Date the deposit described in the preceding sentence has been made for the benefit  of the holders of Limited Partner Interests subject to purchase as provided herein, then from and  after the Purchase Date, notwithstanding that any Certificate shall not have been surrendered for  purchase, all rights of the holders of such Limited Partner Interests (including any rights pursuant  to Articles IV, V, VI, and XII) shall thereupon cease, except the right to receive the purchase  price (determined in accordance with Section 15.1(a)) for Limited Partner Interests therefor,  without interest, upon surrender to the Transfer Agent of the Certificates representing such  Limited Partner Interests, and such Limited Partner Interests shall thereupon be deemed to be  transferred to 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 General Partner or any Affiliate  of the General Partner, or the Partnership, as the case may be, shall be deemed to be the owner of  all such Limited Partner Interests from and after the Purchase Date and shall have all rights as  the owner of such Limited Partner Interests (including all rights as owner of such Limited  Partner Interests pursuant to Articles IV, V, VI, and XII).  (c) At any time from and after the Purchase Date, a holder of an Outstanding Limited  Partner Interest subject to purchase as provided in this Section 15.1 may surrender his Certificate  evidencing such Limited Partner Interest to the Transfer Agent in exchange for payment of the  amount described in Section 15.1(a), without interest thereon.  ARTICLE XVI    PREFERRED UNITS  

 

  61  Section 16.1 Designation.  (a) On October 5, 2016, the General Partner designated and created a series of  Preferred Units designated as “9.00% Series A Cumulative Redeemable Perpetual Preferred  Units,” and fixed the preferences, rights, powers and duties of the holders of the Series A  Preferred Units as set forth in this Article XVI.  Each Series A Preferred Unit shall be identical  in all respects to every other Series A Preferred Unit, except as to the respective dates from  which the Series A Liquidation Preference shall increase or from which Series A Distributions  may begin accruing, to the extent such dates may differ.  The Series A Preferred Units represent  perpetual equity interests in the Partnership and shall not give rise to a claim by the holder for  redemption thereof at a particular date.  (b) The General Partner hereby designates and creates a series of Preferred Units to  be designated as “8.50% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual  Preferred Units,” and fixes the preferences, rights, powers and duties of the holders of the Series  B Preferred Units as set forth in this Article XVI.  Each Series B Preferred Unit shall be identical  in all respects to every other Series B Preferred Unit, except as to the respective dates from  which the Series B Liquidation Preference shall increase or from which Series B Distributions  may begin accruing, to the extent such dates may differ.  The Series B Preferred Units represent  perpetual equity interests in the Partnership and shall not give rise to a claim by the holder for  redemption thereof at a particular date.  Section 16.2 Units.  (a) The authorized number of Series A Preferred Units and of Series B Preferred  Units shall each be unlimited.  Series A Preferred Units or Series B Preferred Units that are  purchased or otherwise acquired by the Partnership shall be cancelled.  (b) The Series A Preferred Units and the Series B Preferred Units shall, as to each  such series of Preferred Units, be represented by a single Certificate registered in the name of the  Depository or its nominee, and no Series A Holder or Series B Holder shall be entitled to receive  a Certificate evidencing such Units, unless otherwise required by law or the Depository gives  notice of its intention to resign or is no longer eligible to act as such with respect to such series of  Preferred Units and the Partnership shall have not selected a substitute Depository within 60  calendar days thereafter.  So long as the Depository shall have been appointed and is serving  with respect to such series of Preferred Units, payments and communications made by the  Partnership to Series A Holders or Series B Holders shall be made by making payments to, and  communicating with, the Depository.  Section 16.3 Distributions.  (a) Distributions on each Series A Preferred Unit shall accumulate at the Series A  Distribution Rate in each Series A Distribution Period from and including the first day of the  Series A Distribution Period (or for any Series A Preferred Units issued after the Series A  Original Issue Date, from and including the first day of the Series A Distribution Period  immediately preceding the issuance date of such additional Series A Preferred Units) to and  including the earlier of (a) the last day of such Series A Distribution Period and (b) the date the  

 

  62  Partnership redeems the applicable Series A Preferred Units in full in accordance with Section  16.6 below, whether or not such Series A Distributions shall have been declared.  Distributions  on each Series B Preferred Unit shall accumulate at the applicable Series B Distribution Rate in  each Series B Distribution Period from and including the first day of the Series B Distribution  Period (or for any Series B Preferred Units issued after the Series B Original Issue Date, from  and including the first day of the Series B Distribution Period immediately preceding the  issuance date of such additional Series B Preferred Units) to and including the earlier of (x) the  last day of such Series B Distribution Period and (y) the date the Partnership redeems the  applicable Series B Preferred Units in full in accordance with Section 16.6 below, whether or  not such Series B Distributions shall have been declared.  Series A Holders and Series B  Holders shall be entitled to receive Series A Distributions or Series B Distributions, as  applicable, from time to time out of any assets of the Partnership legally available for the  payment of distributions at the Series A Distribution Rate per Series A Preferred Unit or at the  applicable Series B Distribution Rate per Series B Preferred Unit, as applicable, in each case  when, as, and if declared by the General Partner.  Distributions, to the extent declared by the  General Partner to be paid by the Partnership in accordance with this Section 16.3, shall be paid  for each Series A Distribution Period on each Series A Distribution Payment Date or for each  Series B Distribution Period on each Series B Distribution Payment Date.  Series A  Distributions shall be payable based on a 360-day year consisting of twelve 30-day months.   Series B Distributions for any Series B Distribution Period during the Series B Fixed Rate  Period shall be payable based on a 360-day year consisting of twelve 30-day months and Series  B Distributions for any Series B Distribution Period during the Series B Floating Rate Period  shall be payable based on a 360-day year and the number of days actually elapsed during such  Series B Distribution Period.  All Series A Distributions and Series B Distributions payable by  the Partnership pursuant to this Section 16.3 shall be payable without regard to income of the  Partnership.  The guaranteed payment with respect to any Series A Distribution Period shall be  for the account of the Series A Holders as of the close of the last Business Day of such Series A  Distribution Period.  (b) Not later than 5:00 p.m., New York City time, on each Series A Distribution  Payment Date and Series B Distribution Payment Date, the Partnership shall pay those Series A  Distributions or Series B Distributions, if any, that shall have been declared by the General  Partner to Series A Holders or Series B Holders, as applicable, on the Record Date for the  applicable Series A Preferred Distribution or Series B Preferred Distribution.  The Record Date  (the “Series A Distribution Record Date”) for any Series A Distribution payment shall be as of  the close of the National Securities Exchange on which the Series A Preferred Units are listed or  admitted to trading on the last Business Day of each Series A Distribution Period immediately  preceding the applicable Series A Distribution Payment Date, except that in the case of payments  of Series A Distributions in arrears, the Series A Distribution Record Date with respect to a  Series A Distribution Payment Date shall be such date as may be designated by the General  Partner in accordance with this Article XVI.  The Record Date (the “Series B Distribution  Record Date”) for any Series B Distribution payment shall be as of the close of the National  Securities Exchange on which the Series B Preferred Units are listed or admitted to trading on  the last Business Day of each Series B Distribution Period immediately preceding the applicable  Series B Distribution Payment Date, except that in the case of payments of Series B Distributions  in arrears, the Series B Distribution Record Date with respect to a Series B Distribution Payment  Date shall be such date as may be designated by the General Partner in accordance with this  

 

  63  Article XVI.  No distribution shall be declared or paid or set apart for payment on any Junior  Securities (other than a distribution payable solely in Junior Securities) unless full cumulative  Series A Distributions and Series B Distributions have been or contemporaneously are being  paid or provided for on all Outstanding Series A Preferred Units, Series B Preferred Units and  any other Parity Securities through the most recent respective Series A Distribution Payment  Dates and Series B Distribution Payment Dates.  Accumulated Series A Distributions or  accumulated Series B Distributions in arrears for any past Series A Distribution Period or Series  B Distribution Period, as applicable, may be declared by the General Partner and paid on any  date fixed by the General Partner, whether or not a Series A Distribution Payment Date or a  Series B Distribution Payment Date, to Series A Holders or Series B Holders, as applicable, on  the record date for such payment, which may not be more than 60 days, nor less than 15 days,  before such payment date.  Subject to the next succeeding sentence, if all accumulated Series A  Distributions and Series B Distributions in arrears on all Outstanding Series A Preferred Units,  Series B Preferred Units and any other Parity Securities shall not have been declared and paid, or  if sufficient funds for the payment thereof shall not have been set apart, payment of accumulated  distributions in arrears on the Series A Preferred Units, Series B Preferred Units and any such  Parity Securities shall be made in order of their respective distribution payment dates,  commencing with the earliest.  If less than all distributions payable with respect to all Series A  Preferred Units, Series B Preferred Units and any other Parity Securities are paid, any partial  payment shall be made pro rata with respect to the Series A Preferred Units, Series B Preferred  Units and any such other Parity Securities entitled to a distribution payment at such time in  proportion to the aggregate distribution amounts remaining due in respect of such Series A  Preferred Units, Series B Preferred Units and such other Parity Securities at such time.  Subject  to Sections 12.4 and 16.6, neither Series A Holders nor Series B Holders shall be entitled to any  distribution, whether payable in cash, property or stock, in excess of full cumulative Series A  Distributions or Series B Distributions, as applicable.  No interest or sum of money in lieu of  interest shall be payable in respect of any distribution payment which may be in arrears on the  Series A Preferred Units or Series B Preferred Units.  So long as the Series A Preferred Units or  Series B Preferred Units, as applicable, are held of record by the nominee of the Depository,  declared Series A Distributions or Series B Distributions shall be paid to the Depository in same- day funds on each Series A Distribution Payment Date or Series B Distribution Payment Date, as  applicable.  Section 16.4 [Reserved].   Section 16.5 Voting Rights.  (a) Notwithstanding anything to the contrary in this Agreement, neither the Series A  Preferred Units nor the Series B Preferred Units shall have any voting rights except as set forth  in Section 13.3(d), this Section 16.5 or as otherwise provided by the Marshall Islands Act.  (b) In the event that six quarterly Series A Distributions, whether consecutive or not,  are in arrears, the Series A Holders shall have the right, voting as a class together with holders  of any other Parity Securities upon which like voting rights have been conferred and are  exercisable, at a meeting of the General Partner called for such purpose within 30 days after  receipt by the General Partner of a request by Series A Holders holding a majority of the  Outstanding Series A Preferred Units, to elect one member of the Board of Directors of the  

 

  64  General Partner, and the size of the Board of Directors of the General Partner shall be increased  as needed to accommodate such change.  Such right of such Series A Holders to elect a member  of the Board of Directors of the General Partner shall continue until the Partnership pays in full,  or declares and sets aside funds for the payment of, all Series A Distributions accumulated and  in arrears on the Series A Preferred Units, at which time such right shall terminate, subject to the  revesting of such right in the event of each and every subsequent failure to pay six quarterly  Series A Distributions as described above in this Section 16.5(b).  In the event that six quarterly  Series B Distributions, whether consecutive or not, are in arrears, the Series B Holders shall  have the right, voting as a class together with holders of any other Parity Securities upon which  like voting rights have been conferred and are exercisable, at a meeting of the General Partner  called for such purpose within 30 days after receipt by the General Partner of a request by Series  B Holders holding a majority of the Outstanding Series B Preferred Units, to elect one member  of the Board of Directors of the General Partner, and the size of the Board of Directors of the  General Partner shall be increased as needed to accommodate such change.  Such right of such  Series B Holders to elect a member of the Board of Directors of the General Partner shall  continue until the Partnership pays in full, or declares and sets aside funds for the payment of,  all Series B Distributions accumulated and in arrears on the Series B Preferred Units, at which  time such right shall terminate, subject to the revesting of such right in the event of each and  every subsequent failure to pay six quarterly Series B Distributions as described above in this  Section 16.5(b).  Upon any termination of the right of the Series A Holders, the Series B  Holders and, if applicable, holders of any other Parity Securities to vote as a class for such  director, the term of office of the director then in office elected by such Series A Holders, Series  B Holders and holders voting as a class shall terminate immediately.  Any director elected by  the Series A Holders, the Series B Holders and, if applicable, holders of any other Parity  Securities shall be entitled to one vote on any matter before the Board of Directors of the  General Partner.  (c)   (i) Unless the General Partner shall have received the affirmative vote or  consent of the holders of at least 66 2/3% of the Outstanding Series A Preferred Units,  voting as a separate class, the General Partner shall not adopt any amendment to this  Agreement that would have a material adverse effect on the existing terms of the Series A  Preferred Units.  Unless the General Partner shall have received the affirmative vote or  consent of the holders of at least 66 2/3% of the Outstanding Series B Preferred Units,  voting as a separate class, the General Partner shall not adopt any amendment to this  Agreement that would have a material adverse effect on the existing terms of the Series B  Preferred Units.  (ii) Unless the General Partner shall have received the affirmative vote or  consent of the holders of at least 66 2/3% of the Outstanding Series A Preferred Units and  Series B Preferred Units, voting as a class together with holders of any other Parity  Securities upon which like voting rights have been conferred and are exercisable, the  Partnership shall not (x) issue any Parity Securities or Senior Securities if the cumulative  dividends payable on Outstanding Series A Preferred Units or Series B Preferred Units  are in arrears or (y) create or issue any Senior Securities.  

 

  65  (d) For any matter described in this Section 16.5 in which the Series A Holders or  Series B Holders are entitled to vote as a class (whether separately or together with the holders of  any Parity Securities), such Series A Holders or Series B Holders shall be entitled to one vote per  Series A Preferred Unit or Series B Preferred Unit, as applicable.  Any Series A Preferred Units  or Series B Preferred Units held by the Partnership or any of its subsidiaries or Affiliates shall  not be entitled to vote.  Section 16.6 Optional Redemption.  (a) The Partnership shall have the right at any time, and from time to time, on or after  October 5, 2021 to redeem the Series A Preferred Units, in whole or in part, from any source of  funds legally available for such purpose.  Any such redemption shall occur on a date set by the  General Partner (the “Series A Redemption Date”).  The Partnership shall have the right at any  time, and from time to time, on or after October 15, 2027 to redeem the Series B Preferred Units,  in whole or in part, from any source of funds legally available for such purpose.  Any such  redemption shall occur on a date set by the General Partner (the “Series B Redemption Date”).  (b) The Partnership shall effect any such redemption by paying cash for each Series  A Preferred Unit or Series B Preferred Unit, as applicable, to be redeemed equal to (i) the Series  A Liquidation Preference for such Series A Preferred Unit on such Series A Redemption Date  (the “Series A Redemption Price”) or (ii) the Series B Liquidation Preference for such Series B  Preferred Unit on such Series B Redemption Date (the “Series B Redemption Price”), as  applicable.  So long as the Series A Preferred Units or Series B Preferred Units to be redeemed  are held of record by the nominee of the Depository, the Series A Redemption Price or Series B  Redemption Price, as applicable, shall be paid by the Paying Agent to the Depository on the  Series A Redemption Date or the Series B Redemption Date, as applicable.  (c) The Partnership shall give notice of any redemption by mail, postage prepaid, not  less than 30 days and not more than 60 days before the scheduled Series A Redemption Date or  Series B Redemption Date, to the Series A Holders or Series B Holders, as applicable (as of 5:00  p.m. New York City time on the Business Day next preceding the day on which notice is given),  of any Series A Preferred Units or Series B Preferred Units to be redeemed as such Series A  Holders’ or Series B Holders’ names, as applicable, appear on the books of the Transfer Agent  and at the address of such Series A Holders or Series B Holders shown therein.  Such notice (the  “Series A Redemption Notice” or the “Series B Redemption Notice”, as applicable) shall state, as  applicable: (1) the Series A Redemption Date or Series B Redemption Date, (2) the number of  Series A Preferred Units or Series B Preferred Units to be redeemed and, if less than all  Outstanding Series A Preferred Units or Series B Preferred Units are to be redeemed, the number  (and the identification) of Series A Preferred Units or Series B Preferred Units to be redeemed  from such Series A Holder or Series B Holder, (3) the Series A Redemption Price or Series B  Redemption Price, (4) the place where the Series A Preferred Units or Series B Preferred Units  are to be redeemed and shall be presented and surrendered for payment of the Series A  Redemption Price or Series B Redemption Price therefor and (5) that distributions on the Series  A Preferred Units or Series B Preferred Units to be redeemed shall cease to accumulate from and  after such Series A Redemption Date or Series B Redemption Date.  

 

  66  (d) If the Partnership elects to redeem less than all of the Outstanding Series A  Preferred Units or Series B Preferred Units, as applicable, the number of Series A Preferred  Units or Series B Preferred Units to be redeemed shall be determined by the General Partner, and  such Series A Preferred Units or Series B Preferred Units shall be redeemed by such method of  selection as the Depository shall determine either Pro Rata or by lot, with adjustments to avoid  redemption of fractional Series A Preferred Units or Series B Preferred Units.  The aggregate  Series A Redemption Price or Series B Redemption Price for any such partial redemption of the  Outstanding Series A Preferred Units or Series B Preferred Units shall be allocated  correspondingly among the redeemed Series A Preferred Units or Series B Preferred Units, as  applicable.  The Series A Preferred Units or Series B Preferred Units not redeemed shall remain  Outstanding and entitled to all the rights and preferences provided in this Article XVI.  The  Partnership is permitted to redeem all or part of one series of Preferred Units without redeeming  all or part of any other series of Preferred Units.  (e) If the Partnership gives or causes to be given a Series A Redemption Notice or  Series B Redemption Notice, the Partnership shall deposit with the Paying Agent funds,  sufficient to redeem the Series A Preferred Units or Series B Preferred Units, as applicable, as  to which such Series A Redemption Notice or Series B Redemption Notice shall have been  given, no later than 5:00 p.m. New York City time on the Business Day immediately preceding  the Series A Redemption Date or Series B Redemption Date, and shall give the Paying Agent  irrevocable instructions and authority to pay the Series A Redemption Price to the Series A  Holders or the Series B Redemption Price to the Series B Holders to be redeemed upon  surrender or deemed surrender (which shall occur automatically if the Certificate representing  such Series A Preferred Units or Series B Preferred Unit, as applicable, is issued in the name of  the Depository or its nominee) of the certificates therefor as set forth in the Series A  Redemption Notice or Series B Redemption Notice.  If the Series A Redemption Notice or  Series B Redemption Notice shall have been given, from and after the Series A Redemption  Date or Series B Redemption Date, as applicable, unless the Partnership defaults in providing  funds sufficient for such redemption at the time and place specified for payment pursuant to the  Series A Redemption Notice or Series B Redemption Notice, all Series A Distributions on such  Series A Preferred Units to be redeemed or Series B Distributions on such Series B Preferred  Units to be redeemed shall cease to accumulate and all rights of holders of such Series A  Preferred Units or Series B Preferred Units as Limited Partners with respect to such Series A  Preferred Units or Series B Preferred Units to be redeemed shall cease, except the right to  receive the Series A Redemption Price or Series B Redemption Price, as applicable, and such  Series A Preferred Units or Series B Preferred Units shall not thereafter be transferred on the  books of the Transfer Agent or be deemed to be Outstanding for any purpose whatsoever.  The  Partnership shall be entitled to receive from the Paying Agent the interest income, if any,  earned on such funds deposited with the Paying Agent (to the extent that such interest income  is not required to pay the Series A Redemption Price of the Series A Preferred Units or the  Series B Redemption Price of the Series B Preferred Units, as applicable, to be redeemed), and  the holders of any Series A Preferred Units or Series B Preferred Units so redeemed shall have  no claim to any such interest income.  Any funds deposited with the Paying Agent hereunder  by the Partnership for any reason, including redemption of Series A Preferred Units or Series B  Preferred Units, that remain unclaimed or unpaid after two years after the applicable Series A  Redemption Date or Series B Redemption Date or other payment date, shall be, to the extent  permitted by law, repaid to the Partnership upon its written request, after which repayment the  

 

  67  Series A Holders or Series B Holders entitled to such redemption or other payment shall have  recourse only to the Partnership.  Notwithstanding any Series A Redemption Notice or Series B  Redemption Notice, there shall be no redemption of any Series A Preferred Units or Series B  Preferred Units, as applicable, called for redemption until funds sufficient to pay the full Series  A Redemption Price of such Series A Preferred Units or the full Series B Redemption Price of  such Series B Preferred Units shall have been deposited by the Partnership with the Paying  Agent.  (f) Any Series A Preferred Units or Series B Preferred Units that are redeemed or  otherwise acquired by the Partnership shall be canceled.  If only a portion of the Series A  Preferred Units or Series B Preferred Units represented by a Certificate shall have been called for  redemption, upon surrender of the Certificate to the Paying Agent (which shall occur  automatically if the Certificate representing such Series A Preferred Units or Series B Preferred  Units is registered in the name of the Depository or its nominee), the Paying Agent shall issue to  the Series A Holders or Series B Holders, as applicable, a new Certificate (or adjust the  applicable book-entry account) representing the number of Series A Preferred Units or Series B  Preferred Units represented by the surrendered Certificate that have not been called for  redemption.  (g) Notwithstanding anything to the contrary in this Article XVI, in the event that  full cumulative distributions on the Series A Preferred Units, Series B Preferred Units and any  other Parity Securities shall not have been paid or declared and set apart for payment, none of  the Partnership, the General Partner or any Affiliate of the General Partner shall be permitted  to repurchase, redeem or otherwise acquire, in whole or in part, any Series A Preferred Units,  Series B Preferred Units or other Parity Securities except pursuant to a purchase or exchange  offer made on the same terms to all Series A Holders, Series B Holders and holders of any  other Parity Securities.  None of the Partnership, the General Partner or any Affiliate of the  General Partner shall be permitted to redeem, repurchase or otherwise acquire any Common  Units or any other Junior Securities unless full cumulative distributions on the Series A  Preferred Units, Series B Preferred Units and any other Parity Securities for all prior and the  then-ending Series A Distribution Periods and Series B Distribution Periods shall have been  paid or declared and set apart for payment.  Section 16.7 Rank.  The Series A Preferred Units and Series B Preferred Units shall each be deemed to rank:  (a) Senior to (i) the Common Units and (ii) any other class or series of Partnership  Securities established after the Series A Original Issue Date by the General Partner, the terms of  which class or series do not expressly provide that it is made senior to or on parity with the  Series A Preferred Units or Series B Preferred Units as to current distributions (collectively  referred to with the Partnership’s Common Units as “Junior Securities”);  (b) On a parity with each other and with any other class or series of Partnership  Securities established after the Series A Original Issue Date by the General Partner, the terms of  which class or series are not expressly subordinated or senior to the Series A Preferred Units or  

 

  68  Series B Preferred Units as to current distributions (collectively referred to as “Parity  Securities”); and  (c) Junior to any class or series of Partnership Securities established after the Series  A Original Issue Date by the General Partner, the terms of which class or series expressly  provide that it ranks senior to the Series A Preferred Units or Series B Preferred Units as to  current distributions (collectively referred to as “Senior Securities”).  The Partnership may issue Junior Securities and, subject to any approvals required by  Series A Holders and Series B Holders pursuant to Section 16.5(c)(ii), Parity Securities from  time to time in one or more classes or series without the consent of the Series A Holders or  Series B Holders.  The General Partner has the authority to determine the preferences, powers,  qualifications, limitations, restrictions and special or relative rights or privileges, if any, of any  such class or series before the issuance of any Partnership Securities of such class or series.  Section 16.8 No Sinking Fund.  Neither the Series A Preferred Units nor the Series B Preferred Units shall have the  benefit of any sinking fund.   Section 16.9 Record Holders.  To the fullest extent permitted by applicable law, the General Partner, Partnership, the  Registrar, the Transfer Agent and the Paying Agent may deem and treat any Series A Holder and  Series B Holder as the true, lawful and absolute owner of the applicable Series A Preferred Units  or Series B Preferred Units, as applicable, for all purposes, and neither the General Partner, the  Partnership nor the Registrar, the Transfer Agent or the Paying Agent shall be affected by any  notice to the contrary.  Section 16.10 Notices.  All notices or communications in respect of the Series A Preferred Units or Series B  Preferred Units shall be sufficiently given if given in writing and delivered in person or by first  class mail, postage prepaid, or if given in such other manner as may be permitted in this Article  XVI, this Agreement or by applicable law.  Section 16.11 Other Rights; Fiduciary Duties.  Neither the Series A Preferred Units nor the Series B Preferred Units shall have any  voting powers, preferences or relative, participating, optional or other special rights, or  qualifications, limitations or restrictions thereof, other than as set forth in this Article XVI or as  provided by applicable law.  Notwithstanding anything to the contrary in this Agreement, but  subject to Section 7.9(c) and without reference to the definition of “good faith” in Section 7.9(b),  neither the General Partner nor any other Indemnitee shall owe any fiduciary duties to Series A  Holders or Series B Holders, other than a contractual duty of good faith and fair dealing.  

 

  69  ARTICLE XVII    GENERAL PROVISIONS  Section 17.1 Addresses and Notices.  Any notice, demand, request, report or proxy materials required or permitted to be given  or made to a Partner under this Agreement shall be in writing and shall be deemed given or made  when delivered in person or when sent by first class United States mail or by other means of  written communication to the Partner at the address described below.  Any notice, payment or  report to be given or made to a Partner hereunder shall be deemed conclusively to have been  given or made, and the obligation to give such notice or report or to make such payment shall be  deemed conclusively to have been fully satisfied, upon sending of such notice, payment or report  to the Record Holder of such Partnership Securities at his address as shown on the records of the  Transfer Agent or as otherwise shown on the records of the Partnership, regardless of any claim  of any Person who may have an interest in such Partnership Securities by reason of any  assignment or otherwise.  An affidavit or certificate of making of any notice, payment or report  in accordance with the provisions of this Section 17.1 executed by the General Partner, the  Transfer Agent or the mailing organization shall be prima facie evidence of the giving or making  of such notice, payment or report.  If any notice, payment or report addressed to a Record Holder  at the address of such Record Holder appearing on the books and records of the Transfer Agent  or the Partnership is returned by the United States Postal Service marked to indicate that the  United States Postal Service is unable to deliver it, such notice, payment or report and any  subsequent notices, payments and reports shall be deemed to have been duly given or made  without further mailing (until such time as such Record Holder or another Person notifies the  Transfer Agent or the Partnership of a change in his address) if they are available for the Partner  at the principal office of the Partnership for a period of one year from the date of the giving or  making of such notice, payment or report to the other Partners.  Any notice to the Partnership  shall be deemed given if received by the General Partner at the principal office of the Partnership  designated pursuant to Section 2.3.  The General Partner may rely and shall be protected in  relying on any notice or other document from a Partner or other Person if believed by it to be  genuine.  Section 17.2 Further Action.  The parties shall execute and deliver all documents, provide all information and take or  refrain from taking action as may be necessary or appropriate to achieve the purposes of this  Agreement.  Section 17.3 Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and  their heirs, executors, administrators, successors, legal representatives and permitted assigns.  Section 17.4 Integration.  

 

  70  This Agreement constitutes the entire agreement among the parties hereto pertaining to  the subject matter hereof and supersedes all prior agreements and understandings pertaining  thereto, including the Prior Agreement.  Section 17.5 Creditors.  None of the provisions of this Agreement shall be for the benefit of, or shall be  enforceable by, any creditor of the Partnership.   Section 17.6 Waiver.  No failure by any party to insist upon the strict performance of any covenant, duty,  agreement or condition of this Agreement or to exercise any right or remedy consequent upon a  breach thereof shall constitute waiver of any such breach of any other covenant, duty, agreement  or condition.  Section 17.7 Counterparts.  This Agreement may be executed in counterparts, all of which together shall constitute an  agreement binding on all the parties hereto, notwithstanding that all such parties are not  signatories to the original or the same counterpart.  Each party shall become bound by this  Agreement immediately upon affixing its signature hereto or, in the case of a Person acquiring a  Limited Partner Interest pursuant to Section 10.2(a), without execution hereof.  Section 17.8 Applicable Law.  This Agreement shall be construed in accordance with and governed by the laws of the  Marshall Islands, without regard to the principles of conflicts of law.  Section 17.9 Invalidity of Provisions.  If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any  respect, the validity, legality and enforceability of the remaining provisions contained herein  shall not be affected thereby.  Section 17.10 Consent of Partners.  Each Partner hereby expressly consents and agrees that, whenever in this Agreement it is  specified that an action may be taken upon the affirmative vote or consent of less than all of the  Partners, such action may be so taken upon the concurrence of less than all of the Partners and  each Partner shall be bound by the results of such action.  Section 17.11 Facsimile Signatures.  The use of facsimile signatures affixed in the name and on behalf of the transfer agent  and registrar of the Partnership on Certificates is expressly permitted by this Agreement.  [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]  

 

  71  IN WITNESS WHEREOF, the parties hereto have executed this Fifth Amended and  Restated Agreement of Limited Partnership as of the date first written above.  GENERAL PARTNER:  Teekay GP L.L.C.  By:         Name: Anne Liversedge  Title: Secretary  (Place of Execution:     )  LIMITED PARTNERS:  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.  Teekay GP L.L.C.  By:          Name: Anne Liversedge  Title: Secretary  (Place of Execution:     )  ACKNOWLEDGED AND AGREED FOR  PURPOSES OF SECTION 16.5(B):  Teekay Holdings Limited, as Sole Member of the  General Partner, to evidence its agreement to  modify the governing documents of the General  Partner at such time and in such manner as may be  required from time to time by Section 16.5(b)  By:    Name: Anne Liversedge   Title: President 

 

  A-72  EXHIBIT A   to the Fifth Amended and Restated   Agreement of Limited Partnership of   Teekay LNG Partners L.P.   Certificate Evidencing Common Units   Representing Limited Partner Interests in   Teekay LNG Partners L.P.  No._________ _________Common Units   In accordance with Section 4.1 of the Fifth Amended and Restated Agreement of Limited  Partnership of Teekay LNG Partners L.P., as amended, supplemented or restated from time to  time (the “Partnership Agreement”), Teekay LNG Partners L.P., a Marshall Islands limited  partnership (the “Partnership”), hereby certifies that  (the “Holder”) is the  registered owner of Common Units representing limited partner interests in the Partnership (the  “Common Units”) transferable on the books of the Partnership, in person or by duly authorized  attorney, upon surrender of this Certificate properly endorsed.  The rights, preferences and  limitations of the Common Units are set forth in, and this Certificate and the Common Units  represented hereby are issued and shall in all respects be subject to the terms and provisions of,  the Partnership Agreement.  Copies of the Partnership Agreement are on file at, and will be  furnished without charge on delivery of written request to the Partnership at, the principal office  of the Partnership located at 4th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton HM 08,  Bermuda.  Capitalized terms used herein but not defined shall have the meanings given them in  the Partnership Agreement.  The Holder, by accepting this Certificate, is deemed to have (i) requested admission as,  and agreed to become, a Limited Partner and to have agreed to comply with and be bound by and  to have executed the Partnership Agreement, (ii) represented and warranted that the Holder has  all right, power and authority and, if an individual, the capacity necessary to enter into the  Partnership Agreement, (iii) granted the powers of attorney provided for in the Partnership  Agreement and (iv) made the waivers and given the consents and approvals contained in the  Partnership Agreement.  This Certificate shall not be valid for any purpose unless it has been countersigned and  registered by the Transfer Agent and Registrar.  Dated:  ______________________________ Teekay LNG Partners L.P.     Countersigned and Registered by: By: Teekay GP L.L.C.,   its General Partner      as Transfer Agent and Registrar By:     Name:       By:   By:    Authorized Signature Secretary     

 

  A-73  [Reverse of Certificate]   ABBREVIATIONS  The following abbreviations, when used in the inscription on the face of this Certificate,  shall be construed as follows according to applicable laws or regulations:    TEN COM  — as tenants in common UNIF GIFT/TRANSFERS MIN ACT   ___________Custodian___________  TEN ENT — as tenants by the entireties (Cust)                                     (Minor)   under Uniform Gifts/Transfers to CD  JT TEN — as joint tenants with right of Minors Act (State)  survivorship and not as tenants in  common      Additional abbreviations, though not in the above list, may also be used.  ASSIGNMENT OF COMMON UNITS  in  TEEKAY LNG PARTNERS L.P.  FOR VALUE RECEIVED,                     hereby assigns, conveys, sells and transfers unto            (Please print or typewrite name (Please insert Social Security or other   and address of assignee) identifying number of assignee)    Common Units representing limited partner interests evidenced by this Certificate, subject to the  Partnership Agreement, and does hereby irrevocably constitute and appoint as its attorney-in-fact  with full power of substitution to transfer the same on the books of Teekay LNG Partners 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 ASSOCIATIONS   AND CREDIT UNIONS WITH   MEMBERSHIP IN AN   APPROVED SIGNATURE      (Signature)           (Signature)  

 

  A-74  GUARANTEE MEDALLION   PROGRAM), PURSUANT TO   S.E.C. RULE 17d-15    No transfer of the Common Units evidenced hereby will be registered on the books of the  Partnership, unless the Certificate evidencing the Common Units to be transferred is surrendered  for registration or transfer.  

 

  B-1  EXHIBIT B  to the Fifth Amended and Restated   Agreement of Limited Partnership of   Teekay LNG Partners L.P.  Certificate Evidencing Series A Cumulative   Redeemable Perpetual Preferred Units   Representing Limited Partner Interests in   Teekay LNG Partners L.P.  No._________ _________Series A Preferred Units   In accordance with Section 4.1 of the Fifth Amended and Restated Agreement of Limited  Partnership of Teekay LNG Partners L.P., as amended, supplemented or restated from time to  time (the “Partnership Agreement”), Teekay LNG Partners L.P., a Marshall Islands limited  partnership (the “Partnership”), hereby certifies that  (the “Holder”) is the  registered owner of 9.00% Series A Cumulative Redeemable Perpetual Preferred Units  representing limited partner interests in the Partnership (the “Series A Preferred Units”)  transferable on the books of the Partnership, in person or by duly authorized attorney, upon  surrender of this Certificate properly endorsed.  The rights, preferences and limitations of the  Series A Preferred Units are set forth in, and this Certificate and the Series A Preferred Units  represented hereby are issued and shall in all respects be subject to the terms and provisions of,  the Partnership Agreement.  Copies of the Partnership Agreement are on file at, and will be  furnished without charge on delivery of written request to the Partnership at, the principal office  of the Partnership located at 4th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton HM 08,  Bermuda.  Capitalized terms used herein but not defined shall have the meanings given them in  the Partnership Agreement.  The Holder, by accepting this Certificate, is deemed to have (i) requested admission as,  and agreed to become, a Limited Partner and to have agreed to comply with and be bound by and  to have executed the Partnership Agreement, (ii) represented and warranted that the Holder has  all right, power and authority and, if an individual, the capacity necessary to enter into the  Partnership Agreement, (iii) granted the powers of attorney provided for in the Partnership  Agreement and (iv) made the waivers and given the consents and approvals contained in the  Partnership Agreement.  This Certificate shall not be valid for any purpose unless it has been countersigned and  registered by the Transfer Agent and Registrar.  Dated:  ______________________________ Teekay LNG Partners L.P.     Countersigned and Registered by: By: Teekay GP L.L.C.,   its General Partner      as Transfer Agent and Registrar By:     Name:       By:   By:    Authorized Signature Secretary  

 

  B-2  [Reverse of Certificate]  ABBREVIATIONS  The following abbreviations, when used in the inscription on the face of this Certificate,  shall be construed as follows according to applicable laws or regulations:  TEN COM  — as tenants in common UNIF GIFT/TRANSFERS MIN ACT   ___________Custodian___________  TEN ENT — as tenants by the entireties (Cust)                                     (Minor)   under Uniform Gifts/Transfers to CD  JT TEN — as joint tenants with right of Minors Act (State)  survivorship and not as tenants in  common      Additional abbreviations, though not in the above list, may also be used.  ASSIGNMENT OF SERIES A PREFERRED UNITS  in  TEEKAY LNG PARTNERS L.P.  FOR VALUE RECEIVED,  hereby assigns, conveys, sells and transfers unto        (Please print or typewrite name (Please insert Social Security or other   and address of assignee) identifying number of assignee)    Series A Preferred Units representing limited partner interests evidenced by this  Certificate, subject to the Partnership Agreement, and does hereby irrevocably constitute and  appoint as its attorney-in-fact with full power of substitution to transfer the same on the books of  the Partnership.    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  ASSOCIATIONS AND CREDIT UNIONS  WITH MEMBERSHIP IN AN APPROVED  SIGNATURE GUARANTEE  MEDALLION PROGRAM), PURSUANT  TO S.E.C. RULE 17Ad-15  (Signature)          (Signature)  

 

  B-3  No transfer of the Series A Preferred Units evidenced hereby will be registered on the books of  the Partnership, unless the Certificate evidencing the Series A Preferred Units to be transferred is  surrendered for registration or transfer.  

 

  C-1  EXHIBIT C  to the Fifth Amended and Restated   Agreement of Limited Partnership of   Teekay LNG Partners L.P.  Certificate Evidencing Series B Fixed-to-Floating Rate Cumulative   Redeemable Perpetual Preferred Units   Representing Limited Partner Interests in   Teekay LNG Partners L.P.  No._________ _________Series B Preferred Units   In accordance with Section 4.1 of the Fifth Amended and Restated Agreement of Limited  Partnership of Teekay LNG Partners L.P., as amended, supplemented or restated from time to  time (the “Partnership Agreement”), Teekay LNG Partners L.P., a Marshall Islands limited  partnership (the “Partnership”), hereby certifies that  (the “Holder”) is the  registered owner of 8.50% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual  Preferred Units representing limited partner interests in the Partnership (the “Series B Preferred  Units”) transferable on the books of the Partnership, in person or by duly authorized attorney,  upon surrender of this Certificate properly endorsed.  The rights, preferences and limitations of  the Series B Preferred Units are set forth in, and this Certificate and the Series B Preferred Units  represented hereby are issued and shall in all respects be subject to the terms and provisions of,  the Partnership Agreement.  Copies of the Partnership Agreement are on file at, and will be  furnished without charge on delivery of written request to the Partnership at, the principal office  of the Partnership located at 4th Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton HM 08,  Bermuda.  Capitalized terms used herein but not defined shall have the meanings given them in  the Partnership Agreement.  The Holder, by accepting this Certificate, is deemed to have (i) requested admission as,  and agreed to become, a Limited Partner and to have agreed to comply with and be bound by and  to have executed the Partnership Agreement, (ii) represented and warranted that the Holder has  all right, power and authority and, if an individual, the capacity necessary to enter into the  Partnership Agreement, (iii) granted the powers of attorney provided for in the Partnership  Agreement and (iv) made the waivers and given the consents and approvals contained in the  Partnership Agreement.  This Certificate shall not be valid for any purpose unless it has been countersigned and  registered by the Transfer Agent and Registrar.    Dated:  ______________________________ Teekay LNG Partners L.P.     Countersigned and Registered by: By: Teekay GP L.L.C.,   its General Partner      as Transfer Agent and Registrar By:     Name:       By:   By:    Authorized Signature Secretary  

 

  C-2    [Reverse of Certificate]  ABBREVIATIONS  The following abbreviations, when used in the inscription on the face of this Certificate,  shall be construed as follows according to applicable laws or regulations:  TEN COM  — as tenants in common UNIF GIFT/TRANSFERS MIN ACT   ___________Custodian___________  TEN ENT —  as tenants by the entireties (Cust)                                     (Minor)   under Uniform Gifts/Transfers to CD  JT TEN — as joint tenants with right of Minors Act (State)  survivorship and not as tenants in  common      Additional abbreviations, though not in the above list, may also be used.  ASSIGNMENT OF SERIES B PREFERRED UNITS  in  TEEKAY LNG PARTNERS L.P.  FOR VALUE RECEIVED,  hereby assigns, conveys, sells and transfers unto        (Please print or typewrite name (Please insert Social Security or other   and address of assignee) identifying number of assignee)    Series B Preferred Units representing limited partner interests evidenced by this  Certificate, subject to the Partnership Agreement, and does hereby irrevocably constitute and  appoint as its attorney-in-fact with full power of substitution to transfer the same on the books of  the Partnership.    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  ASSOCIATIONS AND CREDIT UNIONS  (Signature)          

 

  C-3  WITH MEMBERSHIP IN AN APPROVED  SIGNATURE GUARANTEE  MEDALLION PROGRAM), PURSUANT  TO S.E.C. RULE 17Ad-15  (Signature)    No transfer of the Series B Preferred Units evidenced hereby will be registered on the books of  the Partnership, unless the Certificate evidencing the Series B Preferred Units to be transferred is  surrendered for registration or transfer.

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