UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported): November 6, 2002
MARTIN MIDSTREAM PARTNERS L.P.
(Exact name of Registrant as specified in its charter)
DELAWARE 000-50056 05-0527861 (State of incorporation (Commission file number) (I.R.S. employer identification number) or organization) 4200 STONE ROAD KILGORE, TEXAS 75662 (Address of principal executive offices) (Zip code) |
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (903) 983-6200
ITEM 5. OTHER EVENTS.
On November 6, 2002, Martin Midstream Partners L.P., a Delaware limited partnership (the "Partnership"), completed the sale by the Partnership of 2,900,000 common units representing limited partner interests in the Partnership (the "Units") in an underwritten public offering (the "Offering"). The Units sold in the Offering were registered under the Securities Act of 1933, as amended, pursuant to the Partnership's registration statement (the "Registration Statement") on Form S-1 (File No. 333-91706). In connection with the consummation of the Offering, the Partnership entered into each of the agreements attached as Exhibits to this Current Report on Form 8-K, which had previously been filed as non-executed forms to the Registration Statement. This Current Report on Form 8-K is being filed solely for the purpose of filing execution copies of such form agreements.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS
EXHIBIT NUMBER DESCRIPTION ------- ----------- 1.1 -- Underwriting Agreement dated October 31, 2002, by and among Martin Resource Management Corporation ("MRMC"), Martin Resource LLC ("Resource LLC"), Martin Midstream GP LLC (the "General Partner"), Martin Midstream Partners L.P. (the "Partnership"), Martin Operating Partnership L.P. (the "Operating Partnership"), Martin Operating GP LLC (the "Operating General Partner"), Martin Gas Marine LLC ("MGMLLC"), Martin Gas Sales LLC ("MGSLLC"), Martin L.P. Gas, Inc. ("MLP Gas"), CF Martin Sulphur Holding Corporation ("CFMSHC") and the underwriters named therein. 3.1 -- First Amended and Restated Agreement of Limited Partnership of Martin Midstream Partners L.P., dated November 6, 2002. 3.2 -- Amended and Restated Agreement of Limited Partnership of Martin Operating Partnership L.P., dated November 6, 2002. 10.1 -- Credit Agreement dated November 6, 2002, among the Operating Partnership, as borrower, the Partnership, Royal Bank of Canada, as administrative agent and collateral agent, Comerica Bank-Texas, as co-agent, and the lenders named therein. 10.2 -- Contribution, Conveyance and Assumption Agreement dated October 31, 2002, by and among MRMC, Resource LLC, the General Partner, the Partnership, the Operating Partnership, the Operating General Partner, MGMLLC, Martin Resources, Inc., MLP Gas, MGSLLC, Martin Transport, Inc. ("Transport"), CFMSHC and Midstream Fuel Service LLC ("MFSLLC"). 10.3 -- Omnibus Agreement dated November 1, 2002, by and among MRMC, the General Partner, the Partnership and the Operating Partnership. |
10.4 -- Motor Carrier Agreement dated November 1, 2002, by and between the Operating Partnership and Transport. 10.5 -- Terminal Services Agreement dated November 1, 2002, by and between the Operating Partnership and MGSLLC. 10.6 -- Throughput Agreement dated November 1, 2002, by and between MGSLLC and the Operating Partnership. 10.7 -- Contract for Marine Transportation dated November 1, 2002, by and between the Operating Partnership and MRMC. 10.8 -- Product Storage Agreement dated November 1, 2002, by and between Martin Underground Storage, Inc. and the Operating Partnership. 10.9 -- Marine Fuel Agreement dated November 1, 2002, by and between MFSLLC and the Operating Partnership. 10.10 -- Product Supply Agreement dated November 1, 2002, by and between MGSLLC and the Operating Partnership. 10.11 -- Martin Midstream Partners L.P. Long-Term Incentive Plan 10.12 -- Assignment and Assumption of Lease and Sublease dated November 1, 2002, by and between the Operating Partnership and MGSLLC. 10.13 -- Purchaser Use Easement, Ingress-Egress Easement, and Utility Facilities Easement dated November 1, 2002, by and between MGSLLC and the Operating Partnership. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
MARTIN MIDSTREAM PARTNERS L.P.
By: Martin Midstream GP LLC
Its: General Partner
Date: November 19, 2002 By: /s/ RUBEN S. MARTIN -------------------------------------- Ruben S. Martin, President and Chief Executive Officer |
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION ------ ----------- 1.1 -- Underwriting Agreement dated October 31, 2002, by and among Martin Resource Management Corporation ("MRMC"), Martin Resource LLC ("Resource LLC"), Martin Midstream GP LLC (the "General Partner"), Martin Midstream Partners L.P. (the "Partnership"), Martin Operating Partnership L.P. (the "Operating Partnership"), Martin Operating GP LLC (the "Operating General Partner"), Martin Gas Marine LLC ("MGMLLC"), Martin Gas Sales LLC ("MGSLLC"), Martin L.P. Gas, Inc. ("MLP Gas"), CF Martin Sulphur Holding Corporation ("CFMSHC") and the underwriters named therein. 3.1 -- First Amended and Restated Agreement of Limited Partnership of Martin Midstream Partners L.P., dated November 6, 2002. 3.2 -- Amended and Restated Agreement of Limited Partnership of Martin Operating Partnership L.P., dated November 6, 2002. 10.1 -- Credit Agreement dated November 6, 2002, among the Operating Partnership, as borrower, the Partnership, Royal Bank of Canada, as administrative agent and collateral agent, Comerica Bank-Texas, as co-agent, and the lenders named therein. 10.2 -- Contribution, Conveyance and Assumption Agreement dated October 31, 2002, by and among MRMC, Resource LLC, the General Partner, the Partnership, the Operating Partnership, the Operating General Partner, MGMLLC, Martin Resources, Inc., MLP Gas, MGSLLC, Martin Transport, Inc. ("Transport"), CFMSHC and Midstream Fuel Service LLC ("MFSLLC"). 10.3 -- Omnibus Agreement dated November 1, 2002, by and among MRMC, the General Partner, the Partnership and the Operating Partnership. 10.4 -- Motor Carrier Agreement dated November 1, 2002, by and between the Operating Partnership and Transport. 10.5 -- Terminal Services Agreement dated November 1, 2002, by and between the Operating Partnership and MGSLLC. 10.6 -- Throughput Agreement dated November 1, 2002, by and between MGSLLC and the Operating Partnership. 10.7 -- Contract for Marine Transportation dated November 1, 2002, by and between the Operating Partnership and MRMC. 10.8 -- Product Storage Agreement dated November 1, 2002, by and between Martin Underground Storage, Inc. and the Operating Partnership. 10.9 -- Marine Fuel Agreement dated November 1, 2002, by and between MFSLLC and the Operating Partnership. |
10.10 -- Product Supply Agreement dated November 1, 2002, by and between MGSLLC and the Operating Partnership. 10.11 -- Martin Midstream Partners L.P. Long-Term Incentive Plan 10.12 -- Assignment and Assumption of Lease and Sublease dated November 1, 2002, by and between the Operating Partnership and MGSLLC. 10.13 -- Purchaser Use Easement, Ingress-Egress Easement, and Utility Facilities Easement dated November 1, 2002, by and between MGSLLC and the Operating Partnership. |
EXHIBIT 1.1
MARTIN MIDSTREAM PARTNERS L.P.
2,900,000 COMMON UNITS*
REPRESENTING LIMITED PARTNER INTERESTS
UNDERWRITING AGREEMENT
St. Petersburg, Florida
October 31, 2002
Raymond James & Associates, Inc.
A. G. Edwards & Sons, Inc.
RBC Dain Rauscher Inc.
As Representatives of the Several Underwriters
listed on Schedule I hereto
c/o Raymond James & Associates, Inc.
880 Carillon Parkway
St. Petersburg, Florida 33716
Ladies and Gentlemen:
Martin Midstream Partners L.P., a Delaware limited partnership (the
"Partnership"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters"), an aggregate of 2,900,000 common units, each representing a
limited partner interest in the Partnership (the "Common Units"). The aggregate
of 2,900,000 Common Units to be purchased from the Partnership are called the
"Firm Units." In addition, the Partnership has agreed to sell to the
Underwriters, upon the terms and conditions stated herein, up to an additional
435,000 Common Units (the "Additional Units") to cover over-allotments by the
Underwriters, if any. The Firm Units and the Additional Units are collectively
referred to in this Agreement as the "Units." Raymond James & Associates, Inc.,
A.G. Edwards & Sons, Inc. and RBC Dain Rauscher Inc. are acting as the
representatives of the several Underwriters and in such capacity are referred to
in this Agreement as the "Representatives."
* Plus an additional 435,000 units subject to the Underwriters' over-allotment option.
(a) It is understood and agreed to by all parties that the Partnership was formed to acquire, own and operate, through Martin Operating Partnership L.P., a Delaware limited partnership (the "Operating Partnership"), certain of the assets and operations of the marine transportation, terminalling, LPG distribution and fertilizer business (the "MRMC Business") held by various subsidiaries of Martin Resource Management Corporation, a Texas corporation ("MRMC"), and, thereafter, to manage such assets and operations as more particularly described in the Prospectus (as defined herein). On the Closing Date (as hereinafter defined), the Operating Partnership will have entered into a Credit Agreement (the "MLP Credit Agreement") with RBC Capital Markets, Royal Bank of Canada and the lenders named therein (the "MLP Lenders") providing for borrowings of up to $60.0 million. On the Closing Date, MRMC will have entered into a Second Amended and Restated Credit Agreement (the "MRMC Credit Agreement") with JP MorganChase and the lenders named therein (the "MRMC Lenders"). For the purposes of this Agreement, the term "Permitted Liens" shall mean liens, encumbrances and/or security interests (i) granted by any of the Martin Parties (excluding the Partnership Entities) to the MRMC Lenders in relation to the MRMC Credit Agreement, (ii) granted by any Partnership Entity to the MLP Lenders in relation to the MLP Credit Agreement or (iii) granted by any of the Martin Parties pursuant to all of their existing secured debt.
(b) It is further understood and agreed by all parties hereto that prior to the date hereof:
(i) Martin Gas Sales, Inc., a Texas corporation ("MGSI"), converted under Texas law into Martin Gas Sales LLC, a Texas limited liability company ("MGS");
(ii) Martin Fuel Service, Inc., an Alabama corporation ("MFSI"), converted under Alabama law into Midstream Fuel Service LLC, an Alabama limited liability company ("Midstream"); and
(iii) Martin Gas Marine, Inc., a Texas corporation ("MGMI"), converted under Texas law into Martin Gas Marine LLC, a Texas limited liability company ("Marine").
(c) It is further understood and agreed by all parties that as of the date hereof:
(i) Martin Resource LLC, a Delaware limited liability company ("Martin LLC"), is a wholly-owned direct subsidiary of MRMC;
(ii) Martin Midstream GP LLC, a Delaware limited liability company (the "General Partner"), is a wholly-owned direct subsidiary of Martin LLC;
(iii) the General Partner is the sole general partner of the Partnership, having a 2% general partner interest in the Partnership;
(iv) Martin LLC is the sole limited partner of the Partnership, having a 98% limited partner interest in the Partnership;
(v) Martin Operating GP LLC, a Delaware limited liability company ("Operating GP"), is a wholly-owned direct subsidiary of Martin LLC;
(vi) Operating GP is the sole general partner of the Operating Partnership, having a 0.1% general partner interest in the Operating Partnership;
(vii) Martin LLC is the sole limited partner of the Operating Partnership, having a 99.9% limited partner interest in the Operating Partnership;
(viii) each of Martin Resources, Inc., a Texas corporation ("Resources"), Martin Transport, Inc., a Texas corporation ("MTI"), MGS, Midstream and Marine is a wholly-owned direct subsidiary of MRMC;
(ix) Martin L.P. Gas, Inc., a Texas corporation ("MLP Gas"), is a wholly-owned indirect subsidiary of MRMC and a wholly-owned direct subsidiary of MGS;
(x) CF Martin Sulphur Holding Corporation, a Nevada corporation ("CFMSHC"), is a wholly-owned indirect subsidiary of MRMC and its direct shareholders (and ownership percentages) are MGMI (50.06%), MGSI (49.21%) and MTI (0.73%);
(xi) MRMC indirectly owns 50% of the membership interests of CF Martin Sulphur L.L.C., a Delaware limited liability company ("CFMSLLC"), and the direct members of CFMSLLC (and their ownership percentages) are Marine (25.05%), MTI (.35%) and MGSI (24.6%);
(xii) CF Industries Inc., a Delaware corporation ("CFI"), directly owns 50% of the membership interests of CFMSLLC;
(xiii) CFMSLLC is the sole general partner of CF Martin Sulphur, L.P., a Delaware limited partnership ("CFMSLP"), having a 1% general partner interest in CFMSLP; and
(xiv) each of CFMSHC and CFI hold a 49.5% limited partner interest in CFMSLP.
(d) Prior to or concurrently with the Closing (as defined herein), the following transactions will occur:
(i) MRMC will contribute to Martin LLC, as a capital contribution, (i) all of the outstanding membership interest in Marine and (ii) all of the outstanding common stock of Resources;
(ii) Martin LLC will contribute to the Operating Partnership, in exchange for a limited partner interest in the Operating Partnership, (i) all of the outstanding membership interest in Marine LLC and (ii) all of the outstanding common stock of Resources;
(iii) MGS will contribute to the Operating Partnership all of the outstanding capital stock of Martin L.P. Gas, Inc., a Texas corporation ("MLP Gas") and a wholly-owned subsidiary of MGS, in exchange for a limited partner interest in the Operating Partnership;
(iv) Resources will merge with and into the Operating Partnership with the Operating Partnership being the surviving entity;
(v) MLP Gas will merge with and into the Operating Partnership with the Operating Partnership being the surviving entity;
(vi) MGS will contribute to the Operating Partnership the LPG Assets (as defined in the Contribution, Conveyance and Assumption Agreement, dated as of the date hereof, among MRMC, the General Partner, the Partnership, Operating GP, the Operating Partnership, Marine, Resources, MLP Gas, MGS, Martin LLC, CFMSHC and Midstream (the "Contribution Agreement") in exchange for a limited partner interest in the Operating Partnership;
(vii) Midstream will contribute the Tenn-Tom Towing Assets (as defined in the Contribution Agreement) to the Operating Partnership in exchange for a limited partner interest in the Operating Partnership;
(viii) Marine will distribute to the Operating Partnership (i) its 25.05% membership interest in CFMSLLC and (ii) the Marine Retained Assets (as defined in the Contribution Agreement);
(ix) Operating Partnership will distribute to Martin LLC the Retained Assets (as defined in the Contribution Agreement);
(x) MTI will sell 7.3 shares of common stock of CFMSHC owned by MTI to MGS in exchange for 40 shares of common stock of MRMC;
(xi) CFMSHC will liquidate and dissolve and in such liquidation and dissolution distribute its assets, including its 49.5% interest in CFMSLP, on a pro-rata basis to its shareholders Marine and MGS, and MGS will immediately contribute its distributed interest to the Operating Partnership in exchange for a limited partner interest in the Operating Partnership;
(xii) MGS will contribute its limited partner interest in the Operating Partnership to the Partnership in exchange for subordinated units of the Partnership ("Subordinated Units");
(xiii) Midstream will contribute its limited partner interest in the Operating Partnership to the Partnership in exchange for Subordinated Units;
(xiv) Martin LLC will contribute a portion of its limited partner interest in the Operating Partnership to the General Partner as a capital contribution;
(xv) Martin LLC will contribute (i) its remaining limited partner interest in the Operating Partnership and (ii) all of its membership interest in the Operating GP to the Partnership in exchange for Subordinated Units;
(xvi) the General Partner will contribute the limited partner interest in the Operating Partnership that it received from Martin LLC to the Partnership in exchange for (i) a continuation of its 2% general partner interest in the Partnership and (ii) the issuance of incentive distribution rights ("Incentive Distribution Rights") under the partnership agreement of the Partnership (the "Partnership Agreement");
(xvii) CFMSHC, CFI and CFMSLLC will enter into an amendment to the Agreement of Limited Partnership of CFMSLP (the "CFMSLP Amendment");
(xviii) the Operating Partnership will borrow $37,200,000 under the MLP Credit Agreement;
(xix) the limited partner interest in the Partnership owned by Martin LLC will be redeemed for $980; and
(xx) the public offering of the Firm Units contemplated hereby will be consummated.
Promptly after the Closing, Marine will merge with and into the
Operating Partnership with the Operating Partnership being the surviving entity.
The transactions described in the immediately preceding paragraph (d) are
referred to as the "Transactions." In connection with the Transactions, the
parties to the Transactions entered into various bills of sale, deeds, leases,
assignments, conveyances, contribution agreements and related documents
(collectively, the "Conveyances"). The mergers described in clauses (iv) and (v)
of paragraph (d) above are referred to herein as the "Mergers." In connection
with the consummation of the Mergers, the parties to these Transactions entered
into, as applicable, merger agreements and certificates and articles of merger
(the "Merger Documents"). The conversions described in clauses (i) through (iii)
of paragraph (b) above are referred to herein as the "Conversions." In
connection with the consummation of the Conversions, the parties to those
Transactions entered into, as applicable, conversion agreements and certificates
and articles of conversion (the "Conversion Documents"). The Conveyances, Merger
Documents and Conversion Documents are collectively referred to herein as the
"Transaction Documents."
The General Partner, the Partnership, Operating GP and the Operating Partnership collectively constitute the "Partnership Entities." MRMC, Martin LLC, Marine, MGS, MLP Gas, CFMSHC and the Partnership Entities (collectively, the "Martin Parties") wish to confirm as follows their agreement with you and the other several Underwriters, on whose behalf you are acting, in connection with the several purchases of the Units from the Partnership.
1. Registration Statement and Prospectus. The Partnership has prepared and filed with the Securities and Exchange Commission (the "Commission") in accordance with the provisions of the Securities Act of 1933 and the rules and regulations of the Commission thereunder (collectively, the "Act"), a registration statement on Form S-1 (File No. 333-91706), including a prospectus subject to completion, relating to the Units. Such registration statement, as amended, including the financial statements, exhibits and appendices thereto, at the time when it becomes effective and as thereafter amended by any post-effective amendment, is referred to in this Agreement as the "Registration Statement." The prospectus in the form included in the Registration Statement or, if the prospectus included in the Registration Statement omits certain information in reliance upon Rule 430A under the Act and such information is thereafter included in a prospectus filed with the Commission pursuant to Rule 424(b) under the Act or as part of a post-effective amendment to the Registration Statement after the Registration Statement becomes effective, the prospectus as so filed, is referred to in this Agreement as the "Prospectus." If the Partnership elects, with the consent of the Representatives, to rely on Rule 434 under the Act, all references to the Prospectus shall be deemed to include the form of
prospectus and the term sheet contemplated by Rule 434, taken together, provided to the Underwriters by the Partnership in reliance on Rule 434 under the Act (the "Rule 434 Prospectus"). If the Partnership files another registration statement with the Commission to register a portion of the Units pursuant to Rule 462(b) under the Act (the "Rule 462 Registration Statement"), then any reference to "Registration Statement" herein shall be deemed to include the registration statement on Form S-1 (File No. 333-91706) and the Rule 462 Registration Statement, as each such registration statement may be amended pursuant to the Act. The prospectus subject to completion in the form included in the Registration Statement at the time of the initial filing of such Registration Statement with the Commission and as such prospectus is amended from time to time until the date of the Prospectus is referred to in this Agreement as the "Preliminary Prospectus." All references in this Agreement to the Registration Statement, the Rule 462 Registration Statement, the Rule 434 Prospectus, a Preliminary Prospectus or the Prospectus, or any amendments or supplements to any of the foregoing, shall include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System ("EDGAR").
2. Agreements to Sell and Purchase. The Partnership hereby agrees to issue and sell the Firm Units to the Underwriters and, upon the basis of the representations, warranties and agreements of the Martin Parties herein contained and subject to all the terms and conditions set forth herein, each Underwriter agrees, severally and not jointly, to purchase from the Partnership at a purchase price of $17.67 per Unit (the "purchase price per Unit"), the number of Firm Units set forth opposite the name of such Underwriter in Schedule I hereto.
The Partnership hereby also agrees to sell to the Underwriters, and, upon the basis of the representations, warranties and agreements of the Martin Parties herein contained and subject to all the terms and conditions set forth herein, the Underwriters shall have the right for 30 days from the date of the Prospectus to purchase from the Partnership, up to 435,000 Additional Units at the same purchase price per Unit as paid for the Firm Units. The Additional Units may be purchased solely for the purpose of covering over-allotments, if any, made in connection with the offering of the Firm Units. If any Additional Units are to be purchased, each Underwriter, severally and not jointly, agrees to purchase the number of Additional Units (subject to such adjustments as you may determine to avoid fractional shares) that bears the same proportion to the total number of Additional Units to be purchased by the Underwriters as the number of Units set forth opposite the name of such Underwriter in Schedule I hereto bears to the total number of Units. The option to purchase Additional Units may be exercised at any time within 30 days after the date of the Prospectus, but no more than once.
3. Terms of Public Offering. The Partnership has been advised by you that the Underwriters propose to make a public offering of their respective portions of the Units as soon after the Registration Statement and this Agreement have become effective as in your judgment is advisable and initially to offer the Units upon the terms set forth in the Prospectus.
Not later than 12:00 p.m. on the second business day following the date the Units are released by the Underwriters for sale to the public, the Partnership shall deliver or cause to be delivered copies of the Prospectus in such quantities and at such places as the Representatives shall request.
4. Delivery of the Units and Payment Therefor. Delivery to the Underwriters of the Firm Units and payment therefor (the "Closing") shall be made at the offices of Baker Botts L.L.P., 2001 Ross Avenue, Dallas, Texas at 8:30 a.m., Dallas, Texas time, on November 6, or such other place, time and date not later than 1:30 p.m., Dallas, Texas time, on November 6, as the Representatives shall designate by notice to the Partnership (the time and date of such closing are called the "Closing Date"). The place of the Closing and the Closing Date may be varied by agreement between you and the Partnership. The Partnership hereby acknowledges that circumstances under which the Representatives may provide notice to postpone the Closing Date as originally scheduled include any determination by the Partnership or the Representatives to recirculate to the public copies of an amended or supplemented Prospectus or a delay as contemplated by the provisions of Section 11 hereof.
Delivery to the Underwriters of and payment for any Additional Units to be purchased by the Underwriters (the "Additional Closing") shall be made at the offices of Baker Botts L.L.P, 2001 Ross Avenue, Dallas, Texas, at 10:00 a.m., Dallas, Texas time, on such date or dates (the "Additional Closing Date") (which may be the same as the Closing Date, but shall in no event be earlier than the Closing Date nor earlier than three nor later than ten business days after the giving of the notice hereinafter referred to; the Closing Date and the Additional Closing Date are sometimes each referred to herein as a "Closing Date") as shall be specified in a written notice, from the Representatives on behalf of the Underwriters to the Partnership, of the Underwriters' determination to purchase a number, specified in such notice, of Additional Units. Such notice may be given at any time within 30 days after the date of the Prospectus and must set forth (i) the aggregate number of Additional Units as to which the Underwriters are exercising the option and (ii) the names and denominations in which the certificates for which the Additional Units are to be registered. The place of the Additional Closing and the Additional Closing Date may be varied by agreement between you and the Partnership.
Certificates for the Firm Units and for any Additional Units to be purchased hereunder shall be registered in such names and in such denominations as you shall request prior to 1:00 p.m., Dallas, Texas time, not later than the second full business day preceding the Closing Date or the Additional Closing Date, as the case may be. Such certificates shall be made available to you in Dallas, Texas for inspection and packaging not later than 9:30 a.m., Dallas, Texas time, on the business day immediately preceding the Closing Date or the Additional Closing Date, as the case may be. The certificates evidencing the Firm Units and any Additional Units to be purchased hereunder shall be delivered to you on the Closing Date or the Additional Closing Date, as the case may be, against payment of the purchase price therefore by wire transfer of immediately available funds to an account specified in writing, not later than the close of business on the business day next preceding the Closing Date or the Additional Closing Date, as the case may be, by the Partnership. Payment for the Units sold by the Partnership hereunder shall be delivered by the Representatives to the Partnership.
It is understood that the Representatives have been authorized, for their own accounts and the accounts of the several Underwriters, to accept delivery of and receipt for, and make payment of the purchase price per Unit for the Firm Units and the Additional Units, if any, that the Underwriters have agreed to purchase. Raymond James and Associates, Inc., individually and not as a Representative of the Underwriters, may, but shall not be obligated to, make payment for any Units to be purchased by any Underwriter whose funds shall not have been received by the
Representatives by the Closing Date or the Additional Closing Date, as the case may be, for the account of such Underwriter, but any such payment shall not relieve such Underwriter from any of its obligations under this Agreement.
5. Covenants and Agreements of the Martin Parties. Each of the Martin Parties, jointly and severally, covenants and agrees with the several Underwriters as follows:
(a) Preparation of Registration Statement and Prospectus. The
Martin Parties will use their best efforts to cause the Registration Statement
and any amendments thereto to become effective, if it has not already become
effective, and will advise you promptly and, if requested by you, will confirm
such advice in writing (i) when the Registration Statement has become effective
and the time and date of any filing of any post-effective Registration Statement
or any amendment or supplement to any Preliminary Prospectus or the Prospectus
and the time and date that any post-effective amendment to the Registration
Statement becomes effective, (ii) if Rule 430A under the Act is employed, when
the Prospectus has been timely filed pursuant to Rule 424(b) under the Act,
(iii) of the receipt of any comments of the Commission, or any request by the
Commission for amendments or supplements to the Registration Statement, any
Preliminary Prospectus or the Prospectus or for additional information, (iv) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the suspension of qualification of the Units
for offering or sale in any jurisdiction or the initiation of any proceeding for
such purposes and (v) within the period of time referred to in Section 5(e)
below, of any event that comes to the attention of any of the Martin Parties or
Partnership Entities that makes any statement made in the Registration Statement
or the Prospectus (as then amended or supplemented) untrue in any material
respect or that requires the making of any additions thereto or changes therein
in order to make the statements therein (in the case of the Prospectus, in light
of the circumstances under which they were made) not misleading in any material
respect, or of the necessity to amend or supplement the Prospectus (as then
amended or supplemented) to comply with the Act or any other law. If at any time
the Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Martin Parties will make every reasonable effort to
obtain the withdrawal or lifting of such order at the earliest possible time. If
the Partnership elects, with the consent of the Representatives, to rely on Rule
434 under the Act, the Martin Parties will provide the Underwriters with copies
of the form of Rule 434 Prospectus (including copies of a term sheet that
complies with the requirements of Rule 434 under the Act), in such number as the
Underwriters may reasonably request, and file with the Commission in accordance
with Rule 424(b) of the Act the form of Prospectus complying with Rule 434(b)(2)
of the Act before the close of business on the first business day immediately
following the date hereof. If the Partnership elects not to rely on Rule 434
under the Act, the Martin Parties will provide the Underwriters with copies of
the form of Prospectus, in such number as the Underwriters may reasonably
request, and file with the Commission such Prospectus in accordance with Rule
424(b) of the Act before the close of business on the first business day
immediately following the date hereof.
(b) Signed Copies of Registration Statements. The Martin Parties will furnish to you, without charge, two signed duplicate originals of the Registration Statement as originally filed with the Commission and of each amendment thereto, including financial statements and all exhibits thereto, and will also furnish to you, without charge, such number of conformed copies
of the Registration Statement as originally filed and of each amendment thereto as you may reasonably request.
(c) Amendments to Registration Statement. The Martin Parties will not file any Rule 462 Registration Statement or any amendment to the Registration Statement or make any amendment or supplement to the Prospectus unless (i) you shall have previously been advised thereof and been given a reasonable opportunity to review such filing, amendment or supplement and (ii) you have not reasonably objected to such filing, amendment or supplement after being so advised and having been given a reasonable opportunity to review such filing, amendment or supplement.
(d) Copies of the Preliminary Prospectus. Prior to the execution and delivery of this Agreement, the Martin Parties have delivered or will deliver to you, without charge, in such quantities as you have requested or may hereafter reasonably request, copies of each form of the Preliminary Prospectus. Consistent with the provisions of Section 5(e) hereof, the Partnership consents to the use, in accordance with the provisions of the Act and with the securities or Blue Sky laws of the jurisdictions in which the Units are offered by the several Underwriters and by dealers, prior to the date of the Prospectus, of each Preliminary Prospectus so furnished by the Martin Parties.
(e) Copies of the Prospectus. As soon after the execution and
delivery of this Agreement as is practicable and thereafter from time to time
for such period as in the reasonable opinion of counsel for the Underwriters a
prospectus is required by the Act to be delivered in connection with sales by
any Underwriter or a dealer (the "Prospectus Delivery Period"), the Partnership
will deliver to each Underwriter and each dealer, without charge, as many copies
of the Prospectus (and of any amendment or supplement thereto) as they may
reasonably request. The Partnership consents to the use of the Prospectus (and
of any amendment or supplement thereto) in accordance with the provisions of the
Act and with the securities or Blue Sky laws of the jurisdictions in which the
Units are offered by the several Underwriters and by all dealers to whom Units
may be sold, both in connection with the offering and sale of the Units and for
such period of time thereafter as the Prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer. If at any time
prior to the later of (i) the completion of the distribution of the Units
pursuant to the offering contemplated by the Registration Statement or (ii) the
expiration of prospectus delivery requirements with respect to the Units under
Section 4(3) of the Act and Rule 174 thereunder, any event shall occur that in
the judgment of the Martin Parties or in the opinion of counsel for the
Underwriters is required to be set forth in the Prospectus (as then amended or
supplemented) or should be set forth therein in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or if it is necessary to supplement or amend the Prospectus to
comply with the Act or any other law, the Martin Parties will forthwith prepare
and, subject to Sections 5(a) and 5(c) hereof, file with the Commission and use
their best efforts to cause to become effective as promptly as possible an
appropriate supplement or amendment thereto, and will furnish to each
Underwriter who has previously requested Prospectuses, without charge, a
reasonable number of copies thereof.
(f) Blue Sky Qualification. The Martin Parties will cooperate with you and counsel for the Underwriters in connection with the registration or qualification of the Units for offering and sale by the several Underwriters and by dealers under the securities or Blue Sky
laws of such jurisdictions as you may reasonably designate and will file such consents to service of process or other documents as may be reasonably necessary in order to effect and maintain such registration or qualification for so long as required to complete the distribution of the Units; provided that in no event shall any Partnership Entity be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it to general service of process in suits, other than those arising out of the offering or sale of the Units, as contemplated by this Agreement and the Prospectus, in any jurisdiction where it is not now so subject. In the event that the qualification of the Units in any jurisdiction is suspended, the Martin Parties shall so advise you promptly in writing. The Partnership Entities will comply with such Blue Sky laws and will continue such qualifications, registrations and exemptions in effect for so long as required to complete the distribution of the Units.
(g) Reports to Security Holders. The Martin Parties will make generally available to security holders of the Partnership a consolidated earnings statement of the Partnership (in form complying with the provisions of Rule 158), which need not be audited, covering a twelve-month period commencing after the effective date of the Registration Statement and the Rule 462 Registration Statement, if any, and ending not later than 15 months thereafter, as soon as practicable after the end of such period, which consolidated earnings statement shall satisfy the provisions of Section 11(a) of the Act.
(h) Copies of Reports. During the period ending two years from the date hereof, the Martin Parties will furnish to you and, upon your request, to each of the other Underwriters, (i) as soon as practical, copies of all materials furnished by the Partnership to its security holders or filed with the Commission, the National Association of Securities Dealers, Inc. (the "NASD") or the Nasdaq Stock Market ("NASDAQ") or any national securities exchange.
(i) Expenses. If this Agreement shall terminate or shall be terminated after execution pursuant to any provision hereof or if this Agreement shall be terminated by the Underwriters because of any inability, failure or refusal on the part of the Martin Parties to perform in all material respects any agreement herein or to comply in all material respects with any of the terms or provisions hereof or to fulfill in all material respects any of the conditions of this Agreement, the Martin Parties agree to reimburse you and the other Underwriters for all out-of-pocket expenses (including travel expenses and reasonable fees and expenses of counsel for the Underwriters, but excluding wages and salaries paid by you) reasonably incurred by you in connection herewith; provided that such reimbursement amount shall not exceed $350,000.
(j) Application of Proceeds. The Martin Parties will cause the Partnership to apply the net proceeds from the sale of the Units to be sold by it hereunder in accordance in all material respects with the statements under the caption "Use of Proceeds" in the Prospectus.
(k) Rule 430A. If Rule 430A under the Act is employed, the Martin Parties will cause the Partnership to timely file the Prospectus or term sheet (as described in Rule 434(b) under the Act) pursuant to Rule 424(b) under the Act.
(l) Lock-up Period. For a period of 180 days after the date of the Prospectus first filed pursuant to Rule 424(b) under the Act, the Martin Parties will cause the Partnership not
to, directly or indirectly, (i) issue, sell, offer or contract to sell or otherwise dispose of or transfer any Common Units or securities convertible into or exchangeable or exercisable for Common Units (collectively, "Partnership Units") or any rights to purchase Partnership Units, or file any registration statement under the Act with respect to any of the foregoing, or (ii) enter into any swap or other agreement that transfers, in whole or in part, directly or indirectly, the economic consequences of ownership of Partnership Units whether any such swap or transaction is to be settled by delivery of Common Units or other securities, in cash or otherwise, in each case without the prior written consent of the Representatives on behalf of the Underwriters; provided, however, that the foregoing restrictions do not apply to (A) the sale of Common Units to the Underwriters pursuant to this Agreement, (B) the issuance of Common Units by the Partnership to employee benefit plans, qualified unit option plans or other employee compensation plans and issuances of Common Units upon the exercise of options under such plans and (C) the issuance of Common Units in connection with accretive acquisitions made by the Partnership provided that the recipients of those Common Units agree to be bound by the restrictions in this paragraph (l).
(m) Copies of Financial Statements. Prior to the Closing Date or the Additional Closing Date, as the case may be, the Martin Parties will furnish to you, as promptly as possible, copies of any unaudited interim consolidated financial statements of the Partnership and its subsidiaries for any period subsequent to the periods covered by the financial statements appearing in the Prospectus.
(n) Undertakings. The Martin Parties will cause the Partnership to comply with all provisions of any undertakings contained in the Registration Statement.
(o) Stabilization or Manipulation. The Martin Parties will not at any time, directly or indirectly, take any action designed, or which might reasonably be expected to cause or result in, or which will constitute, stabilization or manipulation of the price of Common Units to facilitate the sale or resale of any of the Units.
(p) NASDAQ Requirements. The Martin Parties will cause the Partnership to timely file with NASDAQ all documents and notices required by NASDAQ of companies that have or will issue securities that are traded on NASDAQ. The Martin Parties will use their best efforts to complete the inclusion of the Units on NASDAQ, subject only to official notice of issuance, prior to the Closing Date.
(q) Transfer Agent and Registrar. The Martin Parties will cause the Partnership to engage and maintain, at its expense, a transfer agent and, if necessary under the jurisdiction of its formation or the rules of any national securities exchange or automated quotation system on which the Common Units are listed, a registrar (which, if permitted by applicable laws and rules may be the same entity as the transfer agent) for the Common Units.
(r) Consents. The Martin Parties will accomplish or obtain as soon as practicable all consents, recordings and filings necessary to perfect, preserve and protect the title of the Operating Partnership to the properties and assets owned by it as a result of the Transactions.
(s) Directed Unit Program. It is understood that up to 150,000 of the Firm Units (the "Directed Units") will initially be reserved by the Underwriters for offer and sale to officers, directors, employees and persons having business relationships with the Martin Parties ("Directed Unit Participants") upon the terms and conditions set forth in the Prospectus and in accordance with the rules and regulations of the National Association of Securities Dealers, Inc. (the "Directed Unit Program"). Under no circumstances will any Underwriter be liable to the Martin Parties or to any Directed Unit Participant for any action taken or omitted to be taken in good faith in connection with such Directed Unit Program. To the extent that any Directed Units are not affirmatively reconfirmed for purchase by any Directed Unit Participant on or immediately after the date of this Agreement, such Directed Units may be offered to the public as part of the public offering contemplated hereby.
(t) NASD Requirements. The Martin Parties will cause each annual report distributed to the security holders of the Partnership to comply with NASD Rule 2810(b)(5).
6. Representations and Warranties of the Martin Parties. Each of the Martin Parties, jointly and severally, hereby represents and warrants to each Underwriter that:
(a) Preliminary Prospectus. Each Preliminary Prospectus included as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto, or filed pursuant to Rule 424(a) under the Act, complied as to form when so filed in all material respects with the provisions of the Act, except that this representation and warranty does not apply to statements in or omissions from such Preliminary Prospectus (or any amendment or supplement thereto) made in reliance upon and in conformity with information relating to any Underwriter furnished to the Partnership in writing by or on behalf of any Underwriter through you expressly for use therein. The Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus and no proceeding for that purpose has been instituted or threatened by the Commission or the securities authority of any state or other jurisdiction.
(b) No Material Misstatements or Omissions. The Partnership has prepared each of the Registration Statement, any Rule 462 Registration Statement and will prepare any post-effective amendment thereto, and the Prospectus and any amendments or supplements thereto. The Registration Statement (including any Rule 462 Registration Statement), in the form in which it becomes effective and also in such form as it may be when any post-effective amendment thereto shall become effective, and the Prospectus, and any supplement or amendment thereto when filed with the Commission under Rule 424(b) under the Act, will comply as to form in all material respects with the provisions of the Act and will not at any such times contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, except that this representation and warranty does not apply to statements in or omissions from the Registration Statement or the Prospectus (or any amendment or supplement thereto) made in reliance upon and in conformity with information relating to any Underwriter furnished to the Partnership in writing by or on behalf of any Underwriter through you expressly for use therein.
(c) Conformity of EDGAR Filings. To the best knowledge of the Martin Parties, each Preliminary Prospectus and the Prospectus, if filed by electronic transmission
pursuant to EDGAR (except as may be permitted by Regulation S-T under the Act), was or will be identical to the copy thereof delivered to the Underwriters for use in connection with the offer and sale of the Units.
(d) Formation and Qualification of the Partnership and the Operating Partnership. Each of the Partnership and the Operating Partnership has been duly formed and is validly existing in good standing as a limited partnership under the Delaware Revised Uniform Limited Partnership Act (the "Delaware LP Act") with full partnership power and authority to own or lease and operate its properties to be owned or leased and operated by it at each Closing Date, to assume the liabilities being assumed by it pursuant to the Transaction Documents and to conduct its business as presently conducted and as described in the Registration Statement and the Prospectus (and any amendment or supplement thereto), in each case in all material respects. Each of the Partnership and the Operating Partnership is duly registered or qualified as a foreign limited partnership for the transaction of business under the laws of each jurisdiction in which the character of the business to be conducted by it at each Closing Date or the nature or location of the properties to be owned or leased by it at each Closing Date makes such registration or qualification necessary, except where the failure so to register or qualify would not (i) have a material adverse effect on the condition (financial or otherwise), business, properties, net worth or results of operations of the Partnership Entities (a "Material Adverse Effect") or (ii) subject the limited partners of the Partnership to any material liability or disability.
(e) Formation and Qualification of Martin LLC, the General Partner and Operating GP. Each of Martin LLC, the General Partner and Operating GP has been duly formed and is validly existing in good standing as a limited liability company under the Delaware Limited Liability Company Act (the "Delaware LLC Act") with full limited liability company power and authority to own, lease and operate its properties to be owned or leased and operated by it at each Closing Date, to assume the liabilities being assumed by it pursuant to the Transaction Documents, to conduct its business as presently conducted and as described in the Registration Statement and the Prospectus (and any amendment or supplement thereto), and (i) with respect to the General Partner, to act as general partner of the Partnership, and (ii) with respect to Operating GP, to act as general partner of the Operating Partnership, in each case in all material respects. Each of Martin LLC, the General Partner and Operating GP is duly registered or qualified as a foreign limited liability company for the transaction of business under the laws of each jurisdiction in which the character of the business to be conducted by it at each Closing Date or the nature or location of the properties to be owned or leased by it at each Closing Date makes such registration or qualification necessary, except where the failure so to register or qualify would not (i) have a Material Adverse Effect or (ii) subject the limited partners of the Partnership to any material liability or disability.
(f) Formation and Qualification of CFMSLP. CFMSLP has been duly formed and is validly existing in good standing as a limited partnership under the Delaware LP Act with full partnership power and authority to own or lease and operate its properties to be owned or leased and operated by it at each Closing Date and to conduct its business as presently conducted and as described in the Registration Statement and the Prospectus (and any amendment or supplement thereto), in each case in all material respects. CFMSLP is duly registered or qualified as a foreign limited partnership for the transaction of business under the laws of each jurisdiction in which the character of the business to be conducted by it at each
Closing Date or the nature or location of the properties to be owned or leased by it at each Closing Date makes such registration or qualification necessary, except where the failure so to register or qualify would not (i) have a Material Adverse Effect or (ii) subject the Operating Partnership, as a limited partner of CFMSLP, to any material liability or disability.
(g) Ownership of General Partner Interest. On the Closing Date and the Additional Closing Date, as the case may be, the General Partner will be the sole general partner of the Partnership with a 2% general partner interest in the Partnership; such general partner interest will be duly authorized and validly issued in accordance with the First Amended and Restated Agreement of Limited Partnership of the Partnership (the "Partnership Agreement"); and the General Partner will own such general partner interest free and clear of all liens, encumbrances, security interests, charges or claims, except for Permitted Liens, applicable securities laws and any restrictions set forth in the Partnership Agreement.
(h) Ownership of the Sponsor Units and Incentive Distribution Rights. On the Closing Date and the Additional Closing Date, as the case may be, MGS will own 1,543,797 Subordinated Units, Midstream will own 620,644 Subordinated Units and Martin LLC will own 2,088,921 Subordinated Units (all such Subordinated Units being collectively referred to herein as the "Sponsor Units"); all of such Sponsor Units and the limited partner interests represented thereby will be duly authorized and validly issued in accordance with the Partnership Agreement, fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in the Prospectus under the caption "The Partnership Agreement--Limited Liability"); the General Partner will own all of the Incentive Distribution Rights, and such Incentive Distribution Rights will be duly authorized and validly issued in accordance with the Partnership Agreement, and fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in the Prospectus under the caption "The Partnership Agreement--Limited Liability"); and the Sponsor Units and the Incentive Distribution Rights will be owned free and clear of all liens, encumbrances, security interests, charges or claims, except for Permitted Liens, applicable securities laws, any restrictions set forth in the Partnership Agreement and, with respect to the Incentive Distribution Rights, any restrictions on transferability set forth in the governing documents of the Partnership Entities.
(i) Valid Issuance of Units. On the Closing Date and the Additional Closing Date, as the case may be, the Firm Units and the Additional Units, as the case may be, and the limited partner interests represented thereby, will be duly authorized by the Partnership Agreement and, when issued and delivered to the Underwriters against payment therefore in accordance with the terms hereof, will be validly issued, fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in the Prospectus under the caption "The Partnership Agreement--Limited Liability"); and other than the Sponsor Units and the Incentive Distribution Rights, the Units are the only limited partner interests of the Partnership issued and outstanding.
(j) Ownership of Martin LLC. At each Closing Date, MRMC will own a 100% member interest in Martin LLC; such member interest will be duly authorized and validly issued in accordance with the limited liability company agreement of Martin LLC (as the same may be amended and restated at or prior to each Closing Date, the "Martin LLC Agreement")
and will be fully paid (to the extent required under the Martin LLC Agreement) and nonassessable (except as such nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and MRMC will own such member interest free and clear of all liens, encumbrances, security interests, charges or claims, except for Permitted Liens and applicable securities laws and any restrictions set forth in the Martin LLC Agreement.
(k) Ownership of Operating GP. At each Closing Date, the Partnership will own a 100% member interest in Operating GP; such member interest will be duly authorized and validly issued in accordance with the limited liability company agreement of Operating GP (as the same may be amended and restated at or prior to each Closing Date, the "Operating GP Agreement") and will be fully paid (to the extent required under the Operating GP Agreement) and nonassessable (except as such nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and the Partnership will own such member interest free and clear of all liens, encumbrances, security interests, charges or claims, except for Permitted Liens, applicable securities laws and any restrictions set forth in the Operating GP Agreement.
(l) Ownership of the Operating Partnership. At each Closing Date,
(i) Operating GP will be the sole general partner of the Operating Partnership with a 0.1% general partner interest in the Operating Partnership; such general partner interest will be duly authorized and validly issued in accordance with the partnership agreement of the Operating Partnership (as the same may be amended and restated at or prior to each Closing Date, the "Operating Partnership Agreement"); and Operating GP will own such general partner interest free and clear of all liens, encumbrances (except any restrictions on transferability as described in the Prospectus), security interests, charges or claims, except for Permitted Liens, applicable securities laws and any restrictions set forth in the Operating Partnership Agreement; and
(ii) the Partnership will be the sole limited partner of the Operating Partnership with a 99.9% limited partner interest in the Operating Partnership; such limited partner interest will be duly authorized and validly issued in accordance with the Operating Partnership Agreement and will be fully paid (to the extent required under the Operating Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Sections 17-303 and 17-607 of the Delaware LP Act); and the Partnership will own such limited partner interest free and clear of all liens, encumbrances, security interests, charges or claims, except for Permitted Liens, applicable securities laws and any restrictions set forth in the Operating Partnership Agreement.
(m) Ownership of General Partner. At each Closing Date, Martin LLC will own 100% of the member interests in the General Partner; such member interest will be duly authorized and validly issued in accordance with the limited liability company agreement of the General Partner (as the same may be amended and restated at or prior to each Closing Date, the "General Partner LLC Agreement") and will be fully paid (to the extent required under the General Partner LLC Agreement) and nonassessable (except as such nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and Martin LLC will own such member interest free and clear of all liens, encumbrances, security interests, charges or claims, except for
Permitted Liens, applicable securities laws and any restrictions in the General Partner LLC Agreement.
(n) Ownership of Limited Partner Interest in CFMSLP. At each Closing Date, the Operating Partnership will be a limited partner of CFMSLP with a 49.5% limited partner interest in CFMSLP; such limited partner interest has been duly authorized and validly issued in accordance with the partnership agreement, as amended, of CFMSLP and is fully paid (to the extent required under the partnership agreement, as amended, of CFMSLP) and nonassessable (except as such nonassessability may be affected by Sections 17-303 and 17-607 of the Delaware LP Act); and the Operating Partnership will own such limited partner interest free and clear of all liens, encumbrances, security interests, charges or claims, other than transfer restrictions and buy/sell obligations contained in the organizational documents of CFMSLP or its general partner, applicable securities laws and any restrictions set forth in the governing documents of the Partnership Entities.
(o) No Other Subsidiaries. Upon the completion of the transactions summarized in the introductory paragraphs of this Agreement, at each Closing Date, other than (i) the Partnership's ownership of a 100% member interest in Operating GP and a 99.9% limited partner interest in the Operating Partnership, (ii) Operating GP's ownership of a 0.1% general partner interest in the Operating Partnership and (iii) the Operating Partnership's ownership of a 49.5% limited partner interest in CFMSLP, none of the Partnership, Operating GP, or the Operating Partnership will own, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity. Upon the completion of the transactions summarized in the introductory paragraphs of this Agreement, at each Closing Date, other than its ownership of its partnership interests in the Partnership, the General Partner will not own, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity.
(p) No Preemptive Rights, Registration Rights or Options. Except as described in the Prospectus, there are no preemptive rights or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of, any partnership or member interests in the Partnership Entities, in each case pursuant to the organizational documents or any agreement or other instrument to which any Partnership Entity is a party or by which any of them may be bound. Neither the filing of the Registration Statement nor the offering or sale of the Units as contemplated by this Agreement gives rise to any rights for or relating to the registration of any Units or other securities of any Partnership Entity, other than as described in the Prospectus and the Partnership Agreement or as have been waived. Except as described in the Prospectus, there are not outstanding options or warrants to purchase any partnership or member interests in any Partnership Entity.
(q) Authority. The Partnership has all necessary limited
partnership power and authority to issue, sell and deliver (i) the Units, in
accordance with and upon the terms and conditions set forth in this Agreement,
the Partnership Agreement, the Registration Statement and the Prospectus, and
(ii) the Subordinated Units and the Incentive Distribution Rights, in accordance
with the terms and conditions set forth in the Partnership Agreement and the
Transaction Documents. All corporate, partnership and limited liability company
action, as the
case may be, required to be taken by the Martin Parties or any of their
stockholders, partners or members for the authorization, issuance, sale and
delivery of the Units, the Subordinated Units and the Incentive Distribution
Rights, the execution and delivery of the Operative Agreements (as defined in
Section 6(t)) and the consummation of the transactions (including the
Transactions) contemplated by this Agreement and the Operative Agreements has
been, or prior to the Closing will be, validly taken.
(r) Enforceability of Agreement. This Agreement has been duly authorized and validly executed and delivered by each of the Martin Parties and constitutes the valid and legally binding agreement of each of them, enforceable against each of them in accordance with its terms; provided that the enforceability hereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing; and provided further, that the indemnity and contribution provisions hereunder may be limited by federal or state securities laws.
(s) Conformity to Description of the Units, the Subordinated Units and the Incentive Distribution Rights. The Units, when issued and delivered against payment therefor as provided herein, and the Subordinated Units and the Incentive Distribution Rights, when issued and delivered in accordance with the terms of the Partnership Agreement, will conform in all material respects to the descriptions thereof contained in the Prospectus.
(t) Enforceability of Other Agreements. At or before the Closing:
(i) the Partnership Agreement will be duly authorized, executed and delivered by the General Partner and Martin LLC as the "Organizational Limited Partner," and will be a valid and legally binding agreement of the General Partner and the Organizational Limited Partner, enforceable against the General Partner and the Organizational Limited Partner in accordance with its terms;
(ii) the Martin LLC Agreement will be duly authorized, executed and delivered by MRMC and will be a valid and legally binding agreement of MRMC, enforceable against MRMC in accordance with its terms;
(iii) the Operating GP Agreement will be duly authorized, executed and delivered by the Partnership and will be a valid and legally binding agreement of the Partnership, enforceable against the Partnership in accordance with its terms;
(iv) the Operating Partnership Agreement will be duly authorized, executed and delivered by Operating GP and the Partnership and will be a valid and legally binding agreement of Operating GP and the Partnership, enforceable against Operating GP and the Partnership in accordance with its terms;
(v) the General Partner LLC Agreement will be duly authorized, executed and delivered by Martin LLC and will be a valid and legally binding agreement of Martin LLC enforceable against Martin LLC in accordance with its terms;
(vi) each of the Transaction Documents will be duly authorized, executed and delivered by the parties thereto and will be valid and legally binding agreements of each of them, enforceable against each of them in accordance with its terms;
(vii) the omnibus agreement (the "Omnibus Agreement") will be duly authorized, executed and delivered by each of MRMC, the General Partner, the Partnership and the Operating Partnership, and will be valid and legally binding agreement of each of them, enforceable against each of them in accordance with its terms;
(viii) the motor carrier agreement (the "Motor Carrier Agreement") will be duly authorized, executed and delivered by each of the Partnership and MTI, and will be a valid and legally binding agreement of each of them, enforceable against each of them in accordance with its terms;
(ix) the product supply agreement (the "Product Supply Agreement") will be duly authorized, executed and delivered by each of the Partnership and MGS and will be a valid and legally binding agreement of each of them, enforceable against each of them in accordance with its terms;
(x) the marine fuel agreement (the "Marine Fuel Agreement") will be duly authorized, executed and delivered by each of the Partnership and Midstream and will be a valid and legally binding agreement of each of them, enforceable against each of them in accordance with its terms;
(xi) the product storage agreement (the "Product Storage Agreement") will be duly authorized, executed and delivered by each of the Partnership and Martin Underground Storage, Inc. and will be a valid and legally binding agreement of each of them, enforceable against each of them in accordance with its terms;
(xii) the terminal services agreement (the "Terminal Services Agreement") will be duly authorized, executed and delivered by each of the Partnership and MGS and will be a valid and legally binding agreement of each of them, enforceable against each of them in accordance with its terms;
(xiii) the contract for marine transportation (the "Marine Transportation Agreement") will be duly authorized, executed and delivered by each of the Partnership and MRMC and will be a valid and legally binding agreement of each of them, enforceable against each of them in accordance with its terms;
(xiv) the throughput agreement (the "Throughput Agreement") will be duly authorized, executed and delivered by each of the Partnership and MGS and will be a valid and legally binding agreement of each of them, enforceable against each of them in accordance with its terms; and
(xv) the MLP Credit Agreement will be duly authorized, executed and delivered by the Partnership, the Operating Partnership and Operating GP and will be a
valid and legally binding agreement of each of them, enforceable against each of them in accordance with its terms;
provided that, with respect to each agreement described in this Section 6(t), the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and provided further, that the indemnity and contribution provisions contained in any of such agreements may be limited by applicable laws and public policy. The Partnership Agreement, the Martin LLC Agreement, the Operating GP Agreement, the Operating Partnership Agreement, the General Partner LLC Agreement, the Transaction Documents, the Omnibus Agreement, the Motor Carrier Agreement, the Product Supply Agreement, the Marine Fuel Agreement, the Product Storage Agreement, the Terminal Services Agreement, the Marine Transportation Agreement, the Throughput Agreement and the MLP Credit Agreement are herein collectively referred to as the "Operative Agreements."
(u) Sufficiency of Transferred Assets Under the Transaction Documents. The Transaction Documents will be legally sufficient to transfer or convey to the Operating Partnership all properties not already held by it that are, individually or in the aggregate, required to enable the Operating Partnership to conduct its operations in all material respects as contemplated by the Prospectus, subject to the conditions, reservations, encumbrances and limitations contained in the Transaction Documents, the Permitted Liens and those set forth in the Prospectus. The Operating Partnership, upon execution and delivery of the Transaction Documents and the filing of related articles of merger, certificates of merger and articles of conversion with the applicable governmental authorities, will succeed in all material respects to the business, assets, properties, liabilities and operations of the MRMC Business, except as disclosed in the Prospectus and the Transaction Documents.
(v) Legal Proceedings. There are no legal or governmental proceedings pending or, to the best knowledge of the Martin Parties, threatened, against any of the Martin Parties or CFMSLP or to which any of the Martin Parties or CFMSLP any of their respective properties are subject, that are required to be described in the Registration Statement or the Prospectus (or any amendment or supplement thereto) but are not described as required. Except as described in the Prospectus, there is no action, suit, inquiry, proceeding or investigation by or before any court or governmental or other regulatory or administrative agency or commission pending or, to the best knowledge of the Martin Parties, threatened, against or involving any of the Martin Parties or CFMSLP, or to which any of their properties are subject, which might individually or in the aggregate prevent or adversely affect the transactions contemplated by this Agreement or result in a Material Adverse Effect.
(w) Contracts. There are no agreements, contracts, indentures, leases or other instruments that are required to be described in the Registration Statement or the Prospectus (or any amendment or supplement thereto) or to be filed as an exhibit to the Registration Statement that are not described, filed or incorporated by reference in the Registration Statement and the Prospectus as required by the Act.
(x) No Default. None of the Martin Parties or CFMSLP is (i) in violation of (A) its certificate or agreement of limited partnership, limited liability company agreement, certificate or articles of incorporation or bylaws, or other organizational documents, (B) any law, statute, ordinance, administrative or governmental rule or regulation applicable to it, the violation of which would have a Material Adverse Effect or could materially impair the ability of any of the Martin Parties to perform their obligations under this Agreement or the Operative Agreements, or (C) any judgment, decree or injunction of any court or governmental agency or body having jurisdiction over it, the violation of which would have a Material Adverse Effect or could materially impair the ability of any of the Martin Parties to perform their obligations under this Agreement or the Operative Agreements; or (ii) in breach or default in any material respect in the performance of any obligation, agreement or condition contained in (A) any bond, debenture, note or any other evidence of indebtedness or (B) any agreement, contract, indenture, lease or other document or instrument (each of (A) and (B), an "Existing Instrument") to which it is a party or by which any of its properties may be bound, which breach or default would have a Material Adverse Effect or could materially impair the ability of any of the Martin Parties to perform their obligations under this Agreement or the Operative Agreements. To the knowledge of the Martin Parties, no third party to any Existing Instrument is in default under any such Existing Instrument, which default would, if continued, have a Material Adverse Effect.
(y) No Consents or Conflicts. None of the offering, issuance and sale of the Units by the Partnership, the execution, delivery or performance of this Agreement or the Operative Agreements by the Martin Parties that are parties hereto or thereto, or the consummation of the transactions contemplated hereby and thereby (including the Transactions) (i) requires any consent, approval, authorization or other order of or registration, qualification or filing with, any court, regulatory body, administrative agency or other governmental body, agency or official (except (a) such as may be required for the registration of the Units under the Act, the inclusion of the Units on the NASDAQ National Market, the registration of the Common Units under the Securities Exchange Act of 1934 and the rules and regulations of the Commission thereunder (collectively, the "Exchange Act") and compliance with the securities or Blue Sky laws of various jurisdictions, all of which will be, or have been, effected in accordance with this Agreement and except for the NASD's clearance of the underwriting terms of the offering contemplated hereby as required under the NASD's Rules of Fair Practice, (b) as contemplated by the Contribution Agreement, (c) as disclosed in the Registration Statement, (d) the consent required under the lease with the Tampa Port Authority filed as an exhibit to the Registration Statement, (e) any maritime consents, applications and/or filings made in connection with the transfer of vessels to the Partnership Entities, (f) filings with applicable secretaries of state to effect any conversions or mergers contemplated by the Contribution Agreement, and (g) lien filings and lien releases necessary in connection with the MLP Credit Agreement), (ii) conflicts with or will conflict with or constitutes or will constitute a breach or violation of, or a default under, the certificate or agreement of limited partnership, limited liability company agreement, certificate or articles of incorporation or bylaws or other organizational documents of any of the Martin Parties or CFMSLP (assuming all required consents are received from CF Industries, Inc. in regard to the organizational documents of CFMSLP), (iii) conflicts with or will conflict with or constitute or will constitute a breach or violation of, or a default under, any Existing Instrument to which any of the Martin Parties or CFMSLP is a party or by which any of their respective properties may be bound (assuming all required consents and/or approvals are received from the lenders referenced in the "Use of
Proceeds" section of the Prospectus and in connection with the MRMC Credit Agreement and the Tampa Port Authority), (iv) violates or will violate any statute, law, regulation, ruling, filing, judgment, injunction, order or decree applicable to any of the Martin Parties or any of their properties, or (v) results in or will result in the creation or imposition of any lien, encumbrance, security interest, equity, charge or claim upon any property or assets of any of the Martin Parties or CFMSLP (other than the Permitted Liens, applicable securities laws and any restrictions set forth in the governing documents of the Partnership Entities) pursuant to, or requires the consent of any other party to, any Existing Instrument (except as noted above), except in case of (i), (iii), (iv) or (v) above, for such conflicts, breaches, defaults, liens, encumbrances, security interests, charges or claims that will not, individually or in the aggregate, result in a Material Adverse Effect.
(z) Independent Public Accountants. KPMG LLP, the certified public accountants who have certified the financial statements (including the related notes thereto and supporting schedules) filed as part of the Registration Statement and the Prospectus (or any amendment or supplement thereto), are independent public accountants as required by the Act.
(aa) Capitalization; Financial Statements. On June 30, 2002, the Partnership would have had, on the consolidated pro forma basis indicated in the Prospectus (and any amendment or supplement thereto), a capitalization as set forth therein. The historical financial statements, together with related schedules and notes, included in the Registration Statement and the Prospectus (and any amendment or supplement thereto), present fairly in all material respects the financial condition, results of operations, cash flows and changes in financial position of the entities purported to be shown thereby on the basis stated in the Registration Statement at the respective dates or for the respective periods to which they apply; such statements and related schedules and notes have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, except as disclosed therein. The selected historical and pro forma financial information set forth in the Registration Statement, the Preliminary Prospectus, and the Prospectus (and any amendment or supplement thereto) under the caption "Selected Historical and Pro Forma Financial and Operating Data" is accurately presented in all material respects and prepared on a basis consistent with the audited and unaudited historical consolidated financial statements and pro forma financial statements from which it has been derived. The pro forma financial statements of the Partnership included in the Registration Statement, the Preliminary Prospectus and the Prospectus (and any amendment or supplement thereto) have been prepared in all material respects in accordance with the applicable accounting requirements of Article 11 of Regulation S-X of the Commission; the assumptions used in the preparation of such pro forma financial statements are, in the opinion of the management of the Martin Parties, reasonable; and the pro forma adjustments reflected in such pro forma financial statements have been properly applied to the historical amounts in compilation of such pro forma financial statements. No other financial statements or schedules are required to be included in the Registration Statement.
(bb) No Material Adverse Change. Except as disclosed in the Registration Statement and the Prospectus (or any amendment or supplement thereto), subsequent to the respective dates as of which such information is given in the Registration Statement and the Prospectus (or any amendment or supplement thereto), (i) none of the Partnership Entities or CFMSLP has incurred any material liabilities or obligations, indirect, direct or contingent, or
entered into any transaction that is not in the ordinary course of business,
(ii) none of the Partnership Entities or CFMSLP has sustained any material loss
or interference with its business or properties from fire, flood, windstorm,
accident or other calamity, whether or not covered by insurance, (iii) none of
the Partnership Entities or CFMSLP is in default under the terms of outstanding
debt obligations, (iv) there has not been any change in the capitalization or
any material change in the indebtedness of any of the Partnership Entities or
CFMSLP (other than in the ordinary course of business) and (v) there has not
been any material adverse change, or any development involving or that may
reasonably be expected to result in a Material Adverse Effect, in the condition
(financial or otherwise), business, prospects, properties, net worth or result
of operations of the Partnership Entities or CFMSLP taken as a whole.
(cc) Prior Sales of Securities. All offers and sales of securities of Marine, Resources, MLP Gas or any of the Partnership Entities prior to the date hereof were made in compliance with or were the subject of an available exemption from the Act and all other applicable state and federal laws or regulations.
(dd) NASDAQ Listing. The Units have been approved for inclusion on the NASDAQ National Market under the symbol "MMLP," subject to official notice of issuance of the Units being sold by the Partnership, and upon consummation of the offering contemplated hereby the Partnership will be in compliance with the designation and maintenance criteria applicable to NASDAQ National Market issuers.
(ee) No Other Offering Material. None of the Martin Parties has distributed and will not distribute, and has not authorized the Underwriters to distribute, any offering material in connection with the offering and sale of the Units other than the Preliminary Prospectus, the Prospectus or other offering material, if any, as permitted by the Act.
(ff) No Stabilization or Manipulation. Other than excepted activity pursuant to Regulation M under the Exchange Act, none of the Martin Parties has taken and will not take, directly or indirectly, any action that constituted, or any action designed to, or that might reasonably be expected to cause or result in or constitute, under the Act or otherwise, stabilization or manipulation of the price of any security of the Partnership to facilitate the sale or resale of the Units or for any other purpose.
(gg) Taxes. At each Closing Date, each of the Martin Parties and CFMSLP will have filed all tax returns required to be filed, which returns will be complete and correct in all material respects, and no Martin Party will be in default in the payment of any taxes that are payable pursuant to such returns or any assessments with respect thereto.
(hh) Transactions with Affiliates. Except as set forth in the Prospectus, there are no transactions with "affiliates" (as defined in Rule 405 promulgated under the Act) or any officer, director or security holder of the Martin Parties or CFMSLP (whether or not an affiliate) that are required by the Act to be disclosed in the Registration Statement. Additionally, no relationship, direct or indirect, exists between the Martin Parties, CFMSLP or any of their subsidiaries on the one hand, and the directors, officers, stockholders, customers or suppliers of the Martin Parties, CFMSLP or any of their subsidiaries on the other hand that is required by the Act to be disclosed in the Registration Statement and the Prospectus that is not so disclosed.
(ii) Investment Company Act; Public Utility Holding Company Act. None of the Martin Parties or CFMSLP is now, and after the sale of the Units to be sold by the Partnership hereunder and application of the net proceeds from such sale as described in the Prospectus under the caption "Use of Proceeds" none of them will be, (i) an "investment company" or an "affiliated person" of, or "promoter" or "principal underwriter" for, an investment company within the meaning of the Investment Company Act of 1940, as amended, or (ii) a "public utility company," "holding company" or a "subsidiary company" of a "holding company" or an "affiliate" thereof, under the Public Utility Holding Company Act of 1935, as amended.
(jj) Title to Properties. Each of the Partnership Entities and
CFMSLP has, or at each Closing Date will have, good and valid title to all
property (real and personal) described in the Prospectus as being owned by it,
free and clear of all liens, claims, security interests or other encumbrances
except (i) such as are described in the Prospectus, (ii) Permitted Liens, (iii)
liens, encumbrances and/or security interests affecting the property of CFMSLP
as a result of CFMSLP's credit facility, (iv) applicable securities laws, (v)
restrictions set forth in the governing documents of the Partnership Entities or
(vi) such as are not materially burdensome and do not have or will not result in
a Material Adverse Effect. All property (real and personal) held under lease by
the Partnership Entities or CFMSLP is held by them under valid, enforceable
leases with only such exceptions as in the aggregate are not materially
burdensome and do not have or result in a Material Adverse Effect.
(kk) Permits. Each of the Partnership Entities and CFMSLP has, or at each Closing Date will have, all permits, licenses, franchises, approvals, consents and authorizations of governmental or regulatory authorities (hereinafter "permit" or "permits") as are necessary to own its properties and to conduct its business in the manner described in the Prospectus, subject to such qualifications as may be set forth in the Prospectus, except where the failure to have obtained any such permit has not had and will not have a Material Adverse Effect.
(ll) Internal Controls. The Partnership Entities and CFMSLP maintain a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets, (iii) access to assets is permitted only in accordance with management's general or specific authorizations and (iv) the recorded amount of assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(mm) Environmental Compliance. Except as described in the Prospectus, the Martin Parties (i) are in compliance with any and all applicable federal, state, local and foreign laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or other approvals
would not, individually or in the aggregate, have a Material Adverse Effect. None of the Martin Parties has been named as a "potentially responsible party" under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, in regard to any unresolved matter or claim. None of the Martin Parties owns, leases or occupies any property requiring remediation that appears on any list of hazardous sites compiled by any state or local governmental agency. In the ordinary course of its business, each of the Martin Parties conducts a periodic review of the effect of Environmental Laws on its business, operations and properties, in the course of which it identifies and evaluates associated costs and liabilities (including any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential liabilities to third parties). On the basis of such review and amount of its established reserves, each of the Martin Parties has reasonably concluded that such associated costs and liabilities would not, individually or in the aggregate, result in a Material Adverse Effect.
(nn) Lock-Up Agreements. The Martin Parties have procured lock-up agreements, in the form of Exhibit A attached hereto ("Lock-Up Agreements"), from each of the Martin Parties and the executive officers and directors of the General Partner.
(oo) NASD Affiliations. No officer, director, manager or nominee for any of the foregoing of the Partnership Entities has a direct or indirect affiliation or association with any member of the NASD.
(pp) Insurance. Each of the Martin Parties is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which it is engaged; and none of the Martin Parties has reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a comparable cost.
(qq) ERISA. Except for the Martin Midstream Partners L.P. Long-Term Incentive Plan (the "Plan"), none of the Partnership Entities is a party to, or has any liability with respect to, any "employee benefit plan" (as defined under the Employee Retirement Income Security Act of 1974, as amended, and the regulations and published interpretations thereunder (collectively, "ERISA")) established or maintained by them or their "ERISA Affiliates" (as defined below). "ERISA Affiliate" means, with respect to any Partnership Entity, any member of any group or organization described in Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986 (as amended, the "Code") of which such entity is a member. The Plan is in compliance with ERISA and all other applicable state and federal laws. No "reportable event" (as defined in ERISA) has occurred with respect to the Plan. The Plan, if it were to be terminated as of the Closing Date, would not have any "amount of unfunded benefit liabilities" (as defined in ERISA). No Partnership Entity nor any of their ERISA Affiliates has incurred or reasonably expects to incur any liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, the Plan or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan" established or maintained by any Partnership Entity or any of their ERISA Affiliates that is intended to be qualified under Section 401(a) of the Code is so qualified
and nothing has occurred, whether by action or failure to act, that would cause the loss of such qualification.
(rr) Forecast. The financial forecast of combined statements of operations of the Partnership for the 12 months ending September 30, 2003, the notes thereto and the financial forecast of available cash from operating surplus based on such financial forecast that are included in Appendix E to the Registration Statement and the Prospectus were made with a reasonable basis in good faith. All significant assumptions used in the preparation of such financial forecast are accurately disclosed in the Registration Statement and the Prospectus, and such assumptions are, in the opinion of management of the Partnership, reasonable. The calculation of available cash from operating surplus was derived from such financial forecast on a basis consistent with the terms of the Partnership Agreement. Each of the other statements made by the Partnership in the Registration Statement and the Prospectus within the coverage of Rule 175(b) under the Act, including (but not limited to) any statements with respect to future available cash or future cash distributions of the Partnership or the anticipated ratio of taxable income to cash distributions, was made with a reasonable basis and in good faith.
(ss) Private Placement. The offer, sale and issuance of the Sponsor Units and the Incentive Distribution Rights to the General Partner pursuant to the Partnership Agreement are exempt from the registration requirements of the Act and the securities laws of any state having jurisdiction with respect thereto, and none of the Martin Parties has taken or will take any action that would cause the loss of such exemption.
(tt) Directed Unit Sales. None of the Directed Units distributed in connection with the Directed Unit Program will be offered or sold outside of the United States.
7. Expenses. Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, the Martin
Parties agree to pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Martin Parties' counsel and accountants in
connection with the registration of the Units under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement and the Prospectus and amendments and supplements thereto
and the mailing and delivering of copies thereof and of any Preliminary
Prospectus to the Underwriters and dealers; (ii) the printing and delivery
(including postage, air freight charges and charges for counting and packaging)
of such copies of the Registration Statement, the Prospectus, each Preliminary
Prospectus, and all amendments or supplements to any of them as may be
reasonably requested for use in connection with the offering and sale of the
Units; (iii) consistent with the provisions of Section 5(f), all expenses in
connection with the qualification of the Units for offering and sale under state
securities laws or Blue Sky laws, including reasonable attorneys' fees and
out-of-pocket expenses of the counsel for the Underwriters in connection
therewith; (iv) the filing fees incident to securing any required review by the
NASD of the fairness of the terms of the sale of the Units and the reasonable
fees and disbursements of the Underwriters' counsel relating thereto; (v) the
fees and expenses associated with including the Units on the NASDAQ National
Market; (vi) the cost of preparing certificates representing the Units; (vii)
the costs and charges of any transfer agent or registrar; (viii) the cost of the
tax stamps, if any, in connection with the issuance and delivery of the Units to
the respective Underwriters; (ix) expenses incurred by the Underwriters in
connection with the Directed Unit Program, including counsel fees related
directly to the
Directed Unit Program and any stamp duties or other taxes incurred by the
Underwriters in connection with the Directed Unit Program; (x) all other fees,
costs and expenses referred to in Item 13 of the Registration Statement; and
(xi) the transportation, lodging, graphics and other expenses incidental to the
Partnership's preparation for and participation in the "roadshow" for the
offering contemplated hereby. Except as provided in this Section 7 and in
Section 8 hereof, the Underwriters shall pay their own expenses, including the
fees and disbursements of their counsel. In addition, in the event that the
proposed offering is terminated for the reasons set forth in Section 5(i)
hereof, the Partnership agrees to reimburse the Underwriters as provided in
Section 5(i).
8. Indemnification and Contribution. (a) Subject to the limitations in this paragraph below, the Martin Parties agree, jointly and severally, to indemnify and hold harmless you and each other Underwriter, the directors, officers, employees and agents of each Underwriter, and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act from and against any and all losses, claims, damages, liabilities and expenses, including reasonable costs of investigation and attorneys' fees and expenses (collectively, "Damages") arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus or in the Registration Statement or the Prospectus or in any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading, except:
(i) to the extent that any such Damages arise out of or are based
upon an untrue statement or omission or alleged untrue statement or omission
that has been made therein or omitted therefrom in reliance upon and in
conformity with the information furnished in writing to the Partnership by or on
behalf of any Underwriter through you, expressly for use in connection
therewith, which information consists solely of the information specified in
Section 14 hereof; or
(ii) with respect to any Preliminary Prospectus, the foregoing indemnity in this Section 8(a) shall not inure to the benefit of any Underwriter (or any of its directors, officers or employees or any person controlling such Underwriter) if copies of the Prospectus were timely delivered to the Underwriter and a copy of the Prospectus (as then amended or supplemented if the Partnership shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Underwriter to the person claiming Damages, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the Units to such person, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such Damages.
This indemnification shall be in addition to any liability that the Martin Parties may otherwise have.
In addition to their other obligations under this Section 8, the Martin Parties agree that, as an interim measure during the pendency of any claim, action, investigation, inquiry or other proceeding arising out of or based upon any statement or omission, or any inaccuracy in the representations and warranties of the Martin Parties herein or failure to perform their respective
obligations hereunder, all as set forth in this Section 8, the party against whom indemnification is being sought will reimburse, in accordance with the provisions of Section 8(c), each Underwriter and each director, officer, employee, agent or controlling person thereof on a monthly basis for all reasonable legal or other out-of-pocket expenses incurred in connection with investigating or defending any such claim, action, investigation, inquiry or other proceeding (to the extent documented by reasonably itemized invoices therefor), notwithstanding the absence of a judicial determination as to the propriety and enforceability of the obligation of the Martin Parties to reimburse each Underwriter and each director, officer, employee, agent or controlling person thereof for such expenses and the possibility that such payments might later be held to have been improper by a court of competent jurisdiction. To the extent that any such interim reimbursement payment is so held to have been improper, each Underwriter and each director, officer, employee, agent or controlling person thereof shall promptly return it to the person(s) from whom it was received. Any such interim reimbursement payments that are not made to the Underwriters or directors, officers, employees, agents or controlling persons thereof within 30 days of a request for reimbursement shall bear interest compounded daily at a rate determined on the basis of the base lending rate announced from time to time by The Wall Street Journal from the date of such request.
In connection with the offer and sale of the Directed Units, the Martin Parties, jointly and severally, agree, promptly upon a request in writing, to indemnify and hold harmless the Underwriters and the directors, officers, employees, agents and controlling persons thereof from and against any Damages which (i) arise out of, or are based upon, any untrue statement or alleged untrue statement of a material fact contained in any material prepared by or with the approval of the Martin Parties for distribution to Directed Unit Participants in connection with the Directed Unit Program or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) arises out of the failure of any Directed Unit Participant to pay for and accept delivery of Directed Units that the Directed Unit Participant agreed to purchase or (iii) is otherwise related to the Directed Unit Program, other than Damages that are:
(x) finally judicially determined to have resulted directly from the materials prepared by the Underwriters in connection with the Directed Unit Program or from the bad faith, gross negligence or willful misconduct of the Underwriters, or
(y) the result of the failure of the Underwriters to deliver copies of the Prospectus (including any amended or supplemented Prospectus if the Partnership shall have timely furnished any amendments or supplements thereto) to the person claiming Damages, if such delivery was required by law, at or prior to the written confirmation of the sale of the Units to such person, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such Damages.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Martin Parties and their respective directors and officers who sign the Registration Statement and any person who controls the Martin Parties within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent as the foregoing several indemnity from the Martin Parties to each Underwriter and the directors, officers, employees, agents and controlling persons thereof, but only with respect to information furnished in writing by or on
behalf of such Underwriter through you expressly for use in the Registration Statement, the Prospectus or any Preliminary Prospectus, or any amendment or supplement thereto.
In addition to their other obligations under this Section 8, the Underwriters agree, that, as an interim measure during the pendency of any claim, action, investigation, inquiry or other proceeding arising out of failure to perform their obligations hereunder, all as set forth in this Section 8, the party against whom indemnification is being sought will reimburse in accordance with the provisions of Section 8(c), each Martin Party and each director, officer, employee, agent or controlling person thereof on a monthly basis for all reasonable legal or other out-of-pocket expenses incurred in connection with investigating or defending any such claim, action, investigation, inquiry or other proceeding (to the extent documented by reasonably itemized invoices therefor), notwithstanding the absence of a judicial determination as to the propriety and enforceability of the obligation of the Underwriters to reimburse each Martin Party and each director, officer, employee, agent or controlling person thereof for such expenses and the possibility that such payments might later be held to have been improper by a court of competent jurisdiction. To the extent that any such interim reimbursement payment is so held to have been improper, each Martin Party and each director, officer, employee, agent or controlling person thereof shall promptly return it to the person(s) from whom it was received. Any such interim reimbursement payments that are not made to the Martin Parties or directors, officers, employees, agents or controlling persons thereof within 30 days of a request for reimbursement shall bear interest compounded daily at a rate determined on the basis of the base lending rate announced from time to time by The Wall Street Journal from the date of such request.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective directors,
officers, employees, agents and controlling persons who may be subject to
liability arising out of any claim or action in respect of which indemnity may
be sought by the Underwriters against the Martin Parties under this Section 8
if, in the reasonable judgment of the Representatives, it is advisable for the
Representatives and those Underwriters, officers, employees and controlling
persons to be jointly represented by separate counsel, and in that event fees
and expenses of one such separate counsel (plus one local counsel if necessary
in the
opinion of counsel to the indemnified party) shall be paid by the Martin Parties. No indemnifying party shall (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding, or (ii) be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with the consent of the indemnifying party or if there be a final judgment of the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 is unavailable or insufficient for any reason whatsoever to hold harmless an indemnified party in respect of any Damages referred to herein, then an indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Damages (i) in such proportion as is appropriate to reflect the relative benefits received by the Martin Parties on the one hand, and the Underwriters on the other hand, from the offering and sale of the Units or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative and several fault of the Martin Parties on the one hand, and the Underwriters on the other hand, in connection with the statements or omissions that resulted in such Damages as well as any other relevant equitable considerations. The relative and several benefits received by the Martin Parties on the one hand, and the Underwriters on the other hand, shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Partnership bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault of the Martin Parties on the one hand, and the Underwriters on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Martin Parties on the one hand, or by the Underwriters on the other hand and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Martin Parties and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 8 was determined by a pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the Damages
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8, no Underwriter shall be required to contribute any amount in excess
of the amount of the underwriting commissions received by such
underwriter in connection with the Units underwritten by it and distributed to
the public. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 8 are several in proportion
to the respective numbers of Firm Units set forth opposite their names in
Schedule I hereto (or such numbers of Firm Units increased as set forth in
Section 11 hereof) and not joint.
Any Damages for which an indemnified party is entitled to indemnification or contribution under this Section 8, in accordance with the provisions of Section 8(c), shall be paid by the indemnifying party to the indemnified party as Damages are incurred after receipt of reasonably itemized invoices therefor. The indemnity, contribution and reimbursement agreements contained in this Section 8 and the representations and warranties of the Martin Parties set forth in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Underwriter or director, officer, employee, agent or controlling person thereof, the Martin Parties, their respective directors or officers or any person controlling the Martin Parties, (ii) acceptance of any Units and payment therefor hereunder and (iii) any termination of this Agreement. A successor to any Underwriter or director, officer, employee, agent or controlling person thereof, or to the Martin Parties, their respective directors or officers or any person controlling the Martin Parties, shall be entitled to the benefits of the indemnity, contribution and reimbursement agreements contained in this Section 8.
(e) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in the second
paragraph of Section 8(a) or the second paragraph of Section 8(b), including the
amounts of any requested reimbursement payments and the method of determining
such amounts, shall be settled by arbitration conducted pursuant to the Code of
Arbitration Procedure of the NASD. Any such arbitration must be commenced by
service of a written demand for arbitration or written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in the second paragraph of this
Section 8, and would not resolve the ultimate propriety or enforceability of the
obligation to reimburse expenses that is created by the provisions of the first
paragraph of this Section 8.
9. Conditions of Underwriters' Obligations. The several obligations of the Underwriters to purchase the Firm Units hereunder are subject to the following conditions:
(a) The Registration Statement shall have become effective not later than 12:00 noon, New York City time, on the date hereof, or at such later date and time as shall be consented to in writing by the Representatives, and all filings required by Rules 424(b), 430A and 462 under the Act shall have been timely made.
(b) You shall be reasonably satisfied that since the respective dates as of which information is given in the Registration Statement and Prospectus, (i) there shall not have been any change in the capitalization or any material change in the indebtedness (other than in
the ordinary course of business) of the Partnership Entities, (ii) except as set forth or contemplated by the Registration Statement or the Prospectus, no material oral or written agreement or other transaction shall have been entered into by the Partnership Entities that is not in the ordinary course of business or that could reasonably be expected to result in a material reduction in the future earnings of the Partnership Entities, (iii) no loss or damage (whether or not insured) to the property of the Partnership Entities shall have been sustained that had or could reasonably be expected to have a Material Adverse Effect, (iv) no legal or governmental action, suit or proceeding affecting the Partnership Entities or any of their properties, or that affects or could reasonably be expected to affect the transactions contemplated by this Agreement, shall have been instituted or threatened and that would reasonably be expected to result in a Material Adverse Effect and (v) there shall not have been any material change in the condition (financial or otherwise), business, prospects, properties, net worth or results of operations of the Partnership Entities that makes it impractical or inadvisable in your judgment to proceed with the public offering or purchase of the Units as contemplated hereby.
(c) You shall have received on the Closing Date (and the Additional Closing Date, if any) a written opinion of Baker Botts L.L.P., counsel to the Martin Parties, substantially to the effect that:
(i) Each of the Partnership and the Operating Partnership has been duly formed and is validly existing in good standing as a limited partnership under the Delaware LP Act with all necessary limited partnership power and authority to own or lease its properties, to assume the liabilities being assumed by it pursuant to the Transaction Documents and to conduct its business as presently conducted and as described in the Registration Statement and the Prospectus, in each case in all material respects. Each of the Partnership and the Operating Partnership has been duly registered or qualified as a foreign limited partnership for the transaction of business under the laws of each jurisdiction in which the character of the business conducted by it or the nature or location of the properties owned or leased by it makes such registration or qualification necessary, except where the failure to so register or qualify does not have a Material Adverse Effect.
(ii) Each of Martin LLC, the General Partner and Operating GP has been duly formed and is validly existing in good standing as a limited liability company under the Delaware LLC Act with all necessary limited liability company power and authority to own or lease its properties, to assume the liabilities being assumed by it pursuant to the Transaction Documents and to conduct its business as presently conducted and as described in the Registration Statement and the Prospectus, in each case in all material respects. The General Partner has all necessary limited liability company power and authority to act as general partner of the Partnership. Operating GP has all necessary limited liability company power and authority to act as general partner of the Operating Partnership. Each of Martin LLC, the General Partner and Operating GP has been duly registered or qualified as a foreign limited liability company for the transaction of business under the laws of each jurisdiction in which the character of the business conducted by it or the nature or location of the properties owned or leased by it makes such registration or qualification necessary, except where the failure to so register or qualify does not have a Material Adverse Effect.
(iii) CFMSLP has been duly formed and is validly existing in good standing as a limited partnership under the Delaware LP Act with full partnership power and authority to own or lease and operate its properties to be owned or leased and operated by it at each Closing Date and to conduct its business as presently conducted.
(iv) The General Partner is the sole general partner of the Partnership with a 2% general partner interest in the Partnership; such general partner interest has been duly authorized and validly issued in accordance with the Partnership Agreement; and the General Partner owns such general partner interest free and clear of all liens, encumbrances, security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming the General Partner as debtor is on file in the office of the Secretary of State of Delaware or (ii) otherwise known to such counsel, without independent investigation, in each case other than those created by or arising under the Delaware LP Act, Permitted Liens, applicable securities laws and any restrictions set forth in the governing documents of the Partnership Entities.
(v) The General Partner owns all of the Incentive Distribution Rights, MGS owns 1,543,797 Subordinated Units, Midstream owns 620,644 Subordinated Units and Martin LLC owns 2,088,921 Subordinated Units; all of such Common Units, Subordinated Units and the limited partner interests represented thereby and the Incentive Distribution Rights have been duly authorized and validly issued in accordance with the Partnership Agreement, and are fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in the Prospectus under the caption "The Partnership Agreement--Limited Liability"); and the General Partner, MGS, Midstream and Martin LLC own their respective Subordinated Units and Incentive Distribution Rights free and clear of all liens, encumbrances, security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming the General Partner, MGS, Midstream or Martin LLC as debtor is on file in the office of the Secretary of State of Delaware or (ii) otherwise known to such counsel, without independent investigation, in each case other than those created by or arising under the Delaware LP Act, Permitted Liens, applicable securities laws, any restrictions set forth in the governing documents of the Partnership Entities and, with respect to the Incentive Distribution Rights, any restrictions on transferability set forth in the governing documents of the Partnership Entities.
(vi) The Units to be issued and sold to the Underwriters by the Partnership pursuant to the Underwriting Agreement and the limited partner interests represented thereby have been duly authorized by the Partnership Agreement and, when issued and delivered to the Underwriters against payment therefore in accordance with the terms of the Underwriting Agreement, will be validly issued, fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as such nonassessability may be affected by matters described in the Prospectus under the caption "The Partnership Agreement--Limited Liability"); and other than the Sponsor Units and the Incentive Distribution Rights, the Units are the only limited partner interests of the Partnership issued and outstanding at the Closing Date.
(vii) MRMC is the sole member of Martin LLC with a 100% member
interest in Martin LLC; such member interest has been duly authorized
and validly issued in accordance with the Martin LLC Agreement and is
fully paid (to the extent required under the Martin LLC Agreement) and
nonassessable (except as such nonassessability may be affected by
Section 18-607 of the Delaware LLC Act); and MRMC owns such member
interest free and clear of all liens, encumbrances, security interests,
charges or claims (i) in respect of which a financing statement under
the Uniform Commercial Code of the State of Delaware naming MRMC as
debtor is on file in the office of the Secretary of State of Delaware
or (ii) otherwise known to such counsel, without independent
investigation, in each case other than those created by or arising
under the Delaware LP Act, Permitted Liens, applicable securities laws
and any restrictions set forth in the governing documents of the
Partnership Entities.
(viii) The Partnership is the sole member of Operating GP with a 100% member interest in Operating GP; such member interest has been duly authorized and validly issued in accordance with the Operating GP Agreement and is fully paid (to the extent required under the Operating GP Agreement) and nonassessable (except as such nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and the Partnership owns such member interest free and clear of all liens, encumbrances, security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming the Partnership as debtor is on file in the office of the Secretary of State of Delaware or (ii) otherwise known to such counsel, without independent investigation, in each case other than those created by or arising under the Delaware LP Act, Permitted Liens, applicable securities laws and any restrictions set forth in the governing documents of the Partnership Entities.
(ix) Operating GP is the sole general partner of the Operating Partnership with a 0.1% general partner interest in the Operating Partnership; such general partner interest has been duly authorized and validly issued in accordance with the Operating Partnership Agreement, and Operating GP owns such general partner interest free and clear of all liens, encumbrances , security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming Operating GP as debtor is on file in the office of the Secretary of State of Delaware or (ii) otherwise known to such counsel, without independent investigation, in each case other than those created by or arising under the Delaware LP Act, Permitted Liens, applicable securities laws and any restrictions set forth in the governing documents of the Partnership Entities.
(x) The Partnership is the sole limited partner of the Operating Partnership with a 99.9% limited partner interest in the Operating Partnership; such limited partner interest has been duly authorized and validly issued in accordance with the Operating Partnership Agreement and is fully paid (to the extent required under the Operating Partnership Agreement) and nonassessable (except as such nonassessability may be affected by Sections 17-303 and 17-607 of the Delaware LP Act); and the Partnership owns such limited partner interest free and clear of all liens, encumbrances, security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming the Partnership as debtor
is on file in the office of the Secretary of State of Delaware or (ii) otherwise known to such counsel, without independent investigation, in each case other than those created by or arising under the Delaware LP Act, Permitted Liens, applicable securities laws and any restrictions set forth in the governing documents of the Partnership Entities.
(xi) Martin LLC is the sole member of the General Partner with a 100% member interest in the General Partner; such member interest has been duly authorized and validly issued in accordance with the General Partner LLC Agreement and is fully paid (to the extent required under the General Partner LLC Agreement) and nonassessable (except as such nonassessability may be affected by Section 18-607 of the Delaware LLC Act); and Martin LLC owns such member interest free and clear of all liens, encumbrances, security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming Martin LLC as debtor is on file in the office of the Secretary of State of Delaware or (ii) otherwise known to such counsel, without independent investigation, in each case other than those created by or arising under the Delaware LP Act, Permitted Liens, applicable securities laws and any restrictions set forth in the governing documents of the Partnership Entities.
(xii) At the Closing Date, each of MGM and the Operating Partnership will be a limited partner of CFMSLP with an aggregate 49.5% limited partner interest in CFMSLP; such limited partner interests have been duly authorized and validly issued in accordance with the partnership agreement, as amended, of CFMSLP and are fully paid (to the extent required under the partnership agreement, as amended, of CFMSLP) and nonassessable (except as such nonassessability may be affected by Sections 17-303 and 17-607 of the Delaware LP Act); and each of MGM and the Operating Partnership will own such limited partner interests free and clear of all liens, encumbrances, security interests, charges or claims (i) in respect of which a financing statement under the Uniform Commercial Code of the State of Delaware naming MGM or the Operating Partnership as debtor is on file in the office of the Secretary of State of Delaware or (ii) otherwise known to such counsel, without independent investigation, in each case other than those created by or arising under the Delaware LP Act, applicable securities laws, any restrictions set forth in the governing documents of the Partnership Entities, and any transfer restrictions and buy/sell obligations contained in the governing documents of CFMSLP or its general partner.
(xiii) Except as described in the Prospectus, there are no preemptive rights or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of, any partnership or member interests in the Partnership Entities, in each case pursuant to the organizational documents or any agreement or other instrument listed as an exhibit to the Registration Statement to which any Partnership Entity is a party or by which any of them may be bound. To such counsel's knowledge, neither the filing of the Registration Statement nor the offering or sale of the Units as contemplated by this Agreement gives rise to any rights for or relating to the registration of any Units or other securities of any Partnership Entity, other than as described in the Prospectus and the Partnership Agreement or as have been waived. To such counsel's knowledge, except as
described in the Prospectus, there are no outstanding options or warrants to purchase partnership or member interests in any Partnership Entity.
(xiv) The Partnership has all necessary limited partnership power and authority to issue, sell and deliver (i) the Units, in accordance with and upon the terms and conditions set forth in this Agreement, the Partnership Agreement, the Registration Statement and the Prospectus, and (ii) the Subordinated Units and the Incentive Distribution Rights, in accordance with the terms and conditions set forth in the Partnership Agreement and the Transaction Documents.
(xv) This Agreement has been duly authorized and validly executed and delivered by each of the Martin Parties.
(xvi) Each of the Operative Agreements to which any of the Martin Parties is a party has been duly authorized and validly executed and delivered by the Martin Parties that are parties thereto. Assuming due authorization, execution and delivery by each party other than a Martin Party, each of the Operative Agreements (other than any Operative Agreement governed by law other than Texas law) to which any of the Martin Parties is a party constitutes a valid and legally binding obligation of the Martin Parties that are parties thereto, enforceable against each such party in accordance with its terms, subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (ii) public policy, applicable law relating to fiduciary duties and indemnification and contribution and an implied covenant of good faith and fair dealing.
(xvii) The Mergers of Resources and MLP Gas with and into the Operating Partnership became effective under the Delaware LP Act and the Texas Business Corporation Act, as applicable, on November 1, 2002.
(xviii) Pursuant to Section 17-211 of the Delaware LP Act, upon the effectiveness of the Mergers of Resources and MLP Gas with and into the Operating Partnership, for all purposes of the laws of the State of Delaware, all of the rights, privileges and powers of Resources and MLP Gas, and all property, real, personal and mixed, and all debts due to either of Resources and MLP Gas, as well as all other things and causes of action belonging to each of Resources and MLP Gas, shall be vested in the Operating Partnership, and shall thereafter be the property of the Operating Partnership as they were of each of Resources and MLP Gas, and the title to any real property vested by deed or otherwise, under the laws of the State of Delaware, in either of Resources or MLP Gas shall not revert or be in any way impaired by reason of Section 17-211 of the Delaware LP Act. Pursuant to Article 5.06 of the Texas Business Corporation Act, all rights, title and interests to all real estate and other property owned by each of Resources and MLP Gas shall be allocated to and vested in the Operating Partnership without reversion or impairment, without further act or deed, and without any transfer or assignment having occurred, but subject to any existing liens or other encumbrances thereon.
(xix) Each of the Conveyances that purports to transfer right, title or interest to property (i) is in a form legally sufficient as between the parties thereto to convey to the transferee thereunder all of the right, title and interest of the transferor stated therein in and to the properties located in the State of Texas and to any vessels governed by the United States regulations relating to the documentation of vessels, as described in the Conveyances, subject to the conditions, reservations and limitations contained in the Conveyances, except motor vehicles or other property requiring conveyances of certificated title as to which the Conveyances are legally sufficient to compel delivery of such certificated title, (ii) is in a form legally sufficient for recordation in the appropriate public offices of the State of Texas or in relation to vessels, in the National Vessel Documentation Center of the U.S. Coast Guard, in each case to the extent such recordation is required, (iii) upon proper recordation of any deeds included in the Conveyances relating to real properties located in the State of Texas and upon obtaining or making the maritime consents, applications and/or filings to be obtained or made in connection with the transfer of vessels to the Partnership Entities, will constitute record notice to all third parties under the applicable recordation statutes of the State of Texas and the United States regulations relating to the documentation of vessels concerning record title to the real property or vessels, as the case may be, transferred thereby; and (iv) recordation in the office of the County Clerk for each county in which the Partnership Entities own real property is the appropriate public office in the State of Texas for the recordation of deeds and assignments of interests in real property located in such county.
(xx) Except as described in the Prospectus, to the knowledge of such counsel, there is no action, suit, inquiry, proceeding or investigation by or before any court or governmental or other regulatory or administrative agency or commission pending or threatened, against or involving any of the Martin Parties, or to which any of the Martin Parties or their properties are subject that are required to be described in the Registration Statement or Prospectus that are not described as required therein.
(xxi) None of the offering, issuance and sale of the Units by the Partnership, the execution, delivery or performance of this Agreement or the Operative Agreements by the Martin Parties that are parties hereto or thereto, or the consummation of the transactions contemplated hereby and thereby (including the Transactions) (i) conflicts with or will conflict with or constitutes or will constitute a breach or violation of, or a default under, the certificate or agreement of limited partnership, limited liability company agreement, certificate or articles of incorporation or bylaws (or other organizational documents) of any of the Martin Parties, (ii) constitutes or will constitute a breach or violation of, or a default (or an event that, with notice or lapse of time or both, would constitute such a default) under, any Operative Agreement or any other agreement filed as an exhibit to the Registration Statement, (iii) violates or will result in any violation of (assuming compliance with all applicable state securities and Blue Sky laws) any applicable Delaware, Texas or federal law or regulation, or any ruling, filing, judgment, injunction, order or decree of any Delaware, Texas or federal court or government agency applicable to the Martin Parties, or (iv) results in or will result in the creation or imposition of any lien, encumbrance, security interest, charge or claim (other than Permitted Liens) upon any property or assets of any of the Partnership Entities,
which conflicts, breaches, violations, defaults or liens, encumbrances,
security interests, charges or claims, in the case of clauses (ii),
(iii) or (iv), would individually or in the aggregate, result in a
Material Adverse Effect.
(xxii) No consent, approval, authorization or other order of, or registration, qualification or filing with, any Delaware, Texas or federal court, regulatory body, administrative agency or other governmental body, agency or official is required on the part of any of the Martin Parties for the valid offering, issuance and sale of the Units to the Underwriters under this Agreement, the execution, delivery and performance of this Agreement or the Operative Agreements by the Martin Parties that are parties hereto or thereto or the consummation by the Martin Parties of the transactions (including the Transactions) contemplated by this Agreement or the Operative Agreements except (i) for such consents required under the Act and the Exchange Act or under state securities or "Blue Sky" laws, as to which such counsel need to express any opinion, (ii) for such consents which have been obtained or made, (iii) for such consents which (A) are of a routine or administrative nature, (B) are not customarily obtained or made prior to the consummation of transactions such as those contemplated by this Agreement and the Operative Agreements and (C) are expected in the reasonable judgment of the General Partner to be obtained in the ordinary course of business subsequent to the consummation of the Transactions or (iv) for such consents which, if not obtained or made, would not, individually or in the aggregate, have a Material Adverse Effect.
(xxiii) The Registration Statement has been declared effective by the Commission under the Act. To the knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued under the Act and no proceedings for such purpose have been instituted or are pending or are contemplated or threatened by the Commission. Any required filing of the Prospectus and any supplement thereto pursuant to Rule 424(b) under the Act has been made in the manner and within the time period required by such Rule 424(b).
(xxiv) The Registration Statement, including any Rule 462 Registration Statement, the Prospectus and each amendment or supplement to the Registration Statement and the Prospectus, as of their respective effective or issue dates (other than the financial statements and the notes and schedules thereto, and the other financial, statistical and accounting data included in the Registration Statement, Prospectus and in the exhibits to or excluded from the Registration Statement, as to which no opinion need be given) comply as to form in all material respects with the requirements of the Act.
(xxv) None of the Partnership Entities is an "investment company", as such term is defined in the Investment Company Act of 1940, as amended, or a "public utility holding company" or "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended.
(xxvi) The opinion of Baker Botts L.L.P. that is filed as Exhibit 8.1 to the Registration Statement is confirmed and the Underwriters may rely on such opinion as if it were addressed to them.
(xxvii) The statements in the Registration Statement and Prospectus under the captions "Cash Distribution Policy," "Management's Discussion and Analysis of Financial Condition and Results of Operations - Description of Our Credit Facility," "Certain Relationships and Related Transactions," "Conflicts of Interest and Fiduciary Responsibilities," "Description of the Common Units," "Description of the Subordinated Units" and "The Partnership Agreement" accurately describe in all material respects the portions of the documents addressed thereby and, insofar as they purport to constitute summaries of law or legal conclusions, are accurate in all material respects; the description of the statutes and regulations set forth in the Registration Statement and Prospectus under the caption "Business--Environmental and Regulatory Matters" fairly describe in all material respects the portions of the statutes and regulations addressed thereby; and the Common Units, the Subordinated Units and the Incentive Distribution Rights conform in all material respects to the descriptions thereof contained in the Registration Statement and Prospectus under the captions "Prospectus Summary--The Offering," "Cash Distribution Policy," "Description of the Common Units," "Description of the Subordinated Units" and "The Partnership Agreement."
(xxviii) The offer, sale and issuance of the Sponsor Units and the Incentive Distribution Rights to the General Partner or any of the Martin Parties pursuant to the Partnership Agreement are exempt from the registration requirements of the Act and the securities laws of the State of Texas.
In rendering such opinion, counsel may rely, to the extent they deem such reliance proper, as to matters of fact upon certificates of officers of the Martin Parties and of government officials, provided that counsel shall state their belief that they and you are justified in relying thereon. Copies of all such certificates shall be furnished to you and your counsel on the Closing Date and the Additional Closing Date, as the case may be.
In addition, such counsel shall state that they have participated in conferences with officers and other representatives of the Martin Parties, the independent public accountants of the Partnership, and the Underwriters, at which the contents of the Registration Statement and the Prospectus and related matters were discussed, and although such counsel has not independently verified, is not passing on, and is not assuming any responsibility for the accuracy, completeness or fairness of the statements contained in, the Registration Statement and the Prospectus (except to the extent specified in the foregoing opinion), based on the foregoing, no information has come to such counsel's attention that causes such counsel to believe that the Registration Statement (other than (i) the financial statements included therein, including the notes and schedules thereto and the auditors' reports thereon, (ii) the other financial, statistical and accounting data included therein, and (iii) the exhibits thereto, as to which such counsel need not comment), as of its effective date contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus (other than (i) the financial statements included therein, including the notes and schedules thereto and the auditors' reports thereon, (ii) the other financial, statistical and accounting data included therein, and (iii) the exhibits thereto, as to which such counsel need not comment), as of its issue date and the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(d) You shall have received on the Closing Date a written opinion of each of Trenam, Kemker, Scharf, Barkin, Frye, O'Neill and Mullis, P.A. and Vickers, Riis, Murray and Curran, L.L.C., counsel to the Martin Parties, substantially to the effect set forth in Exhibit B attached hereto.
(e) You shall have received on the Closing Date a written opinion of Cook, Yancey, King & Galloway, a Professional Law Corporation, counsel to the Martin Parties, substantially to the effect set forth in Exhibit C attached hereto.
(f) You shall have received on the Closing Date a written opinion of Marquis & Aurbach, counsel to the Martin Parties, substantially to the effect set forth in Exhibit D attached hereto.
(g) You shall have received on the Closing Date or Additional Closing Date, as the case may be, an opinion of Vinson & Elkins L.L.P., as counsel for the Underwriters, dated the Closing Date or Additional Closing Date, as the case may be, with respect to the issuance and sale of the Units, the Registration Statement and other related matters as you may reasonably request, and the Martin Parties and their counsel shall have furnished to your counsel such documents as they may reasonably request for the purpose of enabling them to pass upon such matters.
(h) You shall have received letters addressed to you and dated the date hereof and the Closing Date or the Additional Closing Date, as the case may be, from the firm of KPMG LLP, independent certified public accountants (i) confirming that they are independent public accountants within the meaning of the Act and are in compliance with the applicable requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X of the Commission, and (ii) stating, as of the date thereof (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Prospectus, as of a date not more than five days prior to the date thereof), the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants' "comfort letters" to underwriters in connection with registered public offerings.
(i) All corporate, partnership and limited liability company proceedings and other legal matters incident to the authorization, form and validity of this Agreement, the Operative Agreements, the Common Units, the Subordinated Units, the Incentive Distribution Rights, the Registration Statement and the Prospectus, and all other legal matters relating to this Agreement, the transactions contemplated hereby and the Transactions shall be reasonably satisfactory in all material respects to counsel for the Underwriters, and the Partnership shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.
(j) The MLP Credit Agreement shall have been duly authorized, executed and delivered by the Partnership, Operating Partnership and Operating GP and each of the other parties thereto.
(k) (i) No stop order suspending the effectiveness of the Registration Statement shall have been issued by the Commission and no proceedings for that purpose shall be pending or, to the knowledge of the Partnership, shall be threatened or contemplated by the Commission at or prior to the Closing Date or Additional Closing Date, as the case may be; (ii) no order suspending the effectiveness of the Registration Statement or the qualification or registration of the Units under the securities or Blue Sky laws of any jurisdiction shall be in effect and no proceeding for such purpose shall be pending or, to the knowledge of the Partnership, threatened or contemplated by the authorities of any jurisdiction; (iii) any request for additional information on the part of the staff of the Commission or any such authorities shall have been complied with to the satisfaction of the staff of the Commission or such authorities; (iv) after the date hereof, no amendment or supplement to the Registration Statement or the Prospectus shall have been filed unless a copy thereof was first submitted to you and you did not object thereto in good faith; and (v) all of the representations and warranties of the Martin Parties contained in this Agreement shall be true and correct on and as of the date hereof and on and as of the Closing Date or Additional Closing Date, as the case may be, as if made on and as of the Closing Date or Additional Closing Date, as the case may be, and you shall have received a certificate, dated the Closing Date or the Additional Closing Date, as the case may be, and signed by the chief executive officer and the chief financial officer of the Partnership (or such other officers as are acceptable to you) to the effect set forth in this Section 9(k) and in Sections 9(b), 9(l) and 9(q) hereof and that shall set forth a representation of the Partnership that all of the transactions summarized in the introductory paragraphs of this Agreement have been completed.
(l) The Martin Parties shall not have failed in any material respect at or prior to the Closing Date or the Additional Closing Date, as the case may be, to have performed or complied with any of their agreements herein contained and required to be performed or complied with by them hereunder at or prior to the Closing Date or Additional Closing Date, as the case may be.
(m) The Partnership shall have furnished or caused to have been furnished to you such further certificates and documents as you shall have reasonably requested.
(n) At or prior to the Closing Date, you shall have received Lock-Up Agreements from each of the Martin Parties and the directors and executive officers of the General Partner not to (except as provided in such Lock-Up Agreement) directly or indirectly (i) sell, offer or contract to sell or otherwise dispose of or transfer any Common Units, whether now owned or acquired after the date of the Prospectus or with respect to which the power of disposition is acquired after the date of the Prospectus, or file any registration statement under the Act with respect to the foregoing or (ii) enter into any swap or other agreement that transfers, in whole or in part, directly or indirectly, the economic consequences of ownership of Common Units whether any such swap or transaction is to be settled by delivery of Common Units, in cash or otherwise, before the expiration of 180 days from the Closing Date, without the prior written consent of Raymond James & Associates, Inc.
(o) At or prior to the effective date of the Registration Statement, you shall have received a letter from the Corporate Financing Department of the NASD confirming that such Department has determined to raise no objections with respect to the fairness or reasonableness of the underwriting terms and arrangements of the offering contemplated hereby.
(p) The NASDAQ National Market shall have approved the Units for inclusion therein, subject only to official notice of issuance, and satisfactory evidence of such actions shall have been provided to the Underwriters.
(q) The consents, applications, filings and releases set forth
on Schedule 10(q) shall have been obtained or made, except for such consents
(i)(A) which are of a routine or administrative nature, (B) are not customarily
obtained or made prior to the consummation of transactions such as those
contemplated by this Agreement and the Operative Agreements and (C) are expected
in the reasonable judgment of the General Partner to be obtained in the ordinary
course of business subsequent to the consummation of the Transactions or (ii)
which, if not obtained or made, would not, individually or in the aggregate,
have a Material Adverse Affect.
All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof only if they are reasonably satisfactory in form and substance to you and your counsel. Any representation made in any certificate executed by an officer of the Partnership shall be deemed to be a representation of the Partnership.
The several obligations of the Underwriters to purchase Additional Units hereunder are subject to the satisfaction on and as of the Additional Closing Date of the conditions set forth in this Section 9, except that, if the Additional Closing Date is other than the Closing Date, the certificates, opinions and letters referred to in this Section 9 shall be dated as of the Additional Closing Date and the opinions called for by paragraphs (c) and (d) shall be revised to reflect the sale of Additional Units.
If any of the conditions hereinabove provided for in this Section 9 shall not have been satisfied when and as required by this Agreement, this Agreement may be terminated by you by notifying the Partnership of such termination in writing or by telegram at or prior to such Closing Date, but you shall be entitled to waive any of such conditions.
10. Effective Date of Agreement. This Agreement shall become effective upon the later of (a) the execution and delivery hereof by the parties hereto and (b) release of notification of the effectiveness of the Registration Statement by the Commission; provided, however, that the provisions of Sections 7 and 8 shall at all times be effective.
11. Defaulting Underwriters. If any one or more of the Underwriters shall fail or refuse to purchase Firm Units that it or they have agreed to purchase hereunder, and the aggregate number of Firm Units that such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate number of the Firm Units, each non-defaulting Underwriter shall be obligated, severally, in the proportion in which the number of Firm Units set forth opposite its name in Schedule I hereto bears to the aggregate number of Firm Units set forth opposite the names of all non-defaulting Underwriters or in such other proportion as you may specify in the Agreement Among Underwriters, to purchase the
Firm Units that such defaulting Underwriter or Underwriters agreed, but failed or refused, to purchase. If any Underwriter or Underwriters shall fail or refuse to purchase Firm Units and the aggregate number of Firm Units with respect to which such default occurs is more than one-tenth of the aggregate number of Firm Units and arrangements satisfactory to you and the Partnership for the purchase of such Firm Units are not made within 48 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or the Partnership. In any such case that does not result in termination of this Agreement, either you or the Partnership shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and the Prospectus or any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any such default of any such Underwriter under this Agreement.
12. Termination of Agreement. This Agreement shall be subject to termination in your absolute discretion, without liability on the part of any Underwriter to any of the Martin Parties by notice to the Partnership, if prior to the Closing Date or the Additional Closing Date (if different from the Closing Date and then only as to the Additional Units), as the case may be, in your sole judgment, (i) trading in the Partnership's Common Units shall have been suspended by the Commission or the NASDAQ, (ii) trading in securities generally on the NYSE or NASDAQ shall have been suspended or materially limited, or minimum or maximum prices shall have been generally established on such exchange, or additional material governmental restrictions, not in force on the date of this Agreement, shall have been imposed upon trading in securities generally by any such exchange or by order of the Commission or any court or other governmental authority, (iii) a general moratorium on commercial banking activities shall have been declared by either federal or New York State authorities, (iv) there shall have occurred any material disruption in commercial banking or securities settlement or clearance services, or (v) there shall have occurred any outbreak or escalation of hostilities or other international or domestic calamity, crisis or change in political, financial or economic conditions or other material event the effect of which on the financial markets of the United States is such as to make it, in your judgment, impracticable or inadvisable to market the Units or to enforce contracts for the sale of the Units. Notice of such cancellation shall be promptly given to the Partnership and its counsel by telegraph, telecopy or telephone and shall be subsequently confirmed by letter.
13. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Martin Parties or their respective officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of the Underwriters or the Martin Parties or any of the officers, directors, employees, agents or controlling persons referred to in Section 8 hereof, and will survive delivery of and payment for the Units. The provisions of Sections 7 and 8 hereof shall survive the termination or cancellation of this Agreement.
14. Information Furnished by the Underwriters. The Martin Parties acknowledge that
(i) the second to the last paragraph of the cover page of the Prospectus regarding delivery of the Units,
(ii) the list of the Underwriters and their respective participation in the sale of the Units, and
(iii) the statements set forth in the third, eighth, ninth, tenth, and eighteenth paragraphs, the last sentence of the eleventh paragraph, and the second sentence of the seventh paragraph, in each case under the caption "Underwriting" in the Prospectus.
constitute the only information furnished by or on behalf of the Underwriters through you as such information is referred to in Sections 6.1(a), 6.1(b) and 8 hereof.
15. Miscellaneous. Except as otherwise provided in Sections 5 and 12 hereof, notice given pursuant to any of the provisions of this Agreement shall be in writing and shall be delivered:
(i) to the Partnership:
Martin Midstream Partners L.P.
4200 Stone Road
Kilgore, Texas 75662
Attention: Ruben Martin
with a copy to:
Baker Botts L.L.P.
2001 Ross Avenue
600 Trammell Crow Center
Dallas, Texas 75201
Attention: C. Neel Lemon, III
(ii) to the Underwriters:
Raymond James & Associates, Inc. 2001 Ross Avenue 3550 Trammel Crow Center Dallas, Texas 75201 Attention: Allen D. Lassiter
with a copy to:
Vinson & Elkins L.L.P.
2001 Ross Avenue
3700 Trammell Crow Center
Dallas, Texas 75201
Attention: Jeffrey A. Chapman
and
Vinson & Elkins L.L.P.
1001 Fannin
2300 First City Tower
Houston, Texas 77002-6760
Attention: Thomas P. Mason
This Agreement has been and is made solely for the benefit of the several Underwriters, the Martin Parties and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except that (A) the indemnities of the Martin Parties contained in Section 8 shall also be deemed to be for the benefit of each director, officer, employee and agent of any Underwriter and any person who controls any Underwriter within the meaning of Section 15 of the Act and (B) the indemnity agreement of the Underwriters contained in Section 8 of this Agreement shall be deemed to be for the benefit of each director of the General Partner, each officer of the General Partner who has signed the Registration Statement and any person who controls any of the Martin Parties within the meaning of Section 15 of the Act. Nothing in this Agreement is intended or shall be construed to give any person, other than the persons referred to in this Section 15, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein.
16. Applicable Law; Counterparts. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida without reference to choice of law principles thereunder.
This Agreement may be signed in various counterparts, which together shall constitute one and the same instrument.
This Agreement shall be effective when, but only when, at least one counterpart hereof shall have been executed on behalf of each party hereto.
17. Waiver of Jury Trial. The Partnership and the Underwriters each hereby irrevocably waive any right they may have to a trial by jury in respect of any claim based upon or arising out of this Agreement or the transactions contemplated hereby.
Please confirm that the foregoing correctly sets forth the agreement among the Martin Parties and the several Underwriters.
Very truly yours,
MARTIN RESOURCE MANAGEMENT
CORPORATION
By: /s/ Ruben S. Martin Name: Ruben S. Martin Title: President |
MARTIN RESOURCE LLC
By: Martin Resource Management
Corporation, as sole member
By: /s/ Ruben S. Martin Name: Ruben S. Martin Title: President |
MARTIN MIDSTREAM GP LLC
By: /s/ Ruben S. Martin Name: Ruben S. Martin Title: Chief Executive Officer |
MARTIN MIDSTREAM PARTNERS L.P.
By: Martin Midstream GP LLC,
as general partner
By: /s/ Ruben S. Martin Name: Ruben S. Martin Title: Chief Executive Officer |
MARTIN OPERATING GP LLC
By: Martin Resource LLC,
as sole member
By: Martin Resource Management
Corporation, as sole member
By: /s/ Ruben S. Martin Name: Ruben S. Martin Title: President |
MARTIN OPERATING PARTNERSHIP L.P.
By: Martin Operating GP LLC,
as general partner
By: Martin Resource LLC, as sole
member
By: Martin Resource Management
Corporation, as sole
member
By: /s/ Ruben S. Martin Name: Ruben S. Martin Title: President |
MARTIN GAS MARINE LLC
By: Martin Resource Management
Corporation, as sole member
By: /s/ Ruben S. Martin Name: Ruben S. Martin Title: President |
MARTIN GAS SALES LLC
By: Martin Resource Management
Corporation, as sole member
By: /s/ Ruben S. Martin Name: Ruben S. Martin Title: President |
MARTIN L.P. GAS, INC.
By: /s/ Ruben S. Martin Name: Ruben S. Martin Title: President |
CF MARTIN SULPHUR HOLDING CORPORATION
By: /s/ Robert D. Bondurant Name: Robert D. Bondurant Title: Authorized Representative |
CONFIRMED as of the date first above
mentioned.
RAYMOND JAMES & ASSOCIATES, INC.
A. G. EDWARDS & SONS, INC.
RBC DAIN RAUSCHER INC.
Acting on behalf of themselves and as the
Representatives of the other several
Underwriters named in Schedule I hereto.
By Raymond James & Associates, Inc.
By: /s/ Allen D. Lassiter Authorized Representative |
SCHEDULE I
Number Name Firm Shares ---- ----------- Raymond James & Associates, Inc. 935,250 A.G. Edwards & Sons, Inc. 810,550 RBC Dain Rauscher Inc. 748,200 Ferris, Baker Watts, Incorporated 58,000 Legg Mason Wood Walker, Incorporated 58,000 McDonald Investments Inc., a KeyCorp Company 58,000 Morgan Keegan & Company, Inc. 58,000 Sanders Morris Harris 58,000 Stephens Inc. 58,000 Wedbush Morgan Securities Inc. 58,000 ------------ TOTAL: 2,900,000 |
SCHEDULE 10(Q)
1. The consent required under the lease with the Tampa Port Authority filed as an exhibit to the Registration Statement.
2. Any maritime consents, applications and/or filings obtained or made in connection with the transfer of vessels to the Partnership Entities.
3. Filings with applicable secretaries of state to effect any conversions or mergers contemplated by the Contribution Agreement.
4. Lien filings and lien releases necessary in connection with the MLP Credit Agreement.
5. All required consents from CF Industries, Inc.
6. All required consents and/or approvals from the lenders referred in the "Use of Proceeds" section of the Prospectus.
EXHIBIT A
_______, 2002
RAYMOND JAMES & ASSOCIATES, INC.
A. G. EDWARDS & SONS, INC.
RBC DAIN RAUSCHER INC.
As Representatives of the Several Underwriters
c/o Raymond James & Associates, Inc.
880 Carillon Parkway
St. Petersburg, FL 33716
RE: MARTIN MIDSTREAM PARTNERS L.P. (THE "PARTNERSHIP") -
RESTRICTION ON STOCK SALES
Dear Sirs:
This letter is delivered to you pursuant to the Underwriting Agreement (the "Underwriting Agreement") to be entered into by the Martin Parties (as defined in the Underwriting Agreement), including the Partnership, as issuer, Raymond James & Associates, Inc. and the Representatives (the "Representatives") of certain underwriters (the "Underwriters") to be named therein. Upon the terms and subject to the conditions of the Underwriting Agreement, the Underwriters intend to effect a public offering of Common Units of the Partnership (the "Units"), as described in and contemplated by the registration statement of the Partnership on Form S-1, File No. 333-91706 (the "Registration Statement"), as filed with the Securities and Exchange Commission on July 1, 2002 (the "Offering"). Capitalized terms used but not defined herein have the respective meanings assigned to such terms in the Underwriting Agreement.
The undersigned recognizes that it is in the best financial interests of the undersigned that the Partnership completes the proposed Offering.
The undersigned further recognizes that the Units held by the undersigned are, or may be, subject to certain restrictions on transferability, including those imposed by United States federal securities laws. Notwithstanding these restrictions, the undersigned has agreed to enter into this letter agreement to further assure the Underwriters that the Units of the undersigned, now held or hereafter acquired, will not enter the public market at a time that might impair the underwriting effort.
Therefore, as an inducement to the Underwriters to execute the Underwriting Agreement, the undersigned hereby acknowledges and agrees that the undersigned will not (i) sell, offer, contract to sell, pledge, grant any option to purchase or otherwise dispose of (collectively, a "Disposition") any Units, or any securities convertible into or exercisable or exchangeable for, or any rights to purchase or otherwise acquire, any Units held by the undersigned or acquired by the undersigned after the date hereof, or that may be deemed to be beneficially owned by the undersigned (collectively, the "Lock-Up Units"), pursuant to the Rules and Regulations promulgated under the Act and the Exchange Act for a period commencing on the date hereof
and ending 180 days after the date of the Partnership's Prospectus first filed pursuant to Rule 424(b) under the Act, inclusive (the "Lock-Up Period"), without the prior written consent of Raymond James & Associates, Inc. or (ii) exercise or seek to exercise or effectuate in any manner any rights of any nature that the undersigned has or may have hereafter to require the registration under the Act the undersigned's sale, transfer or other disposition of any of the Lock-Up Units or other securities of the Martin Parties held by the undersigned, or to otherwise participate as a selling securityholder in any manner in any registration effected by the Martin Parties under the Act, including under the Registration Statement, during the Lock-Up Period. The foregoing restrictions are expressly agreed to preclude the undersigned from engaging in any hedging, collar (whether or not for any consideration) or other transaction that is designed to or reasonably expected to lead or result in a Disposition of Lock-Up Units during the Lock-Up Period, even if such Lock-Up Units would be disposed of by someone other than such holder. Such prohibited hedging or other transactions would include any short sale or any purchase, sale or grant of any right (including any put or call option or reversal or cancellation thereof) with respect to any Lock-Up Units or with respect to any security (other than a broad-based market basket or index) that includes, relates to or derives any significant part of its value from Lock-Up Units.
Notwithstanding the agreement not to make any Disposition during the Lock-Up Period, you have agreed that the foregoing restrictions shall not apply to:
(1) the Units being offered in the prospectus included in the Registration Statement; or
(2) Units issued by the Partnership under employee incentive plans or upon the exercise of options issued under employee incentive plans.(1)
It is understood that, if the Underwriting Agreement (other than the provisions thereof that survive termination) shall terminate or be terminated prior to payment for and delivery of the Units, you will release the undersigned from the obligations under this letter agreement.
In furtherance of the foregoing, the Martin Parties and their transfer agents and registrars are hereby authorized to decline to make any transfer of Lock-Up Units if such transfer would constitute a violation or breach of this letter. This letter shall be binding on the undersigned and the respective successors, heirs, personal representatives and assigns of the undersigned.
Very truly yours,
EXHIBIT B
FORM OF LOCAL COUNSEL OPINIONS
FOR FLORIDA AND ALABAMA
In the case of the Closing Date only, each of Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A., with respect to the State of Florida, and Vickers, Riis, Murray and Curran, L.L.C., with respect to the State of Alabama, shall have furnished to you their written opinions, dated the Closing Date, in form and substance satisfactory to you, to the effect that:
(a) The Operating Partnership has been duly qualified or registered as a foreign limited partnership for the transaction of business under the laws of [Florida or Alabama, as applicable].
(b) The Operating GP has been duly qualified or registered as a foreign limited liability company for the transaction of business under the laws of [Florida or Alabama, as applicable].
(c) Each of the Operative Agreements to which MFSI or Midstream is a party has been duly authorized and validly executed and delivered by such party. [Alabama only]
(d) Each of the Partnership and the Operating Partnership has
all requisite limited partnership power and authority under the laws of
the State of [insert applicable state] to own or lease its properties
and to conduct its business in the State of [insert applicable state],
in each case in all material respects as described or otherwise
disclosed in the Prospectus; each of the General Partner and the
Operating GP has all requisite limited liability company power and
authority under the laws of the State of [insert applicable state] to
own or lease its properties and to conduct its business in the State of
[insert applicable state], in each case in all material respects as
described or otherwise disclosed in the Prospectus; and upon the
consummation of the Transactions (assuming that the Partnership will
not be liable under the laws of the State of Delaware for the
liabilities of the Operating Partnership and assuming that unitholders
will not be liable under the laws of the State of Delaware for the
liabilities of the Partnership or the Operating Partnership), the
Partnership will not be liable under the laws of the State of [insert
applicable state] for the liabilities of the Operating Partnership, and
unitholders will not be liable under the laws of the State of [insert
applicable state] for the liabilities of the Partnership or the
Operating Partnership except in each case to the same extent as under
the laws of the State of Delaware.
(e) [Alabama only: The Conversion of MFSI into Midstream was legally sufficient under the laws of the State of Alabama to vest in Midstream the assets of MFSI located in the State of Alabama.] Assuming that the Mergers and the Conversions [Alabama only: , other than the Conversion of MFSI into
Midstream,] were legally sufficient under applicable Delaware and Texas
law to vest in the Operating Partnership, as applicable, the assets of
the parties to the Mergers and the Conversions, then the Mergers and
the Conversions were legally sufficient under the law of the State of
[insert applicable state] to vest, directly or indirectly, in the
Operating Partnership, as applicable, the assets of the parties to the
Mergers and the Conversions located in the State of [insert applicable
state].
(f) No permit, consent, approval, authorization, order, registration, filing or qualification ("consent") of or with any court, governmental agency or body of the State of [insert applicable state] having jurisdiction over the Martin Parties or any of their respective properties is required for the issuance and sale of the Units by the Partnership, or for the conveyance of the properties located in the State of [insert applicable state] purported to be conveyed to the Operating Partnership, as applicable, pursuant to the Conveyances, except (A) for such consents required under the Securities Act, the Exchange Act and state securities or "Blue Sky" laws, as to which such counsel need not express any opinion, (B) for such consents which have been obtained or made, (C) for such consents which (i) are of a routine or administrative nature, (ii) are not customarily obtained or made prior to the consummation of transactions such as those contemplated by this Agreement and the Operative Agreements and (iii) are expected in the reasonable judgment of the General Partner to be obtained or made in the ordinary course of business subsequent to the consummation of the Transactions, (D) for such consents which, if not obtained or made, would not, individually or in the aggregate, have a material adverse effect upon the operations conducted or to be conducted as described in the Prospectus in the State of [insert applicable state] by the Partnership Entities or (E) as disclosed in the Prospectus.
(g) The execution, delivery and performance of the Conveyances
relating to the transfer of property in the State of [insert applicable
state] has not violated and will not violate any statute of the State
of [insert applicable state] or any rule, regulation or, to the
knowledge of such counsel, any order of any agency of the State of
[insert applicable state] having jurisdiction over any of the Martin
Parties or any of their respective properties, except for any such
violations which, individually or in the aggregate, would not have a
material adverse effect on the unitholders or the operations conducted
in the State of [insert applicable state] by the Partnership Entities,
taken as a whole.
(h) Each of the Conveyances is in a form legally sufficient as between the parties thereto to convey to the transferee thereunder all of the right, title and interest of the transferor stated therein in and to the properties located in the State of [insert applicable state], as described in the Conveyances, subject to the conditions, reservations and limitations contained in the Conveyances, except motor vehicles or other property requiring conveyance of certificated title as to which the Conveyances are legally sufficient to compel delivery of such certificated title.
(i) Each of the Conveyances in the form of a deed or real property assignment (including, without limitation, the form of the exhibits and schedules thereto) is in a form legally sufficient for recordation in the appropriate public offices of the State of [insert applicable state], to the extent such recordation is required, and, upon proper recordation of any of such deeds and real property assignments in the State of [insert applicable state], will constitute notice to all third parties under the recordation statutes of the State of [insert applicable state] concerning record title to the assets transferred thereby; recordation in the office of the County Clerk for each county in which the Partnership Entities own property is the appropriate public office in the State of [insert applicable state] for the recordation of deeds and assignments of interests in real property located in such county.
In rendering such opinion, such counsel may (A) rely in respect of
matters of fact upon certificates of officers and employees of the Martin
Parties and upon information obtained from public officials, (B) assume that all
documents submitted to them as originals are authentic, and all copies submitted
to them conform to the originals thereof, and that the signatures on all
documents examined by them are genuine, (C) state that such opinions are limited
to the laws of the State of [insert applicable state], excepting therefrom
municipal and local ordinances and regulations, (D) state that they express no
opinion with respect to state or local taxes or tax statutes to which any of the
limited partners of the Partnership or any of the Partnership Entities may be
subject, and (E) with respect to the opinion in paragraph (i) rely upon
certificates of foreign qualification provided by the Secretary of State of
[insert applicable state] (each of which shall be dated as of the date not more
than fourteen days prior to the Closing Date and provided to you).
In rendering such opinion, such counsel shall state that (A) Baker Botts L.L.P. and the Martin Parties are hereby authorized to rely upon such opinion letter in connection with the Transactions as if such opinion letter were addressed and delivered to them on the date hereof and (B) subject to the foregoing, such opinion letter may be relied upon by the Underwriters and its counsel only in connection with the Transactions and no other use or distribution of this opinion letter may be made without such counsel's prior written consent.
EXHIBIT C
FORM OF LOCAL COUNSEL
OPINION FOR LOUISIANA
In the case of the Closing Date only, Cook, Yancy, King & Galloway, a Professional law corporation, with respect to the State of Louisiana, shall have furnished to you its written opinion, dated the Closing Date, in form and substance satisfactory to you, to the effect that:
(a) The Operating Partnership has been duly qualified or registered as a foreign limited partnership for the transaction of business under the laws of Louisiana.
(b) The Operating GP has been duly qualified or registered as a foreign limited liability company for the transaction of business under the laws of Louisiana.
(c) Each of the Partnership and the Operating Partnership has all requisite limited partnership power and authority under the laws of the State of Louisiana to own or lease its properties and to conduct its business in the State of Louisiana, in each case in all material respects as described or otherwise disclosed in the Prospectus; each of the General Partner and the Operating GP has all requisite limited liability company power and authority under the laws of the State of Louisiana to own or lease its properties and to conduct its business in the State of Louisiana, in each case in all material respects as described or otherwise disclosed in the Prospectus; and upon the consummation of the Transactions (assuming that the Partnership will not be liable under the laws of the State of Delaware for the liabilities of the Operating Partnership and assuming that unitholders will not be liable under the laws of the State of Delaware for the liabilities of the Partnership or the Operating Partnership), the Partnership will not be liable under the laws of the State of Louisiana for the liabilities of the Operating Partnership, and unitholders will not be liable under the laws of the State of Louisiana for the liabilities of the Partnership or the Operating Partnership except in each case to the same extent as under the laws of the State of Delaware.
(d) No permit, consent, approval, authorization, order, registration, filing or qualification ("consent") of or with any court, governmental agency or body of the State of Louisiana having jurisdiction over the Martin Parties or any of their respective properties is required for the issuance and sale of the Units by the Partnership, or for the execution, delivery and performance of that certain Product Storage Agreement, by and between Martin Underground Storage, Inc. and the Partnership (the "Product Storage Agreement"), except (A) for such consents required under the Securities Act, the Exchange Act and state securities or "Blue Sky" laws, as to which such counsel need not express any opinion, (B) for such consents which have been obtained or made, (C) for such consents which (i) are of a routine or administrative nature, (ii) are not customarily obtained or made prior to the consummation of transactions such as those contemplated by this Agreement and the Operative Agreements and (iii) are expected in the reasonable judgment of the General Partner to be obtained or made in the ordinary course of
business subsequent to the consummation of the Transactions, (D) for such consents which, if not obtained or made, would not, individually or in the aggregate, have a material adverse effect upon the operations conducted or to be conducted as described in the Prospectus in the State of Louisiana by the Partnership Entities or (E) as disclosed in the Prospectus.
(e) The execution, delivery and performance of the Product Storage Agreement has not violated and will not violate any statute of the State of Louisiana or any rule, regulation or, to the knowledge of such counsel, any order of any agency of the State of Louisiana having jurisdiction over any of the Martin Parties or any of their respective properties, except for any such violations which, individually or in the aggregate, would not have a material adverse effect on the unitholders or the operations conducted in the State of Louisiana by the Partnership Entities, taken as a whole.
In rendering such opinion, such counsel may (A) rely in respect of matters of fact upon certificates of officers and employees of the Martin Parties and upon information obtained from public officials, (B) assume that all documents submitted to them as originals are authentic, and all copies submitted to them conform to the originals thereof, and that the signatures on all documents examined by them are genuine, (C) state that such opinions are limited to the laws of the State of Louisiana, excepting therefrom municipal and local ordinances and regulations, (D) state that they express no opinion with respect to state or local taxes or tax statutes to which any of the limited partners of the Partnership or any of the Partnership Entities may be subject, and (E) with respect to the opinion in paragraph (i) rely upon certificates of foreign qualification provided by the Secretary of State of Louisiana (each of which shall be dated as of the date not more than fourteen days prior to the Closing Date and provided to you).
In rendering such opinion, such counsel shall state that (A) Baker Botts L.L.P. and the Martin Parties are hereby authorized to rely upon such opinion letter in connection with the Transactions as if such opinion letter were addressed and delivered to them on the date hereof and (B) subject to the foregoing, such opinion letter may be relied upon by the Underwriters and its counsel only in connection with the Transactions and no other use or distribution of this opinion letter may be made without such counsel's prior written consent.
EXHIBIT D
FORM OF LOCAL COUNSEL OPINION FOR NEVADA
In the case of the Closing Date only, Marquis & Aurbach shall have furnished to you their written opinion, dated the Closing Date, in form and substance satisfactory to you, to the effect that the distribution of assets by CFMSHC pursuant to a liquidation proceeding was legally sufficient under the laws of the State of Nevada to vest in each of Marine, MGS and MTI an interest in CFMSLP on the basis of their pro rata interest in CFMSHC.
In rendering such opinion, such counsel may (A) rely in respect of matters of fact upon certificates of officers and employees of the Martin Parties and upon information obtained from public officials, (B) assume that all documents submitted to them as originals are authentic, and all copies submitted to them conform to the originals thereof, and that the signatures on all documents examined by them are genuine, (C) state that such opinions are limited to the laws of the State of Nevada, excepting therefrom federal laws including but not limited to bankruptcy, municipal and local ordinances and regulations and excepting voidability under the Uniform Fraudulent Transfer Act, codified at Chapter 112 of the Nevada Revised Statutes (D) state that they express no opinion with respect to federal, state or local taxes or tax statutes to which CFMSHC, CFMSLP, or any of the limited partners of the Partnership or any of the Partnership Entities may be subject.
In rendering such opinion, such counsel shall state that (A) Baker Botts L.L.P. and the Martin Parties are hereby authorized to rely upon such opinion letter in connection with the Transactions as if such opinion letter were addressed and delivered to them on the date hereof and (B) subject to the foregoing, such opinion letter may be relied upon by the Underwriters and its counsel only in connection with the Transactions and no other use or distribution of this opinion letter may be made without such counsel's prior written consent.
EXHIBIT 3.1
EXECUTION COPY
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
MARTIN MIDSTREAM PARTNERS L.P.
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS Section 1.1 Definitions............................................................................1 Section 1.2 Construction..........................................................................20 ARTICLE II - ORGANIZATION Section 2.1 Formation.............................................................................20 Section 2.2 Name..................................................................................21 Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices..................21 Section 2.4 Purpose and Business..................................................................21 Section 2.5 Powers................................................................................22 Section 2.6 Power of Attorney.....................................................................22 Section 2.7 Term..................................................................................23 Section 2.8 Title to Partnership Assets...........................................................23 ARTICLE III - RIGHTS OF LIMITED PARTNERS Section 3.1 Limitation of Liability...............................................................24 Section 3.2 Management of Business................................................................24 Section 3.3 Outside Activities of the Limited Partners............................................24 Section 3.4 Rights of Limited Partners............................................................24 ARTICLE IV - CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION OF PARTNERSHIP INTERESTS Section 4.1 Certificates..........................................................................25 Section 4.2 Mutilated, Destroyed, Lost or Stolen Certificates.....................................25 Section 4.3 Record Holders........................................................................26 Section 4.4 Transfer Generally....................................................................27 Section 4.5 Registration and Transfer of Limited Partner Interests................................27 Section 4.6 Transfer of the General Partner's General Partner Interest............................28 Section 4.7 Transfer of Incentive Distribution Rights.............................................29 Section 4.8 Restrictions on Transfers.............................................................29 Section 4.9 Citizenship Certificates; Non-citizen Assignees.......................................30 Section 4.10 Redemption of Partnership Interests of Non-citizen Assignees..........................31 ARTICLE V - CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS Section 5.1 Organizational Contributions..........................................................32 Section 5.2 Contributions by the General Partner and its Affiliates...............................32 Section 5.3 Contributions by Initial Limited Partners and Distributions to the General Partner...............................................................................33 Section 5.4 Interest and Withdrawal...............................................................33 Section 5.5 Capital Accounts......................................................................34 Section 5.6 Issuances of Additional Partnership Securities........................................36 Section 5.7 Limitations on Issuance of Additional Partnership Securities..........................37 |
Section 5.8 Conversion of Subordinated Units......................................................40 Section 5.9 Limited Preemptive Right..............................................................43 Section 5.10 Splits and Combinations...............................................................44 Section 5.11 Fully Paid and Non-Assessable Nature of Limited Partner Interests.....................44 ARTICLE VI - ALLOCATIONS AND DISTRIBUTIONS Section 6.1 Allocations for Capital Account Purposes..............................................44 Section 6.2 Allocations for Tax Purposes..........................................................52 Section 6.3 Requirement and Characterization of Distributions; Distributions to Record Holders...............................................................................54 Section 6.4 Distributions of Available Cash from Operating Surplus................................55 Section 6.5 Distributions of Available Cash from Capital Surplus..................................57 Section 6.6 Adjustment of Minimum Quarterly Distribution and Target Distribution Levels...........57 Section 6.7 Special Provisions Relating to the Holders of Subordinated Units......................57 Section 6.8 Special Provisions Relating to the Holders of Incentive Distribution Rights...........58 Section 6.9 Entity-Level Taxation.................................................................58 ARTICLE VII - MANAGEMENT AND OPERATION OF BUSINESS Section 7.1 Management............................................................................59 Section 7.2 Certificate of Limited Partnership....................................................61 Section 7.3 Restrictions on the General Partner's Authority.......................................61 Section 7.4 Reimbursement of the General Partner..................................................62 Section 7.5 Outside Activities....................................................................63 Section 7.6 Loans from the General Partner; Loans or Contributions from the Partnership; Contracts with Affiliates; Certain Restrictions on the General Partner.......................................................................64 Section 7.7 Indemnification.......................................................................65 Section 7.8 Liability of Indemnitees..............................................................67 Section 7.9 Resolution of Conflicts of Interest...................................................68 Section 7.10 Other Matters Concerning the General Partner..........................................70 Section 7.11 Purchase or Sale of Partnership Securities............................................70 Section 7.12 Registration Rights of the General Partner and its Affiliates.........................70 Section 7.13 Reliance by Third Parties.............................................................72 ARTICLE VIII - BOOKS, RECORDS, ACCOUNTING AND REPORTS Section 8.1 Records and Accounting................................................................73 Section 8.2 Fiscal Year...........................................................................73 Section 8.3 Reports...............................................................................73 ARTICLE IX - TAX MATTERS Section 9.1 Tax Returns and Information...........................................................74 Section 9.2 Tax Elections.........................................................................74 Section 9.3 Tax Controversies.....................................................................74 Section 9.4 Withholding...........................................................................74 |
ARTICLE X - ADMISSION OF PARTNERS Section 10.1 Admission of Initial Limited Partners.................................................75 Section 10.2 Admission of Substituted Limited Partner..............................................75 Section 10.3 Admission of Successor General Partner................................................75 Section 10.4 Admission of Additional Limited Partners..............................................76 Section 10.5 Amendment of Agreement and Certificate of Limited Partnership.........................76 ARTICLE XI - WITHDRAWAL OR REMOVAL OF PARTNERS Section 11.1 Withdrawal of the General Partner.....................................................76 Section 11.2 Removal of the General Partner........................................................78 Section 11.3 Interest of Departing Partner and Successor General Partner...........................79 Section 11.4 Termination of Subordination Period, Conversion of Subordinated Units and Extinguishment of Cumulative Common Unit Arrearages...................................80 Section 11.5 Withdrawal of Limited Partners........................................................80 ARTICLE XII - DISSOLUTION AND LIQUIDATION Section 12.1 Dissolution...........................................................................80 Section 12.2 Continuation of the Business of the Partnership After Dissolution.....................81 Section 12.3 Liquidator............................................................................81 Section 12.4 Liquidation...........................................................................82 Section 12.5 Cancellation of Certificate of Limited Partnership....................................83 Section 12.6 Return of Contributions...............................................................83 Section 12.7 Waiver of Partition...................................................................83 Section 12.8 Capital Account Restoration...........................................................83 ARTICLE XIII - AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE Section 13.1 Amendment to be Adopted Solely by the General Partner.................................83 Section 13.2 Amendment Procedures..................................................................85 Section 13.3 Amendment Requirements................................................................85 Section 13.4 Special Meetings......................................................................86 Section 13.5 Notice of a Meeting...................................................................86 Section 13.6 Record Date...........................................................................87 Section 13.7 Adjournment...........................................................................87 Section 13.8 Waiver of Notice; Approval of Meeting; Approval of Minutes............................87 Section 13.9 Quorum................................................................................87 Section 13.10 Conduct of a Meeting..................................................................88 Section 13.11 Action Without a Meeting..............................................................88 Section 13.12 Voting and Other Rights...............................................................89 ARTICLE XIV - MERGER Section 14.1 Authority.............................................................................89 Section 14.2 Procedure for Merger or Consolidation.................................................89 Section 14.3 Approval by Limited Partners of Merger or Consolidation...............................90 Section 14.4 Certificate of Merger.................................................................91 Section 14.5 Effect of Merger......................................................................91 |
ARTICLE XV - RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS Section 15.1 Right to Acquire Limited Partner Interests............................................92 ARTICLE XVI - GENERAL PROVISIONS Section 16.1 Addresses and Notices.................................................................93 Section 16.2 Further Action........................................................................94 Section 16.3 Binding Effect........................................................................94 Section 16.4 Integration...........................................................................94 Section 16.5 Creditors.............................................................................94 Section 16.6 Waiver................................................................................94 Section 16.7 Counterparts..........................................................................94 Section 16.8 Applicable Law........................................................................95 Section 16.9 Invalidity of Provisions..............................................................95 Section 16.10 Consent of Partners...................................................................95 |
FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF MARTIN MIDSTREAM PARTNERS L.P.
THIS AGREEMENT OF LIMITED PARTNERSHIP OF MARTIN MIDSTREAM PARTNERS L.P., dated as of November 6, 2002, is entered into by and among Martin Midstream GP LLC, a Delaware limited liability company, as the General Partner, and Martin Resource LLC, a Delaware limited liability company, as the Organizational Limited Partner, together with any other Persons who become Partners in the Partnership or parties hereto as provided herein. In consideration of the covenants, conditions and agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.
"Acquisition" means any transaction in which any Group Member acquires (through an asset acquisition, merger, stock acquisition or other form of investment) control over all or a portion of the assets, properties or business of another Person for the purpose of increasing the operating capacity or revenues of the Partnership Group from the operating capacity or revenues of the Partnership Group existing immediately prior to such transaction.
"Additional Book Basis" means the portion of any remaining Carrying Value of an Adjusted Property that is attributable to positive adjustments made to such Carrying Value as a result of Book-Up Events. For purposes of determining the extent that Carrying Value constitutes Additional Book Basis:
(i) Any negative adjustment made to the Carrying Value of an Adjusted Property as a result of either a Book-Down Event or a Book-Up Event shall first be deemed to offset or decrease that portion of the Carrying Value of such Adjusted Property that is attributable to any prior positive adjustments made thereto pursuant to a Book-Up Event or Book-Down Event.
(ii) If Carrying Value that constitutes Additional Book Basis is reduced as a result of a Book-Down Event and the Carrying Value of other property is increased as a result of such Book-Down Event, an allocable portion of any such increase in Carrying Value shall be treated as Additional Book Basis; provided that the amount treated as Additional Book Basis pursuant hereto as a result of such Book-Down Event shall not exceed the amount by which the Aggregate Remaining Net Positive Adjustments after such Book-Down Event exceeds the remaining Additional Book Basis attributable to all of the Partnership's Adjusted Property after such Book-Down Event (determined without regard to the application of this clause (ii) to such Book-Down Event).
"Additional Book Basis Derivative Items" means any Book Basis Derivative Items that are computed with reference to Additional Book Basis. To the extent that the Additional Book Basis attributable to all of the Partnership's Adjusted Property as of the beginning of any taxable period exceeds the Aggregate Remaining Net Positive Adjustments as of the beginning of such
period (the "Excess Additional Book Basis"), the Additional Book Basis Derivative Items for such period shall be reduced by the amount that bears the same ratio to the amount of Additional Book Basis Derivative Items determined without regard to this sentence as the Excess Additional Book Basis bears to the Additional Book Basis as of the beginning of such period.
"Additional Limited Partner" means a Person admitted to the Partnership as a Limited Partner pursuant to Section 10.4 and who is shown as such on the books and records of the Partnership.
"Adjusted Capital Account" means the Capital Account maintained for each Partner as of the end of each fiscal year of the Partnership, (a) increased by any amounts that such Partner is obligated to restore under the standards set by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b) decreased by (i) the amount of all losses and deductions that, as of the end of such fiscal year, are reasonably expected to be allocated to such Partner in subsequent years under Sections 704(e)(2) and 706(d) of the Code and Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all distributions that, as of the end of such fiscal year, are reasonably expected to be made to such Partner in subsequent years in accordance with the terms of this Agreement or otherwise to the extent they exceed offsetting increases to such Partner's Capital Account that are reasonably expected to occur during (or prior to) the year in which such distributions are reasonably expected to be made (other than increases as a result of a minimum gain chargeback pursuant to Section 6.1(d)(i) or 6.1(d)(ii)). The foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. The "Adjusted Capital Account" of a Partner in respect of a General Partner Interest, a Common Unit, a Subordinated Unit or an Incentive Distribution Right or any other specified interest in the Partnership shall be the amount which such Adjusted Capital Account would be if such General Partner Interest, Common Unit, Subordinated Unit, Incentive Distribution Right or other interest in the Partnership were the only interest in the Partnership held by such Partner from and after the date on which such General Partner Interest, Common Unit, Subordinated Unit, Incentive Distribution Right or other interest was first issued.
"Adjusted Operating Surplus" means, with respect to any period, Operating Surplus generated during such period (a) less (i) any net increase in Working Capital Borrowings with respect to such period and (ii) any net reduction in cash reserves for Operating Expenditures with respect to such period not relating to an Operating Expenditure made during such period, and (b) plus (i) any net decrease in Working Capital Borrowings with respect to such period, and (ii) any net increase in cash reserves for Operating Expenditures with respect to such period required by any debt instrument for the repayment of principal, interest or premium. Adjusted Operating Surplus does not include that portion of Operating Surplus included in clause (a)(i) of the definition of Operating Surplus.
"Adjusted Property" means any property the Carrying Value of which has been adjusted pursuant to Section 5.5(d)(i) or 5.5(d)(ii).
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with,
the Person in question. As used herein, the term "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
"Aggregate Remaining Net Positive Adjustments" means, as of the end of any taxable period, the sum of the Remaining Net Positive Adjustments of all the Partners.
"Agreed Allocation" means any allocation, other than a Required Allocation, of an item of income, gain, loss or deduction pursuant to the provisions of Section 6.1, including, without limitation, a Curative Allocation (if appropriate to the context in which the term "Agreed Allocation" is used).
"Agreed Value" of any Contributed Property means the fair market value of such property or other consideration at the time of contribution as determined by the General Partner using such reasonable method of valuation as it may adopt. The General Partner shall, in its discretion, use such method as it deems reasonable and appropriate to allocate the aggregate Agreed Value of Contributed Properties contributed to the Partnership in a single or integrated transaction among each separate property on a basis proportional to the fair market value of each Contributed Property.
"Agreement" means this First Amended and Restated Agreement of Limited Partnership of Martin Midstream Partners L.P., as it may be amended, supplemented or restated from time to time.
"Assignee" means a Non-citizen Assignee or a Person to whom one or more Limited Partner Interests have been transferred in a manner permitted under this Agreement and who has executed and delivered a Transfer Application as required by this Agreement, but who has not been admitted as a Substituted Limited Partner.
"Associate" means, when used to indicate a relationship with any Person, (a) any corporation or organization of which such Person is a director, officer or partner or is, directly or indirectly, the owner of 20% or more of any class of voting stock or other voting interest; (b) any trust or other estate in which such Person has at least a 20% beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of such Person, or any relative of such spouse, who has the same principal residence as such Person.
"Available Cash" means, with respect to any Quarter ending prior to the Liquidation Date:
(a) the sum of (i) all cash and cash equivalents of the Partnership Group on hand at the end of such Quarter, and (ii) all additional cash and cash equivalents of the Partnership Group on hand on the date of determination of Available Cash with respect to such Quarter resulting from Working Capital Borrowings made subsequent to the end of such Quarter, less
(b) the amount of any cash reserves that are necessary or appropriate in the reasonable discretion of the General Partner to (i) provide for the proper conduct of the business
of the Partnership Group (including reserves for future capital expenditures and
for anticipated future credit needs of the Partnership Group) subsequent to such
Quarter, (ii) comply with applicable law or any loan agreement, security
agreement, mortgage, debt instrument or other agreement or obligation to which
any Group Member is a party or by which it is bound or its assets are subject or
(iii) provide funds for distributions under Section 6.4 or 6.5 in respect of any
one or more of the next four Quarters; provided, however, that the General
Partner may not establish cash reserves pursuant to (iii) above if the effect of
such reserves would be that the Partnership is unable to distribute the Minimum
Quarterly Distribution on all Common Units, plus any Cumulative Common Unit
Arrearage on all Common Units, with respect to such Quarter; and, provided
further, that disbursements made by a Group Member or cash reserves established,
increased or reduced after the end of such Quarter but on or before the date of
determination of Available Cash with respect to such Quarter shall be deemed to
have been made, established, increased or reduced, for purposes of determining
Available Cash, within such Quarter if the General Partner so determines.
Notwithstanding the foregoing, "Available Cash" with respect to the Quarter in which the Liquidation Date occurs and any subsequent Quarter shall equal zero.
"Book Basis Derivative Items" means any item of income, deduction, gain or loss included in the determination of Net Income or Net Loss that is computed with reference to the Carrying Value of an Adjusted Property (e.g., depreciation, depletion, or gain or loss with respect to an Adjusted Property).
"Book-Down Event" means an event which triggers a negative adjustment to the Capital Accounts of the Partners pursuant to Section 5.5(d).
"Book-Tax Disparity" means with respect to any item of Contributed Property or Adjusted Property, as of the date of any determination, the difference between the Carrying Value of such Contributed Property or Adjusted Property and the adjusted basis thereof for federal income tax purposes as of such date. A Partner's share of the Partnership's Book-Tax Disparities in all of its Contributed Property and Adjusted Property will be reflected by the difference between such Partner's Capital Account balance as maintained pursuant to Section 5.5 and the hypothetical balance of such Partner's Capital Account computed as if it had been maintained strictly in accordance with federal income tax accounting principles.
"Book-Up Event" means an event which triggers a positive adjustment to the Capital Accounts of the Partners pursuant to Section 5.5(d).
"Business" has the meaning assigned to such term in the Omnibus Agreement.
"Business Day" means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the United States of America or the State of Texas shall not be regarded as a Business Day.
"Capital Account" means the capital account maintained for a Partner pursuant to Section 5.5. The "Capital Account" of a Partner in respect of a General Partner Interest, a Common Unit, a Subordinated Unit, an Incentive Distribution Right or any other Partnership Interest shall be the amount which such Capital Account would be if such General Partner
Interest, Common Unit, Subordinated Unit, Incentive Distribution Right or other Partnership Interest were the only interest in the Partnership held by such Partner from and after the date on which such General Partner Interest, Common Unit, Subordinated Unit, Incentive Distribution Right or other Partnership Interest was first issued.
"Capital Contribution" means any cash, cash equivalents or the Net Agreed Value of Contributed Property that a Partner contributes to the Partnership pursuant to this Agreement or the Contribution Agreement, or any payment made by the General Partner to the Partnership described in Section 5.2(c).
"Capital Improvement" means any (a) addition or improvement to the capital assets owned by any Group Member or (b) acquisition of existing, or the construction of new, capital assets (including, without limitation, marine transportation, storage facilities and logistics assets, and related assets), in each case if such addition, improvement, acquisition or construction is made to increase the operating capacity or revenues of the Partnership Group from the operating capacity or revenues of the Partnership Group existing immediately prior to such addition, improvement, acquisition or construction.
"Capital Surplus" has the meaning assigned to such term in Section 6.3(a).
"Carrying Value" means (a) with respect to a Contributed Property, the Agreed Value of such property reduced (but not below zero) by all depreciation, amortization and cost recovery deductions charged to the Partners' and Assignees' Capital Accounts in respect of such Contributed Property, and (b) with respect to any other Partnership property, the adjusted basis of such property for federal income tax purposes, all as of the time of determination. The Carrying Value of any property shall be adjusted from time to time in accordance with Sections 5.5(d)(i) and 5.5(d)(ii) and to reflect changes, additions or other adjustments to the Carrying Value for dispositions and acquisitions of Partnership properties, as deemed appropriate by the General Partner.
"Cause" means a court of competent jurisdiction has entered a final, non-appealable judgment finding the General Partner liable for actual fraud, gross negligence or willful or wanton misconduct in its capacity as a general partner of the Partnership.
"Certificate" means a certificate (i) substantially in the form of Exhibit A to this Agreement, (ii) issued in global form in accordance with the rules and regulations of the Depositary or (iii) in such other form as may be adopted by the General Partner in its discretion, issued by the Partnership evidencing ownership of one or more Common Units or a certificate, in such form as may be adopted by the General Partner in its discretion, issued by the Partnership evidencing ownership of one or more other Partnership Securities.
"Certificate of Limited Partnership" means the Certificate of Limited Partnership of the Partnership filed with the Secretary of State of the State of Delaware as such Certificate of Limited Partnership may be amended, supplemented or restated from time to time.
"Citizenship Certification" means a properly completed certificate in such form as may be specified by the General Partner by which a Limited Partner or an Assignee certifies that he
(and if he is a nominee holding for the account of another Person, that to the best of his knowledge such other Person) is an Eligible Citizen.
"Claim" has the meaning assigned to such term in Section 7.12(c).
"Closing Date" means the 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 Internal Revenue Code of 1986, as amended and in effect from time to time. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law.
"Combined Interest" has the meaning assigned to such term in Section 11.3(a).
"Commission" means the United States Securities and Exchange Commission.
"Common Unit" means a Partnership Security representing a fractional part of the Partnership Interests of all Limited Partners and Assignees and of the General Partner, and having the rights and obligations specified with respect to Common Units in this Agreement. The term "Common Unit" does not refer to a Subordinated Unit prior to its conversion into a Common Unit pursuant to the terms hereof.
"Common Unit Arrearage" means, with respect to any Common Unit, whenever issued, as to any Quarter within the Subordination Period, the excess, if any, of (a) the Minimum Quarterly Distribution with respect to a Common Unit in respect of such Quarter over (b) the sum of all Available Cash distributed with respect to a Common Unit in respect of such Quarter pursuant to Section 6.4(a)(i).
"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 to serve on an audit committee of a board of directors by the National Securities Exchange on which the Common Units are listed for trading.
"Contributed Property" means each property or other asset, in such form as may be permitted by the Delaware Act, but excluding cash, contributed to the Partnership. Once the Carrying Value of a Contributed Property is adjusted pursuant to Section 5.5(d), such property shall no longer constitute a Contributed Property, but shall be deemed an Adjusted Property.
"Contribution Agreement" means that certain Contribution, Conveyance and Assumption Agreement, dated as of the Closing Date, among the General Partner, the Partnership, the Operating Partnership, Martin Resource Management Corporation and certain other Affiliates of Martin Resource Management Corporation, together with the additional conveyance documents and instruments contemplated or referenced thereunder.
"Controlled Person" means any corporation or partnership of which the Partnership or any Subsidiary owns or controls an interest in excess of 25%.
"Cumulative Common Unit Arrearage" means, with respect to any Common
Unit, whenever issued, and as of the end of any Quarter, the excess, if any, of
(a) the sum resulting from adding together the Common Unit Arrearage as to an
Initial Common Unit for each of the Quarters within the Subordination Period
ending on or before the last day of such Quarter over (b) the sum of any
distributions theretofore made pursuant to Section 6.4(a)(ii) and the second
sentence of Section 6.5 with respect to an Initial Common Unit (including any
distributions to be made in respect of the last of such Quarters).
"Curative Allocation" means any allocation of an item of income, gain, deduction, loss or credit pursuant to the provisions of Section 6.1(d)(xi).
"Current Market Price" has the meaning assigned to such term in Section 15.1(a).
"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. Section 17-101, et seq., as amended, supplemented or restated from time to time, and any successor to such statute.
"Departing Partner" means a former General Partner from and after the effective date of any withdrawal or removal of such former General Partner pursuant to Section 11.1 or 11.2.
"Depositary" means, with respect to any Units issued in global form, The Depository Trust Company and its successors and permitted assigns.
"Economic Risk of Loss" has the meaning set forth in Treasury Regulation Section 1.752-2(a).
"Eligible Citizen" means a Person who is (i) qualified to own interests in real property in jurisdictions in which any Group Member does business or proposes to do business from time to time, and whose status as a Limited Partner or Assignee does not or would not subject such Group Member to a significant risk of cancellation or forfeiture of any of its properties or any interest therein and (ii) is not a Non-citizen.
"Event of Withdrawal" has the meaning assigned to such term in Section 11.1(a).
"Final Subordinated Units" has the meaning assigned to such term in
Section 6.1(d)(x).
"First Liquidation Target Amount" has the meaning assigned to such term in Section 6.1(c)(i)(D).
"First Target Distribution" means $0.55 per Unit per Quarter (or, with respect to the period commencing on the Closing Date and ending on December 31, 2002, it means the product of $0.55 multiplied by a fraction of which the numerator is the number of days in such period, and of which the denominator is 91), subject to adjustment in accordance with Sections 6.6 and 6.9.
"Fully Diluted Basis" means, when calculating the number of Outstanding Units for any period, a basis that includes, in addition to the Outstanding Units, all Partnership Securities and options, rights, warrants and appreciation rights relating to an equity interest in the Partnership (a) that are convertible into or exercisable or exchangeable for Units that are senior to or pari passu with the Subordinated Units, (b) whose conversion, exercise or exchange price is less than the Current Market Price on the date of such calculation, (c) that may be converted into or exercised or exchanged for such Units prior to or during the Quarter following the end of the last Quarter contained in the period for which the calculation is being made without the satisfaction of any contingency beyond the control of the holder other than the payment of consideration and the compliance with administrative mechanics applicable to such conversion, exercise or exchange, and (d) were not converted into or exercised or exchanged for such Units prior to the end of the last quarter referred to in clause (c) above; provided that for purposes of determining the number of Outstanding Units on a Fully Diluted Basis when calculating whether the Subordination Period has ended or Subordinated Units are entitled to convert into Common Units pursuant to Section 5.8, such Partnership Securities, options, rights, warrants and appreciation rights shall be deemed to have been Outstanding Units only for the four Quarters that comprise the last four Quarters of the measurement period; provided, further, that if consideration will be paid to any Group Member in connection with such conversion, exercise or exchange, the number of Units to be included in such calculation shall be that number equal to the difference between (i) the number of Units issuable upon such conversion, exercise or exchange and (ii) the number of Units which such consideration would purchase at the Current Market Price.
"General Partner" means Martin Midstream GP LLC and its successors and permitted assigns as general partner of the Partnership.
"General Partner Interest" means the ownership interest of the General Partner in the Partnership (in its capacity as a general partner without reference to any Limited Partner Interest held by it) which may be evidenced by Partnership Securities or a combination thereof or interest therein, and includes any and all benefits to which the General Partner is entitled as provided in this Agreement, together with all obligations of the General Partner to comply with the terms and provisions of this Agreement.
"Group" means a Person that with or through any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent given to such Person in response to a proxy or consent solicitation made to 10 or more Persons) or disposing of any Partnership Securities with any other Person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or indirectly, Partnership Securities.
"Group Member" means a member of the Partnership Group.
"Holder" as used in Section 7.12, has the meaning assigned to such term in Section 7.12(a).
"Incentive Distribution Right" means a non-voting Limited Partner Interest issued to the General Partner in connection with the transfer of all of its interest in the Operating Partnership
and Martin Operating GP LLC pursuant to Section 5.2, which Partnership Interest will confer upon the holder thereof only the rights and obligations specifically provided in this Agreement with respect to Incentive Distribution Rights (and no other rights otherwise available to or other obligations of a holder of a Partnership Interest). Notwithstanding anything in this Agreement to the contrary, the holder of an Incentive Distribution Right shall not be entitled to vote such Incentive Distribution Right on any Partnership matter except as may otherwise be required by law.
"Incentive Distributions" means any amount of cash distributed to the
holders of the Incentive Distribution Rights pursuant to Sections 6.4(a)(v),
(vi) and (vii) and 6.4(b)(iii), (iv) and (v).
"Indemnified Persons" has the meaning assigned to such term in Section 7.12(c).
"Indemnitee" means (a) the General Partner, (b) any Departing Partner,
(c) any Person who is or was an Affiliate of the General Partner or any
Departing Partner, (d) any Person who is or was a member, partner, officer,
director, employee, agent or trustee of any Group Member, the General Partner or
any Departing Partner or any Affiliate of any Group Member, the General Partner
or any Departing Partner, and (e) any Person who is or was serving at the
request of the General Partner or any Departing Partner or any Affiliate of the
General Partner or any Departing Partner as an officer, director, employee,
member, partner, agent, fiduciary or trustee of another Person; provided, that a
Person shall not be an Indemnitee by reason of providing, on a fee-for-services
basis, trustee, fiduciary or custodial services.
"Initial Common Units" means the Common Units sold in the Initial Offering.
"Initial Limited Partners" means the General Partner and the Underwriters, in each case upon being admitted to the Partnership in accordance with Section 10.1.
"Initial Offering" means the initial offering and sale of Common Units to the public, as described in the Registration Statement.
"Initial Unit Price" means (a) with respect to the Common Units and the Subordinated Units, the initial public offering price per Common Unit at which the Underwriters offered the Common Units to the public for sale as set forth on the cover page of the prospectus included as part of the Registration Statement and first issued at or after the time the Registration Statement first became effective or (b) with respect to any other class or series of Units, the price per Unit at which such class or series of Units is initially sold by the Partnership, as determined by the General Partner, in each case adjusted as the General Partner determines to be appropriate to give effect to any distribution, subdivision or combination of Units.
"Interim Capital Transactions" means the following transactions if they occur prior to the Liquidation Date: (a) borrowings, refinancings or refundings of indebtedness and sales of debt securities (other than Working Capital Borrowings and other than for items purchased on open account in the ordinary course of business) by any Group Member; (b) sales of equity interests by any Group Member (including the Common Units sold to the Underwriters pursuant to the exercise of their over-allotment option); and (c) sales or other voluntary or involuntary dispositions of any assets of any Group Member other than (i) sales or other dispositions of
inventory, accounts receivable and other assets in the ordinary course of business, and (ii) sales or other dispositions of assets as part of normal retirements or replacements.
"Issue Price" means the price at which a Unit is purchased from the Partnership, after taking into account any sales commission or underwriting discount charged to the Partnership.
"Limited Partner" means, unless the context otherwise requires, (a) the Organizational Limited Partner prior to its withdrawal from the Partnership, each Initial Limited Partner, each Substituted Limited Partner, each Additional Limited Partner and any Departing Partner upon the change of its status from General Partner to Limited Partner pursuant to Section 11.3 or (b) solely for purposes of Articles V, VI, VII and IX, each Assignee; provided, however, that when the term "Limited Partner" is used herein in the context of any vote or other approval, including without limitation Articles XIII and XIV, such term shall not, solely for such purpose, include any holder of an Incentive Distribution Right except as may otherwise be required by law.
"Limited Partner Interest" means the ownership interest of a Limited Partner or Assignee in the Partnership, which may be evidenced by Common Units, Subordinated Units, Incentive Distribution Rights or other Partnership Securities or a combination thereof or interest therein, and includes any and all benefits to which such Limited Partner or Assignee is entitled as provided in this Agreement, together with all obligations of such Limited Partner or Assignee to comply with the terms and provisions of this Agreement; provided, however, that when the term "Limited Partner Interest" is used herein in the context of any vote or other approval, including without limitation Articles XIII and XIV, such term shall not, solely for such purpose, include any holder of an Incentive Distribution Right except as may otherwise be required by law.
"Liquidation Date" means (a) in the case of an event giving rise to the dissolution of the Partnership of the type described in clauses (a) and (b) of the first sentence of Section 12.2, the date on which the applicable time period during which the holders of Outstanding Units have the right to elect to reconstitute the Partnership and continue its business has expired without such an election being made, and (b) in the case of any other event giving rise to the dissolution of the Partnership, the date on which such event occurs.
"Liquidator" means one or more Persons selected by the General Partner to perform the functions described in Section 12.3 as liquidating trustee of the Partnership within the meaning of the Delaware Act.
"Merger Agreement" has the meaning assigned to such term in Section 14.1.
"Minimum Quarterly Distribution" means $0.50 per Unit per Quarter (or with respect to the period commencing on the Closing Date and ending on December 31, 2002, it means the product of $0.50 multiplied by a fraction of which the numerator is the number of days in such period and of which the denominator is 91), subject to adjustment in accordance with Sections 6.6 and 6.9.
"National Securities Exchange" means an exchange registered with the Commission under Section 6(a) of the Securities Exchange Act of 1934, as amended, supplemented or restated from time to time, and any successor to such statute, or the Nasdaq Stock Market or any successor thereto.
"Net Agreed Value" means, (a) in the case of any Contributed Property, the Agreed Value of such property reduced by any liabilities either assumed by the Partnership upon such contribution or to which such property is subject when contributed, and (b) in the case of any property distributed to a Partner or Assignee by the Partnership, the Partnership's Carrying Value of such property (as adjusted pursuant to Section 5.5(d)(ii)) at the time such property is distributed, reduced by any indebtedness either assumed by such Partner or Assignee upon such distribution or to which such property is subject at the time of distribution, in either case, as determined under Section 752 of the Code.
"Net Income" means, for any taxable year, the excess, if any, of the Partnership's items of income and gain (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable year over the Partnership's items of loss and deduction (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable year. The items included in the calculation of Net Income shall be determined in accordance with Section 5.5(b) and shall not include any items specially allocated under Section 6.1(d); provided that the determination of the items that have been specially allocated under Section 6.1(d) shall be made as if Section 6.1(d)(xii) were not in this Agreement.
"Net Loss" means, for any taxable year, the excess, if any, of the Partnership's items of loss and deduction (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable year over the Partnership's items of income and gain (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable year. The items included in the calculation of Net Loss shall be determined in accordance with Section 5.5(b) and shall not include any items specially allocated under Section 6.1(d); provided that the determination of the items that have been specially allocated under Section 6.1(d) shall be made as if Section 6.1(d)(xii) were not in this Agreement.
"Net Positive Adjustments" means, with respect to any Partner, the excess, if any, of the total positive adjustments over the total negative adjustments made to the Capital Account of such Partner pursuant to Book-Up Events and Book-Down Events.
"Net Termination Gain" means, for any taxable year, the sum, if positive, of all items of income, gain, loss or deduction recognized by the Partnership after the Liquidation Date. The items included in the determination of Net Termination Gain shall be determined in accordance with Section 5.5(b) and shall not include any items of income, gain or loss specially allocated under Section 6.1(d).
"Net Termination Loss" means, for any taxable year, the sum, if negative, of all items of income, gain, loss or deduction recognized by the Partnership after the Liquidation Date. The items included in the determination of Net Termination Loss shall be determined in accordance with Section 5.5(b) and shall not include any items of income, gain or loss specially allocated under Section 6.1(d).
"Non-citizen" means (1) any person (including any individual, a partnership, a corporation or an association) who is not a United States citizen, within the meaning of Section 2
of the Shipping Act, 1916, as amended or as it may hereafter be amended; (2) any
foreign government or representative thereof; (3) any corporation, the
president, chief executive officer or chairman of the board of directors of
which is a Non-citizen, or of which more than a minority or the number of its
directors necessary to constitute a quorum are Non-citizens; (4) any corporation
organized under the laws of any foreign government; (5) any corporation of which
25%or greater interest is owned beneficially or of record, or may be voted by, a
Non-citizen or Non-citizens, or which by any other means whatsoever is
controlled by or in which control is permitted to be exercised by a Non-citizen
or Non-citizens (the General Partner being authorized to determine reasonably
the meaning of "control" for this purpose); (6) any partnership or association
which is controlled by a Non-citizen or Non-citizens; or (7) any person
(including an individual, partnership, corporation or association) who acts as
representative of or fiduciary for any person described in clauses (1) through
(6) above.
"Non-citizen Assignee" means a Person whom the General Partner has determined in its discretion does not constitute an Eligible Citizen and as to whose Partnership Interest the General Partner has become the Substituted Limited Partner pursuant to Section 4.9.
"Nonrecourse Built-in Gain" means with respect to any Contributed Properties or Adjusted Properties that are subject to a mortgage or pledge securing a Nonrecourse Liability, the amount of any taxable gain that would be allocated to the Partners pursuant to Sections 6.2(b)(i)(A), 6.2(b)(ii)(A) and 6.2(b)(iii) if such properties were disposed of in a taxable transaction in full satisfaction of such liabilities and for no other consideration.
"Nonrecourse Deductions" means any and all items of loss, deduction or expenditure (including, without limitation, any expenditure described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(b), are attributable to a Nonrecourse Liability.
"Nonrecourse Liability" has the meaning set forth in Treasury Regulation Section 1.752-1(a)(2).
"Notice of Election to Purchase" has the meaning assigned to such term in Section 15.1(b).
"Omnibus Agreement" means that Omnibus Agreement, dated as of the Closing Date, among Martin Resource Management Corporation, the General Partner, the Partnership and the Operating Partnership.
"Operating Expenditures" means all Partnership Group expenditures, including, but not limited to, taxes, reimbursements of the General Partner, repayment of Working Capital Borrowings, debt service payments and capital expenditures, subject to the following:
(a) Payments (including prepayments) of principal of and premium on indebtedness other than Working Capital Borrowings shall not constitute Operating Expenditures; and
(b) Operating Expenditures shall not include (i) capital expenditures made for Acquisitions or for Capital Improvements, (ii) payment of transaction expenses relating to
Interim Capital Transactions or (iii) distributions to Partners. Where capital expenditures are made in part for Acquisitions or for Capital Improvements and in part for other purposes, the General Partner's good faith allocation between the amounts paid for each shall be conclusive.
"Operating Partnership" means Martin Operating Partnership, L.P., a Delaware limited partnership, and any successors thereto.
"Operating Partnership Agreement" means the Amended and Restated Partnership Agreement of the Operating Partnership, as it may be amended, supplemented or restated from time to time.
"Operating Surplus" means, with respect to any period ending prior to the Liquidation Date, on a cumulative basis and without duplication,
(a) the sum of (i) $8.5 million plus (ii) all cash and cash equivalents of the Partnership Group on hand as of the close of business on the Closing Date, (iii) all cash receipts of the Partnership Group for the period beginning on the Closing Date and ending with the last day of such period, other than cash receipts from Interim Capital Transactions (except to the extent specified in Section 6.5) and (iv) all cash receipts of the Partnership Group after the end of such period but on or before the date of determination of Operating Surplus with respect to such period resulting from Working Capital Borrowings, less
(b) the sum of (i) Operating Expenditures for the period
beginning on the Closing Date and ending with the last day of such period and
(ii) the amount of cash reserves that is necessary or advisable in the
reasonable discretion of the General Partner to provide funds for future
Operating Expenditures; provided, however, that disbursements made (including
contributions to a Group Member or disbursements on behalf of a Group Member) or
cash reserves established, increased or reduced after the end of such period but
on or before the date of determination of Available Cash with respect to such
period shall be deemed to have been made, established, increased or reduced, for
purposes of determining Operating Surplus, within such period if the General
Partner so determines.
Notwithstanding the foregoing, "Operating Surplus" with respect to the Quarter in which the Liquidation Date occurs and any subsequent Quarter shall equal zero.
"Opinion of Counsel" means a written opinion of counsel (who may be regular counsel to the Partnership or the General Partner or any of its Affiliates) acceptable to the General Partner in its reasonable discretion.
"Option Closing Date" means the date or dates on which any Common Units are sold by the Partnership to the Underwriters upon exercise of the Over-Allotment Option.
"Organizational Limited Partner" means Martin Resource LLC in its capacity as the organizational limited partner of the Partnership pursuant to this Agreement.
"Outstanding" means, with respect to Partnership Securities, all Partnership Securities that are issued by the Partnership and reflected as outstanding on the Partnership's books and records as of the date of determination; provided, however, that if at any time any Person or
Group (other than the General Partner or its Affiliates) beneficially owns 20% or more of any Outstanding Partnership Securities of any class then Outstanding, all Partnership Securities owned by such Person or Group shall not be voted on any matter and shall not be considered to be Outstanding when sending notices of a meeting of Limited Partners to vote on any matter (unless otherwise required by law), calculating required votes, determining the presence of a quorum or for other similar purposes under this Agreement, except that Common Units so owned shall be considered to be Outstanding for purposes of Section 11.1(b)(iv) (such Common Units shall not, however, be treated as a separate class of Partnership Securities for purposes of this Agreement); provided, further, that the foregoing limitation shall not apply (i) to any Person or Group who acquired 20% or more of any Outstanding Partnership Securities of any class then Outstanding directly from the General Partner or its Affiliates, (ii) to any Person or Group who acquired 20% or more of any Outstanding Partnership Securities of any class then Outstanding directly or indirectly from a Person or Group described in clause (i) provided that the General Partner shall have notified such Person or Group in writing that such limitation shall not apply, or (iii) to any Person or Group who acquired 20% or more of any Partnership Securities issued by the Partnership with the prior approval of the Board of Directors of the General Partner; provided further, that the provisions contained herein may be amended by the General Partner as provided in Section 13.1 hereof.
"Over-Allotment Option" means the over-allotment option granted to the Underwriters by the Partnership pursuant to the Underwriting Agreement.
"Parity Units" means Common Units and all other Units of any other
class or series that have the right (i) to receive distributions of Available
Cash from Operating Surplus pursuant to each of subclauses (a)(i) and (a)(ii) of
Section 6.4 in the same order of priority with respect to the participation of
Common Units in such distributions or (ii) to participate in allocations of Net
Termination Gain pursuant to Section 6.1(c)(i)(B) in the same order of priority
with the Common Units, in each case regardless of whether the amounts or value
so distributed or allocated on each Parity Unit equals the amount or value so
distributed or allocated on each Common Unit. Units whose participation in such
(i) distributions of Available Cash from Operating Surplus and (ii) allocations
of Net Termination Gain are subordinate in order of priority to such
distributions and allocations on Common Units shall not constitute Parity Units
even if such Units are convertible under certain circumstances into Common Units
or Parity Units.
"Partner Nonrecourse Debt" has the meaning set forth in Treasury Regulation Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in Treasury Regulation Section 1.704-2(i)(2).
"Partner Nonrecourse Deductions" means any and all items of loss, deduction or expenditure (including, without limitation, any expenditure described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(i), are attributable to a Partner Nonrecourse Debt.
"Partners" means the General Partner and the Limited Partners.
"Partnership" means Martin Midstream Partners L.P., a Delaware limited partnership, and any successors thereto.
"Partnership Group" means the Partnership, the Operating Partnership and any Subsidiary of any such entity, treated as a single consolidated entity.
"Partnership Interest" means an interest in the Partnership, which shall include the General Partner Interest and Limited Partner Interests.
"Partnership Minimum Gain" means that amount determined in accordance with the principles of Treasury Regulation Section 1.704-2(d).
"Partnership Security" means any class or series of equity interest in the Partnership (but excluding any options, rights, warrants and appreciation rights relating to an equity interest in the Partnership), including without limitation, Common Units, Subordinated Units and Incentive Distribution Rights.
"Percentage Interest" means as of any date of determination (a) as to the General Partner (in its capacity as General Partner without reference to any Limited Partner Interests held by it), 2.0%, (b) as to any Unitholder or Assignee holding Units, the product obtained by multiplying (i) 98% less the percentage applicable to paragraph (c) by (ii) the quotient obtained by dividing (A) the number of Units held by such Unitholder or Assignee by (B) the total number of all Outstanding Units, and (c) as to the holders of additional Partnership Securities issued by the Partnership in accordance with Section 5.6, the percentage established as a part of such issuance. The Percentage Interest with respect to an Incentive Distribution Right shall at all times be zero.
"Person" means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.
"Per Unit Capital Amount" means, as of any date of determination, the Capital Account, stated on a per Unit basis, underlying any Unit held by a Person other than the General Partner or any Affiliate of the General Partner who holds Units.
"Pro Rata" means (a) when modifying Units or any class thereof, apportioned equally among all designated Units in accordance with their relative Percentage Interests, (b) when modifying Partners and Assignees, apportioned among all Partners and Assignees in accordance with their relative Percentage Interests and (c) when modifying holders of Incentive Distribution Rights, apportioned equally among all holders of Incentive Distribution Rights in accordance with the relative number of Incentive Distribution Rights held by each such holder.
"Purchase Date" means the date determined by the General Partner as the date for purchase of all Outstanding Units of a certain class (other than Units owned by the General Partner and its Affiliates) pursuant to Article XV.
"Quarter" means, unless the context requires otherwise, a fiscal quarter, or, with respect to the first fiscal quarter after the Closing Date, the portion of such fiscal quarter after the Closing Date, of the Partnership.
"Recapture Income" means any gain recognized by the Partnership (computed without regard to any adjustment required by Section 734 or Section 743 of the Code) upon the disposition of any property or asset of the Partnership, which gain is characterized as ordinary income because it represents the recapture of deductions previously taken with respect to such property or asset.
"Record Date" means the date established by the General Partner for determining (a) the identity of the Record Holders entitled to notice of, or to vote at, any meeting of Limited Partners or entitled to vote by ballot or give approval of Partnership action in writing without a meeting or entitled to exercise rights in respect of any lawful action of Limited Partners or (b) the identity of Record Holders entitled to receive any report or distribution or to participate in any offer.
"Record Holder" means the Person in whose name a Common Unit is registered on the books of the Transfer Agent as of the opening of business on a particular Business Day, or with respect to other Partnership Securities, the Person in whose name any such other Partnership Security is registered on the books which the General Partner has caused to be kept as of the opening of business on such Business Day.
"Redeemable Interests" means any Partnership Interests for which a
redemption notice has been given, and has not been withdrawn, pursuant to
Section 4.10.
"Registration Statement" means the Registration Statement on Form S-1 (Registration No. 333-91706) as it has been or as it may be amended or supplemented from time to time, filed by the Partnership with the Commission under the Securities Act to register the offering and sale of the Common Units in the Initial Offering.
"Remaining Net Positive Adjustments" means as of the end of any taxable period, (i) with respect to the Unitholders holding Common Units or Subordinated Units, the excess of (a) the Net Positive Adjustments of the Unitholders holding Common Units or Subordinated Units as of the end of such period over (b) the sum of those Partners' Share of Additional Book Basis Derivative Items for each prior taxable period, (ii) with respect to the General Partner (as holder of the General Partner Interest), the excess of (a) the Net Positive Adjustments of the General Partner as of the end of such period over (b) the sum of the General Partner's Share of Additional Book Basis Derivative Items with respect to the General Partner Interest for each prior taxable period, and (iii) with respect to the holders of Incentive Distribution Rights, the excess of (a) the Net Positive Adjustments of the holders of Incentive Distribution Rights as of the end of such period over (b) the sum of the Share of Additional Book Basis Derivative Items of the holders of the Incentive Distribution Rights for each prior taxable period.
"Required Allocations" means (a) any limitation imposed on any allocation of Net Losses or Net Termination Losses under Section 6.1(b) or 6.1(c)(ii) and (b) any allocation of an item of income, gain, loss or deduction pursuant to Section 6.1(d)(i), 6.1(d)(ii), 6.1(d)(iv), 6.1(d)(vii) or 6.1(d)(ix).
"Residual Gain" or "Residual Loss" means any item of gain or loss, as the case may be, of the Partnership recognized for federal income tax purposes resulting from a sale, exchange or other disposition of a Contributed Property or Adjusted Property, to the extent such item of gain
or loss is not allocated pursuant to Section 6.2(b)(i)(A) or 6.2(b)(ii)(A), respectively, to eliminate Book-Tax Disparities.
"Second Liquidation Target Amount" has the meaning assigned to such term in Section 6.1(c)(i)(E).
"Second Target Distribution" means $0.625 per Unit per Quarter (or, with respect to the period commencing on the Closing Date and ending on December 31, 2002, it means the product of $0.625 multiplied by a fraction of which the numerator is equal to the number of days in such period and of which the denominator is 91), subject to adjustment in accordance with Sections 6.6 and 6.9.
"Securities Act" means the Securities Act of 1933, as amended, supplemented or restated from time to time and any successor to such statute.
"Share of Additional Book Basis Derivative Items" means in connection with any allocation of Additional Book Basis Derivative Items for any taxable period, (i) with respect to the Unitholders holding Common Units or Subordinated Units, the amount that bears the same ratio to such Additional Book Basis Derivative Items as the Unitholders' Remaining Net Positive Adjustments as of the end of such period bears to the Aggregate Remaining Net Positive Adjustments as of that time, (ii) with respect to the General Partner (as holder of the General Partner Interest), the amount that bears the same ratio to such additional Book Basis Derivative Items as the General Partner's Remaining Net Positive Adjustments as of the end of such period bears to the Aggregate Remaining Net Positive Adjustment as of that time, and (iii) with respect to the Partners holding Incentive Distribution Rights, the amount that bears the same ratio to such Additional Book Basis Derivative Items as the Remaining Net Positive Adjustments of the Partners holding the Incentive Distribution Rights as of the end of such period bears to the Aggregate Remaining Net Positive Adjustments as of that time.
"Special Approval" means approval by a majority of the members of the Conflicts Committee.
"Subordinated Unit" means a Unit representing a fractional part of the Partnership Interests of all Limited Partners and Assignees and having the rights and obligations specified with respect to Subordinated Units in this Agreement. The term "Subordinated Unit" as used herein does not include a Common Unit or Parity Unit. A Subordinated Unit that is convertible into a Common Unit or a Parity Unit shall not constitute a Common Unit or Parity Unit until such conversion occurs.
"Subordination Period" means the period commencing on the Closing Date and ending on the first to occur of the following dates:
(a) the first day of any Quarter beginning after September 30, 2009 in respect of which (i) (A) distributions of Available Cash from Operating Surplus on each of the Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units with respect to each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Minimum Quarterly Distribution (or portion thereof for the first fiscal
quarter after the Closing Date) on all Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units during such periods and (B) the Adjusted Operating Surplus generated during each of the three consecutive, non-overlapping four-quarter periods immediately preceding such date equaled or exceeded the sum of the Minimum Quarterly Distribution on all of the Common Units and Subordinated Units and any other Units that are senior or equal in right of distribution to the Subordinated Units that were Outstanding during such periods on a Fully Diluted Basis, plus the related distribution on the General Partner Interest, during such periods and (ii) there are no Cumulative Common Unit Arrearages; and
(b) the date on which the General Partner is removed as general partner of the Partnership upon the requisite vote by holders of Outstanding Units under circumstances where Cause does not exist and Units held by the General Partner and its Affiliates are not voted in favor of such removal.
"Subsidiary" means, with respect to any Person, (a) a corporation of
which more than 50% of the voting power of shares entitled (without regard to
the occurrence of any contingency) to vote in the election of directors or other
governing body of such corporation is owned, directly or indirectly, at the date
of determination, by such Person, by one or more Subsidiaries of such Person or
a combination thereof, (b) a partnership (whether general or limited) in which
such Person or a Subsidiary of such Person is, at the date of determination, a
general or limited partner of such partnership, but only if more than 50% of the
partnership interests of such partnership (considering all of the partnership
interests of the partnership as a single class) is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries of such Person, or a combination thereof, or (c) any other Person
(other than a corporation or a partnership) in which such Person, one or more
Subsidiaries of such Person, or a combination thereof, directly or indirectly,
at the date of determination, has (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of a majority of the directors or
other governing body of such Person.
"Substituted Limited Partner" means a Person who is admitted as a Limited Partner to the Partnership pursuant to Section 10.2 in place of and with all the rights of a Limited Partner and who is shown as a Limited Partner on the books and records of the Partnership.
"Surviving Business Entity" has the meaning assigned to such term in
Section 14.2(b).
"Third Liquidation Target Amount" has the meaning assigned to such term in Section 6.1(c)(i)(F).
"Third Target Distribution" means $0.75 per Unit per Quarter (or, with respect to the period commencing on the Closing Date and ending on December 31, 2002, it means the product of $0.75 multiplied by a fraction of which the numerator is equal to the number of days in such period and of which the denominator is 91), subject to adjustment in accordance with Sections 6.6 and 6.9.
"Trading Day" has the meaning assigned to such term in Section 15.1(a).
"transfer" has the meaning assigned to such term in Section 4.4(a).
"Transfer Agent" means such bank, trust company or other Person (including the General Partner or one of its Affiliates) as shall be appointed from time to time by the Partnership to act as registrar and transfer agent for the Common Units; provided that if no Transfer Agent is specifically designated for any other Partnership Securities, the General Partner shall act in such capacity.
"Transfer Application" means an application and agreement for transfer of Units in the form set forth on the back of a Certificate or in a form substantially to the same effect in a separate instrument.
"Underwriter" means each Person named as an underwriter in Schedule I to the Underwriting Agreement who purchases Common Units pursuant thereto.
"Underwriting Agreement" means the Underwriting Agreement dated October 31, 2002 among the Underwriters, the Partnership, the General Partner, the Operating Partnership and Martin Resource Management 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 Subordinated Units but shall not include (i) a General Partner Interest or (ii) Incentive Distribution Rights.
"Unitholders" means the holders of Units.
"Unit Majority" means, (x) during the Subordination Period, at least a majority of the Outstanding Common Units (excluding Common Units owned by the General Partner and its Affiliates) voting as a class and at least a majority of the Outstanding Subordinated Units voting as a class, and thereafter, (y) at least a majority of the Outstanding Common Units.
"Unpaid MQD" has the meaning assigned to such term in Section 6.1(c)(i)(B).
"Unrealized Gain" attributable to any item of Partnership property means, as of any date of determination, the excess, if any, of (a) the fair market value of such property as of such date (as determined under Section 5.5(d)) over (b) the Carrying Value of such property as of such date (prior to any adjustment to be made pursuant to Section 5.5(d) as of such date).
"Unrealized Loss" attributable to any item of Partnership property means, as of any date of determination, the excess, if any, of (a) the Carrying Value of such property as of such date (prior to any adjustment to be made pursuant to Section 5.5(d) as of such date) over (b) the fair market value of such property as of such date (as determined under Section 5.5(d)).
"Unrecovered Capital" means at any time, with respect to a Unit, the Initial Unit Price less the sum of all distributions constituting Capital Surplus theretofore made in respect of an Initial Common Unit and any distributions of cash (or the Net Agreed Value of any distributions in kind) in connection with the dissolution and liquidation of the Partnership theretofore made in respect of an Initial Common Unit, adjusted as the General Partner determines to be appropriate to give effect to any distribution, subdivision or combination of such Units.
"U.S. GAAP" means United States Generally Accepted Accounting Principles consistently applied.
"U.S. Maritime Company" means any corporation or other entity which, directly or indirectly (1) owns or operates vessels in the United States coastwise trade, intercoastal trade or noncontiguous domestic trade; (2) owns or operates any vessel built with construction differential subsidies from the United States Government (or any agency thereof); (3) is a party to an operating differential subsidy agreement with the United States Government (or any agency thereof) on account of ships owned, chartered or operated by it; (4) owns any vessel on which there is a preferred mortgage issued in connection with Title XI of the Merchant Marine Act, 1936, as amended; (5) operates vessels under agreement with the United States Government (or any agency thereof); (6) conducts any activity, takes any action or receives any benefit which would be adversely affected under any provision of the U.S. maritime, shipping or vessel documentation laws by virtue of Non-citizen ownership of its stock; or (7) maintains a Capital Construction Fund under the provisions of Section 607 of the Merchant Marine Act of 1936, as amended.
"Withdrawal Opinion of Counsel" has the meaning assigned to such term in Section 11.1(b).
"Working Capital Borrowings" means borrowings used solely for working capital purposes or to pay distributions to Partners made pursuant to a credit facility or other arrangement to the extent such borrowings are required to be reduced to a relatively small amount each year (or for the year in which the Initial Offering is consummated, the 12-month period beginning on the Closing Date) for an economically meaningful period of time.
Section 1.2 Construction. Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (b) references to Articles and Sections refer to Articles and Sections of this Agreement; and (c) the term "include" or "includes" means includes, without limitation, and "including" means including, without limitation.
ARTICLE II
ORGANIZATION
Section 2.1 Formation. The General Partner and the Organizational Limited Partner have previously formed the Partnership as a limited partnership pursuant to the provisions of the Delaware Act and hereby amend and restate the original Agreement of Limited Partnership of Martin Midstream Partners L.P. in its entirety. This amendment and restatement shall become effective on the date of this Agreement. Except as expressly provided to the contrary in this Agreement, the rights, duties (including fiduciary duties), liabilities and obligations of the Partners and the administration, dissolution and termination of the Partnership shall be governed by the Delaware Act. All Partnership Interests shall constitute personal property of the owner thereof for all purposes and a Partner has no interest in specific Partnership property.
Section 2.2 Name. The name of the Partnership shall be "Martin Midstream Partners L.P." The Partnership's business may be conducted under any other name or names deemed necessary or appropriate by the General Partner in its sole discretion, including the name of the General Partner. The words "Limited Partnership," "L.P.," "Ltd." or similar words or letters shall be included in the Partnership's name where necessary for the purpose of complying with the laws of any jurisdiction that so requires. The General Partner in its discretion may change the name of the Partnership at any time and from time to time and shall notify the Limited Partners of such change in the next regular communication to the Limited Partners.
Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices. Unless and until changed by the General Partner, the registered office of the Partnership in the State of Delaware shall be located at 1209 Orange Street, Wilmington, Delaware 19801, and the registered agent for service of process on the Partnership in the State of Delaware at such registered office shall be The Corporation Trust Company. The principal office of the Partnership shall be located at 4200 Stone Road, Kilgore, Texas 75662 or such other place as the General Partner may from time to time designate by notice to the Limited Partners. The Partnership may maintain offices at such other place or places within or outside the State of Delaware as the General Partner deems necessary or appropriate. The address of the General Partner shall be 4200 Stone Road, Kilgore, Texas 75662 or such other place as the General Partner may from time to time designate by notice to the Limited Partners.
Section 2.4 Purpose and Business. The purpose and nature of the business to be conducted by the Partnership shall be to (a) own the equity of the general partner of the Operating Partnership and to serve as a limited partner of the Operating Partnership and, in connection therewith, to exercise all the rights and powers conferred upon the Partnership as a partner of the Operating Partnership pursuant to the Operating Partnership Agreement or otherwise, (b) engage directly in, or enter into or form any corporation, partnership, joint venture, limited liability company or other arrangement to engage indirectly in, any business activity that the Operating Partnership is permitted to engage in by the Operating Partnership Agreement or that its subsidiaries are permitted to engage in by their limited liability company or partnership agreements and, in connection therewith, to exercise all of the rights and powers conferred upon the Partnership pursuant to the agreements relating to such business activity, (c) engage directly in, or enter into or form any corporation, partnership, joint venture, limited liability company or other arrangement to engage indirectly in, any business activity that is approved by the General Partner and which lawfully may be conducted by a limited partnership organized pursuant to the Delaware Act and, in connection therewith, to exercise all of the rights and powers conferred upon the Partnership pursuant to the agreements relating to such business activity; provided, however, that the General Partner reasonably determines, as of the date of the acquisition or commencement of such activity, that such activity (i) generates "qualifying income" (as such term is defined pursuant to Section 7704 of the Code) or a Subsidiary or a Partnership activity that generates qualifying income or (ii) enhances the operations of an activity of the Operating Partnership, and (d) do anything necessary or appropriate to the foregoing, including the making of capital contributions or loans to a Group Member. The General Partner has no obligation or duty to the Partnership, the Limited Partners or the Assignees to propose or approve, and in its discretion may decline to propose or approve, the conduct by the Partnership of any business.
Section 2.5 Powers. The Partnership shall be empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described in Section 2.4 and for the protection and benefit of the Partnership.
Section 2.6 Power of Attorney. Each Limited Partner and each Assignee hereby constitutes and appoints the General Partner and, if a Liquidator shall have been selected pursuant to Section 12.3, the Liquidator (and any successor to the Liquidator by merger, transfer, assignment, election or otherwise) and each of their authorized officers and attorneys-in-fact, as the case may be, with full power of substitution, as his true and lawful agent and attorney-in-fact, with full power and authority in his name, place and stead, to:
(i) execute, swear to, acknowledge, deliver, file and record in the appropriate public offices (A) all certificates, documents and other instruments (including this Agreement and the Certificate of Limited Partnership and all amendments or restatements hereof or thereof) that the General Partner or the Liquidator deems necessary or appropriate to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may conduct business or own property; (B) all certificates, documents and other instruments that the General Partner or the Liquidator deems necessary or appropriate to reflect, in accordance with its terms, any amendment, change, modification or restatement of this Agreement; (C) all certificates, documents and other instruments (including conveyances and a certificate of cancellation) that the General Partner or the Liquidator deems necessary or appropriate to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement; (D) all certificates, documents and other instruments relating to the admission, withdrawal, removal or substitution of any Partner pursuant to, or other events described in, Article IV, X, XI or XII; (E) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of any class or series of Partnership Securities issued pursuant to Section 5.6; and (F) all certificates, documents and other instruments (including agreements and a certificate of merger) relating to a merger or consolidation of the Partnership pursuant to Article XIV; and
(ii) execute, swear to, acknowledge, deliver, file and record all ballots, consents, approvals, waivers, certificates, documents and other instruments necessary or appropriate, in the discretion of the General Partner or the Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action that is made or given by the Partners hereunder or is consistent with the terms of this Agreement or is necessary or appropriate, in the discretion of the General Partner or the Liquidator, to effectuate the terms or intent of this Agreement; provided, that when required by Section 13.3 or any other provision of this Agreement that establishes a percentage of the Limited Partners or of the Limited Partners of any class or series required to take any action, the General Partner and the Liquidator may exercise the power of attorney made in this Section 2.6(a)(ii) only after the necessary vote, consent or approval of the Limited Partners or of the Limited Partners of such class or series, as applicable.
Nothing contained in this Section 2.6(a) shall be construed as authorizing the General Partner to amend this Agreement except in accordance with Article XIII or as may be otherwise expressly provided for in this Agreement.
(b) The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive and, to the maximum extent permitted by law, not be affected by the subsequent death, incompetency, disability, incapacity, dissolution, bankruptcy or termination of any Limited Partner or Assignee and the transfer of all or any portion of such Limited Partner's or Assignee's Partnership Interest and shall extend to such Limited Partner's or Assignee's heirs, successors, assigns and personal representatives. Each Limited Partner or Assignee hereby agrees to be bound by any representation made by the General Partner or the Liquidator acting in good faith pursuant to such power of attorney; and each Limited Partner or Assignee hereby waives, to the maximum extent permitted by law, any and all defenses that may be available to contest, negate or disaffirm the action of the General Partner or the Liquidator taken in good faith under such power of attorney. Each Limited Partner or Assignee shall execute and deliver to the General Partner or the Liquidator, within 15 days after receipt of the request therefor, such further designation, powers of attorney and other instruments as the General Partner or the Liquidator deems necessary to effectuate this Agreement and the purposes of the Partnership.
Section 2.7 Term. The term of the Partnership commenced upon the filing of the Certificate of Limited Partnership in accordance with the Delaware Act and shall continue in existence until the dissolution of the Partnership in accordance with the provisions of Article XII. The existence of the Partnership as a separate legal entity shall continue until the cancellation of the Certificate of Limited Partnership as provided in the Delaware Act.
Section 2.8 Title to Partnership Assets. Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner or Assignee, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof. Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner, one or more of its Affiliates or one or more nominees, as the General Partner may determine. The General Partner hereby declares and warrants that any Partnership assets for which record title is held in the name of the General Partner or one or more of its Affiliates or one or more nominees shall be held by the General Partner or such Affiliate or nominee for the use and benefit of the Partnership in accordance with the provisions of this Agreement; provided, however, that the General Partner shall use reasonable efforts to cause record title to such assets (other than those assets in respect of which the General Partner determines that the expense and difficulty of conveyancing makes transfer of record title to the Partnership impracticable) to be vested in the Partnership as soon as reasonably practicable; provided, further, that, prior to the withdrawal or removal of the General Partner or as soon thereafter as practicable, the General Partner shall use reasonable efforts to effect the transfer of record title to the Partnership and, prior to any such transfer, will provide for the use of such assets in a manner satisfactory to the General Partner. All Partnership assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which record title to such Partnership assets is held.
ARTICLE III
RIGHTS OF LIMITED PARTNERS
Section 3.1 Limitation of Liability. The Limited Partners and the Assignees shall have no liability under this Agreement except as expressly provided in this Agreement or the Delaware Act.
Section 3.2 Management of Business. No Limited Partner or Assignee, in its capacity as such, shall participate in the operation, management or control (within the meaning of the Delaware Act) of the Partnership's business, transact any business in the Partnership's name or have the power to sign documents for or otherwise bind the Partnership. Any action taken by any Affiliate of the General Partner or any officer, director, employee, manager, member, general partner, agent or trustee of the General Partner or any of its Affiliates, or any officer, director, employee, manager, member, general partner, agent or trustee of a Group Member, in its capacity as such, shall not be deemed to be participation in the control of the business of the Partnership by a limited partner of the Partnership (within the meaning of Section 17-303(a) of the Delaware Act) and shall not affect, impair or eliminate the limitations on the liability of the Limited Partners or Assignees under this Agreement.
Section 3.3 Outside Activities of the Limited Partners. Subject to the provisions of Section 7.5 and the Omnibus Agreement, which shall continue to be applicable to the Persons referred to therein, regardless of whether such Persons shall also be Limited Partners or Assignees, any Limited Partner or Assignee shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities in direct competition with the Partnership Group. Neither the Partnership nor any of the other Partners or Assignees shall have any rights by virtue of this Agreement in any business ventures of any Limited Partner or Assignee.
Section 3.4 Rights of Limited Partners. In addition to other rights
provided by this Agreement or by applicable law, and except as limited by
Section 3.4(b), each Limited Partner shall have the right, for a purpose
reasonably related to such Limited Partner's interest as a limited partner in
the Partnership, upon reasonable written demand and at such Limited Partner's
own expense:
(i) to obtain true and full information regarding the status of the business and financial condition of the Partnership;
(ii) promptly after becoming available, to obtain a copy of the Partnership's federal, state and local income tax returns for each year;
(iii) to have furnished to him a current list of the name and last known business, residence or mailing address of each Partner;
(iv) to have furnished to him a copy of this Agreement and the Certificate of Limited Partnership and all amendments thereto, together with a copy of the executed copies of all powers of attorney pursuant to which this Agreement, the Certificate of Limited Partnership and all amendments thereto have been executed;
(v) to obtain true and full information regarding the amount of cash and a description and statement of the Net Agreed Value of any other Capital Contribution by each Partner and which each Partner has agreed to contribute in the future, and the date on which each became a Partner; and
(vi) to obtain such other information regarding the affairs of the Partnership as is just and reasonable.
(b) The General Partner may keep confidential from the Limited Partners
and Assignees, for such period of time as the General Partner deems reasonable,
(i) any information that the General Partner reasonably believes to be in the
nature of trade secrets or (ii) other information the disclosure of which the
General Partner in good faith believes (A) is not in the best interests of the
Partnership Group, (B) could damage the Partnership Group or (C) that any Group
Member is required by law or by agreement with any third party to keep
confidential (other than agreements with Affiliates of the Partnership the
primary purpose of which is to circumvent the obligations set forth in this
Section 3.4).
ARTICLE IV
CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;
REDEMPTION OF PARTNERSHIP INTERESTS
Section 4.1 Certificates. Upon the Partnership's issuance of Common Units or Subordinated Units to any Person and upon such Person's request, the Partnership shall issue one or more Certificates in the name of such Person evidencing the number of such Units being so issued. In addition, (a) upon the General Partner's request, the Partnership shall issue to it one or more Certificates in the name of the General Partner evidencing its interests in the Partnership and (b) upon the request of any Person owning Incentive Distribution Rights or any other Partnership Securities other than Common Units or Subordinated Units, the Partnership shall issue to such Person one or more certificates evidencing such Incentive Distribution Rights or other Partnership Securities other than Common Units or Subordinated Units. Certificates shall be executed on behalf of the Partnership by the Chairman of the Board, President or any Vice President and the Secretary or any Assistant Secretary of the General Partner. No Common Unit Certificate shall be valid for any purpose until it has been countersigned by the Transfer Agent; provided, however, that if the General Partner elects to issue Common Units in global form, the Common Unit Certificates shall be valid upon receipt of a certificate from the Transfer Agent certifying that the Common Units have been duly registered in accordance with the directions of the Partnership and the Underwriters. Subject to the requirements of Section 6.7(b), the Partners holding Certificates evidencing Subordinated Units may exchange such Certificates for Certificates evidencing Common Units on or after the date on which such Subordinated Units are converted into Common Units pursuant to the terms of Section 5.8.
Section 4.2 Mutilated, Destroyed, Lost or Stolen Certificates.
(a) If any mutilated Certificate is surrendered to the Transfer Agent, the appropriate officers of the General Partner on behalf of the Partnership shall execute, and the Transfer Agent shall countersign and deliver in exchange therefor, a new Certificate evidencing the same number and type of Partnership Securities as the Certificate so surrendered.
(b) The appropriate officers of the General Partner on behalf of the Partnership shall execute and deliver, and the Transfer Agent shall countersign a new Certificate in place of any Certificate previously issued if the Record Holder of the Certificate:
(i) makes proof by affidavit, in form and substance satisfactory to the General Partner, that a previously issued Certificate has been lost, destroyed or stolen;
(ii) requests the issuance of a new Certificate before the General Partner has notice that the Certificate has been acquired by a purchaser for value in good faith and without notice of an adverse claim;
(iii) if requested by the General Partner, delivers to the General Partner a bond, in form and substance satisfactory to the General Partner, with surety or sureties and with fixed or open penalty as the General Partner may reasonably direct, in its sole discretion, to indemnify the Partnership, the Partners, the General Partner and the Transfer Agent against any claim that may be made on account of the alleged loss, destruction or theft of the Certificate; and
(iv) satisfies any other reasonable requirements imposed by the General Partner.
If a Limited Partner or Assignee fails to notify the General Partner within a reasonable time after he has notice of the loss, destruction or theft of a Certificate, and a transfer of the Limited Partner Interests represented by the Certificate is registered before the Partnership, the General Partner or the Transfer Agent receives such notification, the Limited Partner or Assignee shall be precluded from making any claim against the Partnership, the General Partner or the Transfer Agent for such transfer or for a new Certificate.
(c) As a condition to the issuance of any new Certificate under this
Section 4.2, the General Partner may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Transfer
Agent) reasonably connected therewith.
Section 4.3 Record Holders. The Partnership shall be entitled to recognize the Record Holder as the Partner or Assignee with respect to any Partnership Interest and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such Partnership Interest on the part of any other Person, regardless of whether the Partnership shall have actual or other notice thereof, except as otherwise provided by law or any applicable rule, regulation, guideline or requirement of any National Securities Exchange on which such Partnership Interests are listed for trading. Without limiting the foregoing, when a Person (such as a broker, dealer, bank, trust company or clearing corporation or an agent of any of the foregoing) is acting as nominee, agent or in some other representative capacity for another Person in acquiring and/or holding Partnership Interests, as between the Partnership on the one hand, and such other Persons on the other, such representative Person (a) shall be the Partner or Assignee (as the case may be) of record and beneficially, (b) must execute and deliver a Transfer Application and (c) shall be bound by this Agreement and shall have the rights and obligations of a Partner or Assignee (as the case may be) hereunder and as, and to the extent, provided for herein.
Section 4.4 Transfer Generally.
(a) The term "transfer," when used in this Agreement with respect to a Partnership Interest, shall be deemed to refer to a transaction by which the General Partner assigns its General Partner Interest to another Person who becomes the general partner of the Partnership, by which the holder of a Limited Partner Interest assigns such Limited Partner Interest to another Person who is or becomes a Limited Partner or an Assignee, and includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise.
(b) No Partnership Interest shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article IV. Any transfer or purported transfer of a Partnership Interest not made in accordance with this Article IV shall be null and void.
(c) Nothing contained in this Agreement shall be construed to prevent a disposition by any member of the General Partner of any or all of the membership interests of the General Partner.
Section 4.5 Registration and Transfer of Limited Partner Interests.
(a) The Partnership shall keep or cause to be kept on behalf of the Partnership a register in which, subject to such reasonable regulations as it may prescribe and subject to the provisions of Section 4.5(b), the Partnership will provide for the registration and transfer of Limited Partner Interests. The Transfer Agent is hereby appointed registrar and transfer agent for the purpose of registering Common Units and transfers of such Common Units as herein provided. The Partnership shall not recognize transfers of Certificates evidencing Limited Partner Interests unless such transfers are effected in the manner described in this Section 4.5. Upon surrender of a Certificate for registration of transfer of any Limited Partner Interests evidenced by a Certificate, and subject to the provisions of Section 4.5(b), the appropriate officers of the General Partner on behalf of the Partnership shall execute and deliver, and in the case of Common Units, the Transfer Agent shall countersign and deliver, in the name of the holder or the designated transferee or transferees, as required pursuant to the holder's instructions, one or more new Certificates evidencing the same aggregate number and type of Limited Partner Interests as was evidenced by the Certificate so surrendered.
(b) Except as otherwise provided in Section 4.9, the Partnership shall not recognize any transfer of Limited Partner Interests evidenced by a Certificate until the Certificates evidencing such Limited Partner Interests are surrendered for registration of transfer and such Certificates are accompanied by a Transfer Application duly executed by the transferee (or the transferee's attorney-in-fact duly authorized in writing). No charge shall be imposed by the Partnership for such transfer; provided, that as a condition to the issuance of any new Certificate under this Section 4.5, the Partnership may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed with respect thereto.
(c) Limited Partner Interests may be transferred only in the manner described in this Section 4.5. The transfer of any Limited Partner Interests and the admission of any new Limited Partner shall not constitute an amendment to this Agreement.
(d) Until admitted as a Substituted Limited Partner pursuant to Section 10.2, the Record Holder of a Limited Partner Interest shall be an Assignee in respect of such Limited Partner Interest. Limited Partners may include custodians, nominees or any other individual or entity in its own or any representative capacity.
(e) A transferee of a Limited Partner Interest who has completed and delivered a Transfer Application shall be deemed to have (i) requested admission as a Substituted Limited Partner, (ii) agreed to comply with and be bound by and to have executed this Agreement, (iii) represented and warranted that such transferee has the right, power and authority and, if an individual, the capacity to enter into this Agreement, (iv) granted the powers of attorney set forth in this Agreement and (v) given the consents and approvals and made the waivers contained in this Agreement.
(f) The General Partner and its Affiliates shall have the right at any time to transfer their Subordinated Units and Common Units (whether issued upon conversion of the Subordinated Units or otherwise) to one or more Persons.
Section 4.6 Transfer of the General Partner's General Partner Interest.
(a) Subject to Section 4.6(c) below, prior to September 30, 2012, the General Partner shall not transfer all or any part of its General Partner Interest to a Person unless such transfer (i) has been approved by the prior written consent or vote of the holders of at least a majority of the Outstanding Common Units (excluding Common Units held by the General Partner and its Affiliates) or (ii) is of all, but not less than all, of its General Partner Interest to (A) an Affiliate of the General Partner (other than an individual) or (B) another Person (other than an individual) in connection with the merger or consolidation of the General Partner with or into another Person (other than an individual) or the transfer by the General Partner of all or substantially all of its assets to another Person (other than an individual).
(b) Subject to Section 4.6(c) below, on or after September 30, 2012, 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 of the Operating Partnership or
cause the Partnership or the Operating Partnership to be treated as an
association taxable as a corporation or otherwise to be taxed as an entity for
federal income tax purposes (to the extent not already so treated or taxed) and
(iii) such transferee also agrees to purchase all (or the appropriate portion
thereof, if applicable) of the partnership or membership interest of the General
Partner as the general partner or managing member, if any, of each other Group
Member. In the case of a transfer
pursuant to and in compliance with this Section 4.6, the transferee or successor (as the case may be) shall, subject to compliance with the terms of Section 10.3, be admitted to the Partnership as the General Partner immediately prior to the transfer of the Partnership Interest, and the business of the Partnership shall continue without dissolution.
Section 4.7 Transfer of Incentive Distribution Rights. Prior to September 30, 2012, a holder of Incentive Distribution Rights may transfer any or all of the Incentive Distribution Rights held by such holder without any consent of the Unitholders (a) to an Affiliate of such holder (other than an individual) or (b) to another Person (other than an individual) in connection with (i) the merger or consolidation of such holder of Incentive Distribution Rights with or into such other Person or (ii) the transfer by such holder of all or substantially all of its assets to such other Person or (iii) the sale of all or substantially all of the equity interests of such holder to such other Person. Any other transfer of the Incentive Distribution Rights prior to September 30, 2012, shall require the prior approval of holders of at least a majority of the Outstanding Common Units (excluding Common Units held by the General Partner and its Affiliates). On or after September 30, 2012, any holder of Incentive Distribution Rights may transfer any or all of its Incentive Distribution Rights without Unitholder approval. Notwithstanding anything herein to the contrary, no transfer of Incentive Distribution Rights to another Person shall be permitted unless the transferee agrees to be bound by the provisions of this Agreement.
Section 4.8 Restrictions on Transfers.
(a) Except as provided in Section 4.8(d) below, but notwithstanding the other provisions of this Article IV, no transfer of any Partnership Interests shall be made if such transfer would (i) violate the then applicable federal or state securities laws or rules and regulations of the Commission, any state securities commission or any other governmental authority with jurisdiction over such transfer, (ii) terminate the existence or qualification of the Partnership or the Operating Partnership under the laws of the jurisdiction of its formation, or (iii) cause the Partnership or the Operating Partnership to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes (to the extent not already so treated or taxed).
(b) The General Partner may impose restrictions on the transfer of Partnership Interests if a subsequent Opinion of Counsel determines that such restrictions are necessary to avoid a significant risk of the Partnership or the Operating Partnership becoming an association taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes. The restrictions may be imposed by making such amendments to this Agreement as the General Partner may determine to be necessary or appropriate to impose such restrictions; provided, however, that any amendment that the General Partner believes, in the exercise of its reasonable discretion, could result in the delisting or suspension of trading of any class of Limited Partner Interests on the principal National Securities Exchange on which such class of Limited Partner Interests is then traded must be approved, prior to such amendment being effected, by the holders of at least a majority of the Outstanding Limited Partner Interests of such class.
(c) The transfer of a Subordinated Unit that has converted into a Common Unit shall be subject to the restrictions imposed by Section 6.7(b).
(d) Nothing contained in this Article IV, or elsewhere in this Agreement, shall preclude the settlement of any transactions involving Partnership Interests entered into through the facilities of any National Securities Exchange on which such Partnership Interests are listed for trading.
Section 4.9 Citizenship Certificates; Non-citizen Assignees.
(a) If any Group Member is or becomes subject to any federal, state or local law or regulation that, in the reasonable determination of the General Partner, creates (i) a substantial risk of cancellation or forfeiture of any property in which the Group Member has an interest based on the nationality, citizenship or other related status of a Limited Partner or Assignee or (ii) a substantial risk that one or more Group Member or any Controlled Person of a Group Member will not be permitted to conduct business as a U.S. Maritime Company based on the status of a Limited Partner or Assignee as a Non-citizen, the General Partner may request any Limited Partner or Assignee to furnish to the General Partner, within 30 days after receipt of such request, an executed Citizenship Certification or such other information concerning his nationality, citizenship or other related status (or, if the Limited Partner or Assignee is a nominee holding for the account of another Person, the nationality, citizenship or other related status of such Person) as the General Partner may request. If a Limited Partner or Assignee fails to furnish to the General Partner within the aforementioned 30-day period such Citizenship Certification or other requested information or if upon receipt of such Citizenship Certification or other requested information the General Partner determines, with the advice of counsel, that a Limited Partner or Assignee is not an Eligible Citizen, the Partnership Interests owned by such Limited Partner or Assignee shall be subject to redemption in accordance with the provisions of Section 4.10. In addition, the General Partner may require that the status of any such Partner or Assignee be changed to that of a Non-citizen Assignee and, thereupon, the General Partner shall be substituted for such Non-citizen Assignee as the Limited Partner in respect of his Limited Partner Interests.
(b) The General Partner shall, in exercising voting rights in respect of Limited Partner Interests held by it on behalf of Non-citizen Assignees, distribute the votes in the same ratios as the votes of Partners (including without limitation the General Partner) in respect of Limited Partner Interests other than those of Non-citizen Assignees are cast, either for, against or abstaining as to the matter.
(c) Upon dissolution of the Partnership, a Non-citizen Assignee shall have no right to receive a distribution in kind pursuant to Section 12.4 but shall be entitled to the cash equivalent thereof, and the Partnership shall provide cash in exchange for an assignment of the Non-citizen Assignee's share of the distribution in kind. Such payment and assignment shall be treated for Partnership purposes as a purchase by the Partnership from the Non-citizen Assignee of his Limited Partner Interest (representing his right to receive his share of such distribution in kind).
(d) At any time after he can and does certify that he has become an
Eligible Citizen, a Non-citizen Assignee may, upon application to the General
Partner, request admission as a Substituted Limited Partner with respect to any
Limited Partner Interests of such Non-citizen Assignee not redeemed pursuant to
Section 4.10, and upon his admission pursuant to
Section 10.2, the General Partner shall cease to be deemed to be the Limited Partner in respect of the Non-citizen Assignee's Limited Partner Interests.
Section 4.10 Redemption of Partnership Interests of Non-citizen Assignees.
(a) If at any time a Limited Partner or Assignee fails to furnish a Citizenship Certification or other information requested within the 30-day period specified in Section 4.9(a), or if upon receipt of such Citizenship Certification or other information the General Partner determines, with the advice of counsel, that a Limited Partner or Assignee is not an Eligible Citizen, the Partnership may, unless the Limited Partner or Assignee establishes to the satisfaction of the General Partner that such Limited Partner or Assignee is an Eligible Citizen or has transferred his Partnership Interests to a Person who is an Eligible Citizen and who furnishes a Citizenship Certification to the General Partner prior to the date fixed for redemption as provided below, redeem the Partnership Interest of such Limited Partner or Assignee as follows:
(i) The General Partner shall, not later than the 30th day before the date fixed for redemption, give notice of redemption to the Limited Partner or Assignee, at his last address designated on the records of the Partnership or the Transfer Agent, by registered or certified mail, postage prepaid. The notice shall be deemed to have been given when so mailed. The notice shall specify the Redeemable Interests, the date fixed for redemption, the place of payment, that (if applicable) payment of the redemption price will be made upon surrender of the Certificate evidencing the Redeemable Interests and that on and after the date fixed for redemption no further allocations or distributions to which the Limited Partner or Assignee would otherwise be entitled in respect of the Redeemable Interests will accrue or be made.
(ii) The aggregate redemption price for Redeemable Interests shall be an amount equal to the Current Market Price (the date of determination of which shall be the date fixed for redemption) of Limited Partner Interests of the class to be so redeemed multiplied by the number of Limited Partner Interests of each such class included among the Redeemable Interests. The redemption price shall be paid, in the discretion of the General Partner, in cash or by delivery of a promissory note of the Partnership in the principal amount of the redemption price, bearing interest at the rate of 10% annually and payable in three equal annual installments of principal together with accrued interest, commencing one year after the redemption date.
(iii) Upon surrender by or on behalf of the Limited Partner or Assignee, at the place specified in the notice of redemption, of the Certificate evidencing the Redeemable Interests, duly endorsed in blank or accompanied by an assignment duly executed in blank, the Limited Partner or Assignee or his duly authorized representative shall be entitled to receive the payment therefor.
(iv) After the redemption date, Redeemable Interests shall no longer constitute issued and Outstanding Limited Partner Interests.
(b) The provisions of this Section 4.10 shall also be applicable to Limited Partner Interests held by a Limited Partner or Assignee as nominee of a Person determined to be other than an Eligible Citizen.
(c) Nothing in this Section 4.10 shall prevent the recipient of a notice of redemption from transferring his Limited Partner Interest before the redemption date if such transfer is otherwise permitted under this Agreement. Upon receipt of notice of such a transfer, the General Partner shall withdraw the notice of redemption, provided the transferee of such Limited Partner Interest certifies to the satisfaction of the General Partner in a Citizenship Certification delivered in connection with the Transfer Application that he is an Eligible Citizen. If the transferee fails to make such certification, such redemption shall be effected from the transferee on the original redemption date.
ARTICLE V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
Section 5.1 Organizational Contributions. In connection with the formation of the Partnership under the Delaware Act, the General Partner made an initial Capital Contribution to the Partnership in the amount of $20.00, for a 2% General Partner Interest in the Partnership and has been admitted as a General Partner of the Partnership, and the Organizational Limited Partner made an initial Capital Contribution to the Partnership in the amount of $980.00 for a 98% Limited Partner Interest in the Partnership and has been admitted as a Limited Partner of the Partnership. As of the Closing Date, the interest of the Organizational Limited Partner shall be redeemed as provided in the Contribution Agreement; the initial Capital Contributions of each Partner shall thereupon be refunded; and the Organizational Limited Partner shall cease to be a Limited Partner of the Partnership. Ninety-eight percent of any interest or other profit that may have resulted from the investment or other use of such initial Capital Contributions shall be allocated and distributed to the Organizational Limited Partner, and the balance thereof shall be allocated and distributed to the General Partner.
Section 5.2 Contributions by the General Partner and its Affiliates.
(a) On the Closing Date and pursuant to the Contribution Agreement, and in consideration of the assumption of the debt as set forth in Section 3.1(b) of the Contribution Agreement, (i) the General Partner shall contribute to the Partnership, as a Capital Contribution, all of its interest in the Operating Partnership in exchange for (A) the continuation of its General Partner Interest, subject to all of the rights, privileges and duties of the General Partner under this Agreement, and (B) the Incentive Distribution Rights, (ii) the Organizational Limited Partner shall contribute to the Partnership its limited partner interest in the Operating Partnership and all of its interest in Martin Operating GP LLC, as a Capital Contribution, in exchange for 2,088,921 Subordinated Units, (iii) Midstream Fuel Service LLC shall contribute its limited partner interest in the Operating Partnership, as a Capital Contribution, in exchange for 620,644 Subordinated Units, and (iv) Martin Gas Sales LLC will contribute its limited partner interest in the Operating Partnership, as a Capital Contribution, in exchange for 1,543,797 Subordinated Units.
(b) Upon the issuance of any additional Limited Partner Interests by the Partnership (other than the issuance of the Common Units issued in the Initial Offering and other than the
issuance of the Common Units issued pursuant to the Over-Allotment Option and other than Common Units purchased by the General Partner to the extent the Over-Allotment Option is not exercised), the General Partner shall be required to make additional Capital Contributions equal to 2/98ths of any amount contributed to the Partnership by the Limited Partners in exchange for such additional Limited Partner Interests. Except as set forth in the immediately preceding sentence and Article XII, the General Partner shall not be obligated to make any additional Capital Contributions to the Partnership.
(c) The General Partner shall make additional Capital Contributions equal to the amount of any loss or deduction allocated to it pursuant to Section 6.1(d)(xiii) no later than [o] days after the date on which such loss or deduction is realized.
Section 5.3 Contributions by Initial Limited Partners and Distributions to the General Partner.
(a) On the Closing Date and pursuant to the Underwriting Agreement, each Underwriter shall contribute to the Partnership cash in an amount equal to the Issue Price per Initial Common Unit, multiplied by the number of Common Units specified in the Underwriting Agreement to be purchased by such Underwriter at the Closing Date. In exchange for such Capital Contributions by the Underwriters, the Partnership shall issue Common Units to each Underwriter on whose behalf such Capital Contribution is made in an amount equal to the quotient obtained by dividing (i) the cash contribution to the Partnership by or on behalf of such Underwriter by (ii) the Issue Price per Initial Common Unit.
(b) Upon the exercise of the Over-Allotment Option and pursuant to the Underwriting Agreement, each Underwriter shall contribute to the Partnership cash in an amount equal to the Issue Price per Initial Common Unit, multiplied by the number of Common Units specified in the Underwriting Agreement to be purchased by such Underwriter at the Option Closing Date. In exchange for such Capital Contributions by the Underwriters, the Partnership shall issue Common Units to each Underwriter on whose behalf such Capital Contribution is made in an amount equal to the quotient obtained by dividing (i) the cash contributions to the Partnership by or on behalf of such Underwriter by (ii) the Issue Price per Initial Common Unit.
(c) No Limited Partner Interests will be issued or issuable as of or at the Closing Date other than (i) the Common Units issuable pursuant to subparagraph (a) hereof in aggregate number equal to 2,900,000, (ii) the "Additional Units" as such term is used in the Underwriting Agreement in an aggregate number up to 435,000 issuable upon exercise of the Over-Allotment Option pursuant to subparagraph (b) hereof, (iii) the 4,253,362 Subordinated Units issuable to the Martin Resource Management Corporation and its Affiliates pursuant to Section 5.2 hereof, and (iv) the Incentive Distribution Rights.
Section 5.4 Interest and Withdrawal. No interest shall be paid by the Partnership on Capital Contributions. No Partner or Assignee shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent, if any, that distributions made pursuant to this Agreement or upon termination of the Partnership may be considered as such by law and then only to the extent provided for in this Agreement. Except to the extent expressly provided in this Agreement, no Partner or Assignee shall have priority over any other Partner or Assignee either
as to the return of Capital Contributions or as to profits, losses or distributions. Any such return shall be a compromise to which all Partners and Assignees agree within the meaning of Section 17-502(b) of the Delaware Act.
Section 5.5 Capital Accounts.
(a) The Partnership shall maintain for each Partner (or a beneficial
owner of Partnership Interests held by a nominee in any case in which the
nominee has furnished the identity of such owner to the Partnership in
accordance with Section 6031(c) of the Code or any other method acceptable to
the General Partner in its sole discretion) owning a Partnership Interest a
separate Capital Account with respect to such Partnership Interest in accordance
with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital
Account shall be increased by (i) the amount of all Capital Contributions made
to the Partnership with respect to such Partnership Interest pursuant to this
Agreement and (ii) all items of Partnership income and gain (including, without
limitation, income and gain exempt from tax) computed in accordance with Section
5.5(b) and allocated with respect to such Partnership Interest pursuant to
Section 6.1, and decreased by (x) the amount of cash or Net Agreed Value of all
actual and deemed distributions of cash or property made with respect to such
Partnership Interest pursuant to this Agreement and (y) all items of Partnership
deduction and loss computed in accordance with Section 5.5(b) and allocated with
respect to such Partnership Interest pursuant to Section 6.1.
(b) For purposes of computing the amount of any item of income, gain, loss or deduction which is to be allocated pursuant to Article VI and is to be reflected in the Partners' Capital Accounts, the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for federal income tax purposes (including, without limitation, any method of depreciation, cost recovery or amortization used for that purpose), provided, that:
(i) Solely for purposes of this Section 5.5, the Partnership shall be treated as owning directly its proportionate share (as determined by the General Partner based upon the provisions of the Operating Partnership Agreement) of all property owned by the Operating Partnership or any other Subsidiary that is classified as a partnership for federal income tax purposes.
(ii) All fees and other expenses incurred by the Partnership to promote the sale of (or to sell) a Partnership Interest that can neither be deducted nor amortized under Section 709 of the Code, if any, shall, for purposes of Capital Account maintenance, be treated as an item of deduction at the time such fees and other expenses are incurred and shall be allocated among the Partners pursuant to Section 6.1.
(iii) Except as otherwise provided in Treasury Regulation
Section 1.704-1(b)(2)(iv)(m), the computation of all items of income,
gain, loss and deduction shall be made without regard to any election
under Section 754 of the Code which may be made by the Partnership and,
as to those items described in Section 705(a)(1)(B) or 705(a)(2)(B) of
the Code, without regard to the fact that such items are not includable
in gross income or are neither currently deductible nor capitalized for
federal income tax
purposes. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment in the Capital Accounts shall be treated as an item of gain or loss.
(iv) Any income, gain or loss attributable to the taxable disposition of any Partnership property shall be determined as if the adjusted basis of such property as of such date of disposition were equal in amount to the Partnership's Carrying Value with respect to such property as of such date.
(v) In accordance with the requirements of Section 704(b) of the Code, any deductions for depreciation, cost recovery or amortization attributable to any Contributed Property shall be determined as if the adjusted basis of such property on the date it was acquired by the Partnership were equal to the Agreed Value of such property. Upon an adjustment pursuant to Section 5.5(d) to the Carrying Value of any Partnership property subject to depreciation, cost recovery or amortization, any further deductions for such depreciation, cost recovery or amortization attributable to such property shall be determined (A) as if the adjusted basis of such property were equal to the Carrying Value of such property immediately following such adjustment and (B) using a rate of depreciation, cost recovery or amortization derived from the same method and useful life (or, if applicable, the remaining useful life) as is applied for federal income tax purposes; provided, however, that, if the asset has a zero adjusted basis for federal income tax purposes, depreciation, cost recovery or amortization deductions shall be determined using any reasonable method that the General Partner may adopt.
(vi) If the Partnership's adjusted basis in a depreciable or
cost recovery property is reduced for federal income tax purposes
pursuant to Section 48(q)(1) or 48(q)(3) of the Code, the amount of
such reduction shall, solely for purposes hereof, be deemed to be an
additional depreciation or cost recovery deduction in the year such
property is placed in service and shall be allocated among the Partners
pursuant to Section 6.1. Any restoration of such basis pursuant to
Section 48(q)(2) of the Code shall, to the extent possible, be
allocated in the same manner to the Partners to whom such deemed
deduction was allocated.
(c) (i) A transferee of a Partnership Interest shall succeed to a pro rata portion of the Capital Account of the transferor relating to the Partnership Interest so transferred.
(ii) Immediately prior to the transfer of a Subordinated Unit or of a Subordinated Unit that has converted into a Common Unit pursuant to Section 5.8 by a holder thereof (other than a transfer to an Affiliate unless the General Partner elects to have this subparagraph 5.5(c)(ii) apply), the Capital Account maintained for such Person with respect to its Subordinated Units or converted Subordinated Units will (A) first, be allocated to the Subordinated Units or converted Subordinated Units to be transferred in an amount equal to the product of (x) the number of such Subordinated Units or converted Subordinated Units to be transferred and (y) the Per Unit Capital Amount for a Common Unit, and (B) second, any remaining balance in such Capital Account will be
retained by the transferor, regardless of whether it has retained any Subordinated Units or converted Subordinated Units. Following any such allocation, the transferor's Capital Account, if any, maintained with respect to the retained Subordinated Units or converted Subordinated Units, if any, will have a balance equal to the amount allocated under clause (B) hereinabove, and the transferee's Capital Account established with respect to the transferred Subordinated Units or converted Subordinated Units will have a balance equal to the amount allocated under clause (A) hereinabove.
(d) (i) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an issuance of additional Partnership Interests for cash or Contributed Property or the conversion of the General Partner's Combined Interest to Common Units pursuant to Section 11.3(b), the Capital Account of all Partners and the Carrying Value of each Partnership property immediately prior to such issuance shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property, as if such Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such property immediately prior to such issuance and had been allocated to the Partners at such time pursuant to Section 6.1 in the same manner as any item of gain or loss actually recognized during such period would have been allocated. In determining such Unrealized Gain or Unrealized Loss, the aggregate cash amount and fair market value of all Partnership assets (including, without limitation, cash or cash equivalents) immediately prior to the issuance of additional Partnership Interests shall be determined by the General Partner using such reasonable method of valuation as it may adopt; provided, however, that the General Partner, in arriving at such valuation, must take fully into account the fair market value of the Partnership Interests of all Partners at such time. The General Partner shall allocate such aggregate value among the assets of the Partnership (in such manner as it determines in its discretion to be reasonable) to arrive at a fair market value for individual properties.
(ii) In accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemed
distribution to a Partner of any Partnership property (other than a
distribution of cash that is not in redemption or retirement of a
Partnership Interest), the Capital Accounts of all Partners and the
Carrying Value of all Partnership property shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized Loss attributable
to such Partnership property, as if such Unrealized Gain or Unrealized
Loss had been recognized in a sale of such property immediately prior
to such distribution for an amount equal to its fair market value, and
had been allocated to the Partners, at such time, pursuant to Section
6.1 in the same manner as any item of gain or loss actually recognized
during such period would have been allocated. In determining such
Unrealized Gain or Unrealized Loss, the aggregate cash amount and fair
market value of all Partnership assets (including, without limitation,
cash or cash equivalents) immediately prior to a distribution shall (A)
in the case of an actual distribution which is not made pursuant to
Section 12.4 or in the case of a deemed distribution, be determined and
allocated in the same manner as that provided in Section 5.5(d)(i) or
(B) in the case of a liquidating distribution pursuant to Section 12.4,
be determined and allocated by the Liquidator using such reasonable
method of valuation as it may adopt.
Section 5.6 Issuances of Additional Partnership Securities.
(a) Subject to Section 5.7, 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 shall be established by the General Partner in its sole discretion, 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 in the
exercise of its sole discretion, including (i) the right to share Partnership
profits and losses or items thereof; (ii) the right to share in Partnership
distributions; (iii) 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; and (vii) 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 is hereby authorized and directed to take all actions that it deems 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 or any Incentive Distribution Rights 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 is further authorized and directed to specify 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 Delaware Act and is authorized and directed to do all things it deems to be necessary or advisable in connection with any future issuance of Partnership Securities or in connection with the conversion of the General Partner Interest or any Incentive Distribution Rights 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 for trading.
Section 5.7 Limitations on Issuance of Additional Partnership Securities. Except as otherwise specified in this Section 5.7, the issuance of Partnership Securities pursuant to Section 5.6 shall be subject to the following restrictions and limitations:
(a) During the Subordination Period, the Partnership shall not issue (and shall not issue any options, rights, warrants or appreciation rights relating to) an aggregate of more than 1,500,000 (plus an amount, if any, equal to one half of the number of Units issued pursuant to the Over-Allotment Option, if and to the extent exercised) additional Parity Units without the prior approval of the holders of a Unit Majority. In applying this limitation, there shall be excluded Common Units and other Parity Units issued (A) in connection with the Underwriting
Agreement, (B) in accordance with Sections 5.7(b) and 5.7(c), (C) upon
conversion of Subordinated Units pursuant to Section 5.8, (D) upon conversion of
the General Partner Interest or any Incentive Distribution Rights pursuant to
Section 11.3(b), (D) pursuant to the employee benefit plans of the General
Partner, the Partnership or any other Group Member, (E) upon a conversion or
exchange of Parity Units issued after the date hereof into Common Units or other
Parity Units; provided that the total amount of Available Cash required to pay
the aggregate Minimum Quarterly Distribution on all Common Units and all Parity
Units does not increase as a result of this conversion or exchange and (F) in
the event of a combination or subdivision of Common Units.
(b) During the Subordination Period, the Partnership may also issue an unlimited number of Parity Units without the prior approval of the Unitholders, if such issuance occurs (i) in connection with an Acquisition or a Capital Improvement or (ii) within 365 days of, and the net proceeds from such issuance are used to repay debt incurred in connection with, an Acquisition or a Capital Improvement, in each case where such Acquisition or Capital Improvement involves assets that, if acquired by the Partnership as of the date that is one year prior to the first day of the Quarter in which such Acquisition is to be consummated or such Capital Improvement is to be completed, would have resulted, on a pro forma basis, in an increase in:
(A) the amount of Adjusted Operating Surplus generated by the Partnership on a per-Unit basis (for all Outstanding Units) with respect to each of the four most recently completed Quarters (on a pro forma basis as described below) as compared to
(B) the actual amount of Adjusted Operating Surplus generated by the Partnership on a per-Unit basis (for all Outstanding Units) (excluding Adjusted Operating Surplus attributable to the Acquisition or Capital Improvement) with respect to each of such four most recently completed Quarters.
The General Partner's good faith determination that such an increase would have
resulted shall be conclusive. If the issuance of Parity Units with respect to an
Acquisition or Capital Improvement occurs within the first four full Quarters
after the Closing Date, then Adjusted Operating Surplus as used in clauses (A)
(subject to the succeeding sentence) and (B) above shall be calculated (i) for
each Quarter, if any, that commenced after the Closing Date for which actual
results of operations are available, based on the actual Adjusted Operating
Surplus of the Partnership generated with respect to such Quarter, and (ii) for
each other Quarter, on a pro forma basis consistent with the procedures, as
applicable, set forth in Appendix D to the Registration Statement. Furthermore,
the amount in clause (A) shall be determined on a pro forma basis assuming that
(1) all of the Parity Units to be issued in connection with or within 365 days
of such Acquisition or Capital Improvement had been issued and outstanding, (2)
all indebtedness for borrowed money to be incurred or assumed in connection with
such Acquisition or Capital Improvement (other than any such indebtedness that
is to be repaid with the proceeds of such issuance of Parity Units) had been
incurred or assumed, in each case as of the commencement of such four-Quarter
period, (3) the personnel expenses that would have been incurred by the
Partnership in the operation of the acquired assets are the personnel expenses
for employees to be retained by the Partnership in the operation of the acquired
assets, and (4) the
non-personnel costs and expenses are computed on the same basis as those incurred by the Partnership in the operation of the Partnership's business at similarly situated Partnership facilities. For the purposes of this Section 5.7(b), the term "debt" shall be deemed to include indebtedness used to extend, refinance, renew, replace or defease any debt-originally incurred in connection with an Acquisition or Capital Improvement.
(c) During the Subordination Period, without the prior approval of the holders of a Unit Majority, the Partnership shall not issue any additional Partnership Securities (or options, rights, warrants or appreciation rights related thereto) (i) that are entitled in any Quarter to receive in respect of the Subordination Period any distribution of Available Cash from Operating Surplus before the Common Units and any Parity Units have received (or amounts have been set aside for payment of) the Minimum Quarterly Distribution and any Cumulative Common Unit Arrearage for such Quarter or (ii) that are entitled to allocations in respect of the Subordination Period of Net Termination Gain before the Common Units and any Parity Units have been allocated Net Termination Gain pursuant to Section 6.1(c)(i)(B).
(d) During the Subordination Period, without the prior approval of the
Unitholders, the Partnership may issue additional Partnership Securities (or
options, rights, warrants or appreciation rights related thereto) (i) that are
not entitled in any Quarter during the Subordination Period to receive any
distributions of Available Cash from Operating Surplus until after the Common
Units and any Parity Units have received (or amounts have been set aside for
payment of) the Minimum Quarterly Distribution and any Cumulative Common Unit
Arrearage for such Quarter and (ii) that are not entitled to allocations in
respect of the Subordination Period of Net Termination Gain before the Common
Units and Parity Units have been allocated Net Termination Gain pursuant to
Section 6.1(c)(i)(B), even if (A) the amount of Available Cash from Operating
Surplus to which each such Partnership Security is entitled to receive after the
Minimum Quarterly Distribution and any Cumulative Common Unit Arrearage have
been paid or set aside for payment on the Common Units exceeds the Minimum
Quarterly Distribution, (B) the amount of Net Termination Gain to be allocated
to such Partnership Security after Net Termination Gain has been allocated to
any Common Units and Parity Units pursuant to Section 6.1(c)(i)(B) exceeds the
amount of such Net Termination Gain to be allocated to each Common Unit or
Parity Unit or (C) the holders of such additional Partnership Securities have
the right to require the Partnership or its Affiliates to repurchase such
Partnership Securities at a discount, par or a premium.
(e) During the Subordination Period, the Partnership may also issue an unlimited number of Parity Units without the approval of the Unitholders, if the proceeds from such issuance are used exclusively to repay up to $15,000,000 of indebtedness of a Group Member where the aggregate amount of distributions that would have been paid with respect to such newly issued Units or Partnership Securities, plus the related distributions on the General Partner Interest in respect of the four-Quarter period ending prior to the first day of the Quarter in which the issuance is to be consummated (assuming such additional Units or Partnership Securities had been Outstanding throughout such period and that distributions equal to the distributions that were actually paid on the Outstanding Units during the period were paid on such additional Units or Partnership Securities) did not exceed the interest costs actually incurred during such period on the indebtedness that is to be repaid (or, if such indebtedness was not outstanding throughout the entire period, would have been incurred had such indebtedness been outstanding for the
entire period). In the event that the Partnership is required to pay a prepayment penalty in connection with the repayment of such indebtedness, for purposes of the foregoing test the number of Parity Units issued to repay such indebtedness shall be deemed increased by the number of Parity Units that would need to be issued to pay such penalty.
(f) No fractional Units shall be issued by the Partnership.
Section 5.8 Conversion of Subordinated Units. A total of 850,672 of the Outstanding Subordinated Units will convert into Common Units on a one-for-one basis immediately after the distribution of Available Cash to Partners pursuant to Section 6.3(a) in respect of any Quarter ending on or after September 30, 2005 in respect of which:
(i) distributions under Section 6.4 in respect of all Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units with respect to each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Minimum Quarterly Distribution on all of the Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units during such periods;
(ii) the Adjusted Operating Surplus generated during each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Minimum Quarterly Distribution on all of the Common Units, Subordinated Units and any other Units that are senior or equal in right of distribution to the Subordinated Units that were Outstanding during such periods on a Fully Diluted Basis, plus the related distribution on the General Partner Interest in the Partnership, during such periods; and
(iii) the Cumulative Common Unit Arrearage on all of the Common Units is zero.
(b) An additional 850,672 of the Outstanding Subordinated Units will convert into Common Units on a one-for-one basis immediately after the distribution of Available Cash to Partners pursuant to Section 6.3(a) in respect of any Quarter ending on or after September 30, 2006, in respect of which:
(i) distributions under Section 6.4 in respect of all Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units with respect to each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Minimum Quarterly Distribution on all of the Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units during such periods;
(ii) the Adjusted Operating Surplus generated during each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Minimum Quarterly Distribution on all of the Common Units, Subordinated Units and any other Units that are senior or equal in right
of distribution to the Subordinated Units that were Outstanding during such periods on a Fully Diluted Basis, plus the related distribution on the General Partner Interest during such periods; and
(iii) the Cumulative Common Unit Arrearage on all of the Common Units is zero;
provided, however, that the conversion of Subordinated Units pursuant to this
Section 5.8(b) may not occur until at least one year following the conversion of
Subordinated Units pursuant to Section 5.8(a).
(c) An additional 850,672 of the Outstanding Subordinated Units will convert into Common Units on a one-for-one basis immediately after the distribution of Available Cash to Partners pursuant to Section 6.3(a) in respect of any Quarter ending on or after September 30, 2007, in respect of which:
(i) distributions under Section 6.4 in respect of all Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units with respect to each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Minimum Quarterly Distribution on all of the Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units during such periods;
(ii) the Adjusted Operating Surplus generated during each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Minimum Quarterly Distribution on all of the Common Units, Subordinated Units and any other Units that are senior or equal in right of distribution to the Subordinated Units that were Outstanding during such periods on a Fully Diluted Basis, plus the related distribution on the General Partner Interest during such periods; and
(iii) the Cumulative Common Unit Arrearage on all of the Common Units is zero;
provided, however, that the conversion of Subordinated Units pursuant to this
Section 5.8(c) may not occur until at least one year following the conversion of
Subordinated Units pursuant to Section 5.8(b).
(d) An additional 850,672 of the Outstanding Subordinated Units will convert into Common Units on a one-for-one basis immediately after the distribution of Available Cash to Partners pursuant to Section 6.3(a) in respect of any Quarter ending on or after September 30, 2008, in respect of which:
(i) distributions under Section 6.4 in respect of all Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units with respect to each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date
equaled or exceeded the sum of the Minimum Quarterly Distribution on all of the Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units during such periods;
(ii) the Adjusted Operating Surplus generated during each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Minimum Quarterly Distribution on all of the Common Units, Subordinated Units and any other Units that are senior or equal in right of distribution to the Subordinated Units that were Outstanding during such periods on a Fully Diluted Basis, plus the related distribution on the General Partner Interest during such periods; and
(iii) the Cumulative Common Unit Arrearage on all of the Common Units is zero;
provided, however, that the conversion of Subordinated Units pursuant to this
Section 5.8(d) may not occur until at least one year following the conversion of
Subordinated Units pursuant to Section 5.8(c).
(e) An additional 850,672 of the Outstanding Subordinated Units will convert into Common Units on a one-for-one basis immediately after the distribution of Available Cash to Partners pursuant to Section 6.3(a) in respect of any Quarter ending on or after September 30, 2005, in respect of which:
(i) distributions under Section 6.4 in respect of all Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units with respect to each of the two consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Second Target Distribution on all of the Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units during such periods;
(ii) the Adjusted Operating Surplus generated during each of the two consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Second Target Distribution on all of the Common Units, Subordinated Units and any other Units that are senior or equal in right of distribution to the Subordinated Units that were Outstanding during such periods on a Fully Diluted Basis, plus the related distribution on the General Partner Interest during such periods; and
(iii) the Cumulative Common Unit Arrearage on all of the Common Units is zero;
(f) An additional 850,672 of the Outstanding Subordinated Units will convert into Common Units on a one-for-one basis immediately after the distribution of Available Cash to Partners pursuant to Section 6.3(a) in respect of any Quarter ending on or after September 30, 2005, in respect of which:
(i) distributions under Section 6.4 in respect of all Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units with respect to each of the two consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Third Target Distribution on all of the Outstanding Common Units and Subordinated Units and any other Outstanding Units that are senior or equal in right of distribution to the Subordinated Units during such periods;
(ii) the Adjusted Operating Surplus generated during each of the two consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded the sum of the Third Target Distribution on all of the Common Units, Subordinated Units and any other Units that are senior or equal in right of distribution to the Subordinated Units that were Outstanding during such periods on a Fully Diluted Basis, plus the related distribution on the General Partner Interest during such periods; and
(g) (iii) the Cumulative Common Unit Arrearage on all of the Common Units is zero. In the event that less than all of the Outstanding Subordinated Units shall convert into Common Units pursuant to Section 5.8(a) - (f) at a time when there shall be more than one holder of Subordinated Units, then, unless all of the holders of Subordinated Units shall agree to a different allocation, the Subordinated Units that are to be converted into Common Units shall be allocated among the holders of Subordinated Units pro rata based on the number of Subordinated Units held by each such holder.
(h) Any Subordinated Units that are not converted into Common Units pursuant to Section 5.8(a) - (f) shall convert into Common Units on a one-for-one basis immediately after the distribution of Available Cash to Partners pursuant to Section 6.3(a) in respect of the final Quarter of the Subordination Period.
(i) Notwithstanding any other provision of this Agreement, all the then Outstanding Subordinated Units will automatically convert into Common Units on a one-for-one basis as set forth in, and pursuant to the terms of, Section 11.4.
(j) A Subordinated Unit that has converted into a Common Unit shall be subject to the provisions of Section 6.7(b).
Section 5.9 Limited Preemptive Right. Except as provided in this
Section 5.9 and in Section 5.2, 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.
Section 5.10 Splits and Combinations.
(a) Subject to Sections 5.10(d), 6.6 and 6.9 (dealing with adjustments of distribution levels), the Partnership may make a Pro Rata distribution of Partnership Securities to all Record Holders or may effect a subdivision or combination of Partnership Securities so long as, after any such event, each Partner shall have the same Percentage Interest in the Partnership as before such event, and any amounts calculated on a per Unit basis (including any Common Unit Arrearage or Cumulative Common Unit Arrearage) or stated as a number of Units (including the number of Subordinated Units that may convert prior to the end of the Subordination Period and the number of additional Parity Units that may be issued pursuant to Section 5.7 without a Unitholder vote) are proportionately adjusted retroactive to the beginning of the Partnership.
(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 as it may deem 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 the issuance of fractional Units but for the provisions of Section 5.7(e) and this Section 5.10(d), each fractional Unit shall be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to the next higher Unit).
Section 5.11 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-accessibility may be affected by Section 17-607 of the Delaware Act.
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
Section 6.1 Allocations for Capital Account Purposes. For purposes of maintaining the Capital Accounts and in determining the rights of the Partners among themselves, the
Partnership's items of income, gain, loss and deduction (computed in accordance with Section 5.5(b)) shall be allocated among the Partners in each taxable year (or portion thereof) as provided herein below.
(a) Net Income. After giving effect to the special allocations set forth in Section 6.1(d), Net Income for each taxable year and all items of income, gain, loss and deduction taken into account in computing Net Income for such taxable year shall be allocated as follows:
(i) First, 100% to the General Partner, in an amount equal to
the aggregate Net Losses allocated to the General Partner pursuant to
Section 6.1(b)(iii) for all previous taxable years until the aggregate
Net Income allocated to the General Partner pursuant to this Section
6.1(a)(i) for the current taxable year and all previous taxable years
is equal to the aggregate Net Losses allocated to the General Partner
pursuant to Section 6.1(b)(iii) for all previous taxable years;
(ii) Second, 2% to the General Partner, in an amount equal to
the aggregate Net Losses allocated to the General Partner pursuant to
Section 6.1(b)(ii) for all previous taxable years and 98% to the
Unitholders, in accordance with their respective Percentage Interests,
until the aggregate Net Income allocated to such Partners pursuant to
this Section 6.1(a)(ii) for the current taxable year and all previous
taxable years is equal to the aggregate Net Losses allocated to such
Partners pursuant to Section 6.1(b)(ii) for all previous taxable years;
and
(iii) Third, 2% to the General Partner, and 98% to the Unitholders, Pro Rata.
(b) Net Losses. After giving effect to the special allocations set forth in Section 6.1(d), Net Losses for each taxable period and all items of income, gain, loss and deduction taken into account in computing Net Losses for such taxable period shall be allocated as follows:
(i) First, 2% to the General Partner, and 98% to the Unitholders, Pro Rata, until the aggregate Net Losses allocated pursuant to this Section 6.1(b)(i) for the current taxable year and all previous taxable years is equal to the aggregate Net Income allocated to such Partners pursuant to Section 6.1(a)(iii) for all previous taxable years, provided that the Net Losses shall not be allocated pursuant to this Section 6.1(b)(i) to the extent that such allocation would cause any Unitholder to have a deficit balance in its Adjusted Capital Account at the end of such taxable year (or increase any existing deficit balance in its Adjusted Capital Account);
(ii) Second, 2% to the General Partner, and 98% to the Unitholders, Pro Rata; provided, that Net Losses shall not be allocated pursuant to this Section 6.1(b)(ii) to the extent that such allocation would cause any Unitholder to have a deficit balance in its Adjusted Capital Account at the end of such taxable year (or increase any existing deficit balance in its Adjusted Capital Account);
(iii) Third, the balance, if any, 100% to the General Partner.
(c) Net Termination Gains and Losses. After giving effect to the
special allocations set forth in Section 6.1(d), all items of income, gain, loss
and deduction taken into account in computing Net Termination Gain or Net
Termination Loss for such taxable period shall be allocated in the same manner
as such Net Termination Gain or Net Termination Loss is allocated hereunder. All
allocations under this Section 6.1(c) shall be made after Capital Account
balances have been adjusted by all other allocations provided under this Section
6.1 and after all distributions of Available Cash provided under Sections 6.4
and 6.5 have been made; provided, however, that solely for purposes of this
Section 6.1(c), Capital Accounts shall not be adjusted for distributions made
pursuant to Section 12.4.
(i) If a Net Termination Gain is recognized (or deemed recognized pursuant to Section 5.5(d)), such Net Termination Gain shall be allocated among the Partners in the following manner (and the Capital Accounts of the Partners shall be increased by the amount so allocated in each of the following subclauses, in the order listed, before an allocation is made pursuant to the next succeeding subclause):
(A) First, to each Partner having a deficit balance in its Capital Account, in the proportion that such deficit balance bears to the total deficit balances in the Capital Accounts of all Partners, until each such Partner has been allocated Net Termination Gain equal to any such deficit balance in its Capital Account;
(B) Second, 98% to all Unitholders holding Common Units, Pro Rata, and 2% to the General Partner, until the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) its Unrecovered Capital plus (2) the Minimum Quarterly Distribution for the Quarter during which the Liquidation Date occurs, reduced by any distribution pursuant to Section 6.4(a)(i) or (b)(i) with respect to such Common Unit for such Quarter (the amount determined pursuant to this clause (2) is hereinafter defined as the "Unpaid MQD") plus (3) any then existing Cumulative Common Unit Arrearage;
(C) Third, if such Net Termination Gain is recognized (or is deemed to be recognized) prior to the expiration of the Subordination Period, 98% to all Unitholders holding Subordinated Units, Pro Rata, and 2% to the General Partner, until the Capital Account in respect of each Subordinated Unit then Outstanding equals the sum of (1) its Unrecovered Capital, determined for the taxable year (or portion thereof) to which this allocation of gain relates, plus (2) the Minimum Quarterly Distribution for the Quarter during which the Liquidation Date occurs, reduced by any distribution pursuant to Section 6.4(a)(iii) with respect to such Subordinated Unit for such Quarter;
(D) Fourth, 98% to all Unitholders, Pro Rata, and 2%
to the General Partner, until the Capital Account in respect
of each Common Unit then Outstanding is equal to the sum of
(1) its Unrecovered Capital, plus (2) the Unpaid MQD, plus (3)
any then existing Cumulative Common Unit Arrearage, plus (4)
the excess of (aa) the First Target Distribution less the
Minimum Quarterly Distribution for each Quarter of the
Partnership's existence over
(bb) the cumulative per Unit amount of any distributions of Available Cash that is deemed to be Operating Surplus made pursuant to Sections 6.4(a)(iv) and 6.4(b)(ii) (the sum of (1) plus (2) plus (3) plus (4) is hereinafter defined as the "First Liquidation Target Amount");
(E) Fifth, 85% to all Unitholders, Pro Rata, 13% to the holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General Partner, until the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) the First Liquidation Target Amount, plus (2) the excess of (aa) the Second Target Distribution less the First Target Distribution for each Quarter of the Partnership's existence over (bb) the cumulative per Unit amount of any distributions of Available Cash that is deemed to be Operating Surplus made pursuant to Sections 6.4(a)(v) and 6.4(b)(iii) (the sum of (1) plus (2) is hereinafter defined as the "Second Liquidation Target Amount");
(F) Sixth, 75% to all Unitholders, Pro Rata, 23% to the holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General Partner, until the Capital Account in respect of each Common Unit then Outstanding is equal to the sum of (1) the Second Liquidation Target Amount, plus (2) the excess of (aa) the Third Target Distribution less the Second Target Distribution for each Quarter of the Partnership's existence over (bb) the cumulative per Unit amount of any distributions of Available Cash that is deemed to be Operating Surplus made pursuant to Sections 6.4(a)(vi)and 6.4(b)(iv) (the sum of (1) plus (2) is hereinafter defined as the "Third Liquidation Target Amount"); and
(G) Finally, any remaining amount 50% to all Unitholders, Pro Rata, 48% to the holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General Partner.
(ii) If a Net Termination Loss is recognized (or deemed recognized pursuant to Section 5.5(d)), such Net Termination Loss shall be allocated among the Partners in the following manner:
(A) First, if such Net Termination Loss is recognized (or is deemed to be recognized) prior to the conversion of the last Outstanding Subordinated Unit, 98% to the Unitholders holding Subordinated Units, Pro Rata, and 2% to the General Partner, until the Capital Account in respect of each Subordinated Unit then Outstanding has been reduced to zero;
(B) Second, 98% to all Unitholders holding Common Units, Pro Rata, and 2% to the General Partner, until the Capital Account in respect of each Common Unit then Outstanding has been reduced to zero; and
(C) Third, the balance, if any, 100% to the General Partner.
(iii) If, immediately prior to the allocation of any Net Termination Gain or Net Termination Loss pursuant to Section 6.1(c)(i) and (ii), the cumulative amount of Capital Contributions by the General Partner to the Partnership described in Section 5.2(c)
exceeds the cumulative amount of items allocated to the General Partner pursuant to Section 6.1(d)(xiii), items of loss and deduction shall be allocated to the General Partner, immediately prior to any allocation pursuant to Section 6.1(c)(i) and (ii), in an amount equal to such excess. In the event the amount of Partnership losses and deductions available to make the allocation described in the previous sentence is less than the amount required to satisfy such allocation, Net Termination Gain that would otherwise be allocated to the General Partner pursuant to Sections 6.1(c)(i)(B), (D), (E), (F) or (G), in an amount equal to such shortfall, shall be allocated to the Unitholders holding Common Units instead.
(d) Special Allocations. Notwithstanding any other provision of this
Section 6.1, the following special allocations shall be made for such taxable
period:
(i) Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Partnership Minimum Gain during any Partnership taxable period, each Partner shall be allocated items of Partnership income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(d), each Partner's Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii)). This Section 6.1(d)(i) is intended to comply with the Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(ii) Chargeback of Partner Nonrecourse Debt Minimum Gain.
Notwithstanding the other provisions of this Section 6.1 (other than
Section 6.1(d)(i)), except as provided in Treasury Regulation Section
1.704-2(i)(4), if there is a net decrease in Partner Nonrecourse Debt
Minimum Gain during any Partnership taxable period, any Partner with a
share of Partner Nonrecourse Debt Minimum Gain at the beginning of such
taxable period shall be allocated items of Partnership income and gain
for such period (and, if necessary, subsequent periods) in the manner
and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and
1.704-2(j)(2)(ii), or any successor provisions. For purposes of this
Section 6.1(d), each Partner's Adjusted Capital Account balance shall
be determined, and the allocation of income or gain required hereunder
shall be effected, prior to the application of any other allocations
pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other
than an allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii),
with respect to such taxable period. This Section 6.1(d)(ii) is
intended to comply with the chargeback of items of income and gain
requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be
interpreted consistently therewith.
(iii) Priority Allocations.
(A) If the amount of cash or the Net Agreed Value of
any property distributed (except cash or property distributed
pursuant to Section 12.4) to any Unitholder with respect to
its Units for a taxable year is greater (on a per Unit basis)
than the amount of cash or the Net Agreed Value of property
distributed to the other Unitholders with respect to their
Units (on a per Unit basis), then (1) each Unitholder
receiving such greater cash or property distribution shall be
allocated gross income in an amount equal to the product of
(aa) the amount by which the distribution (on a per Unit
basis) to such Unitholder exceeds the distribution (on a per
Unit basis) to the Unitholders receiving the smallest
distribution and (bb) the number of Units owned by the
Unitholder receiving the greater distribution; and (2) the
General Partner shall be allocated gross income in an
aggregate amount equal to 1/98th of the sum of the amounts
allocated in clause (1) above.
(B) After the application of Section 6.1(d)(iii)(A), all or any portion of the remaining items of Partnership gross income or gain for the taxable period, if any, shall be allocated 100% to the holders of Incentive Distribution Rights, Pro Rata, until the aggregate amount of such items allocated to the holders of Incentive Distribution Rights pursuant to this paragraph 6.1(d)(iii)(B) for the current taxable year and all previous taxable years is equal to the cumulative amount of all Incentive Distributions made to the holders of Incentive Distribution Rights from the Closing Date to a date 45 days after the end of the current taxable year.
(iv) Qualified Income Offset. In the event any Partner unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations promulgated under Section 704(b) of the Code, the deficit balance, if any, in its Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Section 6.1(d)(i) or (ii).
(v) Gross Income Allocations. In the event any Partner has a deficit balance in its Capital Account at the end of any Partnership taxable period in excess of the sum of (A) the amount such Partner is required to restore pursuant to the provisions of this Agreement and (B) the amount such Partner is deemed obligated to restore pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such Partner shall be specially allocated items of Partnership gross income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 6.1(d)(v) shall be made only if and to the extent that such Partner would have a deficit balance in its Capital Account as adjusted after all other allocations provided for in this Section 6.1 have been tentatively made as if this Section 6.1(d)(v) were not in this Agreement.
(vi) Nonrecourse Deductions. Nonrecourse Deductions for any taxable period shall be allocated to the Partners in accordance with their respective Percentage Interests. If the General Partner determines in its good faith discretion that the Partnership's Nonrecourse Deductions must be allocated in a different ratio to satisfy the safe harbor requirements of the Treasury Regulations promulgated under Section 704(b) of the Code, the General Partner is authorized, upon notice to the other Partners, to revise the prescribed ratio to the numerically closest ratio that does satisfy such requirements.
(vii) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any taxable period shall be allocated 100% to the Partner that bears the Economic Risk of Loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Partner bears the Economic Risk of Loss with respect to a Partner Nonrecourse Debt, such Partner Nonrecourse Deductions attributable thereto shall be allocated between or among such Partners in accordance with the ratios in which they share such Economic Risk of Loss.
(viii) Nonrecourse Liabilities. For purposes of Treasury Regulation Section 1.752-3(a)(3), the Partners agree that Nonrecourse Liabilities of the Partnership in excess of the sum of (A) the amount of Partnership Minimum Gain and (B) the total amount of Nonrecourse Built-in Gain shall be allocated among the Partners in accordance with their respective Percentage Interests.
(ix) Code Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(c) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(x) Economic Uniformity. At the election of the General Partner with respect to any taxable period ending upon, or after, the termination of the Subordination Period, all or a portion of the remaining items of Partnership gross income or gain for such taxable period, after taking into account allocations pursuant to Section 6.1(d)(iii), shall be allocated 100% to each Partner holding Subordinated Units that are Outstanding as of the termination of the Subordination Period ("Final Subordinated Units") in the proportion of the number of Final Subordinated Units held by such Partner to the total number of Final Subordinated Units then Outstanding, until each such Partner has been allocated an amount of gross income or gain which increases the Capital Account maintained with respect to such Final Subordinated Units to an amount equal to the product of (A) the number of Final Subordinated Units held by such Partner and (B) the Per Unit Capital Amount for a Common Unit. The purpose of this allocation is to establish uniformity between the Capital Accounts underlying Final Subordinated Units and the Capital Accounts underlying Common Units held by Persons other than the
General Partner and its Affiliates immediately prior to the conversion of such Final Subordinated Units into Common Units. This allocation method for establishing such economic uniformity will only be available to the General Partner if the method for allocating the Capital Account maintained with respect to the Subordinated Units between the transferred and retained Subordinated Units pursuant to Section 5.5(c)(ii) does not otherwise provide such economic uniformity to the Final Subordinated Units.
(xi) Curative Allocation.
(A) Notwithstanding any other provision of this
Section 6.1, other than the Required Allocations, the Required
Allocations shall be taken into account in making the Agreed
Allocations so that, to the extent possible, the net amount of
items of income, gain, loss and deduction allocated to each
Partner pursuant to the Required Allocations and the Agreed
Allocations, together, shall be equal to the net amount of
such items that would have been allocated to each such Partner
under the Agreed Allocations had the Required Allocations and
the related Curative Allocation not otherwise been provided in
this Section 6.1. Notwithstanding the preceding sentence,
Required Allocations relating to (1) Nonrecourse Deductions
shall not be taken into account except to the extent that
there has been a decrease in Partnership Minimum Gain and (2)
Partner Nonrecourse Deductions shall not be taken into account
except to the extent that there has been a decrease in Partner
Nonrecourse Debt Minimum Gain. Allocations pursuant to this
Section 6.1(d)(xi)(A) shall only be made with respect to
Required Allocations to the extent the General Partner
reasonably determines that such allocations will otherwise be
inconsistent with the economic agreement among the Partners.
Further, allocations pursuant to this Section 6.1(d)(xi)(A)
shall be deferred with respect to allocations pursuant to
clauses (1) and (2) hereof to the extent the General Partner
reasonably determines that such allocations are likely to be
offset by subsequent Required Allocations.
(B) The General Partner shall have reasonable discretion, with respect to each taxable period, to (1) apply the provisions of Section 6.1(d)(xi)(A) in whatever order is most likely to minimize the economic distortions that might otherwise result from the Required Allocations, and (2) divide all allocations pursuant to Section 6.1(d)(xi)(A) among the Partners in a manner that is likely to minimize such economic distortions.
(xii) Corrective Allocations. In the event of any allocation of Additional Book Basis Derivative Items or any Book-Down Event or any recognition of a Net Termination Loss, the following rules shall apply:
(A) In the case of any allocation of Additional Book Basis Derivative Items (other than an allocation of Unrealized Gain or Unrealized Loss under Section 5.5(d) hereof), the General Partner shall allocate additional items of gross income and gain away from the holders of Incentive Distribution Rights to the Unitholders and the General Partner, or additional items of deduction and loss away from the Unitholders and the General Partner to the holders of Incentive
Distribution Rights, to the extent that the Additional Book Basis Derivative Items allocated to the Unitholders or the General Partner exceed their Share of Additional Book Basis Derivative Items. For this purpose, the Unitholders and the General Partner shall be treated as being allocated Additional Book Basis Derivative Items to the extent that such Additional Book Basis Derivative Items have reduced the amount of income that would otherwise have been allocated to the Unitholders or the General Partner under the Partnership Agreement (e.g., Additional Book Basis Derivative Items taken into account in computing cost of goods sold would reduce the amount of book income otherwise available for allocation among the Partners). Any allocation made pursuant to this Section 6.1(d)(xii)(A) shall be made after all of the other Agreed Allocations have been made as if this Section 6.1(d)(xii) were not in this Agreement and, to the extent necessary, shall require the reallocation of items that have been allocated pursuant to such other Agreed Allocations.
(B) In the case of any negative adjustments to the Capital Accounts of the Partners resulting from a Book-Down Event or from the recognition of a Net Termination Loss, such negative adjustment (1) shall first be allocated, to the extent of the Aggregate Remaining Net Positive Adjustments, in such a manner, as reasonably determined by the General Partner, that to the extent possible the aggregate Capital Accounts of the Partners will equal the amount which would have been the Capital Account balance of the Partners if no prior Book-Up Events had occurred, and (2) any negative adjustment in excess of the Aggregate Remaining Net Positive Adjustments shall be allocated pursuant to Section 6.1(c) hereof.
(C) In making the allocations required under this
Section 6.1(d)(xii), the General Partner, in its sole
discretion, may apply whatever conventions or other
methodology it deems reasonable to satisfy the purpose of this
Section 6.1(d)(xii).
Section 6.2 Allocations for Tax Purposes.
(a) Except as otherwise provided herein, for federal income tax purposes, each item of income, gain, loss and deduction shall be allocated among the Partners in the same manner as its correlative item of "book" income, gain, loss or deduction is allocated pursuant to Section 6.1.
(b) In an attempt to eliminate Book-Tax Disparities attributable to a Contributed Property or Adjusted Property, items of income, gain, loss, depreciation, amortization and cost recovery deductions shall be allocated for federal income tax purposes among the Partners as follows:
(i) (A) In the case of a Contributed Property, such items attributable thereto shall be allocated among the Partners in the manner provided under Section 704(c) of the Code that takes into account the variation between the Agreed Value of such property and its adjusted basis at the time of contribution; and (B) any item of Residual Gain or Residual Loss attributable to a Contributed Property shall be allocated among the
Partners in the same manner as its correlative item of "book" gain or loss is allocated pursuant to Section 6.1.
(ii) (A) In the case of an Adjusted Property, such items shall
(1) first, be allocated among the Partners in a manner consistent with
the principles of Section 704(c) of the Code to take into account the
Unrealized Gain or Unrealized Loss attributable to such property and
the allocations thereof pursuant to Section 5.5(d)(i) or 5.5(d)(ii),
and (2) second, in the event such property was originally a Contributed
Property, be allocated among the Partners in a manner consistent with
Section 6.2(b)(i)(A); and (B) any item of Residual Gain or Residual
Loss attributable to an Adjusted Property shall be allocated among the
Partners in the same manner as its correlative item of "book" gain or
loss is allocated pursuant to Section 6.1.
(iii) The General Partner shall apply the principles of Treasury Regulation Section 1.704-3(d) to eliminate Book-Tax Disparities.
(c) For the proper administration of the Partnership and for the
preservation of uniformity of the Limited Partner Interests (or any class or
classes thereof), the General Partner shall have sole discretion to (i) adopt
such conventions as it deems appropriate in determining the amount of
depreciation, amortization and cost recovery deductions; (ii) make special
allocations for federal income tax purposes of income (including, without
limitation, gross income) or deductions; and (iii) amend the provisions of this
Agreement as appropriate (x) to reflect the proposal or promulgation of Treasury
Regulations under Section 704(b) or Section 704(c) of the Code or (y) otherwise
to preserve or achieve uniformity of the Limited Partner Interests (or any class
or classes thereof). The General Partner may adopt such conventions, make such
allocations and make such amendments to this Agreement as provided in this
Section 6.2(c) only if such conventions, allocations or amendments would not
have a material adverse effect on the Partners, the holders of any class or
classes of Limited Partner Interests issued and Outstanding or the Partnership,
and if such allocations are consistent with the principles of Section 704 of the
Code.
(d) The General Partner in its discretion may determine to depreciate or amortize the portion of an adjustment under Section 743(b) of the Code attributable to unrealized appreciation in any Adjusted Property (to the extent of the unamortized Book-Tax Disparity) using a predetermined rate derived from the depreciation or amortization method and useful life applied to the Partnership's common basis of such property, despite any inconsistency of such approach with Treasury Regulation Section 1.167(c)-l(a)(6) or any successor regulations thereto. If the General Partner determines that such reporting position cannot reasonably be taken, the General Partner may adopt depreciation and amortization conventions under which all purchasers acquiring Limited Partner Interests in the same month would receive depreciation and amortization deductions, based upon the same applicable rate as if they had purchased a direct interest in the Partnership's property. If the General Partner chooses not to utilize such aggregate method, the General Partner may use any other reasonable depreciation and amortization conventions to preserve the uniformity of the intrinsic tax characteristics of any Limited Partner Interests that would not have a material adverse effect on the Limited Partners or the Record Holders of any class or classes of Limited Partner Interests.
(e) Any gain allocated to the Partners upon the sale or other taxable disposition of any Partnership asset shall, to the extent possible, after taking into account other required allocations of gain pursuant to this Section 6.2, be characterized as Recapture Income in the same proportions and to the same extent as such Partners (or their predecessors in interest) have been allocated any deductions directly or indirectly giving rise to the treatment of such gains as Recapture Income.
(f) All items of income, gain, loss, deduction and credit recognized by the Partnership for federal income tax purposes and allocated to the Partners in accordance with the provisions hereof shall be determined without regard to any election under Section 754 of the Code which may be made by the Partnership; provided, however, that such allocations, once made, shall be adjusted as necessary or appropriate to take into account those adjustments permitted or required by Sections 734 and 743 of the Code.
(g) Each item of Partnership income, gain, loss and deduction shall for federal income tax purposes, be determined on an annual basis and prorated on a monthly basis and shall be allocated to the Partners as of the opening of the Nasdaq National Market on the first Business Day of each month; provided, however, that (i) such items for the period beginning on the Closing Date and ending on the last day of the month in which the Option Closing Date or the expiration of the Over-allotment Option occurs shall be allocated to the Partners as of the opening of the Nasdaq National Market on the first Business Day of the next succeeding month; and provided, further, that gain or loss on a sale or other disposition of any assets of the Partnership or any other extraordinary item of income or loss realized and recognized other than in the ordinary course of business, as determined by the General Partner in its sole discretion, shall be allocated to the Partners as of the opening of the Nasdaq National Market on the first Business Day of the month in which such gain or loss is recognized for federal income tax purposes. The General Partner may revise, alter or otherwise modify such methods of allocation as it determines necessary or appropriate in its sole discretion, to the extent permitted or required by Section 706 of the Code and the regulations or rulings promulgated thereunder.
(h) Allocations that would otherwise be made to a Limited Partner under
the provisions of this Article VI shall instead be made to the beneficial owner
of Limited Partner Interests held by a nominee in any case in which the nominee
has furnished the identity of such owner to the Partnership in accordance with
Section 6031(c) of the Code or any other method acceptable to the General
Partner in its sole discretion.
Section 6.3 Requirement and Characterization of Distributions; Distributions to Record Holders.
(a) Within 45 days following the end of each Quarter commencing with the Quarter ending on December 31, 2002, an amount equal to 100% of Available Cash with respect to such Quarter shall, subject to Section 17-607 of the Delaware Act, be distributed in accordance with this Article VI by the Partnership to the Partners as of the Record Date selected by the General Partner in its reasonable discretion. All amounts of Available Cash distributed by the Partnership on any date from any source shall be deemed to be Operating Surplus until the sum of all amounts of Available Cash theretofore distributed by the Partnership to the Partners pursuant to Section 6.4 equals the Operating Surplus from the Closing Date through the close of the
immediately preceding Quarter. Any remaining amounts of Available Cash distributed by the Partnership on such date shall, except as otherwise provided in Section 6.5, be deemed to be "Capital Surplus." All distributions required to be made under this Agreement shall be made subject to Section 17-607 of the Delaware Act.
(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 shall have the discretion to treat taxes paid by the Partnership on behalf of, or amounts withheld with respect to, all or less than all of the Partners, as a distribution of Available Cash to such Partners.
(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. 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 Distributions of Available Cash from Operating Surplus.
(a) During the Subordination Period. Available Cash with respect to any Quarter within the Subordination Period that is deemed to be Operating Surplus pursuant to the provisions of Section 6.3 or 6.5 shall, subject to Section 17-607 of the Delaware Act, be distributed as follows, except as otherwise required by Section 5.6(b) in respect of additional Partnership Securities issued pursuant thereto:
(i) First, 98% to the Unitholders holding Common Units, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Common Unit then Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;
(ii) Second, 98% to the Unitholders holding Common Units, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Common Unit then Outstanding an amount equal to the Cumulative Common Unit Arrearage existing with respect to such Quarter;
(iii) Third, 98% to the Unitholders holding Subordinated Units, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Subordinated Unit then Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;
(iv) Fourth, 98% to all Unitholders, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the First Target Distribution over the Minimum Quarterly Distribution for such Quarter;
(v) Fifth, 85% to all Unitholders, Pro Rata, 13% to the holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Second Target Distribution over the First Target Distribution for such Quarter;
(vi) Sixth, 75% to all Unitholders, Pro Rata, 23% to the holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Third Target Distribution over the Second Target Distribution for such Quarter; and
(vii) Thereafter, 50% to all Unitholders, Pro Rata, 48% to the holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General Partner;
provided, however, if the Minimum Quarterly Distribution, the First Target Distribution, the Second Target Distribution and the Third Target Distribution have been reduced to zero pursuant to the second sentence of Section 6.6(a), the distribution of Available Cash that is deemed to be Operating Surplus with respect to any Quarter will be made solely in accordance with Section 6.4(a)(vii).
(b) After the Subordination Period. Available Cash with respect to any Quarter after the Subordination Period that is deemed to be Operating Surplus pursuant to the provisions of Section 6.3 or 6.5, subject to Section 17-607 of the Delaware Act, shall be distributed as follows, except as otherwise required by Section 5.6(b) in respect of additional Partnership Securities issued pursuant thereto:
(i) First, 98% to all Unitholders, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Unit then Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;
(ii) Second, 98% to all Unitholders, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the First Target Distribution over the Minimum Quarterly Distribution for such Quarter;
(iii) Third, 85% to all Unitholders, Pro Rata, 13% to the holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Second Target Distribution over the First Target Distribution for such Quarter;
(iv) Fourth, 75% to all Unitholders, Pro Rata, 23% to the holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Third Target Distribution over the Second Target Distribution for such Quarter; and
(v) Thereafter, 50% to all Unitholders, Pro Rata, 48% to the holders of the Incentive Distribution Rights, Pro Rata, and 2% to the General Partner;
provided, however, if the Minimum Quarterly Distribution, the First Target Distribution, the Second Target Distribution and the Third Target Distribution have been reduced to zero pursuant to the second sentence of Section 6.6(a), the distribution of Available Cash that is deemed to be Operating Surplus with respect to any Quarter will be made solely in accordance with Section 6.4(b)(v).
Section 6.5 Distributions of Available Cash from Capital Surplus. Available Cash that is deemed to be Capital Surplus pursuant to the provisions of Section 6.3(a) shall, subject to Section 17-607 of the Delaware Act, be distributed, unless the provisions of Section 6.3 require otherwise, 98% to all Unitholders, Pro Rata, and 2% to the General Partner, until a hypothetical holder of an Initial Common Unit has received with respect to such Common Unit, during the period since the Closing Date through such date, distributions of Available Cash that are deemed to be Capital Surplus in an aggregate amount equal to the Initial Unit Price. Available Cash that is deemed to be Capital Surplus shall then be distributed 98% to all Unitholders holding Common Units, Pro Rata, and 2% to the General Partner, until there has been distributed in respect of each Common Unit then Outstanding an amount equal to the Cumulative Common Unit Arrearage. Thereafter, all Available Cash shall be distributed as if it were Operating Surplus and shall be distributed in accordance with Section 6.4.
Section 6.6 Adjustment of Minimum Quarterly Distribution and Target Distribution Levels.
(a) The Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution, Third Target Distribution, Common Unit Arrearages and Cumulative Common Unit Arrearages shall be proportionately adjusted in the event of any distribution, combination or subdivision (whether effected by a distribution payable in Units or otherwise) of Units or other Partnership Securities in accordance with Section 5.10. In the event of a distribution of Available Cash that is deemed to be from Capital Surplus, the then applicable Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution, shall be adjusted proportionately downward to equal the product obtained by multiplying the otherwise applicable Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution, as the case may be, by a fraction of which the numerator is the Unrecovered Capital of the Common Units immediately after giving effect to such distribution and of which the denominator is the Unrecovered Capital of the Common Units immediately prior to giving effect to such distribution.
(b) The Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution, shall also be subject to adjustment pursuant to Section 6.9.
Section 6.7 Special Provisions Relating to the Holders of Subordinated Units.
(a) Except with respect to the right to vote on or approve matters requiring the vote or approval of a percentage of the holders of Outstanding Common Units and the right to participate in allocations of income, gain, loss and deduction and distributions made with respect to Common Units, the holder of a Subordinated Unit shall have all of the rights and obligations of a Unitholder holding Common Units hereunder; provided, however, that immediately upon
the conversion of Subordinated Units into Common Units pursuant to Section 5.8, the Unitholder holding a Subordinated Unit shall possess all of the rights and obligations of a Unitholder holding Common Units hereunder, including the right to vote as a Common Unitholder and the right to participate in allocations of income, gain, loss and deduction and distributions made with respect to Common Units; provided, however, that such converted Subordinated Units shall remain subject to the provisions of Sections 5.5(c)(ii), 6.1(d)(x) and 6.7(b).
(b) The Unitholder holding a Subordinated Unit which has converted into a Common Unit pursuant to Section 5.8 shall not be issued a Common Unit Certificate pursuant to Section 4.1, and shall not be permitted to transfer its converted Subordinated Units to a Person which is not an Affiliate of the holder until such time as the General Partner determines, based on advice of counsel, that a converted Subordinated Unit should have, as a substantive matter, like intrinsic economic and federal income tax characteristics, in all material respects, to the intrinsic economic and federal income tax characteristics of an Initial Common Unit. In connection with the condition imposed by this Section 6.7(b), the General Partner may take whatever reasonable steps are required to provide economic uniformity to the converted Subordinated Units in preparation for a transfer of such converted Subordinated Units, including the application of Sections 5.5(c)(ii) and 6.1(d)(x); provided, however, that no such steps may be taken that would have a material adverse effect on the Unitholders holding Common Units represented by Common Unit Certificates.
Section 6.8 Special Provisions Relating to the Holders of Incentive Distribution Rights. Notwithstanding anything to the contrary set forth in this Agreement, the holders of the Incentive Distribution Rights (a) shall (i) possess the rights and obligations provided in this Agreement with respect to a Limited Partner pursuant to Articles III and VII and (ii) have a Capital Account as a Partner pursuant to Section 5.5 and all other provisions related thereto and (b) shall not (i) be entitled to vote on any matters requiring the approval or vote of the holders of Outstanding Units, (ii) be entitled to any distributions other than as provided in Sections 6.4(a)(v), (vi) and (vii), 6.4(b)(iii), (iv) and (v), and 12.4 or (iii) be allocated items of income, gain, loss or deduction other than as specified in this Article VI.
Section 6.9 Entity-Level Taxation. If legislation is enacted or the interpretation of existing language is modified by the relevant governmental authority which causes a Group Member to be treated as an association taxable as a corporation or otherwise subjects a Group Member to entity-level taxation for federal, state or local income tax purposes, the then applicable Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution, shall be adjusted to equal the product obtained by multiplying (a) the amount thereof by (b) one minus the sum of (i) the highest marginal federal corporate (or other entity, as applicable) income tax rate of the Group Member for the taxable year of the Group Member in which such Quarter occurs (expressed as a percentage) plus (ii) the effective overall state and local income tax rate (expressed as a percentage) applicable to the Group Member for the calendar year next preceding the calendar year in which such Quarter occurs (after taking into account the benefit of any deduction allowable for federal income tax purposes with respect to the payment of state and local income taxes), but only to the extent of the increase in such rates resulting from such legislation or interpretation. Such effective overall state and local income tax rate shall be determined for the taxable year next preceding the first taxable year during which the Group Member is taxable for federal income tax purposes as an
association taxable as a corporation or is otherwise subject to entity-level taxation by determining such rate as if the Group Member had been subject to such state and local taxes during such preceding taxable year.
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 or Assignee 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 which 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, in its sole discretion, may deem necessary or appropriate to conduct the business of the Partnership, to exercise all powers set forth in Section 2.5 and to effectuate the purposes set forth in Section 2.4, including the following:
(i) the making of any expenditures, the lending or borrowing of money, the assumption or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance of evidences of indebtedness, including indebtedness that is convertible into Partnership 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);
(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 such insurance for the benefit of the Partnership Group and the Partners as it deems necessary or appropriate;
(ix) the formation of, or acquisition of an interest in, and the contribution of property and the making of loans to, any other 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 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) unless restricted or prohibited by Section 5.7, the purchase, sale or other acquisition or disposition of Partnership Securities, or the issuance of additional options, rights, warrants and appreciation rights relating to Partnership Securities; and
(xiv) the undertaking of any action in connection with the Partnership's participation in the Operating Partnership or any other subsidiary of the Partnership as a member or partner.
(b) Notwithstanding any other provision of this Agreement, the Operating Partnership Agreement, the Delaware Act or any applicable law, rule or regulation, each of the Partners and the Assignees 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 the Operating Partnership Agreement, the Underwriting Agreement, the Omnibus Agreement, the Contribution Agreement 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 Assignees 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 has caused the Certificate of Limited Partnership to be filed with the Secretary of State of the State of Delaware as required by the Delaware Act. The General Partner shall use all reasonable efforts to cause to be filed such other certificates or documents as may be determined by the General Partner in its sole discretion to be reasonable and necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware or any other state in which the Partnership may elect to do business or own property. To the extent that such action is determined by the General Partner in its sole discretion to be reasonable and necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate of Limited Partnership and do all things to maintain the Partnership as a limited partnership (or a partnership or other entity in which the limited partners have limited liability) under the laws of the State of Delaware or of any other state in which the Partnership may elect to do business or own property. 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.
(a) 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, except as
otherwise provided in this Agreement, (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 Partnership's assets in a single transaction or a series of related transactions (including by way of merger, consolidation or other combination) or approve on behalf of the Partnership the sale, exchange or other disposition of all or substantially all of the assets of the Operating Partnership 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 or the Operating
Partnership and shall not apply to any forced sale of any or all of the assets
of the Partnership or the Operating Partnership 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 Partnership Agreement or (ii)
except as expressly permitted by Section 7.9(d), take any action permitted to be
taken by a partner of the Operating Partnership, 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, except, in either case, as permitted under Sections
4.6, 11.1 and 11.2 with respect to the election of a successor general partner
or managing member of any Group Member.
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 reasonable basis as the General Partner may determine in its sole discretion, 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 necessary or appropriate expenses allocable to the Partnership or otherwise reasonably incurred by the General Partner in connection with operating the Partnership's business (including expenses allocated to the General Partner by its Affiliates). The General Partner shall determine the expenses that are allocable to the Partnership in any reasonable manner determined by the General Partner in its sole discretion. 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) Subject to Section 5.7, the General Partner, in its sole discretion and without the approval of the Limited Partners (who shall have no right to vote in respect thereof), may propose and adopt on behalf of the Partnership employee benefit plans, employee programs and employee practices (including plans, programs and practices involving the issuance of Partnership Securities or options to purchase 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 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 Partnership 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).
(b) Martin Resource Management Corporation has entered into the Omnibus Agreement with the General Partner, and the Partnership, which agreement sets forth certain restrictions on the ability of Martin Resource Management Corporation and its Affiliates to engage in the Business.
(c) Except as specifically restricted by Section 7.5(a) and 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 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 express or implied by law to any Group Member or any Partner or Assignee. Neither any Group Member, any Limited Partner nor any other Person shall have any rights by virtue of this Agreement, the Operating Partnership Agreement, the limited liability company or partnership agreement of any other Group Member or the partnership relationship established hereby or thereby 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 the General Partner's fiduciary duty or any other obligation of any type whatsoever of the General Partner 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, Martin Resource Management Corporation, the General Partner and the Indemnitees shall have no obligation to present business opportunities to the Partnership.
(e) The General Partner and any 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 all rights of the General Partner or Limited Partner, as applicable, relating to such Units or Partnership Securities.
(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 or any Subsidiary of the Group Member.
(g) Anything in this Agreement to the contrary notwithstanding, to the extent that provisions of Sections 7.7, 7.8, 7.9, 7.10 or other Sections of this Agreement purport or are interpreted to have the effect of restricting the fiduciary duties that might otherwise, as a result of Delaware 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; Contracts with Affiliates; Certain Restrictions on the General Partner.
(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). The borrowing party shall reimburse the lending party for any costs (other than any additional interest costs) incurred by the lending party in connection with the borrowing of such funds. For purposes of this Section 7.6(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. No Group Member may lend funds to the General Partner or any of its Affiliates (other than another 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 established in the sole discretion of the General Partner; provided, however, that the Partnership may not charge the Group Member interest at a rate less than the rate that would be charged to the Group Member (without reference to the General Partner's financial abilities or guarantees) by unrelated lenders on comparable loans. The foregoing authority shall be exercised by the General Partner in its sole discretion and shall not create any right or benefit in favor of any Group Member or any other Person.
(c) The General Partner may itself, or may enter into an agreement with any of its Affiliates to, render services to a Group Member or to the General Partner in the discharge of its duties as General Partner of the Partnership. Any services rendered to a Group Member by the
General Partner or any of its Affiliates shall be on terms that are fair and
reasonable to the Partnership; provided, however, that the requirements of this
Section 7.6(c) shall be deemed satisfied as to (i) any transaction approved by
Special Approval, (ii) any transaction, the terms of which are no less favorable
to the Partnership Group than those generally being provided to or available
from unrelated third parties or (iii) any transaction that, taking into account
the totality of the relationships between the parties involved (including other
transactions that may be particularly favorable or advantageous to the
Partnership Group), is equitable to the Partnership Group. The provisions of
Section 7.4 shall apply to the rendering of services described in this Section
7.6(c).
(d) The Partnership Group may transfer assets to joint ventures, other partnerships, corporations, limited liability companies or other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions as are consistent with this Agreement and applicable law.
(e) Neither the General Partner nor any of its Affiliates shall sell, transfer or convey any property to, or purchase any property from, the Partnership, directly or indirectly, except pursuant to transactions that are fair and reasonable to the Partnership; provided, however, that the requirements of this Section 7.6(e) shall be deemed to be satisfied as to (i) the transactions effected pursuant to Sections 5.2 and 5.3, the Contribution Agreement and any other transactions described in or contemplated by the Registration Statement, (ii) any transaction approved by Special Approval, (iii) any transaction, the terms of which are no less favorable to the Partnership than those generally being provided to or available from unrelated third parties, or (iv) any transaction that, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to the Partnership), is equitable to the Partnership. With respect to any contribution of assets to the Partnership in exchange for Partnership Securities, the Conflicts Committee, in determining whether the appropriate number of Partnership Securities are being issued, may take into account, among other things, the fair market value of the assets, the liquidated and contingent liabilities assumed, the tax basis in the assets, the extent to which tax-only allocations to the transferor will protect the existing partners of the Partnership against a low tax basis, and such other factors as the Conflicts Committee deems relevant under the circumstances.
(f) The General Partner and its Affiliates will have no obligation to permit any Group Member to use any facilities or assets of the General Partner and its Affiliates, except as may be provided in contracts entered into from time to time specifically dealing with such use, nor shall there be any obligation on the part of the General Partner or its Affiliates to enter into such contracts.
(g) Without limitation of Sections 7.6(a) through 7.6(f), and 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.
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 in each case the Indemnitee acted in good faith and in a manner that such Indemnitee reasonably believed to be in, or (in the case of a Person other than the General Partner) not opposed to, the best interests of the Partnership and, with respect to any criminal proceeding, had no reasonable cause to believe its conduct was unlawful; provided, further, no indemnification pursuant to this Section 7.7 shall be available to the General Partner with respect to its 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). The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that the Indemnitee acted in a manner contrary to that specified above. Any indemnification pursuant to this Section 7.7 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 the final disposition
of such claim, demand, action, suit or proceeding upon receipt by the
Partnership of any undertaking by or on behalf of the Indemnitee to repay such
amount if it shall be determined that the Indemnitee is not entitled to be
indemnified as authorized in this Section 7.7.
(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 interest of the participants and beneficiaries of the plan
shall be deemed to be for a purpose which is in, or not opposed to, the best
interests of the Partnership.
(f) In no event may an Indemnitee subject 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.
(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, the Assignees 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 if such Indemnitee acted in good faith.
(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. The provisions of this Agreement, to the extent that they restrict or otherwise
modify the duties and liabilities of an Indemnitee otherwise existing at law or in equity, are agreed by the Partners to replace such other duties and liabilities of such Indemnitee.
(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 to the Partnership, the Limited Partners, the General Partner, and the Partnership's and General Partner's directors, officers and employees 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.
(a) Unless otherwise expressly provided in this Agreement, the Operating Partnership Agreement or the limited liability company agreement or partnership agreement of any other Group Member, 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, the Operating Partnership, any other Group Member, any Partner or any Assignee, 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 the Operating Partnership 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 is, or by operation of this Agreement is deemed to be, fair and reasonable 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 received Special Approval. Any such approval by the Conflicts Committee shall be subject to the presumption that, in making its decision, the Conflicts Committee acted on an informed basis, in good faith, and in the honest belief that the action taken was in the best interests of the Partnership, and in any proceeding brought by any Unitholder or by or on behalf of such Unitholder or any other Unitholders or the Partnership challenging such approval, the Person bringing or prosecuting such proceeding shall have the burden of overcoming such presumption. Any conflict of interest and any resolution of such conflict of interest shall be conclusively deemed fair and reasonable to the Partnership if such conflict of interest or resolution is (i) approved by Special Approval, (ii) on terms no less favorable to the Partnership than those generally being provided to or available from unrelated third parties or (iii) fair to the Partnership, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to the Partnership). The General Partner (including the Conflicts Committee in connection with Special Approval) shall be authorized in connection with its determination of what is "fair and reasonable" to the Partnership and in connection with its resolution of any conflict of interest to consider (A) the relative interests of any party to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interest; (B) any customary or accepted industry practices and any customary or historical dealings with a particular Person; (C) any applicable generally accepted accounting practices or principles; and (D) such additional factors as the General Partner (including the Conflicts Committee) determines in its sole discretion to be relevant, reasonable or appropriate under the circumstances. In any proceeding brought by any Unitholder by or on behalf of such Unitholder or any other Unitholders or the
Partnership alleging that such a resolution by the General Partner (and not by the Conflicts Committee, whose resolution shall be conclusive as provided above) is not fair to the Partnership, such Unitholder shall have the burden of proof of overcoming such conclusion. Nothing contained in this Agreement, however, is intended to nor shall it be construed to require the General Partner (including the Conflicts Committee) to consider the interests of any Person other than the Partnership. In the absence of bad faith by the General Partner, the resolution, action or terms so made, taken or provided by the General Partner with respect to such matter shall not constitute a breach of this Agreement or any other agreement contemplated herein or a breach of any standard of care or duty imposed herein or therein or, to the extent permitted by law, under the Delaware Act or any other law, rule or regulation.
(b) Whenever this Agreement or any other agreement contemplated hereby
provides that the General Partner or any of its Affiliates is permitted or
required to make a decision (i) in its "sole discretion" or "discretion," that
it deems "necessary or appropriate" or "necessary or advisable" or under a grant
of similar authority or latitude, except as otherwise provided herein, the
General Partner or such Affiliate shall be entitled to consider only such
interests and factors as it desires and shall have no duty or obligation to give
any consideration to any interest of, or factors affecting, the Partnership, the
Operating Partnership, any Group Member, any Limited Partner or any Assignee,
(ii) it may make such decision in its sole discretion (regardless of whether
there is a reference to "sole discretion" or "discretion") unless another
express standard is provided for, or (iii) in "good faith" or under another
express standard, the General Partner or such Affiliate shall act under such
express standard and shall not be subject to any other or different standards
imposed by this Agreement, the Operating Partnership Agreement, the limited
liability company agreement or partnership agreement of any Group Member any
other agreement contemplated hereby or under the Delaware Act or any other law,
rule or regulation. In addition, any actions taken by the General Partner or
such Affiliate consistent with the standards of "reasonable discretion" set
forth in the definitions of Available Cash or Operating Surplus shall not
constitute a breach of any duty of the General Partner to the Partnership or the
Limited Partners. The General Partner shall have no duty, express or implied, to
sell or otherwise dispose of any asset of the Partnership Group other than in
the ordinary course of business. No borrowing by any Group Member or the
approval thereof by the General Partner shall be deemed to constitute a breach
of any duty of the General Partner 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 (A) enable distributions to the General Partner or its Affiliates
(including in their capacities as Limited Partners) to exceed 2% of the total
amount distributed to all partners or (B) hasten the expiration of the
Subordination Period or the conversion of any Subordinated Units into Common
Units.
(c) Whenever a particular transaction, arrangement or resolution of a conflict of interest is required under this Agreement to be "fair and reasonable" to any Person, the fair and reasonable nature of such transaction, arrangement or resolution shall be considered in the context of all similar or related transactions.
(d) The 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.
(d) Any standard of care and duty imposed by this Agreement or under the Delaware Act or any applicable law, rule or regulation shall be modified, waived or limited, to the extent permitted by law, as required to permit the General Partner to act under this Agreement or any other agreement contemplated by this Agreement and to make any decision pursuant to the authority prescribed in this Agreement, so long as such action is reasonably believed by the General Partner to be in, or not inconsistent with, the best interests of the Partnership.
Section 7.11 Purchase or Sale of Partnership Securities. The General Partner may cause the Partnership to purchase or otherwise acquire Partnership Securities; provided that, except as permitted pursuant to Section 4.10, the General Partner may not cause any Group Member to purchase Subordinated Units during the Subordination Period. 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.
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 of this Agreement notwithstanding that it may later cease to be an Affiliate of the General Partner) 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 upon the request of any such 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 in its good faith judgment 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 promptly prepare and file (x) 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 (y) 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 do any and all other acts and things that may
reasonably be necessary or advisable 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. 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 which, 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 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 7.12(b) shall continue to be applicable with respect to the General Partner (and any of the General Partner's Affiliates) 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, during such two-year period, it has requested inclusion in a registration statement pursuant to Section 7.12(b) or requested that a registration statement be filed pursuant to Section 7.12(a); 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
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 the 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 and Assignees 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. 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 in its discretion, 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 in its discretion, 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 for trading, 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 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. The classification, realization and recognition of income, gain, losses and deductions and other items shall be on the accrual method of accounting for federal income tax purposes.
Section 9.2 Tax Elections.
(a) The Partnership shall make the election under Section 754 of the Code in accordance with applicable regulations thereunder, subject to the reservation of the right to seek to revoke any such election upon the General Partner's determination that such revocation is in the best interests of the Limited Partners. Notwithstanding any other provision herein contained, for the purposes of computing the adjustments under Section 743(b) of the Code, the General Partner shall be authorized (but not required) to adopt a convention whereby the price paid by a transferee of a Limited Partner Interest will be deemed to be the lowest quoted closing price of the Limited Partner Interests on any National Securities Exchange on which such Limited Partner Interests are traded during the calendar month in which such transfer is deemed to occur pursuant to Section 6.2(g) without regard to the actual price paid by such transferee.
(b) The Partnership shall elect to deduct expenses incurred in
organizing the Partnership ratably over a sixty-month period as provided in
Section 709 of the Code.
(c) Except as otherwise provided herein, the General Partner shall determine whether the Partnership should make any other elections permitted by the Code.
Section 9.3 Tax Controversies. Subject to the provisions hereof, the General Partner is designated as the Tax Matters Partner (as defined in the Code) and is authorized and required to represent the Partnership (at the Partnership's expense) in connection with all examinations of the Partnership's affairs by tax authorities, including resulting administrative and judicial proceedings, and to expend Partnership funds for professional services and costs associated therewith. Each Partner agrees to cooperate with the General Partner and to do or refrain from doing any or all things reasonably required by the General Partner to conduct such proceedings.
Section 9.4 Withholding. Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines in its discretion to be necessary or appropriate 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 or Assignee (including, without limitation, by reason of Section 1446 of the Code), the amount withheld may at the discretion of the General Partner be treated by the Partnership as a distribution of cash pursuant to Section 6.3 in the amount of such withholding from such Partner.
ARTICLE X
ADMISSION OF PARTNERS
Section 10.1 Admission of Initial Limited Partners. Upon the issuance by the Partnership of Common Units, Subordinated Units and Incentive Distribution Rights to the Partners as described in Section 5.3 in connection with the Initial Offering, the General Partner shall admit such parties to the Partnership as Initial Limited Partners in respect of the Common Units, Subordinated Units or Incentive Distribution Rights issued to them.
Section 10.2 Admission of Substituted Limited Partner. By transfer of a Limited Partner Interest in accordance with Article IV, the transferor shall be deemed to have given the transferee the right to seek admission as a Substituted Limited Partner subject to the conditions of, and in the manner permitted under, this Agreement. A transferor of a Certificate representing a Limited Partner Interest shall, however, only have the authority to convey to a purchaser or other transferee who does not execute and deliver a Transfer Application (a) the right to negotiate such Certificate to a purchaser or other transferee and (b) the right to transfer the right to request admission as a Substituted Limited Partner to such purchaser or other transferee in respect of the transferred Limited Partner Interests. Each transferee of a Limited Partner Interest (including any nominee holder or an agent acquiring such Limited Partner Interest for the account of another Person) who executes and delivers a Transfer Application shall, by virtue of such execution and delivery, be an Assignee and be deemed to have applied to become a Substituted Limited Partner with respect to the Limited Partner Interests so transferred to such Person. Such Assignee shall become a Substituted Limited Partner (x) at such time as the General Partner consents thereto, which consent may be given or withheld in the General Partner's discretion, and (y) when any such admission is shown on the books and records of the Partnership. If such consent is withheld, such transferee shall be an Assignee. An Assignee shall have an interest in the Partnership equivalent to that of a Limited Partner with respect to allocations and distributions, including liquidating distributions, of the Partnership. With respect to voting rights attributable to Limited Partner Interests that are held by Assignees, the General Partner shall be deemed to be the Limited Partner with respect thereto and shall, in exercising the voting rights in respect of such Limited Partner Interests on any matter, vote such Limited Partner Interests at the written direction of the Assignee who is the Record Holder of such Limited Partner Interests. If no such written direction is received, such Limited Partner Interests will not be voted. An Assignee shall have no other rights of a Limited Partner.
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 Admission of Additional Limited Partners.
(a) A Person (other than the General Partner, an Initial Limited Partner or a Substituted Limited Partner) who makes a Capital Contribution to the Partnership in accordance with this Agreement shall be admitted to the Partnership as an Additional Limited Partner only upon furnishing to the General Partner
(i) evidence of acceptance in form satisfactory to the General Partner of all of the terms and conditions of this Agreement, including the power of attorney granted in Section 2.6, and
(ii) such other documents or instruments as may be required in the discretion of the General Partner to effect such Person's admission as an Additional Limited Partner.
(b) Notwithstanding anything to the contrary in this Section 10.4, no Person shall be admitted as an Additional Limited Partner without the consent of the General Partner, which consent may be given or withheld in the General Partner's discretion. The admission of any Person as an Additional Limited Partner shall become effective on the date upon which the name of such Person is recorded as such in the books and records of the Partnership, following the consent of the General Partner to such admission.
Section 10.5 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 and appropriate under the Delaware Act to amend the records of the Partnership to reflect such admission and, if necessary, to prepare as soon as practicable an amendment to this Agreement and, if required by law, the General Partner shall prepare and file an amendment to the Certificate of Limited Partnership, and the General Partner may for this purpose, among others, exercise the power of attorney granted pursuant to Section 2.6.
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 bankruptcy petition for relief under Chapter 7 of the United States Bankruptcy Code; (C) files a petition or answer seeking for itself a liquidation, dissolution or similar relief (but not a reorganization) under any law; (D) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the General Partner in a proceeding of the type described in clauses (A)-(C) of this Section 11.1(a)(iv); or (E) seeks, consents to or acquiesces in the appointment of a trustee (but not a debtor-in-possession), receiver or liquidator of the General Partner or of all or any substantial part of its properties;
(v) A final and non-appealable order of relief under Chapter 7 of the United States Bankruptcy Code is entered by a court with appropriate jurisdiction pursuant to a voluntary or involuntary petition by or against the General Partner; or
(vi) (A) in the event the General Partner is a corporation, a
certificate of dissolution or its equivalent is filed for the General
Partner, or 90 days expire after the date of notice to the General
Partner of revocation of its charter without a reinstatement of its
charter, under the laws of its state of incorporation; (B) in the event
the General Partner is a partnership or a limited liability company,
the dissolution and commencement of winding up of the General Partner;
(C) in the event the General Partner is acting in such capacity by
virtue of being a trustee of a trust, the termination of the trust; (D)
in the event the General Partner is a natural person, his death or
adjudication of incompetency; and (E) otherwise in the event of the
termination of the General Partner.
If an Event of Withdrawal specified in Section 11.1(a)(iv), (v) or (vi)(A), (B),
(C) or (E) occurs, the withdrawing General Partner shall give notice to the
Limited Partners within 30 days after such occurrence. The Partners hereby agree
that only the Events of Withdrawal described in this Section 11.1 shall result
in the withdrawal of the General Partner from the Partnership.
(b) Withdrawal of the General Partner from the Partnership upon the occurrence of an Event of Withdrawal shall not constitute a breach of this Agreement under the following circumstances: (i) at any time during the period beginning on the Closing Date and ending at 12:00 midnight, Eastern Standard Time, on September 30, 2012, the General Partner voluntarily withdraws by giving at least 90 days' advance notice of its intention to withdraw to the Limited Partners; provided that prior to the effective date of such withdrawal, the withdrawal is approved by Unitholders holding at least a majority of the Outstanding Common Units (excluding Common Units held by the General Partner and its Affiliates) and the General Partner delivers to the Partnership an Opinion of Counsel ("Withdrawal Opinion of Counsel") that such withdrawal (following the selection of the successor General Partner) would not result in the loss of the limited liability of any Limited Partner or any Group Member or cause any Group Member to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for federal
income tax purposes (to the extent not previously treated as such); (ii) at any time after 12:00 midnight, Eastern Standard Time, on September 30, 2012, the General Partner voluntarily withdraws by giving at least 90 days' advance notice to the Unitholders, such withdrawal to take effect on the date specified in such notice; (iii) 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; or (iv) notwithstanding clause (i) of this sentence, at any time that the General Partner voluntarily withdraws by giving at least 90 days' advance notice of its intention to withdraw to the Limited Partners, such withdrawal to take effect on the date specified in the notice, if at the time such notice is given one Person and its Affiliates (other than the General Partner and its Affiliates) own beneficially or of record or control at least 50% of the Outstanding Units. 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, 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 or the Partnership does not receive a Withdrawal Opinion of Counsel, the Partnership shall be dissolved in accordance with Section 12.1. Any successor General Partner elected in accordance with the terms of this Section 11.1 shall be subject to the provisions of Section 10.3.
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). 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 majority of the outstanding Common Units voting as a class
and a majority of the outstanding Subordinated Units voting as a class
(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 opining as to the matters covered by a
Withdrawal Opinion of Counsel. 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. The percentage of the Outstanding Units required to
remove the General Partner may be amended by the General Partner as described in
Section 13.1 hereof.
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 and all of its Incentive Distribution Rights (collectively, the "Combined Interest") in exchange for an amount in cash equal to the fair market value of such 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, such successor shall have the option, exercisable prior to the effective date of the departure of such Departing Partner, 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 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 2/98ths of 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 2% 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 2%.
Section 11.4 Termination of Subordination Period, Conversion of Subordinated Units and Extinguishment of Cumulative Common Unit Arrearages. Notwithstanding any provision of this Agreement, if the General Partner is removed as general partner of the Partnership under circumstances where Cause does not exist and Units held by the General Partner and its Affiliates are not voted in favor of such removal, (i) the Subordination Period will end and all Outstanding Subordinated Units will immediately and automatically convert into Common Units on a one-for-one basis and (ii) all Cumulative Common Unit Arrearages on the Common Units will be extinguished.
Section 11.5 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 Substituted Limited Partners or Additional Limited Partners or by the admission of a successor General Partner in accordance with the terms of this Agreement. Upon the removal or withdrawal of the General Partner, if a successor General Partner is elected pursuant to Section 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 Event of Withdrawal of the General Partner as provided in
Section 11.1(a) (other than Section 11.1(a)(ii)), unless a successor is elected
and an Opinion of Counsel is received as provided in Section 11.1(b) or 11.2 and
such successor is admitted to the Partnership pursuant to Section 10.3;
(b) an election to dissolve the Partnership by the General Partner that is approved by the holders of a Unit Majority;
(c) the entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Delaware Act; or
(d) the sale of all or substantially all of the assets and properties of the Partnership Group.
Section 12.2 Continuation of the Business of the Partnership After Dissolution. Upon (a) dissolution of the Partnership following an Event of Withdrawal caused by the withdrawal or removal of the General Partner as provided in Section 11.1(a)(i) or (iii) and the failure of the Partners to select a successor to such Departing Partner pursuant to Section 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 Section 11.1(a)(iv), (v) or (vi), then, to the maximum extent permitted by law, within 180 days thereafter, the holders of a Unit Majority may elect to reconstitute the Partnership and continue its business on the same terms and conditions set forth in this Agreement by forming a new limited partnership on terms identical to those set forth in this Agreement and having as the 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 reconstituted Partnership shall continue 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) all necessary steps shall be taken to cancel this Agreement and the Certificate of Limited Partnership and to enter into and, as necessary, to file a new partnership agreement and certificate of limited partnership, and the successor General Partner may for this purpose exercise the powers of attorney granted the General Partner pursuant to Section 2.6; 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 (x) the exercise of the right would not result in the loss of limited liability of any Limited Partner and (y) neither the Partnership, the reconstituted limited partnership nor the Operating Partnership or any other Group Member would be treated as an association taxable as a corporation or otherwise be taxable as an entity for federal income tax purposes upon the exercise of such right to continue.
Section 12.3 Liquidator. Upon dissolution of the Partnership, unless the Partnership is continued under an election to reconstitute and continue the Partnership pursuant to Section 12.2, the General Partner shall select one or more Persons to act as Liquidator, which may be the
General Partner. 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 at least a majority of the Outstanding Common Units and Subordinated Units voting as a single class. 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 at least a majority of the Outstanding Common Units and Subordinated Units voting as a single class. 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 at least a majority of the Outstanding Common Units and Subordinated Units voting as a single class. 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)) to the extent necessary or desirable in the good faith judgment of the Liquidator to carry out the duties and functions of the Liquidator hereunder for and during such period of time as shall be reasonably required in the good faith judgment of the Liquidator to complete the winding up and liquidation of the Partnership as provided for herein.
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 the Liquidator determines to be in the best interest of the Partners, subject to Section 17-804 of the Delaware Act and the following:
(a) 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, in its absolute discretion, 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, in its absolute discretion, 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. 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 in accordance with, and to the extent of, the positive balances in their respective Capital Accounts, as determined after taking into account all Capital Account adjustments (other than those made by reason of distributions pursuant to this Section 12.4(c)) for the taxable year of the Partnership during which the liquidation of the Partnership occurs (with such date of occurrence being determined pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of such taxable year (or, if later, within 90 days after said date of such occurrence).
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 Partnership shall be terminated and the Certificate of Limited Partnership and all qualifications of the Partnership as a foreign limited partnership in jurisdictions other than the State of Delaware shall be canceled and such other actions as may be necessary to terminate the Partnership shall be taken.
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.
Section 12.8 Capital Account Restoration. No Limited Partner shall have any obligation to restore any negative balance in its Capital Account upon liquidation of the Partnership. The General Partner shall be obligated to restore any negative balance in its Capital Account upon liquidation of its interest in the Partnership by the end of the taxable year of the Partnership during which such liquidation occurs, or, if later, within 90 days after the date of such liquidation.
ARTICLE XIII
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
Section 13.1 Amendment to be Adopted Solely by the General Partner. Each Partner agrees that the General Partner, without the approval of any Partner or Assignee, 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, in the sole discretion of the General Partner, is necessary or advisable to qualify or continue the qualification of the Partnership as a limited partnership or a partnership in which the Limited Partners have limited liability under the laws of any state or to ensure that the Group Members will not be treated as associations taxable as corporations or otherwise taxed as entities for federal income tax purposes;
(d) a change that, in the discretion of the General Partner, (i) does
not adversely affect the Limited Partners (including any particular class of
Partnership Interests as compared to other classes of Partnership Interests) in
any material respect, (ii) is necessary or advisable to (A) satisfy any
requirements, conditions or guidelines contained in any opinion, directive,
order, ruling or regulation of any federal or state agency or judicial authority
or contained in any federal or state statute (including the Delaware Act) or (B)
facilitate the trading of the Units (including the division of any class or
classes of Outstanding Units into different classes to facilitate uniformity of
tax consequences within such classes 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 for trading, compliance with any of which
the General Partner determines in its discretion to be in the best interests of
the Partnership and the Limited Partners, (iii) is necessary or advisable in
connection with action taken by the General Partner pursuant to Section 5.10 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 changes that, in the discretion of the General Partner, are necessary or advisable 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 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 Investment Company Act of 1940, as amended, the Investment Advisers Act of 1940, as amended, or "plan asset" regulations adopted under the Employee Retirement Income Security Act of 1974, as amended, regardless of whether such are substantially similar to plan asset regulations currently applied or proposed by the United States Department of Labor;
(g) subject to the terms of Section 5.7, an amendment that, in the discretion of the General Partner, is necessary or advisable 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 effected, necessitated or contemplated by a Merger Agreement approved in accordance with Section 14.3;
(j) an amendment that, in the discretion of the General Partner, is necessary or advisable to reflect, account for and deal with appropriately the formation by the Partnership of,
or investment by the Partnership in, any corporation, partnership, joint venture, limited liability company or other entity, in connection with the conduct by the Partnership of activities permitted by the terms of Section 2.4;
(k) a merger or conveyance pursuant to Section 14.3(d);
(l) an amendment to Section 11.2 that would reduce the percentage of the Outstanding Units required for the Unitholders to remove the General Partner; provided, however, that once such required percentage has been reduced, it may be further reduced by the General Partner but such required percentage may not be increased without a vote of the Unitholders; provided further, however, that no such amendment may provide that any class Units may vote separately as a class to remove the General Partner;
(m) an amendment to the definition of "Outstanding" contained in
Section 1.1 hereof to increase from 20% or more the percentage of Outstanding
Partnership Securities, that if at any time acquired by any Person or Group,
shall not be voted on any matter and shall not be considered to be Outstanding
for the other purposes described in such definition; provided, however, that
once such percentage has been increased, it may be further increased by the
General Partner, but such required percentage may not be reduced without a vote
of the Unitholders; or
(n) 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 or with the consent of the General Partner which consent may be given or withheld in its sole discretion. A proposed amendment shall be effective upon its approval by the holders of a Unit Majority, unless a greater or different percentage is required under this Agreement or by Delaware law. 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 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 in its sole discretion, (iii) change Section 12.1(b), or (iv) change the term of the Partnership or, except as set forth in Section 12.1(b), give any Person the right to dissolve the Partnership.
(c) Except as provided in Section 14.3, and without limitation of the General Partner's authority to adopt amendments to this Agreement without the approval of any Partners or Assignees as contemplated in Section 13.1, any amendment that would have a material adverse effect on the rights or preferences of any class of Partnership Interests in relation to other classes of Partnership Interests must be approved by the holders of not less than a majority of the Outstanding Partnership Interests of the class affected.
(d) Notwithstanding any other provision of this Agreement, except for amendments pursuant to Section 13.1 and except as otherwise provided by 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 or classes for which a meeting is proposed. Limited Partners shall
call a special 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 Delaware Act or the law of any other state 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 or classes of Units for which a meeting is
proposed in writing by mail or other means of written communication in accordance with Section 16.1. 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 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 does not approve, at the beginning of the meeting, of 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. The holders of a majority of the Outstanding Units of the class or classes 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 or classes 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 at least 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 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 for trading, 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 state statutes then governing the
rights, duties and liabilities of the Partnership and the Partners.
Section 13.12 Voting and Other Rights.
(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 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 one or more corporations, limited liability companies, business trusts or associations, real estate investment trusts, common law trusts or unincorporated businesses, including a general partnership or limited partnership, formed under the laws of any state of the United States of America, 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 approval of the General Partner. If the General Partner shall determine, in the exercise of its discretion, 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 general or limited partner interests, rights, securities or obligations of the Surviving Business Entity; and (i) if any general or limited partner interests, securities or rights of any constituent business entity are not to be exchanged or converted solely for, or into, cash, property or general or limited partner interests, rights, securities or obligations of the Surviving Business Entity, the cash, property or general or limited partner interests, rights, securities or obligations of any limited partnership, corporation, trust or other entity (other than the Surviving Business Entity) which the holders of such general or limited partner interests, securities or rights are to receive in exchange for, or upon conversion of their general or limited partner interests, securities or rights, and (ii) in the case of securities represented by certificates, upon the surrender of such certificates, which cash, property or general or limited partner interests, rights, securities or obligations of the Surviving Business Entity or any general or limited partnership, corporation, trust or other entity (other than the Surviving Business Entity), or evidences thereof, are to be delivered;
(e) a statement of any changes in the constituent documents or the adoption of new constituent documents (the articles or certificate of incorporation, articles of trust, declaration of trust, certificate or agreement of limited partnership 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 the certificate of merger, the effective time shall be fixed no later than the time of the filing of the certificate of merger and stated therein); and
(g) such other provisions with respect to the proposed merger or consolidation as are deemed necessary or appropriate by the General Partner.
Section 14.3 Approval by Limited Partners of Merger or Consolidation.
(a) Except as provided in Section 14.3(d), 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 Section 14.3(d), the Merger Agreement shall be approved upon receiving the affirmative vote or consent of the holders of a Unit Majority unless the Merger Agreement contains any provision that, if contained in an amendment to this Agreement, the provisions of this Agreement or the Delaware Act would require for its approval the vote or consent of a greater percentage of the Outstanding Units or of any class of Limited Partners, in which case such greater percentage vote or consent shall be required for approval of the Merger Agreement.
(c) Except as provided in Section 14.3(d), 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, in its discretion, without Limited Partner approval, 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 Merger 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 merger or conveyance, as the case may be, would not result in the loss of the limited liability of any Limited Partner or any Group Member or cause the Partnership or any Group Member to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes (to the extent not previously treated as such), (ii) the sole purpose of such merger or conveyance is to effect a mere change in the legal form of the Partnership into another limited liability entity and (iii) the governing instruments of the new entity provide the Limited Partners and the General Partner with the same rights and obligations as are herein contained.
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 with the Secretary of State of the State of Delaware in conformity with the requirements of the Delaware Act.
Section 14.5 Effect of Merger.
(a) At the effective time of the certificate of merger:
(i) all of the rights, privileges and powers of each of the business entities that has merged or consolidated, and all property, real, personal and mixed, and all debts due to any of those business entities and all other things and causes of action belonging to each of those business entities, shall be vested in the Surviving Business Entity and after the merger or consolidation shall be the property of the Surviving Business Entity to the extent they were of each constituent business entity;
(ii) the title to any real property vested by deed or otherwise in any of those constituent business entities shall not revert and is not in any way impaired because of the merger or consolidation;
(iii) all rights of creditors and all liens on or security interests in property of any of those constituent business entities shall be preserved unimpaired; and
(iv) all debts, liabilities and duties of those constituent business entities shall attach to the Surviving Business Entity and may be enforced against it to the same extent as if the debts, liabilities and duties had been incurred or contracted by it.
(b) A merger or consolidation effected pursuant to this Article 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 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 in
its sole discretion, to purchase all, but not less than all, of such Limited
Partner Interests of such class 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
purchased during the 90-day period preceding the date that the notice described
in Section 15.1(b) is mailed. As used in this Agreement, (i) "Current Market
Price" as of any date of any class of Limited Partner Interests means the
average of the daily Closing Prices (as hereinafter defined) per Limited Partner
Interest of such class 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, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted for
trading on the principal National Securities Exchange (other than the Nasdaq
Stock Market) on which such Limited Partner Interests of such class are listed
or admitted to trading or, if such Limited Partner Interests of such class are
not listed or admitted to trading on any National Securities Exchange (other
than the Nasdaq Stock Market), the last quoted price on such day or, if not so
quoted, the average of the high bid and low asked prices on such day in the
over-the-counter market, as reported by the Nasdaq Stock Market or such other
system then in use, or, if on any such day such Limited Partner Interests of
such class are not quoted by any such organization, the average of the closing
bid and asked prices on such day as furnished by a professional market maker
making a market in such Limited Partner Interests of such class selected by the
General Partner, or if on any such day no market maker is making a market in
such Limited Partner Interests of such class, the fair value of such Limited
Partner Interests on such day as determined reasonably and in good faith by the
General Partner; and (iii) "Trading Day" means a day on which the principal
National Securities Exchange on which such Limited Partner Interests of any
class are listed or admitted to trading is open for the transaction of business
or, if Limited Partner Interests of a class are not listed or admitted to
trading on any National Securities Exchange, a day on which banking institutions
in New York City generally are open.
(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 (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, if applicable) 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 or admitted to trading. 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), therefor, without interest thereon.
ARTICLE XVI
GENERAL PROVISIONS
Section 16.1 Addresses and Notices. Any notice, demand, request, report or proxy materials required or permitted to be given or made to a Partner or Assignee 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 or Assignee at the address described below. Any notice, payment or report to be given or made to a Partner or Assignee 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 16.1 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 or Assignee 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 and Assignees.
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, Assignee or other Person if
believed by it to be genuine.
Section 16.2 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 16.3 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 16.4 Integration. This Agreement constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto.
Section 16.5 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 16.6 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 16.7 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 Unit, upon accepting the certificate evidencing such Unit, or executing and delivering either a Transfer Application as herein described or any other document satisfactory to the General Partner evidencing such party's agreement to comply with and be bound by this Agreement, independently of the signature of any other party.
Section 16.8 Applicable Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.
Section 16.9 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 16.10 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
GENERAL PARTNER:
MARTIN MIDSTREAM GP LLC
By: /s/ Ruben S. Martin, III Name: Ruben S. Martin, III Title: Chief Executive Officer |
ORGANIZATIONAL LIMITED PARTNER:
MARTIN RESOURCE LLC
By: Martin Resource Management Corporation,
its sole member
By: /s/ Ruben S. Martin, III Name: Ruben S. Martin, III Title: President |
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.
MARTIN MIDSTREAM GP LLC
By: /s/ Ruben S. Martin, III Name: Ruben S. Martin, III Title: President |
EXHIBIT A
TO THE FIRST AMENDED AND
RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
MARTIN MIDSTREAM PARTNERS L.P.
CERTIFICATE EVIDENCING COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS IN
MARTIN MIDSTREAM PARTNERS L.P.
In accordance with Section 4.1 of the First Amended and Restated Agreement of Limited Partnership of Martin Midstream Partners L.P., as amended, supplemented or restated from time to time (the "Partnership Agreement"), Martin Midstream Partners L.P., a Delaware 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 and accompanied by a properly executed application for transfer of the Common Units represented by this Certificate. 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 4200 Stone Road, Kilgore, Texas 75662. 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: Martin Midstream Partners L.P. --------------- Countersigned and Registered by: By: Martin Midstream GP LLC, its General Partner By: ------------------------------- ----------------------------------- as Transfer Agent and Registrar Name: --------------------------------- By: By: ---------------------------------- ----------------------------------- Authorized Signature Secretary |
[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 TEN ENT - as tenants by the entireties __________ Custodian _________ (Cust) (Minor) JT TEN - as joint tenants with right of under Uniform Gifts/Transfers to CD survivorship and not as Minors Act (State) tenants in common |
Additional abbreviations, though not in the above list, may also be used.
ASSIGNMENT OF COMMON UNITS
IN
MARTIN MIDSTREAM PARTNERS L.P.
IMPORTANT NOTICE REGARDING INVESTOR RESPONSIBILITIES
DUE TO TAX SHELTER STATUS OF
MARTIN MIDSTREAM PARTNERS L.P.
You have acquired an interest in Martin Midstream Partners L.P., 4200 Stone Road, Kilgore, Texas 75662, whose taxpayer identification number is 05-0527861. The Internal Revenue Service has issued Martin Midstream Partners L.P. the following tax shelter registration number: __________________.
YOU MUST REPORT THIS REGISTRATION NUMBER TO THE INTERNAL REVENUE SERVICE IF YOU CLAIM ANY DEDUCTION, LOSS, CREDIT OR OTHER TAX BENEFIT OR REPORT ANY INCOME BY REASON OF YOUR INVESTMENT IN MARTIN MIDSTREAM PARTNERS L.P.
You must report the registration number as well as the name and taxpayer identification number of Martin Midstream Partners L.P. on Form 8271. FORM 8271 MUST BE ATTACHED TO THE RETURN ON WHICH YOU CLAIM THE DEDUCTION, LOSS, CREDIT OR OTHER TAX BENEFIT OR REPORT ANY INCOME BY REASON OF YOUR INVESTMENT IN MARTIN MIDSTREAM PARTNERS L.P.
If you transfer your interest in Martin Midstream Partners L.P. to
another person, you are required by the Internal Revenue Service to keep a list
containing (a) that person's name, address and taxpayer identification number,
(b) the date on which you transferred the interest and (c) the name, address and
tax shelter registration number of Martin Midstream Partners L.P. If you do not
want to keep such a list, you must (1) send the information specified above to
the Partnership, which will keep the list for this tax shelter, and (2) give a
copy of this notice to the person to whom you transfer your interest. Your
failure to comply with any of the above-
described responsibilities could result in the imposition of a penalty under
Section 6707(b) or 6708(a) of the Internal Revenue Code of 1986, as amended,
unless such failure is shown to be due to reasonable cause.
ISSUANCE OF A REGISTRATION NUMBER DOES NOT INDICATE THAT THIS INVESTMENT OR THE CLAIMED TAX BENEFITS HAVE BEEN REVIEWED, EXAMINED OR APPROVED BY THE INTERNAL REVENUE SERVICE.
FOR VALUE RECEIVED, _______________ hereby assigns, conveys, sells and
transfers unto ____________________________________ ____________________________________ (Please print or typewrite name (Please insert Social Security or and address of Assignee) other 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 Martin Midstream 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. SIGNATURE(S) MUST BE GUARANTEED BY A MEMBER FIRM OF THE NATIONAL ASSOCIATION OF SECURITIES - (Signature) DEALERS, INC. OR BY A COMMERCIAL BANK OR TRUST ------------------------------------ COMPANY SIGNATURE(S) GUARANTEED - (Signature) ------------------------------------ ----------------------------- |
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 and an Application for Transfer of Common Units has been executed by a transferee either (a) on the form set forth below or (b) on a separate application that the Partnership will furnish on request without charge. A transferor of the Common Units shall have no duty to the transferee with respect to execution of the transfer application in order for such transferee to obtain registration of the transfer of the Common Units.
APPLICATION FOR TRANSFER OF COMMON UNITS
The undersigned ("Assignee") hereby applies for transfer to the name of the Assignee of the Common Units evidenced hereby.
The Assignee (a) requests admission as a Substituted Limited Partner and agrees to comply with and be bound by, and hereby executes, the First Amended and Restated Agreement of Limited Partnership of Martin Midstream Partners L.P. (the "Partnership"), as amended, supplemented or restated to the date hereof (the "Partnership Agreement"), (b) represents and warrants that the Assignee has all right, power and authority and, if an individual, the capacity necessary to enter into the Partnership Agreement, (c) appoints the General Partner of the Partnership and, if a Liquidator shall be appointed, the Liquidator of the Partnership as the Assignee's attorney-in-fact to execute, swear to, acknowledge and file any document, including, without limitation, the Partnership Agreement and any amendment thereto and the Certificate of Limited Partnership of the Partnership and any amendment thereto, necessary or appropriate for the Assignee's admission as a Substituted Limited Partner and as a party to the Partnership Agreement, (d) gives the powers of attorney provided for in the Partnership Agreement, and (e) makes the waivers and gives the consents and approvals contained in the Partnership Agreement. Capitalized terms not defined herein have the meanings assigned to such terms in the Partnership Agreement.
--------------------------------------------------- ------------------------------- Social Security or other identifying number Signature of Assignee --------------------------------------------------- ------------------------------- Purchase Price including commissions, if any Name and Address of Assignee |
Type of Entity (check one):
[ ] Individual [ ] Partnership [ ] Corporation
[ ] Trust [ ] Other (specify)
Nationality (check one):
[ ] U.S. Citizen, Resident or Domestic Entity
[ ] Foreign Corporation [ ] Non-resident Alien
If the U.S. Citizen, Resident or Domestic Entity box is checked, the following certification must be completed.
Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the "Code"), the Partnership must withhold tax with respect to certain transfers of property if a holder of an interest in the Partnership is a foreign person. To inform the Partnership that no withholding is
required with respect to the undersigned interestholder's interest in it, the undersigned hereby certifies the following (or, if applicable, certifies the following on behalf of the interestholder).
Complete Either A or B:
A. Individual Interestholder
1. I am not a non-resident alien for purposes of U.S. income taxation.
2. My U.S. taxpayer identification number (Social Security Number) is __________.
3. My home address is __________________________________________.
B. Partnership, Corporation or Other Interestholder
1. ________________ (Name of Interestholder) is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Code and Treasury Regulations).
2. The interestholder's U.S. employer identification number is ___________.
3. The interestholder's office address and place of incorporation (if applicable) is_______________.
The interestholder agrees to notify the Partnership within sixty (60) days of the date the interestholder becomes a foreign person.
The interestholder understands that this certificate may be disclosed to the Internal Revenue Service by the Partnership and that any false statement contained herein could be punishable by fine, imprisonment or both.
Under penalties of perjury, I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete and, if applicable, I further declare that I have authority to sign this document on behalf of:
Note: If the Assignee is a broker, dealer, bank, trust company, clearing corporation, other nominee holder or an agent of any of the foregoing, and is holding for the account of any other person, this application should be completed by an officer thereof or, in the case of a broker or dealer, by a registered representative who is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or, in the case of any other nominee holder, a person performing a similar function. If the Assignee is a broker,
dealer, bank, trust company, clearing corporation, other nominee owner or an agent of any of the foregoing, the above certification as to any person for whom the Assignee will hold the Common Units shall be made to the best of the Assignee's knowledge.
EXHIBIT 3.2
EXECUTION COPY
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
MARTIN OPERATING PARTNERSHIP L.P.
TABLE OF CONTENTS
Page ---- ARTICLE I DEFINITIONS.............................................................................................1 Section 1.1 Definitions..................................................................................1 Section 1.2 Construction................................................................................10 ARTICLE II ORGANIZATION..........................................................................................10 Section 2.1 Formation...................................................................................10 Section 2.2 Name........................................................................................11 Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices........................11 Section 2.4 Purpose and Business........................................................................11 Section 2.5 Powers......................................................................................12 Section 2.6 Power of Attorney...........................................................................12 Section 2.7 Term........................................................................................13 Section 2.8 Title to Partnership Assets.................................................................13 ARTICLE III RIGHTS OF LIMITED PARTNERS...........................................................................14 Section 3.1 Limitation of Liability.....................................................................14 Section 3.2 Management of Business......................................................................14 Section 3.3 Outside Activities of the Limited Partners..................................................14 Section 3.4 Rights of Limited Partners..................................................................14 ARTICLE IV TRANSFERS OF PARTNERSHIP INTERESTS....................................................................15 Section 4.1 Transfer Generally..........................................................................15 Section 4.2 Transfer of General Partner's General Partner Interest......................................15 Section 4.3 Transfer of a Limited Partner's Partnership Interest........................................16 Section 4.4 Restrictions on Transfers...................................................................16 ARTICLE V CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS............................................17 Section 5.1 Initial Contributions.......................................................................17 Section 5.2 Contributions Pursuant to the Contribution Agreement........................................17 Section 5.3 Additional Capital Contributions............................................................17 Section 5.4 Interest and Withdrawal.....................................................................18 Section 5.5 Capital Accounts............................................................................18 Section 5.6 Loans from Partners.........................................................................20 Section 5.7 Issuances of Additional Partnership Securities..............................................21 Section 5.8 Limited Preemptive Rights...................................................................21 Section 5.9 Fully Paid and Non-Assessable Nature of Limited Partner Interests...........................22 ARTICLE VI ALLOCATIONS AND DISTRIBUTIONS.........................................................................22 Section 6.1 Allocations for Capital Account Purposes....................................................22 Section 6.2 Allocations for Tax Purposes................................................................26 Section 6.3 Distributions...............................................................................28 |
ARTICLE VII MANAGEMENT AND OPERATION OF BUSINESS.................................................................28 Section 7.1 Management..................................................................................28 Section 7.2 Certificate of Limited Partnership..........................................................30 Section 7.3 Restrictions on the General Partner's Authority.............................................30 Section 7.4 Reimbursement of the General Partner........................................................31 Section 7.5 Outside Activities..........................................................................32 Section 7.6 Loans from the General Partner; Loans or Contributions from the Partnership; Contracts with Affiliates; Certain Restrictions on the General Partner.....................................................................................33 Section 7.7 Indemnification.............................................................................34 Section 7.8 Liability of Indemnitees....................................................................36 Section 7.9 Resolution of Conflicts of Interest.........................................................36 Section 7.10 Other Matters Concerning the General Partner...............................................38 Section 7.11 Reliance by Third Parties..................................................................39 ARTICLE VIII BOOKS, RECORDS AND ACCOUNTING.......................................................................39 Section 8.1 Records and Accounting......................................................................39 Section 8.2 Fiscal Year.................................................................................39 ARTICLE IX TAX MATTERS...........................................................................................40 Section 9.1 Tax Returns and Information.................................................................40 Section 9.2 Tax Elections...............................................................................40 Section 9.3 Tax Controversies...........................................................................40 Section 9.4 Withholding.................................................................................40 ARTICLE X ADMISSION OF PARTNERS..................................................................................41 Section 10.1 Admission of Partners......................................................................41 Section 10.2 Admission of Substituted Limited Partner...................................................41 Section 10.3 Admission of Additional Limited Partners...................................................41 Section 10.4 Admission of Successor or Transferee General Partner.......................................42 Section 10.5 Amendment of Agreement and Certificate of Limited Partnership..............................42 ARTICLE XI WITHDRAWAL OR REMOVAL OF PARTNERS.....................................................................42 Section 11.1 Withdrawal of the General Partner..........................................................42 Section 11.2 Removal of the General Partner.............................................................44 Section 11.3 Interest of Departing Partner..............................................................44 Section 11.4 Withdrawal of a Limited Partner............................................................44 ARTICLE XII DISSOLUTION AND LIQUIDATION..........................................................................45 Section 12.1 Dissolution................................................................................45 Section 12.2 Continuation of the Business of the Partnership After Dissolution..........................45 Section 12.3 Liquidator.................................................................................46 Section 12.4 Liquidation................................................................................46 Section 12.5 Cancellation of Certificate of Limited Partnership.........................................47 Section 12.6 Return of Contributions....................................................................47 Section 12.7 Waiver of Partition........................................................................47 Section 12.8 Capital Account Restoration................................................................47 |
ARTICLE XIII AMENDMENT OF PARTNERSHIP AGREEMENT..................................................................48 Section 13.1 Amendment to be Adopted Solely by the General Partner......................................48 Section 13.2 Amendment Procedures.......................................................................49 ARTICLE XIV MERGER...............................................................................................49 Section 14.1 Authority..................................................................................49 Section 14.2 Procedure for Merger or Consolidation......................................................49 Section 14.3 Approval by Limited Partners of Merger or Consolidation....................................50 Section 14.4 Certificate of Merger......................................................................51 Section 14.5 Effect of Merger...........................................................................51 ARTICLE XV GENERAL PROVISIONS....................................................................................52 Section 15.1 Addresses and Notices......................................................................52 Section 15.2 Further Action.............................................................................52 Section 15.3 Binding Effect.............................................................................52 Section 15.4 Integration................................................................................52 Section 15.5 Creditors..................................................................................52 Section 15.6 Waiver.....................................................................................52 Section 15.7 Counterparts...............................................................................52 Section 15.8 Applicable Law.............................................................................53 Section 15.9 Invalidity of Provisions...................................................................53 Section 15.10 Consent of Partners.......................................................................53 |
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
MARTIN OPERATING PARTNERSHIP L.P.
This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of MARTIN OPERATING PARTNERSHIP L.P., dated as of November 6, 2002, is entered into by and between Martin Operating GP LLC, a Delaware limited liability company, as the General Partner, and Martin Midstream Partners L.P., a Delaware limited partnership, as the Limited Partner, together with any other Persons who hereafter become Partners in the Partnership or parties hereto as provided herein.
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. Capitalized terms used herein but not otherwise defined shall have the meanings assigned to such terms in the MLP Agreement.
"Additional Limited Partner" means a Person admitted to the Partnership as a Limited Partner pursuant to Section 10.3 and who is shown as such on the books and records of the Partnership.
"Adjusted Capital Account" means the Capital Account
maintained for each Partner as of the end of each fiscal year of the
Partnership, (a) increased by any amounts that such Partner is
obligated to restore under the standards set by Treasury Regulation
Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to restore under
Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b)
decreased by (i) the amount of all losses and deductions that, as of
the end of such fiscal year, are reasonably expected to be allocated to
such Partner in subsequent years under Sections 704(e)(2) and 706(d) of
the Code and Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii)
the amount of all distributions that, as of the end of such fiscal
year, are reasonably expected to be made to such Partner in subsequent
years in accordance with the terms of this Agreement or otherwise to
the extent they exceed offsetting increases to such Partner's Capital
Account that are reasonably expected to occur during (or prior to) the
year in which such distributions are reasonably expected to be made
(other than increases as a result of a minimum gain chargeback pursuant
to Section 6.1(d)(i) or 6.1(d)(ii)). The foregoing definition of
Adjusted Capital Account is intended to comply with the provisions of
Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith. The "Adjusted Capital Account" of a
Partner in respect of a General Partner Interest or any other specified
interest in the Partnership shall be the amount that such Adjusted
Capital Account would be if such General Partner Interest or other
interest in the Partnership were the only interest in the Partnership
held by such Partner from and after the date on which such General
Partner Interest or other interest in the Partnership was first issued.
"Adjusted Property" means any property the Carrying Value of which has been adjusted pursuant to Section 5.5(d)(i) or 5.5(d)(ii).
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.
"Agreed Allocation" means any allocation, other than a Required Allocation, of an item of income, gain, loss or deduction pursuant to the provisions of Section 6.1, including, without limitation, a Curative Allocation (if appropriate to the context in which the term "Agreed Allocation" is used).
"Agreed Value" of any Contributed Property means the fair market value of such property or other consideration at the time of contribution as determined by the General Partner using such reasonable method of valuation as it may adopt. The General Partner shall, in its discretion, use such method as it deems reasonable and appropriate to allocate the aggregate Agreed Value of Contributed Properties contributed to the Partnership in a single or integrated transaction among each separate property on a basis proportional to the fair market value of each Contributed Property.
"Agreement" means this Amended and Restated Agreement of Limited Partnership of Martin Operating Partnership L.P., as it may be amended, supplemented or restated from time to time.
"Assets" means all assets conveyed, contributed or otherwise transferred, including any transfers of assets pursuant to the mergers set forth in the Contribution Agreement, to the Partnership Group prior to or on the Closing Date pursuant to the Contribution Agreement.
"Assignee" means a Person to whom one or more Limited Partner Interests have been transferred in a manner permitted under this Agreement, but who has not been admitted as a Substituted Limited Partner.
"Associate" means, when used to indicate a relationship with
any Person, (a) any corporation or organization of which such Person is
a director, officer or partner or is, directly or indirectly, the owner
of 20% or more of any class of voting stock or other voting interest;
(b) any trust or other estate in which such Person has at least a 20%
beneficial interest or as to which such Person serves as trustee or in
a similar fiduciary capacity; and (c) any relative or spouse of such
Person, or any relative of such spouse, who has the same principal
residence as such Person.
"Available Cash" means, with respect to any Quarter ending prior to the Liquidation Date:
(a) the sum of (i) all cash and cash equivalents of the Partnership on hand at the end of such Quarter, and (ii) all additional cash and cash equivalents of the Partnership on hand on the date of determination of Available Cash with respect to such Quarter resulting from Working Capital Borrowings made subsequent to the end of such Quarter, less
(b) the amount of any cash reserves that is necessary
or appropriate in the reasonable discretion of the General Partner to
(i) provide for the proper conduct of the business of the Partnership
(including reserves for future capital expenditures and for anticipated
future credit needs of the Partnership) subsequent to such Quarter,
(ii) comply with applicable law or any loan agreement, security
agreement, mortgage, debt instrument or other agreement or obligation
to which any Group Member is a party or by which it is bound or its
assets are subject or (iii) provide funds for distributions under
Section 6.4 or 6.5 of the MLP Agreement in respect of any one or more
of the next four Quarters; provided, however, that the General Partner
may not establish cash reserves pursuant to (iii) above if the effect
of such reserves would be that the MLP is unable to distribute the
Minimum Quarterly Distribution on all Common Units, plus any Cumulative
Common Unit Arrearage on all Common Units, with respect to such
Quarter; and, provided further, that disbursements made by a Group
Member or cash reserves established, increased or reduced after the end
of such Quarter but on or before the date of determination of Available
Cash with respect to such Quarter shall be deemed to have been made,
established, increased or reduced, for purposes of determining
Available Cash, within such Quarter if the General Partner so
determines.
Notwithstanding the foregoing, "Available Cash" with respect to the Quarter in which the Liquidation Date occurs and any subsequent Quarter shall equal zero.
"Book-Tax Disparity" means with respect to any item of Contributed Property or Adjusted Property, as of the date of any determination, the difference between the Carrying Value of such Contributed Property or Adjusted Property and the adjusted basis thereof for federal income tax purposes as of such date. A Partner's share of the Partnership's Book-Tax Disparities in all of its Contributed Property and Adjusted Property will be reflected by the difference between such Partner's Capital Account balance as maintained pursuant to Section 5.5 and the hypothetical balance of such Partner's Capital Account computed as if it had been maintained strictly in accordance with federal income tax accounting principles.
"Capital Account" means the capital account maintained for a Partner pursuant to Section 5.5. The "Capital Account" of a Partner in respect of a General Partner Interest or any other Partnership Interest shall be the amount that such Capital Account would be if such General Partner Interest or other specified interest in the Partnership were the only interest in the Partnership held by such Partner from and after the date on which such General Partner Interest or other specified interest in the Partnership was first issued.
"Capital Contribution" means any cash, cash equivalents or the Net Agreed Value of Contributed Property that a Partner contributes to the Partnership pursuant to this Agreement or the Contribution Agreement.
"Carrying Value" means (a) with respect to a Contributed Property, the Agreed Value of such property reduced (but not below zero) by all depreciation, amortization and cost recovery deductions charged to the Partners' and Assignees' Capital Accounts in respect of such Contributed Property, and (b) with respect to any other Partnership property, the adjusted basis of such property for federal income tax purposes, all as of the time of determination. The Carrying Value of any property shall be adjusted from time to time in accordance with Sections 5.5(d)(i) and 5.5(d)(ii) and to reflect changes, additions or other adjustments to the Carrying Value for dispositions and acquisitions of Partnership properties, as deemed appropriate by the General Partner.
"Certificate of Limited Partnership" means the Certificate of Limited Partnership of the Partnership filed with the Secretary of State of the State of Delaware as referenced in Section 7.2, as such Certificate of Limited Partnership may be amended, supplemented or restated from time to time.
"Closing Date" means the first date on which Common Units are sold by the MLP to the Underwriters pursuant to the provisions of the Underwriting Agreement.
"Code" means the Internal Revenue Code of 1986, as amended and in effect from time to time. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law.
"Commission" means the United States Securities and Exchange Commission.
"Contributed Property" means each property or other asset, in such form as may be permitted by the Delaware Act, but excluding cash, contributed to the Partnership. Once the Carrying Value of a Contributed Property is adjusted pursuant to Section 5.5(d), such property shall no longer constitute a Contributed Property, but shall be deemed an Adjusted Property.
"Contribution Agreement" means that certain Contribution, Conveyance and Assumption Agreement, dated as of October 31, 2002, among the Partnership, the General Partner, the MLP General Partner, the MLP, Martin Resource Management Corporation, certain other Subsidiaries of Martin Resource Management Corporation, Martin Resource LLC, and certain other subsidiaries of Martin Resource LLC, together with the additional conveyance documents and instruments contemplated or referenced thereunder.
"Curative Allocation" means any allocation of an item of
income, gain, deduction, loss or credit pursuant to the provisions of
Section 6.1(d)(ix).
"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. Section 17-101 et seq., as amended, supplemented or restated from time to time, and any successor to such statute.
"Departing Partner" means a former General Partner from and after the effective date of any withdrawal or removal of such former General Partner pursuant to Section 11.1 or 11.2.
"Economic Risk of Loss" has the meaning set forth in Treasury Regulation Section 1.752-2(a).
"Event of Withdrawal" has the meaning assigned to such term in
Section 11.1(a).
"General Partner" means Martin Operating GP LLC and its successors and permitted assigns as general partner of the Partnership.
"General Partner Interest" means the ownership interest of the General Partner in the Partnership (in its capacity as a general partner) 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 Member" means a member of the Partnership Group.
"Indemnitee" means (a) the General Partner, (b) any Departing Partner, (c) any Person who is or was an Affiliate of the General Partner or any Departing Partner, (d) any Person who is or was a member, partner, officer, director, employee, agent or trustee of any Group Member, the General Partner or any Departing Partner or any Affiliate of any Group Member, the General Partner or any Departing Partner, and (e) any Person who is or was serving at the request of the General Partner or any Departing Partner or any Affiliate of the General Partner or any Departing Partner as an officer, director, employee, member, partner, agent, fiduciary or trustee of another Person; provided, that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or custodial services.
"Initial Offering" means the initial offering and sale of Common Units to the public, as described in the Registration Statement.
"Limited Partner" means any Person that is admitted to the Partnership as a limited partner pursuant to the terms and conditions of this Agreement; but the term "Limited Partner" shall not include any Person from and after the time such Person withdraws as a Limited Partner from the Partnership.
"Limited Partner Interest" means the ownership interest of a Limited Partner or Assignee in the Partnership and includes any and all benefits to which such Limited Partner or Assignee is entitled as provided in this Agreement, together with all
obligations of such Limited Partner or Assignee to comply with the terms and provisions of this Agreement.
"Liquidation Date" means (a) in the case of an event giving rise to the dissolution of the Partnership of the type described in clauses (a) and (b) of the first sentence of Section 12.2, the date on which the applicable time period during which the Partners have the right to elect to reconstitute the Partnership and continue its business has expired without such an election being made, and (b) in the case of any other event giving rise to the dissolution of the Partnership, the date on which such event occurs.
"Liquidator" means one or more Persons selected by the General Partner to perform the functions described in Section 12.3 as liquidating trustee of the Partnership within the meaning of the Delaware Act.
"Merger Agreement" has the meaning assigned to such term in
Section 14.1.
"MLP" means Martin Midstream Partners L.P., a Delaware limited partnership.
"MLP Agreement" means the Agreement of Limited Partnership of Martin Midstream Partners L.P., as it may be amended, supplemented or restated from time to time.
"MLP General Partner" means Martin Midstream GP LLC, a Delaware limited liability company and the general partner of the MLP.
"Net Agreed Value" means, (a) in the case of any Contributed
Property, the Agreed Value of such property reduced by any liabilities
either assumed by the Partnership upon such contribution or to which
such property is subject when contributed, and (b) in the case of any
property distributed to a Partner or Assignee by the Partnership, the
Partnership's Carrying Value of such property (as adjusted pursuant to
Section 5.5(d)(ii)) at the time such property is distributed, reduced
by any indebtedness either assumed by such Partner or Assignee upon
such distribution or to which such property is subject at the time of
distribution, in either case, as determined under Section 752 of the
Code.
"Net Income" means, for any taxable year, the excess, if any, of the Partnership's items of income and gain (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable year over the Partnership's items of loss and deduction (other than those items taken into account in the computation of Net Termination Gain or Net Termination Loss) for such taxable year. The items included in the calculation of Net Income shall be determined in accordance with Section 5.5(b) and shall not include any items specially allocated under Section 6.1(d).
"Net Loss" means, for any taxable year, the excess, if any, of the Partnership's items of loss and deduction (other than those items taken into account in the computation
of Net Termination Gain or Net Termination Loss) for such taxable year
over the Partnership's items of income and gain (other than those
items taken into account in the computation of Net Termination Gain or
Net Termination Loss) for such taxable year. The items included in the
calculation of Net Loss shall be determined in accordance with Section
5.5(b) and shall not include any items specially allocated under
Section 6.1(d).
"Net Termination Gain" means, for any taxable year, the sum, if positive, of all items of income, gain, loss or deduction recognized by the Partnership after the Liquidation Date. The items included in the determination of Net Termination Gain shall be determined in accordance with Section 5.5(b) and shall not include any items of income, gain or loss specially allocated under Section 6.1(d).
"Net Termination Loss" means, for any taxable year, the sum, if negative, of all items of income, gain, loss or deduction recognized by the Partnership after the Liquidation Date. The items included in the determination of Net Termination Loss shall be determined in accordance with Section 5.5(b) and shall not include any items of income, gain or loss specially allocated under Section 6.1(d).
"Nonrecourse Built-in Gain" means with respect to any Contributed Properties or Adjusted Properties that are subject to a mortgage or pledge securing a Nonrecourse Liability, the amount of any taxable gain that would be allocated to the Partners pursuant to Sections 6.2(b)(i)(A), 6.2(b)(ii)(A) and 6.2(b)(iii) if such properties were disposed of in a taxable transaction in full satisfaction of such liabilities and for no other consideration.
"Nonrecourse Deductions" means any and all items of loss, deduction or expenditure (including, without limitation, any expenditure described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(b), are attributable to a Nonrecourse Liability.
"Nonrecourse Liability" has the meaning set forth in Treasury Regulation Section 1.752-1(a)(2).
"OLP Subsidiary" means a Subsidiary of the Partnership.
"Omnibus Agreement" means that Omnibus Agreement, dated as November 1, 2002, among the Partnership, Martin Resource Management Corporation, the MLP General Partner and the MLP.
"Opinion of Counsel" means a written opinion of counsel (who may be regular counsel to the Partnership or the General Partner or any of its Affiliates) acceptable to the General Partner in its reasonable discretion.
"Partner Nonrecourse Debt" has the meaning set forth in Treasury Regulation Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in Treasury Regulation Section 1.704-2(i)(2).
"Partner Nonrecourse Deductions" means any and all items of loss, deduction or expenditure (including, without limitation, any expenditure described in Section 705(a)(2)(B) of the Code) that, in accordance with the principles of Treasury Regulation Section 1.704-2(i), are attributable to a Partner Nonrecourse Debt.
"Partners" means the General Partner and the Limited Partners.
"Partnership" means Martin Operating Partnership L.P., a Delaware limited partnership, and any successors thereto.
"Partnership Group" means the Partnership and all OLP Subsidiaries, treated as a single consolidated entity.
"Partnership Interest" means an ownership interest of a Partner in the Partnership, which shall include the General Partner Interest and the Limited Partner Interest(s).
"Partnership Minimum Gain" means that amount determined in accordance with the principles of Treasury Regulation Section 1.704-2(d).
"Partnership Security" means any class or series of equity interest in the Partnership (but excluding any options, rights, warrants and appreciation rights relating to an equity interest in the Partnership).
"Percentage Interest" means the percentage interest in the
Partnership owned by each Partner upon completion of the transactions
in Section 5.2 and shall mean, (a) as to the General Partner, 0.1% and
(b) as to the MLP, 99.9%.
"Person" means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.
"Quarter" means, unless the context requires otherwise, a fiscal quarter (or, with respect to the fiscal quarter during which the Closing Date occurs, the portion of such fiscal quarter remaining after the Closing Date) of the Partnership.
"Recapture Income" means any gain recognized by the
Partnership (computed without regard to any adjustment required by
Section 734 or Section 743 of the Code) upon the disposition of any
property or asset of the Partnership, which gain is characterized as
ordinary income because it represents the recapture of deductions
previously taken with respect to such property or asset.
"Registration Statement" means the Registration Statement on Form S-1 (Registration No. 333-91706) as it has been or as it may be amended or supplemented from time to time, filed by the MLP with the Commission under the Securities Act to register the offering and sale of the Common Units in the Initial Offering.
"Required Allocations" means (a) any limitation imposed on any allocation of Net Losses or Net Termination Losses under Section 6.1(b) or 6.1(c)(ii) and (b) any allocation of an item of income, gain, loss or deduction pursuant to Section 6.1(d)(i), 6.1(d)(ii), 6.1(d)(iv), 6.1(d)(vii) or 6.1(d)(ix).
"Residual Gain" or "Residual Loss" means any item of gain or loss, as the case may be, of the Partnership recognized for federal income tax purposes resulting from a sale, exchange or other disposition of a Contributed Property or an Adjusted Property, to the extent such item of gain or loss is not allocated pursuant to Section 6.2(b)(i)(A) or 6.2(b)(ii)(A), respectively, to eliminate Book-Tax Disparities.
"Securities Act" means the Securities Act of 1933, as amended, supplemented or restated from time to time and any successor to such statute.
"Subsidiary" means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or a Subsidiary of such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries of such Person, or a combination thereof, or (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such Person.
"Substituted Limited Partner" means a Person who is admitted as a Limited Partner to the Partnership pursuant to Section 10.2 in place of and with all the rights of a Limited Partner and who is shown as a Limited Partner on the books and records of the Partnership.
"Surviving Business Entity" has the meaning assigned to such term in Section 14.2(b).
"transfer" has the meaning assigned to such term in Section 4.1(a).
"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 October 31, 2002, among the Underwriters, the MLP, the MLP General Partner, the Partnership and Martin Resource Management Corporation, and certain Affiliates, providing for the purchase of Common Units by such Underwriters.
"Unrealized Gain" attributable to any item of Partnership
property means, as of any date of determination, the excess, if any, of
(a) the fair market value of such property as of such date (as
determined under Section 5.5(d)) over (b) the Carrying Value of such
property as of such date (prior to any adjustment to be made pursuant
to Section 5.5(d) as of such date).
"Unrealized Loss" attributable to any item of Partnership
property means, as of any date of determination, the excess, if any, of
(a) the Carrying Value of such property as of such date (prior to any
adjustment to be made pursuant to Section 5.5(d) as of such date) over
(b) the fair market value of such property as of such date (as
determined under Section 5.5(d)).
"U.S. GAAP" means United States Generally Accepted Accounting Principles consistently applied.
"Withdrawal Opinion of Counsel" has the meaning assigned to such term in Section 11.1(b).
"Working Capital Borrowings" means borrowings used solely for working capital purposes or to pay distributions to Partners made pursuant to a credit facility or other arrangement to the extent such borrowings are required to be reduced to a relatively small amount each year (or for the year in which the Initial Offering is consummated, the 12-month period beginning on the Closing Date) for an economically meaningful period of time.
Section 1.2 Construction. Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (b) references to Articles and Sections refer to Articles and Sections of this Agreement; and (c) the term "include" or "includes" means includes, without limitation, and "including" means including, without limitation.
ARTICLE II
ORGANIZATION
Section 2.1 Formation. Except as expressly provided to the contrary in this Agreement, the rights, duties (including fiduciary duties), liabilities and obligations of the
Partners and the administration, dissolution and termination of the Partnership shall be governed by the Delaware Act. All Partnership Interests shall constitute personal property of the owner thereof for all purposes and a Partner has no interest in specific Partnership property.
Section 2.2 Name. The name of the Partnership shall be "Martin Operating Partnership L.P." The Partnership's business may be conducted under any other name or names deemed necessary or appropriate by the General Partner in its sole discretion, including the name of the General Partner. The words "Limited Partnership," "L.P.," "Ltd." or similar words or letters shall be included in the Partnership's name where necessary for the purpose of complying with the laws of any jurisdiction that so requires. The General Partner in its discretion may change the name of the Partnership at any time and from time to time and shall notify the Limited Partners of such change in the next regular communication to the Limited Partners.
Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices. Unless and until changed by the General Partner, the registered office of the Partnership in the State of Delaware shall be located at 1209 Orange Street, Wilmington, Delaware 19801, and the registered agent for service of process on the Partnership in the State of Delaware at such registered office shall be The Corporation Trust Company. The principal office of the Partnership shall be located at 4200 Stone Road, Kilgore, Texas 75662, or such other place as the General Partner may from time to time designate by notice to the Limited Partners. The Partnership may maintain offices at such other place or places within or outside the State of Delaware as the General Partner deems necessary or appropriate. The address of the General Partner shall be 4200 Stone Road, Kilgore, Texas 75662, 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) acquire, manage,
operate and sell the Assets and any similar assets or properties now or
hereafter acquired by the Partnership, (b) engage directly in, or enter into or
form any corporation, partnership, joint venture, limited liability company or
other arrangement to engage indirectly in, any business activity that the
Partnership is permitted to engage in, or any type of business or activity
engaged in by the General Partner prior to the Closing Date and, in connection
therewith, to exercise all of the rights and powers conferred upon the
Partnership pursuant to the agreements relating to such business activity, (c)
engage directly in, or enter into or form any corporation, partnership, joint
venture, limited liability company or other arrangement to engage indirectly in,
any business activity that is approved by the General Partner and that lawfully
may be conducted by a limited partnership organized pursuant to the Delaware Act
and, in connection therewith, to exercise all of the rights and powers conferred
upon the Partnership pursuant to the agreements relating to such business
activity; provided, however, that the General Partner reasonably determines, as
of the date of the acquisition or commencement of such activity, that such
activity (i) generates "qualifying income" (as such term is defined pursuant to
Section 7704 of the Code) or (ii) enhances the operations of an activity of the
Partnership that generates qualifying income, and (d) do anything necessary or
appropriate to the foregoing, including the making of capital contributions or
loans to a Group Member, the MLP or any Subsidiary of the MLP. The General
Partner has no obligation or duty to the Partnership, the Limited Partners or
the Assignees to propose or approve, and in its discretion may decline to
propose or approve, the conduct by the Partnership of any business.
Section 2.5 Powers. The Partnership shall be empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described in Section 2.4 and for the protection and benefit of the Partnership.
Section 2.6 Power of Attorney.
(a) Each Limited Partner and each Assignee hereby constitutes and appoints the General Partner and, if a Liquidator shall have been selected pursuant to Section 12.3, the Liquidator (and any successor to the Liquidator by merger, transfer, assignment, election or otherwise) and each of their authorized officers and attorneys-in-fact, as the case may be, with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in his name, place and stead, to:
(i) execute, swear to, acknowledge, deliver, file and record in the appropriate public offices (A) all certificates, documents and other instruments (including this Agreement and the Certificate of Limited Partnership and all amendments or restatements hereof or thereof) that the General Partner or the Liquidator deems necessary or appropriate to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may conduct business or own property; (B) all certificates, documents and other instruments that the General Partner or the Liquidator deems necessary or appropriate to reflect, in accordance with its terms, any amendment, change, modification or restatement of this Agreement; (C) all certificates, documents and other instruments (including conveyances and a certificate of cancellation) that the General Partner or the Liquidator deems necessary or appropriate to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement; (D) all certificates, documents and other instruments relating to the admission, withdrawal, removal or substitution of any Partner pursuant to, or other events described in, Article IV, X, XI or XII; (E) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of any class or series of Partnership Interests issued pursuant hereto; and (F) all certificates, documents and other instruments (including agreements and a certificate of merger) relating to a merger or consolidation of the Partnership pursuant to Article XIV; and
(ii) execute, swear to, acknowledge, deliver, file and record all ballots, consents, approvals, waivers, certificates, documents and other instruments necessary or appropriate, in the discretion of the General Partner or the Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action that is made or given by the Partners hereunder or is consistent with the terms of this Agreement or is necessary or appropriate, in the discretion of the General Partner or the Liquidator, to effectuate the terms or intent of this Agreement; provided, that when required by any provision of this Agreement that establishes a percentage of the Limited Partners or of the Limited Partners of any class or series required to take any action, the General Partner and the Liquidator may exercise the power of attorney made in this Section 2.6(a)(ii) only
after the necessary vote, consent or approval of the Limited Partners or of the Limited Partners of such class or series, as applicable.
Nothing contained in this Section 2.6(a) shall be construed as authorizing the General Partner to amend this Agreement except in accordance with Article XIII or as may be otherwise expressly provided for in this Agreement.
(b) The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive and, to the maximum extent permitted by law, not be affected by the subsequent death, incompetency, disability, incapacity, dissolution, bankruptcy or termination of any Limited Partner or Assignee and the transfer of all or any portion of such Limited Partner's or Assignee's Partnership Interest and shall extend to such Limited Partner's or Assignee's heirs, successors, assigns and personal representatives. Each such Limited Partner or Assignee hereby agrees to be bound by any representation made by the General Partner or the Liquidator acting in good faith pursuant to such power of attorney; and each such Limited Partner or Assignee, to the maximum extent permitted by law, hereby waives any and all defenses that may be available to contest, negate or disaffirm the action of the General Partner or the Liquidator taken in good faith under such power of attorney. Each Limited Partner or Assignee shall execute and deliver to the General Partner or the Liquidator, within 15 days after receipt of the request therefor, such further designation, powers of attorney and other instruments as the General Partner or the Liquidator deems necessary to effectuate this Agreement and the purposes of the Partnership.
Section 2.7 Term. The term of the Partnership commenced upon the filing of the Certificate of Limited Partnership in accordance with the Delaware Act and shall continue in existence until the dissolution of the Partnership in accordance with the provisions of Article XII. The existence of the Partnership as a separate legal entity shall continue until the cancellation of the Certificate of Limited Partnership as provided in the Delaware Act.
Section 2.8 Title to Partnership Assets. Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner or Assignee, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof. Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner, one or more of its Affiliates or one or more nominees, as the General Partner may determine. The General Partner hereby declares and warrants that any Partnership assets for which record title is held in the name of the General Partner or one or more of its Affiliates or one or more nominees shall be held by the General Partner or such Affiliate or nominee for the use and benefit of the Partnership in accordance with the provisions of this Agreement; provided, however, that the General Partner shall use reasonable efforts to cause record title to such assets (other than those assets in respect of which the General Partner determines that the expense and difficulty of conveyancing makes transfer of record title to the Partnership impracticable) to be vested in the Partnership as soon as reasonably practicable; provided, further, that, prior to any withdrawal or removal of the General Partner or as soon thereafter as practicable, the General Partner shall use reasonable efforts to effect the transfer of record title to the Partnership and, prior to any such transfer, will provide for the use of such assets in a manner satisfactory to the General Partner.
All Partnership assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which record title to such Partnership assets is held.
ARTICLE III
RIGHTS OF LIMITED PARTNERS
Section 3.1 Limitation of Liability. The Limited Partners and the Assignees shall have no liability under this Agreement except as expressly provided in this Agreement or the Delaware Act.
Section 3.2 Management of Business. No Limited Partner or
Assignee, in its capacity as such, shall participate in the operation,
management or control (within the meaning of the Delaware Act) of the
Partnership's business, transact any business in the Partnership's name or have
the power to sign documents for or otherwise bind the Partnership. Any action
taken by any Affiliate of the General Partner or any officer, director,
employee, manager, member, general partner, agent or trustee of the General
Partner or any of its Affiliates, or any officer, director, employee, manager,
member, general partner, agent or trustee of a Group Member, in its capacity as
such, shall not be deemed to be participation in the control of the business of
the Partnership by a limited partner of the Partnership (within the meaning of
Section 17-303(a) of the Delaware Act) and shall not affect, impair or eliminate
the limitations on the liability of the Limited Partners or Assignees under this
Agreement.
Section 3.3 Outside Activities of the Limited Partners. Subject to the provisions of Article II and the Omnibus Agreement, which shall continue to be applicable to the Persons referred to therein, regardless of whether such Persons shall also be Limited Partners or Assignees, any Limited Partner or Assignee shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities in direct competition with the Partnership Group. Neither the Partnership nor any of the other Partners or Assignees shall have any rights by virtue of this Agreement in any business ventures of any Limited Partner or Assignee.
Section 3.4 Rights of Limited Partners.
(a) In addition to other rights provided by this Agreement or by applicable law, and except as limited by Section 3.4(b), each Limited Partner shall have the right, for a purpose reasonably related to such Limited Partner's interest as a limited partner in the Partnership, upon reasonable written demand and at such Limited Partner's own expense:
(i) promptly after becoming available, to obtain a copy of the Partnership's 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 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;
(iv) 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 that each Partner has agreed to contribute in the future, and the date on which each became a Partner; and
(v) to obtain such other information regarding the affairs of the Partnership as is just and reasonable; and
(vi) to obtain true and full information regarding the status of the business and financial condition of the Partnership.
(b) The General Partner may keep confidential from the Limited Partners and Assignees, for such period of time as the General Partner deems reasonable, (i) any information that the General Partner reasonably believes to be in the nature of trade secrets or (ii) other information the disclosure of which the General Partner in good faith believes (A) is not in the best interests of the MLP or the Partnership Group, (B) could damage the MLP or 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
TRANSFERS OF PARTNERSHIP INTERESTS
Section 4.1 Transfer Generally.
(a) The term "transfer," when used in this Agreement with respect to a Partnership Interest, shall be deemed to refer to a transaction by which a General Partner assigns its General Partner Interest to another Person who becomes the General Partner or by which the holder of a Limited Partner Interest assigns such Limited Partner Interest to another Person who is or becomes a Limited Partner (or an Assignee), and includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise.
(b) No Partnership Interest shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article IV. Any transfer or purported transfer of a Partnership Interest not made in accordance with this Article IV shall be null and void.
(c) Nothing contained in this Agreement shall be construed to prevent a disposition by any member of the General Partner of any or all of the issued and outstanding member interests of the General Partner.
Section 4.2 Transfer of General Partner's General Partner Interest. No provision of this Agreement shall be construed to prevent (and the Limited Partners do hereby expressly consent to) (i) the transfer by the General Partner of all or a portion of its General
Partner Interest to one or more Affiliates, which transferred General Partner Interest, to the extent not transferred to a successor General Partner, shall constitute a Limited Partner Interest or (ii) the transfer by the General Partner, in whole and not in part, of its General Partner Interest upon (a) its merger, consolidation or other combination into any other Person or the transfer by it of all or substantially all of its assets to another Person or (b) sale of all or substantially all of the membership interests of the General Partner by its members if, in the case of a transfer described in either clause (i) or (ii) of this sentence, the rights and duties of the General Partner with respect to the General Partner Interest so transferred are assumed by the transferee and the transferee agrees to be bound by the provisions of this Agreement; provided, however, that in either such case, the transferee is primarily controlled, directly or indirectly, by the MLP or the MLP General Partner or any Person primarily controlling, directly or indirectly, the MLP or the MLP General Partner; provided, further, that in either such case, such transferee furnishes to the Partnership an Opinion of Counsel that such merger, consolidation, combination, transfer or assumption will not result in a loss of limited liability of any Limited Partner or cause the Partnership to be taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes (to the extent not already so treated or taxed). In the case of a transfer pursuant to this Section 4.2 to a Person proposed as a successor general partner of the Partnership, the transferee or successor (as the case may be) shall, subject to compliance with the terms of Section 10.4, be admitted to the Partnership as the General Partner immediately prior to the transfer of the Partnership Interest, and the business of the Partnership shall continue without dissolution.
Section 4.3 Transfer of a Limited Partner's Partnership Interest. A Limited Partner may transfer all, but not less than all, of its Partnership Interest as a Limited Partner in connection with the merger, consolidation or other combination of such Limited Partner with or into any other Person or the transfer by such Limited Partner of all or substantially all of its assets to another Person and, following any such transfer, such Person may become a Substituted Limited Partner pursuant to Article X. Except as set forth in the immediately preceding sentence, or in connection with any pledge of (or any related foreclosure on) a Partnership Interest of a Limited Partner solely for the purpose of securing, directly or indirectly, indebtedness of the Partnership or the MLP, a Limited Partner may not transfer all or any part of its Partnership Interest or withdraw from the Partnership.
Section 4.4 Restrictions on Transfers.
(a) Notwithstanding the other provisions of this Article IV, no transfer of any Partnership Interest shall be made if such transfer would (i) violate the then applicable federal or state securities laws or the rules and regulations of the Commission, any state securities commission or any other governmental authority with jurisdiction over such transfer, (ii) terminate the existence or qualification of the Partnership or the MLP under the laws of the jurisdiction of its formation or (iii) cause the Partnership or the MLP to be treated as an association taxable as a corporation or otherwise to be taxed as an entity for federal income tax purposes (to the extent not already so treated or taxed).
(b) The General Partner may impose restrictions on the transfer of Partnership Interests if a subsequent Opinion of Counsel determines that such restrictions are necessary to avoid a significant risk of the Partnership or the MLP becoming taxable as a corporation or
otherwise to be taxed as an entity for federal income tax purposes. The restrictions may be imposed by making such amendments to this Agreement as the General Partner may determine to be necessary or appropriate to impose such restrictions.
ARTICLE V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
Section 5.1 Initial Contributions. In connection with the initial formation of the Partnership under the Delaware Act, the General Partner made an initial Capital Contribution to the Partnership in the amount of $1.00 in exchange for a 0.1% interest in the Partnership and was admitted as General Partner, and Martin Resource LLC made an initial Capital Contribution to the Partnership in the amount of $999 in exchange for a 99.9% interest (the "Initial LP Interest") in the Partnership and was admitted as a Limited Partner.
Section 5.2 Contributions Pursuant to the Contribution Agreement.
(a) Pursuant to the Contribution Agreement, Martin Resource LLC , Martin Gas Sales LLC, and Midstream Fuel Service LLC contributed to the Partnership all of their direct interests in the Assets pursuant to the Contribution Agreement in exchange for Limited Partner Interests. Immediately following such transfer, and the admission of Martin Resource LLC, Martin Gas Sales LLC and Midstream Fuel Service LLC as Limited Partners, the Initial LP Interest was redeemed by the Partnership for $999 in cash. Following these transactions, these parties held a collective 99.9% Limited Partner Interest in the Partnership.
(b) Pursuant to the Contribution Agreement, Martin Resource LLC, Martin Gas Sales LLC and Midstream Fuel Service LLC transferred their collective 99.9% Limited Partner Interest and the 0.1% General Partner Interest to the MLP and the MLP General Partner in exchange for Subordinated Units (as defined in the MLP Agreement) of the MLP. Pursuant to the Contribution Agreement, the MLP General Partner transferred the Limited Partnership Interest it received from Martin Resource Management Corporation and certain of its Affiliates to the MLP in exchange for a continuation of its 2% general partner interest in the MLP. The contribution by Martin Resource LLC of a portion of its Limited Partner Interest occurred immediately prior to the other contributions covered in this subsection (b) so that the MLP was admitted as a Limited Partner of the Partnership prior to the withdrawal of Martin Resource LLC, Martin Gas Sales LLC and Midstream Fuel Service LLC as Limited Partners of the Partnership.
(c) Following the foregoing transactions, the General Partner owns a 0.1% Partnership Interest as General Partner and the MLP owns a 99.9% Partnership Interest as a Limited Partner.
Section 5.3 Additional Capital Contributions. With the consent of the General Partner, any Limited Partner may, but shall not be obligated to, make additional Capital Contributions to the Partnership. Contemporaneously with the making of any Capital Contributions by a Limited Partner, in addition to those provided in Sections 5.1 and 5.2, the General Partner shall be obligated to make an additional Capital Contribution to the Partnership in an amount equal to 0.1 divided by 99.9 times the amount of the additional Capital
Contribution then made by such Limited Partner. Except as set forth in the immediately preceding sentence and in Article XII, the General Partner shall not be obligated to make any additional Capital Contributions to the Partnership.
Section 5.4 Interest and Withdrawal. No interest shall be paid by the Partnership on Capital Contributions. No Partner or Assignee shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent, if any, that distributions made pursuant to this Agreement or upon termination of the Partnership may be considered as such by law and then only to the extent provided for in this Agreement. Except to the extent expressly provided in this Agreement, no Partner or Assignee shall have priority over any other Partner or Assignee either as to the return of Capital Contributions or as to profits, losses or distributions. Any such return shall be a compromise to which all Partners and Assignees agree within the meaning of Section 17-502(b) of the Delaware Act.
Section 5.5 Capital Accounts.
(a) The Partnership shall maintain for each Partner (or a
beneficial owner of Partnership Interests held by a nominee in any case in which
the nominee has furnished the identity of such owner to the Partnership in
accordance with Section 6031(c) of the Code or any other method acceptable to
the General Partner in its sole discretion) owning a Partnership Interest a
separate Capital Account with respect to such Partnership Interest in accordance
with the rules of Treasury Regulation Section 1.704-1(b)(2)(iv). Such Capital
Account shall be increased by (i) the amount of all Capital Contributions made
to the Partnership with respect to such Partnership Interest pursuant to this
Agreement and (ii) all items of Partnership income and gain (including, without
limitation, income and gain exempt from tax) computed in accordance with Section
5.5(b) and allocated with respect to such Partnership Interest pursuant to
Section 6.1, and decreased by (x) the amount of cash or Net Agreed Value of all
actual and deemed distributions of cash or property made with respect to such
Partnership Interest pursuant to this Agreement and (y) all items of Partnership
deduction and loss computed in accordance with Section 5.5(b) and allocated with
respect to such Partnership Interest pursuant to Section 6.1.
(b) For purposes of computing the amount of any item of income, gain, loss or deduction that is to be allocated pursuant to Article VI and is to be reflected in the Partners' Capital Accounts, the determination, recognition and classification of any such item shall be the same as its determination, recognition and classification for federal income tax purposes (including, without limitation, any method of depreciation, cost recovery or amortization used for that purpose), provided, that:
(i) Solely for purposes of this Section 5.5, the Partnership shall be treated as owning directly its proportionate share (as determined by the General Partner) of all property owned by any OLP Subsidiary that is classified as a partnership for federal income tax purposes.
(ii) All fees and other expenses incurred by the Partnership to promote the sale of (or to sell) a Partnership Interest that can neither be deducted nor amortized under Section 709 of the Code, if any, shall, for purposes of Capital Account
maintenance, be treated as an item of deduction at the time such fees and other expenses are incurred and shall be allocated among the Partners pursuant to Section 6.1.
(iii) Except as otherwise provided in Treasury Regulation
Section 1.704-1(b)(2)(iv)(m), computation of all items of income, gain,
loss and deduction shall be made without regard to any election under
Section 754 of the Code that may be made by the Partnership and, as to
those items described in Section 705(a)(1)(B) or 705(a)(2)(B) of the
Code, without regard to the fact that such items are not includable in
gross income or are neither currently deductible nor capitalized for
federal income tax purposes. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b)
or 743(b) of the Code is required, pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining
Capital Accounts, the amount of such adjustment in the Capital Accounts
shall be treated as an item of gain or loss.
(iv) Any income, gain or loss attributable to the taxable disposition of any Partnership property shall be determined as if the adjusted basis of such property as of such date of disposition were equal in amount to the Partnership's Carrying Value with respect to such property as of such date.
(v) In accordance with the requirements of Section 704(b) of the Code, any deductions for depreciation, cost recovery or amortization attributable to any Contributed Property shall be determined as if the adjusted basis of such property on the date it was acquired by the Partnership were equal to the Agreed Value of such property. Upon an adjustment pursuant to Section 5.5(d) to the Carrying Value of any Partnership property subject to depreciation, cost recovery or amortization, any further deductions for such depreciation, cost recovery or amortization attributable to such property shall be determined (A) as if the adjusted basis of such property were equal to the Carrying Value of such property immediately following such adjustment and (B) using a rate of depreciation, cost recovery or amortization derived from the same method and useful life (or, if applicable, the remaining useful life) as is applied for federal income tax purposes; provided, however, that, if the asset has a zero adjusted basis for federal income tax purposes, depreciation, cost recovery or amortization deductions shall be determined using any reasonable method that the General Partner may adopt.
(vi) If the Partnership's adjusted basis in a depreciable
or cost recovery property is reduced for federal income tax purposes
pursuant to Section 48(q)(1) or 48(q)(3) of the Code, the amount of
such reduction shall, solely for purposes hereof, be deemed to be an
additional depreciation or cost recovery deduction in the year such
property is placed in service and shall be allocated among the Partners
pursuant to Section 6.1. Any restoration of such basis pursuant to
Section 48(q)(2) of the Code shall, to the extent possible, be
allocated in the same manner to the Partners to whom such deemed
deduction was allocated.
(c) A transferee of a Partnership Interest shall succeed to a pro rata portion of the Capital Account of the transferor relating to the Partnership Interest so transferred.
(d) (i) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an issuance of additional Partnership Interests for cash or Contributed Property, the Capital Accounts of all Partners and the Carrying Value of each Partnership property immediately prior to such issuance shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property, as if such Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such property immediately prior to such issuance and had been allocated to the Partners at such time pursuant to Section 6.1 in the same manner as any item of gain or loss actually recognized during such period would have been allocated. In determining such Unrealized Gain or Unrealized Loss, the aggregate cash amount and fair market value of all Partnership assets (including, without limitation, cash or cash equivalents) immediately prior to the issuance of additional Partnership Interests shall be determined by the General Partner using such reasonable method of valuation as it may adopt; provided, however, that the General Partner, in arriving at such valuation, must take fully into account the fair market value of the Partnership Interests of all Partners at such time. The General Partner shall allocate such aggregate value among the assets of the Partnership (in such manner as it determines in its discretion to be reasonable) to arrive at a fair market value for individual properties.
(ii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), immediately prior to any actual or deemed distribution to a Partner of any Partnership property (other than a distribution of cash that is not in redemption or retirement of a Partnership Interest), the Capital Accounts of all Partners and the Carrying Value of all Partnership property shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership property, as if such Unrealized Gain or Unrealized Loss had been recognized in a sale of such property immediately prior to such distribution for an amount equal to its fair market value, and had been allocated to the Partners, at such time, pursuant to Section 6.1(c) in the same manner as any item of gain or loss actually recognized during such period would have been allocated. In determining such Unrealized Gain or Unrealized Loss the aggregate cash amount and fair market value of all Partnership assets (including, without limitation, cash or cash equivalents) immediately prior to a distribution shall (A) in the case of an actual distribution that is not made pursuant to Section 12.4 or in the case of a deemed distribution, be determined and allocated in the same manner as that provided in Section 5.5(d)(i) or (B) in the case of a liquidating distribution pursuant to Section 12.4, be determined and allocated by the Liquidator using such reasonable method of valuation as it may adopt.
Section 5.6 Loans from Partners. Loans by a Partner to the Partnership shall not constitute Capital Contributions. If any Partner shall advance funds to the Partnership in excess of the amounts required hereunder to be contributed by it to the capital of the Partnership, the making of such excess advances shall not result in any increase in the amount of the Capital Account of such Partner. The amount of any such excess advances shall be a debt obligation of the Partnership to such Partner and shall be payable or collectible only out of the Partnership assets in accordance with the terms and conditions upon which such advances are made.
Section 5.7 Issuances of Additional Partnership Securities.
(a) 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 shall be established by the General Partner in its sole discretion. The issuance by the Partnership of Partnership Securities or rights, warrants or appreciation rights in respect thereof shall be deemed an amendment to this Agreement.
(b) Each additional Partnership Security authorized to be
issued by the Partnership pursuant to Section 5.7(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
in its sole discretion, 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
such 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; and (vii) the right, if any, of the holder of each such Partnership
Security to vote on Partnership matters, including matters relating to the
relative designations, preferences, rights, powers and duties of such
Partnership Security.
(c) The General Partner is hereby authorized and directed to take all actions that it deems 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 5.7, (ii) the admission of Additional Limited Partners and (iii) all additional issuances of Partnership Securities. The General Partner is further authorized and directed to specify the relative rights, powers and duties of the holders of the Partnership Interests or other Partnership Securities being so issued. The General Partner shall do all things necessary to comply with the Delaware Act and is authorized and directed to do all things it deems necessary or advisable in connection with any future issuance of Partnership Securities, including compliance with any statute, rule, regulation or guideline of any federal, state or other governmental agency.
Section 5.8 Limited Preemptive Rights. Except as provided in
Section 5.3, no Person shall have preemptive, preferential or other similar
rights with respect to (a) additional Capital Contributions; (b) issuance or
sale of any class or series of Partnership Interests, whether unissued, held in
the treasury or hereafter created; (c) issuance of any obligations, evidences of
indebtedness or other securities of the Partnership convertible into or
exchangeable for, or carrying or accompanied by any rights to receive, purchase
or subscribe to, any such Partnership Interests; (d) issuance of any right of
subscription to or right to receive, or any warrant or option for the purchase
of, any such Partnership Interests; or (e) issuance or sale of any other
securities that may be issued or sold by the Partnership.
Section 5.9 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, except as such non-assessability may be affected by Section 17-607 of the Delaware Act.
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
Section 6.1 Allocations for Capital Account Purposes. For purposes of maintaining the Capital Accounts and in determining the rights of the Partners among themselves, the Partnership's items of income, gain, loss and deduction (computed in accordance with Section 5.5(b)) shall be allocated among the Partners in each taxable year (or portion thereof) as provided herein below.
(a) Net Income. After giving effect to the special allocations set forth in Section 6.1(d), Net Income for each taxable year and all items of income, gain, loss and deduction taken into account in computing Net Income for such taxable year shall be allocated among the Partners as follows:
(i) First, 100% to the General Partner, until the
aggregate Net Income allocated to the General Partner pursuant to this
Section 6.1(a)(i) for the current taxable year and all previous taxable
years is equal to the aggregate Net Losses allocated to the General
Partner pursuant to Section 6.1(b)(ii) for all previous taxable years;
(ii) Second, 0.1% to the General Partner and 99.9% to the Limited Partners in accordance with their respective Percentage Interests.
(b) Net Losses. After giving effect to the special allocations set forth in Section 6.1(d), Net Losses for each taxable period and all items of income, gain, loss and deduction taken into account in computing Net Losses for such taxable period shall be allocated among the Partners as follows:
(i) First, 0.1% to the General Partner and 99.9% to the Limited Partners, in accordance with their respective Percentage Interests; provided, however, that Net Losses shall not be allocated to a Limited Partner pursuant to this Section 6.1(b)(i) to the extent that such allocation would cause a Limited Partner to have a deficit balance in its Adjusted Capital Account at the end of such taxable year (or increase any existing deficit balance in such Limited Partner's Adjusted Capital Account);
(ii) Second, the balance, if any, 100% to the General Partner.
(c) Net Termination Gains and Losses. After giving effect to the special allocations set forth in Section 6.1(d), all items of income, gain, loss and deduction taken into account in computing Net Termination Gain or Net Termination Loss for such taxable period shall be allocated in the same manner as such Net Termination Gain or Net Termination Loss is allocated hereunder. All allocations under this Section 6.1(c) shall be made after Capital Account balances have been adjusted by all other allocations provided under this Section 6.1 and
after all distributions of Available Cash provided under Section 6.4 have been
made with respect to the taxable period ending on or before the Liquidation
Date; provided, however, that solely for purposes of this Section 6.1(c),
Capital Accounts shall not be adjusted for distributions made pursuant to
Section 12.4.
(i) If a Net Termination Gain is recognized (or deemed recognized pursuant to Section 5.5(d)), such Net Termination Gain shall be allocated among the Partners in the following manner (and the Capital Accounts of the Partners shall be increased by the amount so allocated in each of the following subclauses, in the order listed, before an allocation is made pursuant to the next succeeding subclause):
(A) First, to each Partner having a deficit balance in its Capital Account, in the proportion that such deficit balance bears to the total deficit balances in the Capital Accounts of all Partners, until each such Partner has been allocated Net Termination Gain equal to any such deficit balance in its Capital Account; and
(B) Second, 0.1% to the General Partner and 99.9% to the Limited Partners, in accordance with their respective Percentage Interests.
(ii) If a Net Termination Loss is recognized (or deemed recognized pursuant to Section 5.5(d)), such Net Termination Loss shall be allocated among the Partners in the following manner:
(A) First, to the General Partner and the Limited Partners in proportion to, and to the extent of, the positive balances in their respective Capital Accounts; and
(B) Second, the balance, if any, 100% to the General Partner.
(d) Special Allocations. Notwithstanding any other provision of this Section 6.1, the following special allocations shall be made for such taxable period:
(i) Partnership Minimum Gain Chargeback. Notwithstanding any other provision of this Section 6.1, if there is a net decrease in Partnership Minimum Gain during any Partnership taxable period, each Partner shall be allocated items of Partnership income and gain for such period (and, if necessary, subsequent periods) in the manner and amounts provided in Treasury Regulation Sections 1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision. For purposes of this Section 6.1(d), each Partner's Adjusted Capital Account balance shall be determined, and the allocation of income or gain required hereunder shall be effected, prior to the application of any other allocations pursuant to this Section 6.1(d) with respect to such taxable period (other than an allocation pursuant to Sections 6.1(d)(v) and 6.1(d)(vi)). This Section 6.1(d)(i) is intended to comply with the Partnership Minimum Gain chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be interpreted consistently therewith.
(ii) Chargeback of Partner Nonrecourse Debt Minimum Gain.
Notwithstanding the other provisions of this Section 6.1 (other than
Section 6.1(d)(i)), except as provided in Treasury Regulation Section
1.704-2(i)(4), if there is a net decrease in Partner Nonrecourse Debt
Minimum Gain during any Partnership taxable period, any Partner with a
share of Partner Nonrecourse Debt Minimum Gain at the beginning of such
taxable period shall be allocated items of Partnership income and gain
for such period (and, if necessary, subsequent periods) in the manner
and amounts provided in Treasury Regulation Sections 1.704-2(i)(4) and
1.704-2(j)(2)(ii), or any successor provisions. For purposes of this
Section 6.1(d), each Partner's Adjusted Capital Account balance shall
be determined, and the allocation of income or gain required hereunder
shall be effected, prior to the application of any other allocations
pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other
than an allocation pursuant to Sections 6.1(d)(v) and 6.1(d)(vi), with
respect to such taxable period. This Section 6.1(d)(ii) is intended to
comply with the chargeback of items of income and gain requirement in
Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted
consistently therewith.
(iii) Qualified Income Offset. In the event any Partner unexpectedly receives any adjustments, allocations or distributions described in Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by the Treasury Regulations promulgated under Section 704(b) of the Code, the deficit balance, if any, in its Adjusted Capital Account created by such adjustments, allocations or distributions as quickly as possible unless such deficit balance is otherwise eliminated pursuant to Section 6.1(d)(i) or (ii).
(iv) Gross Income Allocations. In the event any Partner
has a deficit balance in its Capital Account at the end of any
Partnership taxable period in excess of the sum of (A) the amount such
Partner is required to restore pursuant to the provisions of this
Agreement and (B) the amount such Partner is deemed obligated to
restore pursuant to Treasury Regulation Sections 1.704-2(g) and
1.704-2(i)(5), such Partner shall be specially allocated items of
Partnership gross income and gain in the amount of such excess as
quickly as possible; provided, that an allocation pursuant to this
Section 6.1(d)(iv) shall be made only if and to the extent that such
Partner would have a deficit balance in its Capital Account as adjusted
after all other allocations provided for in this Section 6.1 have been
tentatively made as if this Section 6.1(d)(iv) were not in this
Agreement.
(v) Nonrecourse Deductions. Nonrecourse Deductions for any taxable period shall be allocated to the Partners in accordance with their respective Percentage Interests. If the General Partner determines in its good faith discretion that the Partnership's Nonrecourse Deductions must be allocated in a different ratio to satisfy the safe harbor requirements of the Treasury Regulations promulgated under Section 704(b) of the Code, the General Partner is authorized, upon notice to the other Partners, to revise the prescribed ratio to the numerically closest ratio that does satisfy such requirements.
(vi) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any taxable period shall be allocated 100% to the Partner that bears the Economic Risk of Loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable in accordance with Treasury Regulation Section 1.704-2(i). If more than one Partner bears the Economic Risk of Loss with respect to a Partner Nonrecourse Debt, such Partner Nonrecourse Deductions attributable thereto shall be allocated between or among such Partners in accordance with the ratios in which they share such Economic Risk of Loss.
(vii) Nonrecourse Liabilities. For purposes of Treasury Regulation Section 1.752-3(a)(3), the Partners agree that Nonrecourse Liabilities of the Partnership in excess of the sum of (A) the amount of Partnership Minimum Gain and (B) the total amount of Nonrecourse Built-in Gain shall be allocated among the Partners in accordance with their respective Percentage Interests.
(viii) Code Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(c) of the Code is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis), and such item of gain or loss shall be specially allocated to the Partners in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations.
(ix) Curative Allocation.
(A) Notwithstanding any other provision of this
Section 6.1, other than the Required Allocations, the Required
Allocations shall be taken into account in making the Agreed
Allocations so that, to the extent possible, the net amount of
items of income, gain, loss and deduction allocated to each
Partner pursuant to the Required Allocations and the Agreed
Allocations, together, shall be equal to the net amount of
such items that would have been allocated to each such Partner
under the Agreed Allocations had the Required Allocations and
the related Curative Allocation not otherwise been provided in
this Section 6.1. Notwithstanding the preceding sentence,
Required Allocations relating to (1) Nonrecourse Deductions
shall not be taken into account except to the extent that
there has been a decrease in Partnership Minimum Gain and (2)
Partner Nonrecourse Deductions shall not be taken into account
except to the extent that there has been a decrease in Partner
Nonrecourse Debt Minimum Gain. Allocations pursuant to this
Section 6.1(d)(ix)(A) shall only be made with respect to
Required Allocations to the extent the General Partner
reasonably determines that such allocations will otherwise be
inconsistent with the economic agreement among the Partners.
Further, allocations pursuant to this Section 6.1(d)(ix)(A)
shall be deferred with respect to allocations pursuant to
clauses (1) and (2) hereof to the extent the General Partner
reasonably determines that such allocations are likely to be
offset by subsequent Required Allocations.
(B) The General Partner shall have reasonable discretion, with respect to each taxable period, to (1) apply the provisions of Section 6.1(d)(ix)(A) in whatever order is most likely to minimize the economic distortions that might otherwise result from the Required Allocations, and (2) divide all allocations pursuant to Section 6.1(d)(ix)(A) among the Partners in a manner that is likely to minimize such economic distortions.
Section 6.2 Allocations for Tax Purposes.
(a) Except as otherwise provided herein, for federal income tax purposes, each item of income, gain, loss and deduction shall be allocated among the Partners in the same manner as its correlative item of "book" income, gain, loss or deduction is allocated pursuant to Section 6.1.
(b) In an attempt to eliminate Book-Tax Disparities attributable to a Contributed Property or Adjusted Property, items of income, gain, loss, depreciation, amortization and cost recovery deductions shall be allocated for federal income tax purposes among the Partners as follows:
(i) (A) In the case of a Contributed Property, such items
attributable thereto shall be allocated among the Partners in the
manner provided under Section 704(c) of the Code that takes into
account the variation between the Agreed Value of such property and its
adjusted basis at the time of contribution; and (B) any item of
Residual Gain or Residual Loss attributable to a Contributed Property
shall be allocated among the Partners in the same manner as its
correlative item of "book" gain or loss is allocated pursuant to
Section 6.1.
(ii) (A) In the case of an Adjusted Property, such items shall (1) first, be allocated among the Partners in a manner consistent with the principles of Section 704(c) of the Code to take into account the Unrealized Gain or Unrealized Loss attributable to such property and the allocations thereof pursuant to Section 5.5(d)(i) or 5.5(d)(ii), and (2) second, in the event such property was originally a Contributed Property, be allocated among the Partners in a manner consistent with Section 6.2(b)(i)(A); and (B) any item of Residual Gain or Residual Loss attributable to an Adjusted Property shall be allocated among the Partners in the same manner as its correlative item of "book" gain or loss is allocated pursuant to Section 6.1.
(iii) The General Partner shall apply the principles of Treasury Regulation Section 1.704-3(d) to eliminate Book-Tax Disparities.
(c) For the proper administration of the Partnership and for the preservation of uniformity of the Units or other limited partner interests of the MLP (or any class or classes thereof), the General Partner shall have sole discretion to (i) adopt such conventions as it deems appropriate in determining the amount of depreciation, amortization and cost recovery deductions; (ii) make special allocations for federal income tax purposes of income (including, without limitation, gross income) or deductions; and (iii) amend the provisions of this Agreement as appropriate (x) to reflect the proposal or promulgation of Treasury Regulations under Section
704(b) or Section 704(c) of the Code or (y) otherwise to preserve or achieve
uniformity of the Units or other limited partner interests of the MLP (or any
class or classes thereof). The General Partner may adopt such conventions, make
such allocations and make such amendments to this Agreement as provided in this
Section 6.2(c) only if such conventions, allocations or amendments would not
have a material adverse effect on the Partners, the holders of any class or
classes of Units or other limited partner interests of the MLP issued and
outstanding or the Partnership, and if such allocations are consistent with the
principles of Section 704 of the Code.
(d) The General Partner in its discretion may determine to depreciate or amortize the portion of an adjustment under Section 743(b) of the Code attributable to unrealized appreciation in any Adjusted Property (to the extent of the unamortized Book-Tax Disparity) using a predetermined rate derived from the depreciation or amortization method and useful life applied to the Partnership's common basis of such property, despite any inconsistency of such approach with Treasury Regulation Section 1.167(c)-l(a)(6) or any successor regulations thereto. If the General Partner determines that such reporting position cannot reasonably be taken, the General Partner may adopt depreciation and amortization conventions under which all purchasers acquiring limited partner interests of the MLP in the same month would receive depreciation and amortization deductions, based upon the same applicable rate as if they had purchased a direct interest in the Partnership's property. If the General Partner chooses not to utilize such aggregate method, the General Partner may use any other reasonable depreciation and amortization conventions to preserve the uniformity of the intrinsic tax characteristics of any limited partner interests of the MLP that would not have a material adverse effect on the Partners or the holders of any class or classes of limited partner interests of the MLP.
(e) Any gain allocated to the Partners upon the sale or other
taxable disposition of any Partnership asset shall, to the extent possible,
after taking into account other required allocations of gain pursuant to this
Section 6.2, be characterized as Recapture Income in the same proportions and to
the same extent as such Partners (or their predecessors in interest) have been
allocated any deductions directly or indirectly giving rise to the treatment of
such gains as Recapture Income.
(f) All items of income, gain, loss, deduction and credit recognized by the Partnership for federal income tax purposes and allocated to the Partners in accordance with the provisions hereof shall be determined without regard to any election under Section 754 of the Code that may be made by the Partnership; provided, however, that such allocations, once made, shall be adjusted as necessary or appropriate to take into account those adjustments permitted or required by Sections 734 and 743 of the Code.
(g) The General Partner may adopt such methods of allocation of income, gain, loss or deduction between a transferor and a transferee of a Partnership Interest as it determines necessary or appropriate in its sole discretion, to the extent permitted or required by Section 706 of the Code and the regulations or rulings promulgated thereunder.
(h) Allocations that would otherwise be made to a Partner under the provisions of this Article VI shall instead be made to the beneficial owner of Partnership Interests held by a nominee in any case in which the nominee has furnished the identity of such
owner to the Partnership in accordance with Section 6031(c) of the Code or any other method acceptable to the General Partner in its sole discretion.
Section 6.3 Distributions.
(a) Within 45 days following the end of each Quarter commencing with the Quarter ending on September 30, 2002, an amount equal to 100% of Available Cash with respect to such Quarter shall, subject to Section 17-607 of the Delaware Act, be distributed in accordance with this Article VI by the Partnership to the Partners in accordance with their respective Percentage Interests. The immediately preceding sentence shall not require any distribution of cash if and to the extent such distribution would be prohibited by applicable law or by any loan agreement, security agreement, mortgage, debt instrument or other agreement or obligation to which the Partnership is a party or by which it is bound or its assets are subject. All distributions required to be made under this Agreement shall be made subject to Section 17-607 of the Delaware Act.
(b) In the event of the dissolution and liquidation of the Partnership, all receipts received during or after the Quarter in which the Liquidation Date occurs, 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 shall have the discretion to treat taxes paid by the Partnership on behalf of, or amounts withheld with respect to, all or less than all of the Partners, as a distribution of Available Cash to such Partners.
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 or Assignee 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, in its sole discretion, may deem
necessary or appropriate to conduct the business of the Partnership, to exercise
all powers set forth in Section 2.5 and to effectuate the purposes set forth in
Section 2.4, including the following:
(i) the making of any expenditures, the lending or borrowing of money, the assumption or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance of evidences of indebtedness, including indebtedness that is convertible into a Partnership Interest, 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);
(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, the lending of funds to other Persons (including the MLP and any member of the Partnership Group); the repayment of obligations of the MLP or any member 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 such insurance for the benefit of the Partnership Group and the Partners as it deems necessary or appropriate;
(ix) the formation of, or acquisition of an interest in, and the contribution of property and the making of loans to, any further limited or general partnerships, joint ventures, corporations, limited liability companies or other relationships 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 and the incurring of legal expense and the settlement of claims and litigation; and
(xi) the indemnification of any Person against liabilities and contingencies to the extent permitted by law.
(b) Notwithstanding any other provision of this Agreement, the MLP Agreement, the Delaware Act or any applicable law, rule or regulation, each of the Partners and the Assignees and each other Person who may acquire an interest in the Partnership 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 and the other agreements and documents 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, as applicable, 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 Assignees or the other Persons who may acquire an interest in the Partnership; and (iii) agrees that the execution, delivery or performance by the General Partner, the MLP, 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 has caused the Certificate of Limited Partnership to be filed with the Secretary of State of the State of Delaware as required by the Delaware Act. The General Partner shall use all reasonable efforts to cause to be filed such other certificates or documents as may be determined by the General Partner in its sole discretion to be reasonable and necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware or any other state in which the Partnership may elect to do business or own property. To the extent that such action is determined by the General Partner in its sole discretion to be reasonable and necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate of Limited Partnership and do all things to maintain the Partnership as a limited partnership (or a partnership or other entity in which the limited partners have limited liability) under the laws of the State of Delaware or of any other state in which the Partnership may elect to do business or own property. 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 or Assignee.
Section 7.3 Restrictions on the General Partner's Authority.
(a) The General Partner may not, without written approval of
the specific act by the Limited Partners or by other written instrument executed
and delivered by the Limited Partners subsequent to the date of this Agreement,
take any action in contravention of this Agreement, including, except as
otherwise provided in this Agreement, (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 General
Partner Interest.
(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 Partnership's assets in a single transaction or a series of related transactions (including by way of merger, consolidation or other combination) or approve on behalf of the Partnership the sale, exchange or other disposition of all or substantially all of the assets of the Partnership, without the approval of the Limited Partners; 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 and shall not apply to any forced sale of any or all of the assets of the Partnership pursuant to the foreclosure of, or other realization upon, any such encumbrance.
Section 7.4 Reimbursement of the General Partner.
(a) Except as provided in this Section 7.4 and elsewhere in this Agreement or in the Omnibus Agreement, the General Partner shall not be compensated for its services as General Partner or as general partner or managing member of any Group Member.
(b) The General Partner shall be reimbursed on a monthly basis, or such other reasonable basis as the General Partner may determine in its sole discretion, 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 necessary or appropriate expenses allocable to the Partnership or otherwise reasonably incurred by the General Partner in connection with operating the Partnership's business (including expenses allocated to the General Partner by its Affiliates). The General Partner shall determine the expenses that are allocable to the Partnership in any reasonable manner determined by the General Partner in its sole discretion. 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) Subject to Section 5.7, the General Partner, in its sole discretion and without the approval of the Limited Partners (who shall have no right to vote in respect thereof), may propose and adopt on behalf of the Partnership employee benefit plans, employee programs and employee practices, or cause the Partnership to issue Partnership Interests 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. Expenses incurred by the General Partner in connection with any 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 4.2.
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 the General Partner of the Partnership and a general partner or managing member, as the case may be, of any other partnership or limited liability company of which the Partnership is, directly or indirectly, a partner or member, and to undertake activities that are ancillary or related thereto, and (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 of the Partnership or 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.
(b) Except as specifically restricted by Section 7.5(a) and 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 the MLP or any Group Member, independently or with others, including business interests and activities in direct competition with the business and activities of the MLP or any Group Member, and none of the same shall constitute a breach of this Agreement or any duty express or implied by law to the MLP or any Group Member or any Partner or Assignee. Neither the MLP nor any Group Member, any Limited Partner nor any other Person shall have any rights by virtue of this Agreement, the MLP Agreement or the partnership relationship established hereby or thereby in any business ventures of any Indemnitee.
(c) Subject to the terms of Section 7.5(a), Section 7.5(b) and
the Omnibus Agreement, but otherwise notwithstanding anything to the contrary in
this Agreement, (i) the engaging in competitive activities by any Indemnitee
(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 the General Partner's fiduciary duty or
any other obligation of any type whatsoever of the General Partner 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 Indemnitees shall
have no obligation to present business opportunities to the Partnership.
(d) The General Partner and any of its Affiliates may acquire Units or other MLP Securities in addition to those acquired on the Closing Date and, except as otherwise provided in this Agreement, shall be entitled to exercise all rights relating to such Units or MLP Securities.
(e) The term "Affiliates" when used in Section 7.5(a) and
Section 7.5(d) with respect to the General Partner shall not include any Group
Member or any Subsidiary of the MLP or any Group Member.
(f) Anything in this Agreement to the contrary notwithstanding, to the extent that provisions of Sections 7.7, 7.8, 7.9, 7.10 or other Sections of this Agreement purport or are interpreted to have the effect of restricting the fiduciary duties that might otherwise, as a result of
Delaware 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; Contracts with Affiliates; Certain Restrictions on the General Partner.
(a) The General Partner or any of its Affiliates may lend to the Partnership, the MLP or any Group Member, and the Partnership, the MLP or any Group Member may borrow from the General Partner or any of its Affiliates, funds needed or desired by the MLP or 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). The borrowing party shall reimburse the lending party for any costs (other than any additional interest costs) incurred by the lending party in connection with the borrowing of such funds. For purposes of this Section 7.6(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 established in the sole discretion of the General Partner; provided, however, that the Partnership may not charge the Group Member interest at a rate less than the rate that would be charged to the Group Member (without reference to the General Partner's financial abilities or guarantees) by unrelated lenders on comparable loans. The foregoing authority shall be exercised by the General Partner in its sole discretion and shall not create any right or benefit in favor of any Group Member or any other Person.
(c) The General Partner may itself, or may enter into an agreement with the MLP General Partner or any of its Affiliates to, render services to a Group Member or to the General Partner in the discharge of its duties as general partner of the Partnership. Any services rendered to a Group Member by the General Partner, the MLP General Partner or any of their Affiliates shall be on terms that are fair and reasonable to the Partnership; provided, however, that the requirements of this Section 7.6(c) shall be deemed satisfied as to (i) any transaction approved by Special Approval, (ii) any transaction, the terms of which are no less favorable to the Partnership Group than those generally being provided to or available from unrelated third parties or (iii) any transaction that, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to the Partnership Group), is equitable to the Partnership Group. The provisions of Section 7.4 shall apply to the rendering of services described in this Section 7.6(c).
(d) The Partnership Group may transfer assets to joint ventures, other partnerships, corporations, limited liability companies or other business entities in which it is or
thereby becomes a participant upon such terms and subject to such conditions as are consistent with this Agreement and applicable law.
(e) Neither the General Partner nor any of its Affiliates shall sell, transfer or convey any property to, or purchase any property from, the Partnership, directly or indirectly, except pursuant to transactions that are fair and reasonable to the Partnership; provided, however, that the requirements of this Section 7.6(e) shall be deemed to be satisfied as to (i) the transactions effected pursuant to Sections 5.2 and 5.3, the Contribution Agreement and any other transactions described in or contemplated by the Registration Statement, (ii) any transaction approved by Special Approval, (iii) any transaction, the terms of which are no less favorable to the Partnership than those generally being provided to or available from unrelated third parties, or (iv) any transaction that, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to the Partnership Group), is equitable to the Partnership.
(f) The General Partner and its Affiliates will have no obligation to permit any Group Member to use any facilities or assets of the General Partner and its Affiliates, except as may be provided in contracts entered into from time to time specifically dealing with such use, nor shall there be any obligation on the part of the General Partner or its Affiliates to enter into such contracts.
(g) Without limitation of Sections 7.6(a) through 7.6(f), and 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.
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 in each case the Indemnitee acted in good faith and in a manner that such Indemnitee reasonably believed to be in, or (in the case of a Person other than the General Partner) not opposed to, the best interests of the Partnership and, with respect to any criminal proceeding, had no reasonable cause to believe its conduct was unlawful; provided, further, no indemnification pursuant to this Section 7.7 shall be available to the General Partner with respect to its obligations incurred pursuant to the Underwriting Agreement or the Contribution Agreement (other than obligations incurred by the General Partner on behalf of the Partnership). The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that the Indemnitee acted in a manner contrary to that specified above. Any indemnification pursuant to this Section 7.7 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 the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined that the Indemnitee is not entitled to be indemnified as authorized in this Section 7.7.
(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 Partners, as a matter of law or otherwise, both as to actions in the Indemnitee's capacity as an Indemnitee and as to actions in any other capacity (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 interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose that is in, or not opposed to, 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.
(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, the Assignees or any other Persons who have acquired interests in the Units or other MLP Securities, for losses sustained or liabilities incurred as a result of any act or omission if such Indemnitee acted in good faith.
(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. The provisions of this Agreement, to the extent that they restrict or otherwise modify the duties and liabilities of an Indemnitee otherwise existing at law or in equity, are agreed by the Partners to replace such other duties and liabilities of such Indemnitee.
(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 to the Partnership, the Limited Partners, the General Partner, and the Partnership's and General Partner's directors, officers and employees 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.
(a) Unless otherwise expressly provided in this Agreement or the MLP Agreement, whenever a potential conflict of interest exists or arises between the General Partner or any of its Affiliates, on the one hand, and the Partnership, the MLP, any Partner or any Assignee, 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 the MLP 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 is, or by operation of this Agreement is deemed to be, fair and reasonable 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 received Special Approval. Any Special Approval shall be subject to the presumption that, in making its decision, the Conflicts Committee acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the Partnership and the MLP and, in any proceeding brought by any Limited Partner or by or on behalf of such Limited Partner or any other Limited Partners or the Partnership challenging such approval, the Person bringing or prosecuting such proceeding shall have the burden of overcoming such presumption. Any conflict of interest and any resolution of such conflict of interest shall be conclusively deemed fair and reasonable to the Partnership if such conflict of interest or resolution is (i) approved by Special Approval, (ii) on terms no less favorable to the Partnership than those generally being provided to or available from unrelated third parties or (iii) fair to the Partnership, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to the Partnership). The General Partner may also adopt a resolution or course of action that has not received Special Approval. The General Partner shall be authorized in connection with its determination of what is "fair and reasonable" to the Partnership and in connection with its resolution of any conflict of interest to consider (A) the relative interests of any party to such conflict, agreement, transaction or situation and the benefits and burdens relating to such interest; (B) any customary or accepted industry practices and any customary or historical dealings with a particular Person; (C) any applicable generally accepted accounting practices or principles; and (D) such additional factors as the General Partner determines in its sole discretion to be relevant, reasonable or appropriate under the circumstances. In any proceeding brought by any Limited Partner or by or on behalf of such Limited Partner or any other Limited Partners or the Partnership alleging that such a resolution by the General Partner is not fair to the Partnership, such Limited Partner shall have the burden of proof of overcoming such conclusion. Nothing contained in this Agreement, however, is intended to nor shall it be construed to require the General Partner to consider the interests of any Person other than the Partnership. In the absence of bad faith by the General Partner, the resolution, action or terms so made, taken or provided by the General Partner with respect to such matter shall not constitute a breach of this Agreement or any other agreement contemplated herein or a breach of any standard of care or duty imposed herein or therein or, to the extent permitted by law, under the Delaware Act or any other law, rule or regulation.
(b) Whenever this Agreement or any other agreement contemplated hereby provides that the General Partner or any of its Affiliates is permitted or required to make a decision (i) in its "sole discretion" or "discretion," that it deems "necessary or appropriate" or "necessary or advisable" or under a grant of similar authority or latitude, except as otherwise provided herein, the General Partner or such Affiliate shall be entitled to consider only such interests and factors as it desires and shall have no duty or obligation to give any consideration to any interest of, or factors affecting, the Partnership, the MLP, any Limited Partner or any Assignee, (ii) it may make such decision in its sole discretion (regardless of whether there is a reference to "sole discretion" or "discretion") unless another express standard is provided for, or
(iii) in "good faith" or under another express standard, the General Partner or such Affiliate shall act under such express standard and shall not be subject to any other or different standards imposed by this Agreement, the MLP Agreement, any other agreement contemplated hereby or under the Delaware Act or any other law, rule or regulation. In addition, any actions taken by the General Partner or such Affiliate consistent with the standards of "reasonable discretion" set forth in the definition of Available Cash shall not constitute a breach of any duty of the General Partner to the Partnership or the Limited Partners. The General Partner shall have no duty, express or implied, to sell or otherwise dispose of any asset of the Partnership Group other than in the ordinary course of business. No borrowing by any Group Member or the approval thereof by the General Partner shall be deemed to constitute a breach of any duty of the General Partner 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 (A) enable distributions to the General Partner or its Affiliates to exceed 0.01% of the total amount distributed to all Partners or (B) hasten the expiration of the Subordination Period or the conversion of any Subordinated Units into Common Units.
(c) Whenever a particular transaction, arrangement or resolution of a conflict of interest is required under this Agreement to be "fair and reasonable" to any Person, the fair and reasonable nature of such transaction, arrangement or resolution shall be considered in the context of all similar or related transactions.
(d) The Limited Partner hereby authorizes 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.
(d) Any standard of care and duty imposed by this Agreement or under the Delaware Act or any applicable law, rule or regulation shall be modified, waived or limited, to the extent permitted by law, as required to permit the General Partner to act under this
Agreement or any other agreement contemplated by this Agreement and to make any decision pursuant to the authority prescribed in this Agreement, so long as such action is reasonably believed by the General Partner to be in, or not inconsistent with, the best interests of the Partnership.
Section 7.11 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 the 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 AND ACCOUNTING
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 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. The fiscal year of the Partnership shall be a fiscal year ending December 31.
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 federal, state and local income tax purposes on the basis of the accrual method and a taxable year ending on December 31. The tax information reasonably required by the Partners for federal and state income tax reporting purposes with respect to a taxable year shall be furnished to them within 90 days of the close of the calendar year in which the Partnership's taxable year ends. The classification, realization and recognition of income, gain, losses and deductions and other items shall be on the accrual method of accounting for federal income tax purposes.
Section 9.2 Tax Elections.
(a) To the extent applicable for federal income tax purposes, the Partnership shall make the election under Section 754 of the Code in accordance with applicable regulations thereunder, subject to the reservation of the right to seek to revoke any such election upon the General Partner's determination that such revocation is in the best interests of the Limited Partners.
(b) To the extent applicable for federal income tax purposes, the Partnership shall elect to deduct expenses incurred in organizing the Partnership ratably over a sixty-month period as provided in Section 709 of the Code.
(c) Except as otherwise provided herein, the General Partner shall determine whether the Partnership should make any other elections permitted by the Code.
Section 9.3 Tax Controversies. Subject to the provisions hereof, the General Partner is designated as the Tax Matters Partner (as defined in the Code) and is authorized and required to represent the Partnership (at the Partnership's expense) in connection with all examinations of the Partnership's affairs by tax authorities, including resulting administrative and judicial proceedings, and to expend Partnership funds for professional services and costs associated therewith. Each Partner agrees to cooperate with the General Partner and to do or refrain from doing any or all things reasonably required by the General Partner to conduct such proceedings.
Section 9.4 Withholding. Notwithstanding any other provision
of this Agreement, the General Partner is authorized to take any action that it
determines in its discretion to be necessary or appropriate to cause the
Partnership to comply with any withholding requirements established under the
Code or any other federal, state or local law including, without limitation,
pursuant to Sections 1441, 1442, 1445 and 1446 of the Code. To the extent that
the Partnership is required or elects to withhold and pay over to any taxing
authority any amount resulting from the allocation or distribution of income to
any Partner or Assignee (including, without limitation, by reason of Section
1446 of the Code), the amount withheld may at the discretion of the General
Partner be treated by the Partnership as a distribution of cash pursuant to
Section 6.3 in the amount of such withholding from such Partner.
ARTICLE X
ADMISSION OF PARTNERS
Section 10.1 Admission of Partners. Upon the consummation of the transfers and conveyances described in Section 5.2, the General Partner shall be the sole general partner of the Partnership and the MLP shall be the sole limited partner of the Partnership.
Section 10.2 Admission of Substituted Limited Partner. By transfer of a Limited Partner Interest in accordance with Article IV, the transferor shall be deemed to have given the transferee the right to seek admission as a Substituted Limited Partner subject to the conditions of, and in the manner permitted under, this Agreement. A transferor of a Limited Partner Interest shall, however, only have the authority to convey to a purchaser or other transferee (a) the right to negotiate such Limited Partner Interest to a purchaser or other transferee and (b) the right to request admission as a Substituted Limited Partner to such purchaser or other transferee in respect of the transferred Limited Partner Interests. Each transferee of a Limited Partner Interest shall be an Assignee and be deemed to have applied to become a Substituted Limited Partner with respect to the Limited Partner Interests so transferred to such Person. Such Assignee shall become a Substituted Limited Partner (x) at such time as the General Partner consents thereto, which consent may be given or withheld in the General Partner's discretion, and (y) when any such admission is shown on the books and records of the Partnership. If such consent is withheld, such transferee shall remain an Assignee. An Assignee shall have an interest in the Partnership equivalent to that of a Limited Partner with respect to allocations and distributions, including liquidating distributions, of the Partnership. With respect to voting rights attributable to Limited Partner Interests that are held by Assignees, the General Partner shall be deemed to be the Limited Partner with respect thereto and shall, in exercising the voting rights in respect of such Limited Partner Interests on any matter, vote such Limited Partner Interests at the written direction of the Assignee. If no such written direction is received, such Partnership Interests will not be voted. An Assignee shall have no other rights of a Limited Partner.
Section 10.3 Admission of Additional Limited Partners.
(a) A Person (other than the General Partner, the MLP or a Substituted Limited Partner) who makes a Capital Contribution to the Partnership in accordance with this Agreement shall be admitted to the Partnership as an Additional Limited Partner only upon furnishing to the General Partner:
(i) evidence of acceptance in form satisfactory to the General Partner of all of the terms and conditions of this Agreement, including the power of attorney granted in Section 2.6, and
(ii) such other documents or instruments as may be required in the discretion of the General Partner to effect such Person's admission as an Additional Limited Partner.
(b) Notwithstanding anything to the contrary in this Section 10.3, no Person shall be admitted as an Additional Limited Partner without the consent of the General Partner, which consent may be given or withheld in the General Partner's discretion. The admission of
any Person as an Additional Limited Partner shall become effective on the date upon which the name of such Person is recorded as such in the books and records of the Partnership, following the consent of the General Partner to such admission.
Section 10.4 Admission of Successor or Transferee General Partner. A successor General Partner approved pursuant to Section 11.1 or 11.2 or the transferee of or successor to all of the General Partner's Partnership Interest pursuant to Section 4.2 who is proposed to be admitted as a successor General Partner shall, subject to compliance with the terms of Section 11.3, if applicable, 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 4.2, provided, however, that no such successor shall be admitted to the Partnership until compliance with the terms of Section 4.2 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 10.5 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 and appropriate under the Delaware Act to amend the records of the Partnership to reflect such admission and, if necessary, to prepare as soon as practicable an amendment to this Agreement and, if required by law, the General Partner shall prepare and file an amendment to the Certificate of Limited Partnership, and the General Partner may for this purpose, among others, exercise the power of attorney granted pursuant to Section 2.6.
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 4.2;
(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 bankruptcy petition for relief under Chapter 7 of the United States Bankruptcy Code; (C) files a petition or answer seeking for itself a liquidation, dissolution or similar relief (but not a reorganization) under any law; (D) files an answer or other pleading admitting or failing to contest the material allegations of a
petition filed against the General Partner in a proceeding of the type described in clauses (A)-(C) of this Section 11.1(a)(iv); or (E) seeks, consents to or acquiesces in the appointment of a trustee (but not a debtor-in-possession), receiver or liquidator of the General Partner or of all or any substantial part of its properties;
(v) A final and non-appealable order of relief under Chapter 7 of the United States Bankruptcy Code is entered by a court with appropriate jurisdiction pursuant to a voluntary or involuntary petition by or against the General Partner; or
(vi) (A) in the event the General Partner is a corporation, a certificate of dissolution or its equivalent is filed for the General Partner, or 90 days expire after the date of notice to the General Partner of revocation of its charter without a reinstatement of its charter, under the laws of its state of incorporation; (B) in the event the General Partner is a partnership or 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), (v) or
(vi)(A), (B), (C) or (E) occurs, the withdrawing General Partner shall give
notice to the Limited Partners within 30 days after such occurrence. The
Partners hereby agree that only the Events of Withdrawal described in this
Section 11.1 shall result in the withdrawal of the General Partner from the
Partnership.
(b) Withdrawal of the General Partner from the Partnership
upon the occurrence of an Event of Withdrawal shall not constitute a breach of
this Agreement under the following circumstances: (i) at any time during the
period beginning on the Closing Date and ending at 12:00 midnight, Eastern
Standard Time, on September 30, 2012, the General Partner voluntarily withdraws
by giving at least 90 days' advance notice of its intention to withdraw to the
Limited Partners; provided that prior to the effective date of such withdrawal,
the withdrawal is approved by the Limited Partners and the General Partner
delivers to the Partnership an Opinion of Counsel ("Withdrawal Opinion of
Counsel") that such withdrawal (following the selection of the successor General
Partner) would not result in the loss of the limited liability of any Limited
Partner or of the limited partners of the MLP or cause the Partnership or the
MLP to be treated as an association taxable as a corporation or otherwise to be
taxed as an entity for federal income tax purposes (to the extent not previously
treated as such); (ii) at any time after 12:00 midnight, Eastern Standard Time,
on September 30, 2012, the General Partner voluntarily withdraws by giving at
least 90 days' advance notice to the Limited Partners, such withdrawal to take
effect on the date specified in such notice; (iii) at any time that the General
Partner ceases to be the General Partner pursuant to Section 11.1(a)(ii) or
(iii). If the General Partner gives a notice of withdrawal pursuant to Section
11.1(a)(i) hereof, the Limited Partners may, prior to the effective date of such
withdrawal, elect a successor General Partner. If, prior to the effective date
of the General Partner's withdrawal, a successor is not selected by the Limited
Partners as provided herein or the Partnership does not receive a Withdrawal
Opinion of Counsel, the Partnership shall be dissolved in accordance with
Section 12.1. Any successor General Partner
elected in accordance with the terms of this Section 11.1 shall be subject to the provisions of Section 10.3.
Section 11.2 Removal of the General Partner. The General Partner may be removed by the MLP. Upon the removal of the General Partner by the MLP, the MLP shall elect a successor general partner for the Partnership. The admission of any such successor General Partner to the Partnership shall be subject to the provisions of Section 10.3.
Section 11.3 Interest of Departing Partner.
(a) The Partnership Interest of the Departing Partner departing as a result of withdrawal or removal pursuant to Section 11.1 or 11.2 shall be purchased by the successor to the Departing Partner for an amount in cash equal to the fair market value of such Partnership Interest, such amount to be determined and payable as of the effective date of the Departing Partner's departure. Such purchase shall be a condition to the admission to the Partnership of the successor as the General Partner. Any successor General Partner shall indemnify the Departing Partner as to all debts and liabilities of the Partnership arising on or after the effective date of the withdrawal or removal of the Departing Partner.
For purposes of this Section 11.3(a), the fair market value of the Departing Partner's General Partner 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 General Partner Interest of the Departing Partner. In making its determination, such third independent investment banking firm or other independent expert may consider the value of the Partnership's assets, the rights and obligations of the Departing Partner and other factors it may deem relevant.
(b) 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 such Departing Partner for the benefit of the Partnership.
Section 11.4 Withdrawal of a Limited Partner. Without the prior written consent of the General Partner, which may be granted or withheld in its sole discretion, and except as provided in Section 10.1, no Limited Partner shall have the right to withdraw from the Partnership.
ARTICLE XII
DISSOLUTION AND LIQUIDATION
Section 12.1 Dissolution. The Partnership shall not be dissolved by the admission of Substituted Limited Partners or Additional Limited Partners or by the admission of a successor General Partner in accordance with the terms of this Agreement. Upon the removal or withdrawal of the General Partner, if a successor General Partner is elected pursuant to Section 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 Event of Withdrawal of the General Partner as provided in Section 11.1(a) (other than Section 11.1(a)(ii)), unless a successor is elected and an Opinion of Counsel is received as provided in Section 11.1(b) or 11.2 and such successor is admitted to the Partnership pursuant to Section 10.4;
(b) an election to dissolve the Partnership by the General Partner that is approved by all of the Limited Partners;
(c) the entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Delaware Act;
(d) the sale of all or substantially all of the assets and properties of the Partnership Group; or
(e) the dissolution of the MLP.
Section 12.2 Continuation of the Business of the Partnership After Dissolution. Upon dissolution of the Partnership following an Event of Withdrawal caused by the withdrawal or removal of the General Partner as provided in Section 11.1(a)(i) or (iii) and the failure of the Partners to select a successor to such Departing Partner pursuant to Section 11.1 or 11.2, then within 90 days thereafter, all of the Limited Partners may elect to reconstitute the Partnership and continue its business on the same terms and conditions set forth in this Agreement by forming a new limited partnership on terms identical to those set forth in this Agreement and having as a general partner a Person approved by a majority in interest of the Limited Partners. In addition, upon dissolution of the Partnership pursuant to Section 12.1(e), if the MLP is reconstituted pursuant to Section 12.2 of the MLP Agreement, the reconstituted MLP may, within 180 days after such event of dissolution, acting alone, regardless of whether there are any other Limited Partners, elect to reconstitute the Partnership in accordance with the immediately preceding sentence. Upon any such election by the Limited Partners or the MLP, as the case may be, all Partners shall be bound thereby and shall be deemed to have approved same. 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:
(a) the reconstituted Partnership shall continue unless earlier dissolved in accordance with this Article XII;
(b) if the successor General Partner is not the former General Partner, then the interest of the former General Partner shall be purchased by the successor General Partner; and
(c) all necessary steps shall be taken to cancel this Agreement and the Certificate of Limited Partnership and to enter into and, as necessary, to file, a new partnership agreement and certificate of limited partnership, and the successor General Partner may for this purpose exercise the powers of attorney granted the General Partner pursuant to Section 2.6; provided, that the right 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 (x) the exercise of the right would not result in the loss of limited liability of the Limited Partners or any limited partner of the MLP and (y) neither the Partnership, the reconstituted limited partnership, the MLP nor any Group Member would be treated as an association taxable as a corporation or otherwise be taxable as an entity for federal income tax purposes upon the exercise of such right to continue.
Section 12.3 Liquidator. Upon dissolution of the Partnership, unless the Partnership is continued under an election to reconstitute and continue the Partnership 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 a majority of the Limited Partners. 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 a majority in interest of the Limited Partners. Upon dissolution, removal or resignation of the Liquidator, a successor and substitute Liquidator (who shall have and succeed to all rights, powers and duties of the original Liquidator) shall within 30 days thereafter be approved by at least a majority in interest of the Limited Partners. The right to approve a successor or substitute Liquidator in the manner provided herein shall be deemed to refer also to any such successor or substitute Liquidator approved in the manner herein provided. Except as expressly provided in this Article XII, the Liquidator approved in the manner provided herein shall have and may exercise, without further authorization or consent of any of the parties hereto, all of the powers conferred upon the 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)) to the extent necessary or desirable in the good faith judgment of the Liquidator to carry out the duties and functions of the Liquidator hereunder for and during such period of time as shall be reasonably required in the good faith judgment of the Liquidator to complete the winding up and liquidation of the Partnership as provided for herein.
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 the
Liquidator determines to be in the best interest of the Partners, subject to
Section 17-804 of the Delaware Act and the following:
(a) Disposition of Assets. The assets may be disposed of by public or private sale or by distribution in kind to one or more Partners on such terms as the Liquidator and such Partner or Partners may agree. If any property is distributed in kind, the Partner receiving the property shall be deemed for purposes of Section 12.4(c) to have received cash equal to its fair market value; and contemporaneously therewith, appropriate cash distributions must be made to
the other Partners. The Liquidator may, in its absolute discretion, 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, in its absolute discretion, 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) Discharge of Liabilities. 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 owed to Partners otherwise than in respect of their distribution rights under Article VI. With respect to any liability that is contingent, conditional or unmatured or is otherwise not yet due and payable, the Liquidator shall either settle such claim for such amount as it thinks appropriate or establish a reserve of cash or other assets to provide for its payment. When paid, any unused portion of the reserve shall be distributed as additional liquidation proceeds.
(c) Liquidation Distributions. All property and all cash in excess of that required to discharge liabilities as provided in Section 12.4(b) shall be distributed to the Partners in accordance with, and to the extent of, the positive balances in their respective Capital Accounts, as determined after taking into account all Capital Account adjustments (other than those made by reason of distributions pursuant to this Section 12.4(c)) for the taxable year of the Partnership during which the liquidation of the Partnership occurs (with such date of occurrence being determined pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of such taxable year (or, if later, within 90 days after said date of such occurrence).
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 Partnership shall be terminated and the Certificate of Limited Partnership, and all qualifications of the Partnership as a foreign limited partnership in jurisdictions other than the State of Delaware, shall be canceled and such other actions as may be necessary to terminate the Partnership shall be taken.
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 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.
Section 12.8 Capital Account Restoration. No Limited Partner shall have any obligation to restore any negative balance in its Capital Account upon liquidation of the Partnership. The General Partner shall be obligated to restore any negative balance in its Capital Account upon liquidation of its interest in the Partnership by the end of the taxable year of the
Partnership during which such liquidation occurs, or, if later, within 90 days after the date of such liquidation.
ARTICLE XIII
AMENDMENT OF PARTNERSHIP AGREEMENT
Section 13.1 Amendment to be Adopted Solely by the General Partner. Each Partner agrees that the General Partner, without the approval of any Partner or Assignee, 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, in the sole discretion of the General Partner, is necessary or advisable to qualify or continue the qualification of the Partnership as a limited partnership or a partnership in which the Limited Partners have limited liability under the laws of any state or to ensure that no Group Member will be treated as an association taxable as a corporation or otherwise taxed as an entity for federal income tax purposes;
(d) a change that, in the discretion of the General Partner,
(i) does not adversely affect the Limited Partners (including any particular
class of Partnership Interests as compared to other classes of Partnership
Interests) in any material respect, (ii) is necessary or advisable to (A)
satisfy any requirements, conditions or guidelines contained in any opinion,
directive, order, ruling or regulation of any federal or state agency or
judicial authority or contained in any federal or state statute (including the
Delaware Act) or (B) facilitate the trading of limited partner interests of the
MLP (including the division of any class or classes of outstanding limited
partner interests of the MLP into different classes to facilitate uniformity of
tax consequences within such classes of limited partner interests of the MLP) or
comply with any rule, regulation, guideline or requirement of any National
Securities Exchange on which such limited partner interests are or will be
listed for trading, compliance with any of which the General Partner determines
in its discretion to be in the best interests of the MLP and the limited
partners of the MLP, (iii) 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 or (iv) is required to conform the
provisions of this Agreement with the provisions of the MLP Agreement as the
provisions of the MLP Agreement may be amended, supplemented or restated from
time to time;
(e) a change in the fiscal year or taxable year of the Partnership and any changes that, in the discretion of the General Partner, are necessary or advisable 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 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 members, directors, officers, trustees or agents from in any manner being subjected to the provisions of the Investment Company Act of 1940, as amended, the Investment Advisers Act of 1940, as amended, or "plan asset" regulations adopted under the Employee Retirement Income Security Act of 1974, as amended, regardless of whether such are substantially similar to plan asset regulations currently applied or proposed by the United States Department of Labor;
(g) any amendment expressly permitted in this Agreement to be made by the General Partner acting alone;
(h) an amendment effected, necessitated or contemplated by a Merger Agreement approved in accordance with Section 14.3;
(i) an amendment that, in the discretion of the General Partner, is necessary or advisable to reflect, account for and deal with appropriately the formation by the Partnership of, or investment by the Partnership in, any corporation, partnership, joint venture, limited liability company or other entity, in connection with the conduct by the Partnership of activities permitted by the terms of Section 2.4;
(j) a merger or conveyance pursuant to Section 14.3(d); or
(k) any other amendments substantially similar to the foregoing.
Section 13.2 Amendment Procedures. Except with respect to
amendments of the type described in Section 13.1, all amendments to this
Agreement shall be made in accordance with the following requirements:
Amendments to this Agreement may be proposed only by or with the consent of the
General Partner, which consent may be given or withheld in its sole discretion.
A proposed amendment shall be effective upon its approval by the Limited
Partners.
ARTICLE XIV
MERGER
Section 14.1 Authority. The Partnership may merge or consolidate with one or more corporations, limited liability companies, business trusts or associations, real estate investment trusts, common law trusts or unincorporated businesses, including a general partnership or limited partnership, formed under the laws of the State of Delaware or any other state of the United States of America, pursuant to a written agreement of merger or consolidation ("Merger Agreement") in accordance with this Article XIV.
Section 14.2 Procedure for Merger or Consolidation. Merger or consolidation of the Partnership pursuant to this Article XIV requires the prior approval of the General Partner. If the General Partner shall determine, in the exercise of its discretion, 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 general or limited partner interests, rights, securities or obligations of the Surviving Business Entity; and (i) if any general or limited partner interests, securities or rights of any constituent business entity are not to be exchanged or converted solely for, or into, cash, property or general or limited partner interests, rights, securities or obligations of the Surviving Business Entity, the cash, property or general or limited partner interests, rights, securities or obligations of any limited partnership, corporation, trust or other entity (other than the Surviving Business Entity) that the holders of such general or limited partner interests, securities or rights are to receive in exchange for, or upon conversion of their general or limited partner interests, securities or rights, and (ii) in the case of securities represented by certificates, upon the surrender of such certificates, which cash, property or general or limited partner interests, rights, securities or obligations of the Surviving Business Entity or any general or limited partnership, corporation, trust or other entity (other than the Surviving Business Entity), or evidences thereof, are to be delivered;
(e) a statement of any changes in the constituent documents or the adoption of new constituent documents (the articles or certificate of incorporation, articles of trust, declaration of trust, certificate or agreement of limited partnership 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 the certificate of merger, the effective time shall be fixed no later than the time of the filing of the certificate of merger and stated therein); and
(g) such other provisions with respect to the proposed merger or consolidation as are deemed necessary or appropriate by the General Partner.
Section 14.3 Approval by Limited Partners of Merger or Consolidation.
(a) Except as provided in Section 14.3(d), the General Partner, upon its approval of the Merger Agreement, shall direct that the Merger Agreement be submitted to a vote of the 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 Section 14.3(d), the Merger Agreement shall be approved upon receiving the affirmative vote or consent of the Limited Partners.
(c) Except as provided in Section 14.3(d), 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, in its discretion,
without Limited Partner approval, to merge the Partnership or any Group Member
into, or convey all of the Partnership's assets to, another limited liability
entity that shall be newly formed and shall have no assets, liabilities or
operations at the time of such Merger 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 merger or conveyance, as the case may be, would not
result in the loss of the limited liability of any Limited Partner or any
limited partner in the MLP or cause the Partnership or the MLP to be treated as
an association taxable as a corporation or otherwise to be taxed as an entity
for federal income tax purposes (to the extent not previously treated as such),
(ii) the sole purpose of such merger or conveyance is to effect a mere change in
the legal form of the Partnership into another limited liability entity and
(iii) the governing instruments of the new entity provide the Limited Partners
and the General Partner with substantially the same rights and obligations as
are herein contained.
Section 14.4 Certificate of Merger. Upon the required approval by the General Partner and the Limited Partners of a Merger Agreement, a certificate of merger shall be executed and filed with the Secretary of State of the State of Delaware in conformity with the requirements of the Delaware Act.
Section 14.5 Effect of Merger.
(a) At the effective time of the certificate of merger:
(i) all of the rights, privileges and powers of each of the business entities that has merged or consolidated, and all property, real, personal and mixed, and all debts due to any of those business entities and all other things and causes of action belonging to each of those business entities, shall be vested in the Surviving Business Entity and after the merger or consolidation shall be the property of the Surviving Business Entity to the extent they were of each constituent business entity;
(ii) the title to any real property vested by deed or otherwise in any of those constituent business entities shall not revert and is not in any way impaired because of the merger or consolidation;
(iii) all rights of creditors and all liens on or security interests in property of any of those constituent business entities shall be preserved unimpaired; and
(iv) all debts, liabilities and duties of those constituent business entities shall attach to the Surviving Business Entity and may be enforced against it to the same extent as if the debts, liabilities and duties had been incurred or contracted by it.
(b) A merger or consolidation effected pursuant to this Article shall not be deemed to result in a transfer or assignment of assets or liabilities from one entity to another.
ARTICLE XV
GENERAL PROVISIONS
Section 15.1 Addresses and Notices. Any notice, demand,
request, report or proxy materials required or permitted to be given or made to
a Partner or Assignee 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 or
Assignee at the address appearing on the books and records of the Partnership.
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, Assignee or other Person if
believed by it to be genuine.
Section 15.2 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 15.3 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 15.4 Integration. This Agreement constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and understandings pertaining thereto.
Section 15.5 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 15.6 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 breach of any other covenant, duty, agreement or condition.
Section 15.7 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, independently of the signature of any other party.
Section 15.8 Applicable Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.
Section 15.9 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 15.10 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.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
GENERAL PARTNER:
MARTIN OPERATING GP LLC
By: Martin Midstream Partners, L.P.
Its: Managing Member
By: Martin Midstream GP LLC
Its: General Partner
By: /s/ Robert D. Bondurant -------------------------------------- Robert D. Bondurant Chief Financial Officer |
LIMITED PARTNER:
MARTIN MIDSTREAM PARTNERS L.P.
By: Martin Midstream GP LLC
Its General Partner
By: /s/ Robert D. Bondurant -------------------------------------- Robert D. Bondurant Chief Financial Officer |
EXHIBIT 10.1
EXECUTION COPY
MARTIN OPERATING PARTNERSHIP L.P.,
as the Borrower,
MARTIN MIDSTREAM PARTNERS L.P.,
as a Guarantor
ROYAL BANK OF CANADA,
as Administrative Agent and Collateral Agent
COMERICA BANK-TEXAS,
as Co-Agent
and
The Lenders Party Hereto
$60,000,000
CREDIT AGREEMENT
DATED AS OF NOVEMBER 6, 2002
ROYAL BANK OF CANADA,
as Lead Arranger and Book Runner
[MARTIN MIDSTREAM PARTNERS LOGO] [ROYAL BANK OF CANADA LOGO]
TABLE OF CONTENTS
Page ---- ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS.......................................................................1 Section 1.01 Defined Terms...............................................................................1 Section 1.02 Other Interpretive Provisions..............................................................30 Section 1.03 Accounting Terms...........................................................................31 Section 1.04 Rounding...................................................................................31 Section 1.05 References to Agreements and Laws..........................................................31 ARTICLE II. THE COMMITMENTS AND BORROWINGS.......................................................................31 Section 2.01 Revolver Loans.............................................................................31 Section 2.02 Term Loan Facility.........................................................................32 Section 2.03 Borrowings, Conversions and Continuations of Loans.........................................32 Section 2.04 Prepayments................................................................................33 Section 2.05 Reduction or Termination of Commitments....................................................36 Section 2.06 Repayment of Loans.........................................................................37 Section 2.07 Interest...................................................................................37 Section 2.08 Fees.......................................................................................37 Section 2.09 Computation of Interest and Fees...........................................................38 Section 2.10 Evidence of Debt...........................................................................38 Section 2.11 Payments Generally.........................................................................39 Section 2.12 Sharing of Payments........................................................................40 Section 2.13 Priority of Hedging Obligations............................................................41 Section 2.14 Letters of Credit..........................................................................41 Section 2.15 Swing Line Loans...........................................................................47 ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY..............................................................49 Section 3.01 Taxes......................................................................................49 Section 3.02 Illegality.................................................................................50 Section 3.03 Inability to Determine Rates...............................................................51 Section 3.04 Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans.....51 Section 3.05 Funding Losses.............................................................................52 Section 3.06 Matters Applicable to all Requests for Compensation........................................52 Section 3.07 Survival...................................................................................52 ARTICLE IV. CONDITIONS PRECEDENT TO BORROWINGS...................................................................52 Section 4.01 Conditions to Initial Credit Extension.....................................................52 Section 4.02 Deadline for Conditions Effective Date.....................................................55 Section 4.03 Conditions to all Loans and L/C Credit Extension...........................................55 ARTICLE V. REPRESENTATIONS AND WARRANTIES........................................................................56 Section 5.01 Existence; Qualification and Power; Compliance with Laws...................................56 Section 5.02 Authorization; No Contravention............................................................56 Section 5.03 Governmental Authorization.................................................................57 Section 5.04 Binding Effect.............................................................................57 Section 5.05 Financial Statements; No Material Adverse Effect...........................................57 |
Section 5.06 Litigation.................................................................................57 Section 5.07 No Default.................................................................................57 Section 5.08 Ownership of Property; Liens...............................................................57 Section 5.09 Environmental Compliance...................................................................58 Section 5.10 Insurance..................................................................................58 Section 5.11 Taxes......................................................................................58 Section 5.12 ERISA Compliance...........................................................................58 Section 5.13 Subsidiaries and other Investments.........................................................59 Section 5.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act; Use of Proceeds............................................................................59 Section 5.15 Disclosure.................................................................................59 Section 5.16 Labor Matters..............................................................................59 Section 5.17 Compliance with Laws.......................................................................59 Section 5.18 Third Party Approvals......................................................................60 Section 5.19 Solvency...................................................................................60 Section 5.20 Collateral.................................................................................60 Section 5.21 Concerning the Vessels.....................................................................60 Section 5.22 Intellectual Property; Licenses, etc.......................................................61 ARTICLE VI. AFFIRMATIVE COVENANTS................................................................................61 Section 6.01 Financial Statements.......................................................................61 Section 6.02 Certificates; Other Information............................................................62 Section 6.03 Notices....................................................................................63 Section 6.04 Payment of Obligations.....................................................................63 Section 6.05 Preservation of Existence, Etc.............................................................63 Section 6.06 Maintenance of Assets and Business.........................................................64 Section 6.07 Maintenance of Insurance...................................................................64 Section 6.08 Compliance with Laws and Contractual Obligations...........................................64 Section 6.09 Books and Records..........................................................................64 Section 6.10 Inspection Rights..........................................................................64 Section 6.11 Compliance with ERISA......................................................................65 Section 6.12 Use of Proceeds............................................................................65 Section 6.13 Material Agreements........................................................................65 Section 6.14 Concerning the Vessels.....................................................................65 Section 6.15 Guaranties.................................................................................66 Section 6.16 Company Identity...........................................................................66 Section 6.17 Vessel Mortgages...........................................................................66 Section 6.18 Further Assurances; Additional Collateral..................................................66 ARTICLE VII. NEGATIVE COVENANTS..................................................................................67 Section 7.01 Liens......................................................................................67 Section 7.02 Investments and Acquisitions...............................................................69 Section 7.03 Hedging Agreements.........................................................................70 Section 7.04 Indebtedness...............................................................................70 Section 7.05 Lease Obligations..........................................................................70 Section 7.06 Fundamental Changes........................................................................70 Section 7.07 Dispositions...............................................................................71 Section 7.08 Restricted Payments; Distributions and Redemptions.........................................71 Section 7.09 ERISA......................................................................................72 Section 7.10 Nature of Business; Capital Expenditures...................................................72 Section 7.11 Transactions with Affiliates...............................................................72 |
Section 7.12 Burdensome Agreements......................................................................72 Section 7.13 Use of Proceeds............................................................................72 Section 7.14 Amendments to Material Agreements; Amendment to Omnibus Agreement Administrative Fee.......72 Section 7.15 Financial Covenants........................................................................73 Section 7.16 Capital Expenditures.......................................................................73 Section 7.17 Subordinated Indebtedness..................................................................74 ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES.....................................................................74 Section 8.01 Events of Default..........................................................................74 Section 8.02 Remedies Upon Event of Default.............................................................76 ARTICLE IX. AGENTS...............................................................................................77 Section 9.01 Appointment and Authorization of Administrative Agent and Collateral Agent; Lender Hedging Agreements..................................................................77 Section 9.02 Delegation of Duties.......................................................................78 Section 9.03 Default; Master Consent to Assignment......................................................78 Section 9.04 Liability of Administrative Agent..........................................................80 Section 9.05 Reliance by Administrative Agent...........................................................80 Section 9.06 Notice of Default..........................................................................81 Section 9.07 Credit Decision; Disclosure of Information by Administrative Agent.........................81 Section 9.08 Indemnification of Administrative Agent and the Collateral Agent...........................81 Section 9.09 Administrative Agent and Collateral Agent in their Individual Capacities...................82 Section 9.10 Successor Agents...........................................................................82 Section 9.11 Other Agents; Lead Managers................................................................83 ARTICLE X. MISCELLANEOUS.........................................................................................83 Section 10.01 Amendments, Release of Collateral, Etc................................................83 Section 10.02 Notices and Other Communications; Facsimile Copies....................................85 Section 10.03 No Waiver; Cumulative Remedies........................................................86 Section 10.04 Attorney Costs; Expenses and Taxes....................................................86 Section 10.05 Indemnification.......................................................................87 Section 10.06 Payments Set Aside....................................................................88 Section 10.07 Successors and Assigns................................................................88 Section 10.08 Confidentiality.......................................................................90 Section 10.09 Set-off...............................................................................91 Section 10.10 Interest Rate Limitation..............................................................91 Section 10.11 Counterparts..........................................................................92 Section 10.12 Integration...........................................................................92 Section 10.13 Survival of Representations and Warranties............................................92 Section 10.14 Severability..........................................................................92 Section 10.15 Foreign Lenders.......................................................................92 Section 10.16 Governing Law.........................................................................93 Section 10.17 Waiver of Right to Trial by Jury, Etc.................................................94 Section 10.18 Master Consent to Assignment..........................................................94 Section 10.19 Entire Agreement......................................................................94 SIGNATURES.............................................................................................S-1 |
SCHEDULES
1.01(a) Description of Assumed Indebtedness 1.01(b) Designated Martin Shareholders 1.01(c) Stanolind Terminal Agreements 2.01 Commitments 5.13 Subsidiaries and other Equity Investments 5.21 Vessels 7.01 Existing Liens 10.02 Addresses for Notices to Borrower, Guarantors, Administrative Agent, and Collateral Agent EXHIBITS Exhibit: Form of: A-1 Committed Loan Notice A-2 Conversion/Continuation Notice B-1 Revolver Note B-2 Term Note C Compliance Certificate pursuant to Section 6.02(a) D Assignment and Assumption E-1 Subsidiary Guaranty E-2 Guaranty (MLP) F-1 Legal Opinion of Baker Botts L.L.P. F-2 Post-Closing Legal Opinion of Baker Botts L.L.P. G-1 Borrower Pledge and Security Agreement G-2 Subsidiary Pledge and Security Agreement G-3 MLP Pledge and Security Agreement H Master Consent to Assignment I Borrowing Base Certificate J Swing Line Loan Notice K Fleet Mortgage L Leasehold Mortgage (Tampa Facility) M Deed of Trust (Stanolind Terminal) |
CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of November 6, 2002, among MARTIN OPERATING PARTNERSHIP L.P., a Delaware limited partnership (the "Borrower"), MARTIN MIDSTREAM PARTNERS L.P., a Delaware limited partnership (the "MLP"), each lender from time to time party hereto (collectively, the "Lenders" and individually, a "Lender"), ROYAL BANK OF CANADA, a Canadian chartered bank under and governed by the provisions of the Bank Act, being S.C. 1991, c.46, as Administrative Agent and Collateral Agent, and COMERICA BANK-TEXAS, a Texas State Bank, as Co-Agent.
The Borrower has requested that the Lenders provide a secured term loan facility and a secured revolving credit facility, and the Lenders are willing to do so on the terms and conditions set forth herein.
In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 DEFINED TERMS. As used in this Agreement, the following terms shall have the meanings set forth below:
Accounts Receivable means and includes all of the Borrower's and the Subsidiaries' now owned or hereafter acquired or arising accounts, as defined in the U.C.C., including any rights to payment for the sale or lease of goods or rendition of services, whether or not they have been earned by performance.
Acquisition means any acquisition by a Company of assets (other than equity interests and assets acquired in the ordinary course of business in connection with or incidental to its then existing businesses and operations). For the avoidance of doubt, the acquisition of Vessels shall not be considered a transaction in the ordinary course of business.
Acquisition Subfacility has the meaning specified in Section 2.01(b).
Acquisition Subfacility Commitment means an amount (subject to reduction or cancellation as herein provided) equal to $10,000,000.
Additional Amount has the meaning specified in Section 7.17(a).
Administrative Agent means Royal Bank in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.
Administrative Agent's Office means the Administrative Agent's address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.
Administrative Questionnaire means an Administrative Questionnaire in a form supplied by the Administrative Agent.
Affiliate means, as to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to be controlled by any other Person if such other Person possesses, directly or indirectly, power (a) to vote
10% or more of the securities (on a fully diluted basis) having ordinary voting power for the election of directors, managing members, or managing general partners; or (b) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
Agent/Arranger Fee Letter has the meaning specified in Section 2.08(b).
Agent-Related Persons means the Administrative Agent and the Collateral Agent (including any successor administrative agent and collateral agent), together with their respective Affiliates, and the officers, directors, employees, agents and attorneys-in-fact of such Persons and Affiliates.
Aggregate Commitments has the meaning set forth in the definition of "Commitment."
Aggregate Committed Sum means, on any date of determination, the sum of all Committed Sums then in effect for all Lenders in respect of the Revolver Facility and the Term Loan Facility (as the same may have been reduced or canceled as provided in the Loan Documents).
Agreement means this Credit Agreement.
Applicable Rate means the following percentages per annum set forth in the table below, on any date of determination, with respect to the Type of Credit Extension or commitment fee that corresponds to the Leverage Ratio at such date of determination, as calculated based on the quarterly Compliance Certificate most recently delivered pursuant to Section 6.02(a):
APPLICABLE RATE --------------------------------------------------------------------------------------------- Letter of Credit and Pricing Commitment Eurodollar Base Rate + Level Leverage Ratio fee (bps) Rate + (bps) (bps) -------------- ---------------------------- ---------------- ---------------- --------------- 1 Less than or equal to 37.5 175.0 75.0 1.00:1.00 2 Greater than 1.00:1.00 but 37.5 200.0 100.0 less than or equal to 2.00:1.00 3 Greater than 2.00:1.00 but 50.0 225.0 125.0 less than or equal to 2.50:1.00 4 Greater than 2.50:1.00 but 50.0 250.0 150.0 less than or equal to 2.75:1.00 5 Greater than 2.75:1.00 50.0 275.0 175.0 |
Any increase or decrease in the Applicable Rate resulting from a change in the Leverage Ratio shall become effective as of the first day of the fiscal quarter of the Borrower immediately following the date of a Compliance Certificate delivered pursuant to Section 6.02; provided, however, that if no Compliance Certificate is delivered during a fiscal quarter when due in accordance with such Section the following Pricing Levels and Applicable Rates shall apply: (a) Pricing Level 4 shall apply as of the first day of such following fiscal quarter if Pricing Level 1, 2, or 3 is in effect for the current fiscal quarter; (b) Pricing Level 5 shall apply as of the first day of such following fiscal quarter if Pricing Level 4 is in effect for the current fiscal quarter; and (c) Base Rate plus 2.00% shall apply as of the first day of such following fiscal quarter if Pricing Level 5 is in effect for the current fiscal quarter. The Applicable Rate
in effect from the Closing Date through the date the Compliance Certificate is delivered in connection with the fiscal quarter ended March 31, 2003, shall be the greater of (i) Pricing Level 3 or (ii) the Pricing Level that corresponds to the Leverage Ratio set forth in the most recently delivered Compliance Certificate.
Appraisal shall have the meaning set forth in Section 6.02(d).
Approved Fund means any Fund that is administered or managed by a Lender, an Affiliate of a Lender, or an entity or an Affiliate of an entity that administers or manages a Lender.
Arranger means Royal Bank, in its capacity as lead arranger and book runner.
Assignment and Assumption means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.07), and accepted by the Administrative Agent substantially in the form of Exhibit D or any other form approved by the Administrative Agent.
Assumed Indebtedness means the Indebtedness described on Schedule 1.01(a).
Attorney Costs means and includes the fees and disbursements of any law firm or other external counsel.
Attributable Indebtedness means, on any date, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.
Authorizations means all filings, recordings, and registrations with, and all validations or exemptions, approvals, orders, authorizations, consents, franchises, licenses, certificates, and permits from, any Governmental Authority.
Availability Period shall have the meaning set forth in Section 2.01(a).
Bank Guaranties means guaranties or other agreements or instruments serving a similar function issued by a bank or other financial institution.
Base Rate means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time in its sole discretion by Royal Bank as its prime commercial lending rate for United States Dollar loans in the United States. Royal Bank's prime commercial lending rate is not necessarily the lowest rate Royal Bank is charging any corporate customer. Any change in such rate announced by Royal Bank shall take effect at the opening of business on the day specified in the public announcement of such change.
Base Rate Loan means a Loan that bears interest based on the Base Rate.
Board means the Board of Governors of the Federal Reserve System of the United States of America.
Borrower has the meaning set forth in the introductory paragraph hereto.
Borrower Affiliate means the Borrower, the Borrower General Partner, the MLP, the MLP General Partner, and each of their respective Subsidiaries.
Borrower General Partner means the general partner of the Borrower. As of the Closing Date, the general partner of the Borrower is Martin Operating GP LLC, a Delaware limited liability company.
Borrower Operating Agreements means the Organization Documents of each of the MLP General Partner, the MLP, the Borrower General Partner, the Borrower and each of their respective Subsidiaries.
Borrowing means a Committed Borrowing or a Swing Line Borrowing, as the context may require.
Borrowing Base (Working Capital/Distribution Subfacility) means an amount equal to (a) the sum of (i) seventy-five percent (75%) of the Eligible Accounts Receivable and (ii) sixty percent (60%) of the Eligible Inventory (amounts available under this clause (ii) of the Borrowing Base (Working Capital/Distribution Subfacility) which are attributable to Fertilizer shall not exceed $4,000,000) less (b) the sum of (i) the aggregate amount of all First Purchase Payables and (ii) the Borrowing Base Reserve. The Borrowing Base (Working Capital/Distribution Subfacility) shall be determined each month by reference to the most recent Borrowing Base Certificate delivered to the Administrative Agent (absent any error in such Borrowing Base Certificate) which shall be effective as of the date such certificate is required to be delivered pursuant to Section 6.02(e).
Borrowing Base Certificate means a certificate in the form of Exhibit H or any other form approved by the Administrative Agent, together with all attachments contemplated thereby.
Borrowing Base Reserve means the following amounts:
BORROWING BASE RESERVE BORROWING BASE RESERVE PERIOD --------------------------------------- --------------------------------------------------- $0 Closing Date through January 5, 2003 $375,000 January 6, 2003 through April 5, 2003 $750,000 April 6, 2003 through July 5, 2003 $1,125,000 July 6, 2003 through October 5, 2003 $1,500,000 October 6, 2003 through January 5, 2004 $1,875,000 January 6, 2004 through April 5, 2004 $2,250,000 April 6, 2004 through July 5, 2004 $2,625,000 July 6, 2004 through October 5, 2004 $3,000,000 October 6, 2004 through January 5, 2005 $3,375,000 January 6, 2005 through April 5, 2005 $3,750,000 April 6, 2005 through July 5, 2005 $4,125,000 July 6, 2005 through Stated Maturity Date |
Business Day means any day other than a Saturday, Sunday, or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the
Administrative Agent's Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the applicable offshore Dollar interbank market.
Capital Expenditure by a Person means an expenditure (determined in accordance with GAAP) for any fixed asset owned by such Person for use in the operations of such Person having a useful life of more than one year, or any improvements or additions thereto.
Capital Lease means any capital lease or sublease which should be capitalized on a balance sheet in accordance with GAAP.
Cash Collateralize means to pledge and deposit with or deliver to the Collateral Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash and deposit account balances pursuant to documentation in form and substance satisfactory to the Administrative Agent, the Collateral Agent, and the L/C Issuer (which documents hereby are consented to by the Lenders).
Cash Equivalents means:
(a) United States Dollars;
(b) direct general obligations, or obligations of, or obligations fully and unconditionally guaranteed as to the timely payment of principal and interest by, the United States or any agency or instrumentality thereof having remaining maturities of not more than thirteen (13) months, but excluding any such securities whose terms do not provide for payment of a fixed dollar amount upon maturity or call for redemptions;
(c) certificates of deposit and eurodollar time deposits with
maturities of thirteen (13) months or less, bankers acceptances with maturities
not exceeding one hundred eighty (180) days, overnight bank deposits and other
similar short term instruments, in each case with any domestic commercial bank
(i) having capital and surplus in excess of $250,000,000 and (ii) (A) having a
rating of at least "A2" by Moody's and at least "A" by S&P or (B) that is a
Lender not rated by Moody's and/or S&P;
(d) repurchase obligations with a term of not more than thirteen (13) months for underlying securities of the types described in (b) and (c) above entered into with any financial institution meeting the qualifications in (c) above;
(e) commercial paper (having original maturities of not more than two hundred seventy (270) days) of any Person rated "P-1" or better by Moody's or "A-1" or the equivalent by S&P; and
(f) money market mutual or similar funds having assets in excess of $100,000,000, at least 95% of the assets of which are comprised of assets specified in clause (a) through (e) above.
CF Industries means CF Industries, Inc., a Delaware corporation.
CF Martin Sulphur means CF Martin Sulphur L.P., a Delaware limited partnership.
CF Martin Sulphur General Partner means CF Martin Sulphur LLC, a Delaware limited liability company.
Change of Control means (a) Martin Resource shall fail to own, directly or indirectly, at least 51% of the general partnership interests and at least 33?% of the limited partnership interests in the MLP,
(b) any Person, entity or group (other than Martin Resource) acquires beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act) of 66 2/3% or more of the limited partnership interests in the MLP, (c) the MLP shall fail to own, directly or indirectly, 100% of the equity interests in the Borrower, (d) Martin Resource fails for any reason to control, directly or indirectly, the management of the MLP or fails to control, directly or indirectly, the management of the Borrower, or (e) a Martin Resource Change of Control shall occur.
Change in Law means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or the L/C Issuer (or, for purposes of Section 3.04(b), by any lending office of such Lender or by such Lender's or the L/C Issuer's holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.
Closing Date means the date upon which this Agreement and the other Loan Documents have been executed by the Borrower, the MLP, the Lenders, the Administrative Agent, and the Collateral Agent.
Co-Agent Related Person means Comerica Bank-Texas, a Texas State Bank, together with its Affiliates, and their respective officers, directors, employees, agents and attorneys-in-fact.
Code means the Internal Revenue Code of 1986.
Collateral means all property and interests in property and proceeds thereof now owned or hereafter acquired by the MLP, the Borrower, and their respective Subsidiaries in or upon which a Lien now or hereafter exists in favor of the Lenders, or the Collateral Agent on behalf of the Lenders, including all of the assets (including stock and other equity interests, provided, neither equity interests in CF Martin Sulphur nor the general partnership interests of the Borrower shall be pledged unless the conditions in Section 6.18 are satisfied) of the MLP, the Borrower General Partner, the Borrower, and their respective Subsidiaries, whether under this Agreement, the Collateral Documents, or under any other document executed by any Borrower Affiliate and delivered to the Administrative Agent or the Lenders.
Collateral Agent means Royal Bank, in its capacity as collateral agent under any of the Loan Documents, or any successor collateral agent.
Collateral Agent's Office means the Collateral Agent's address and, as appropriate, account as set forth on Schedule 10.02, or such other address or account as the Collateral Agent may from time to time notify to the Borrower and the Lenders.
Collateral Documents means (a) each guaranty, pledge agreement, security agreement, ship mortgage, fleet mortgage, mortgage, assignment, and all other security agreements, deeds of trust, mortgages, chattel mortgages, assignments, pledges, guaranties, financing statements, continuation statements, extension agreements and other similar agreements or instruments executed by the Borrower, the MLP, the Borrower General Partner, any Guarantor, or any of their respective Subsidiaries for the benefit of the Lenders now or hereafter delivered to the Lenders or the Administrative Agent pursuant to or in connection with the transactions contemplated hereby, and all financing statements (or comparable documents now or hereafter filed in accordance with the Uniform Commercial Code or comparable law) against the Borrower, the MLP, the MLP General Partner, any Guarantor, or any of their respective Subsidiaries as debtor in favor of the Lenders or the Collateral Agent for the benefit of the Lenders as secured party to secure or guarantee the payment of any part of the Obligations or the performance of any other duties and obligations of Borrower under the Loan Documents, whenever made or delivered, and
(b) any amendments, supplements, modifications, renewals, replacements, consolidations, substitutions, restatements, and extensions of any of the foregoing.
Commitment means, as to each Lender, its obligation to make (i) Committed Loans to the Borrower pursuant to Section 2.01, in an amount at any one time outstanding not to exceed its Committed Sum, (ii) make Committed Loans to the Borrower on the Conditions Effective Date pursuant to Section 2.02, in an amount not to exceed its Committed Sum, (iii) to purchase participations in L/C Obligations pursuant to Section 2.14, in an aggregate principal amount at any one time outstanding not to exceed, when aggregated with the Loans made pursuant to Section 2.01, its Committed Sum, and (iv) to purchase participations in Swing Line Loans pursuant to Section 2.15, in an amount at any one time outstanding not to exceed its Committed Sum, in each case as such amount may be reduced or adjusted from time to time in accordance with this Agreement (collectively, the "Aggregate Commitments").
Committed Borrowing means a borrowing consisting of simultaneous Committed Loans of the same Type and having the same Interest Period made by each of the Lenders pursuant to Section 2.01 or 2.02.
Committed Loan has the meaning specified in Section 2.01 and 2.02.
Committed Loan Notice means a notice of (a) a Committed Borrowing, (b) a conversion of Committed Loans from one Type to the other, or (c) a continuation of Committed Loans as the same Type, pursuant to Section 2.03(a), which, if in writing, shall be substantially in the form of Exhibit A-1 or A-2, as applicable.
Committed Sum means for any Lender (a) with respect to the Acquisition Subfacility, at any date of determination occurring prior to the Maturity Date, the amount stated beside such Lender's name under the heading for the Acquisition Subfacility on the most-recently amended Schedule 2.01 to this Agreement (which amount is subject to increase, reduction, or cancellation in accordance with the Loan Documents), (b) with respect to the Working Capital/Distribution Subfacility, at any date of determination occurring prior to the Maturity Date, the amount stated beside such Lender's name under the heading for the Working Capital/Distribution Subfacility on the most recently amended Schedule 2.01 to this Agreement (which amount is subject to increase, reduction, or cancellation in accordance with the Loan Documents), and (c) with respect to the Term Loan Facility, at any date of determination occurring prior to the Maturity Date, the amount stated beside such Lender's name under the heading for the Term Loan Facility on the most-recently amended Schedule 2.01 to this Agreement (which amount is subject to increase, reduction, or cancellation in accordance with the Loan Documents).
Company and Companies means, on any date of determination thereof, the MLP, the Borrower and each of their respective Subsidiaries.
Compensation Period has the meaning set forth in Section 2.11(e)(ii).
Compliance Certificate means a certificate substantially in the form of Exhibit C.
Conditions Effective Date means the first date all the conditions
precedent in Section 4.01 are satisfied or waived in accordance with Section
4.01 (or, in the case of Sections 4.01(b) and (c), waived by the Person entitled
to receive the applicable payment).
Consolidated EBITDA means, for any period, for the MLP and its Subsidiaries on a consolidated basis, an amount equal to (a) the sum of (i) Consolidated Net Income, (ii) Consolidated Interest Charges, (iii) the amount of taxes, based on or measured by income, used or included in the determination of such
Consolidated Net Income, (iv) the amount of depreciation, depletion, and
amortization expense deducted in determining such Consolidated Net Income, (v)
other non-cash charges and expenses, including, without limitation, non-cash
charges and expenses relating to Swap Contracts or resulting from accounting
convention changes, of the MLP and its Subsidiaries on a consolidated basis, and
(vi) cash distributions actually received by the MLP and its Subsidiaries from
CF Martin Sulphur less (b) the amount of the MLP's and its Subsidiaries' equity
in the earnings of CF Martin Sulphur, all determined in accordance with GAAP.
For purposes of calculating compliance with Section 7.15, (A) Consolidated EBITDA for any fiscal quarter ending on or prior to September 30, 2002, shall be the pro forma results of the MLP set forth in financial statements provided by the Borrower to the Administrative Agent and to each Lender, which financial information shall be prepared using a methodology substantially similar to the methodology used in preparing the pro forma results of the MLP as set forth in the MLP Registration Statement, and (B) Consolidated EBITDA for any fiscal quarter ending on or after December 31, 2002, shall be the actual results of the MLP as set forth in financial statements filed with the Securities and Exchange Commission in the Form 10-K or 10-Q (financial results for the period ended December 31, 2002, shall be adjusted on a pro forma basis as necessary for the period prior to the MLP Offering Closing), in each case with respect to which financial statements the Borrower shall have provided a certificate containing the representations and warranties set forth in Section 5.05(a).
Consolidated Funded Debt means, as of any date of determination, for the MLP and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal amount of all obligations and liabilities, whether current or long-term, for borrowed money (including Letters of Credit and all other Obligations hereunder), (b) Attributable Indebtedness with respect to Capital Leases, (c) Attributable Indebtedness with respect to Synthetic Lease Obligations, and (d) without duplication, all Guaranty Obligations with respect to Indebtedness of the type specified in subsections (a) through (c) above.
Consolidated Interest Charges means, for any period, for the MLP and its Subsidiaries on a consolidated basis, the sum of all interest, premium payments, fees, charges and related expenses of the MLP and its Subsidiaries in connection with Indebtedness (including capitalized interest), in each case to the extent treated as interest in accordance with GAAP.
Consolidated Net Income means, for any period, for the MLP and its Subsidiaries on a consolidated basis, the net income or net loss of the MLP and its Subsidiaries from continuing operations, provided that there shall be excluded from such net income (to the extent otherwise included therein): (a) the income (or loss) of any entity other than a Subsidiary in which the MLP or any Subsidiary has an ownership interest, except to the extent that any such income has been actually received by the MLP or such Subsidiary in the form of cash dividends or similar cash distributions; (b) net extraordinary gains and losses (other than, in the case of losses, losses resulting from charges against net income to establish or increase reserves for potential environmental liabilities and reserves for exposure under rate cases), (c) any gains or losses attributable to non-cash write-ups or write-downs of assets, (d) proceeds of any insurance on property, plant or equipment other than business interruption insurance, (e) any gain or loss, net of taxes, on the sale, retirement or other disposition of assets (including the capital stock or other equity ownership of any other person, but excluding the sale of inventories in the ordinary course of business), and (f) the cumulative effect of a change in accounting principles.
Contractual Obligation means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
Contribution Agreement means the Contribution, Conveyance and Assumption Agreement dated as of October 31, 2002, by and among the MLP, the Borrower, Martin Resource, Martin Resource LLC, a Delaware limited liability company, the MLP General Partner, the Borrower General Partner, Martin Gas Marine, Martin L.P. Gas, Inc., a Texas corporation, Martin Gas Sales, Martin Transport, Inc., a Texas corporation, CF Martin Sulphur Holding Corporation, a Nevada corporation, and Midstream Fuel Service LLC, an Alabama limited liability company.
Credit Extension means each of the following: (a) a Committed Borrowing, (b) a Swing Line Borrowing, and (c) an L/C Credit Extension.
Current Ratio means, as of any date of determination, the ratio of (a)
consolidated current assets of the MLP and its Subsidiaries (including any
unused portion of the Working Capital/Distribution Subfacility Commitment) to
(b) consolidated current liabilities of the MLP and its Subsidiaries, both as
determined in accordance with GAAP; provided, that for purposes of this
definition, non-cash marked-to-market adjustments relating to Swap Agreements
required to be made under GAAP shall be excluded for purposes of determining
such ratio.
Debtor Relief Laws means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States of America or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
Default means any event that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
Default Rate means an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each case to the fullest extent permitted by applicable Laws.
Designated Martin Shareholders means the shareholders of Martin Resource reflected in Schedule 1.01(b) hereto, together with their respective Affiliates, Family and Family Trusts.
Disposition or Dispose means the sale, transfer, license, or other disposition (including any sale and leaseback transaction) of any property (including stock, partnership and other equity interests) by any Person of property owned by such Person, including any sale, assignment, transfer, or other disposal (including any damage to, loss or destruction of any property, or other event resulting in payments being made to a Person under an insurance policy or as a result of any condemnation or Vessel requisition), with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith. For the avoidance of doubt, the term Disposition shall not include the issuance by a Person of its own equity interests.
Distribution Loan means a Committed Loan which is made in whole or in part for the purpose of paying a Quarterly Distribution or for the purpose of reimbursing the General Partner for the purchase price of partnership units purchased under the MLP's long-term incentive plan.
Dollar or $ means lawful money of the United States of America.
Domestic Person means any corporation, general partnership, limited partnership, or limited liability company that is organized under the laws of the United States of America or any state thereof or the District of Columbia.
Eligible Accounts Receivable means Accounts Receivable, excluding any Account Receivable:
(a) with respect to which more than ninety (90) days have elapsed since the date of the original invoice;
(b) with respect to which any of the representations, warranties, covenants, and agreements contained in any Collateral Document are incorrect or have been breached in any material respect;
(c) with respect to which, in whole or in part, a check, promissory note, draft, trade acceptance or other instrument for the payment of money has been received, presented for payment and returned uncollected for any reason for such Account Receivable (or any other Account Receivable due from such account debtor);
(d) which represents a progress billing (as hereinafter defined) or as to which the Borrower or any of the Subsidiaries has extended the time for payment without the consent of the Administrative Agent; for the purposes hereof, "progress billing" means any invoice for goods sold or leased or services rendered under a contract or agreement pursuant to which the account debtor's obligation to pay such invoice is conditioned upon the Borrower's or any of the Subsidiaries' completion of any further performance under the contract or agreement;
(e) with respect to which any one or more of the following events has occurred to the account debtor on such Account Receivable: death or judicial declaration of incompetency of an account debtor who is an individual; the filing by or against the account debtor of a request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as a bankrupt, winding-up, or other relief under the bankruptcy, insolvency, or similar laws of the United States, any state or territory thereof, or any foreign jurisdiction, now or hereafter in effect; the making of any general assignment by the account debtor for the benefit of creditors; the appointment of a receiver or trustee for the account debtor or for any of the assets of the account debtor, including, without limitation, the appointment of or taking possession by a "custodian," as defined in the U.S. Federal Bankruptcy Code; the institution by or against the account debtor of any other type of insolvency proceeding (under the bankruptcy laws of the United States or otherwise) or of any formal or informal proceeding for the dissolution or liquidation of, settlement of claims against, or winding up of affairs of, the account debtor; the sale, assignment, or transfer of all or any material part of the assets of the account debtor; the nonpayment generally by the account debtor of its debts as they become due; or the cessation of the business of the account debtor as a going concern;
(f) if twenty-five percent (25%) or more of the aggregate Dollar amount of outstanding Accounts Receivable owed at such time by the account debtor thereon is classified as ineligible under clause (a) above, provided, however, any Account Receivable classified as ineligible under clause (a) above shall not be included in the calculation of the twenty-five percent (25%) threshold in this clause (f) if such Account Receivable is the subject of a bona fide dispute between such account debtor and the Borrower;
(g) owed by an account debtor which: (1) does not maintain its chief executive office in the United States; or (2) is not organized under the laws of the United States or any state thereof; or (3) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality
thereof; except to the extent that such Account Receivable is secured or payable by a letter of credit satisfactory to the Administrative Agent in its discretion;
(h) owed by an account debtor which is an Affiliate or employee of the Borrower or any of its Subsidiaries;
(i) except as provided in clause (k) below, with respect to which either the perfection, enforceability, or validity of the Collateral Agent's Liens in such Account Receivable, or the Collateral Agent's right or ability to obtain direct payment to the Collateral Agent of the proceeds of such Account Receivable, is governed by any federal, state, or local statutory requirements other than those of the U.C.C.;
(j) owed by an account debtor to which the Borrower or any of its Subsidiaries, is indebted in any way, or which is subject to any right of setoff or recoupment by the account debtor, or if the account debtor thereon has disputed liability or made any claim with respect to any other Account Receivable due from such account debtor; but in each such case only to the extent of such indebtedness, setoff, recoupment, dispute, or claim;
(k) owed by the government of the United States, or any department, agency, public corporation, or other instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727 et seq.), and any other steps necessary to perfect the Collateral Agent's Liens therein, have been complied with to the Administrative Agent's and Collateral Agent's satisfaction with respect to such Account Receivable;
(l) owed by any state, municipality, or other political subdivision of the United States, or any department, agency, public corporation, or other instrumentality thereof and as to which the Administrative Agent determines that its Lien therein is not or cannot be perfected;
(m) which represents a sale on a bill-and-hold, guaranteed sale, sale and return, sale on approval, consignment, or other repurchase or return basis;
(n) which is evidenced by a promissory note or other instrument or by chattel paper;
(o) if the Administrative Agent believes, in the exercise of its reasonable judgment, that the prospect of collection of such Account Receivable is reasonably likely to be impaired or that the Account Receivable could reasonably be expected not to be paid by reason of the account debtor's financial inability to pay;
(p) with respect to which the account debtor is located in any state requiring the filing of a Notice of Business Activities Report or similar report in order to permit the Borrower or any of the Subsidiaries to seek judicial enforcement in such state of payment of such Account Receivable, unless such Borrower or Subsidiary has qualified to do business in such state or has filed a Notice of Business Activities Report or equivalent report for the then current year;
(q) which arises out of a sale not made in the ordinary course of the Borrower's or any of the Subsidiaries' business;
(r) with respect to which the goods giving rise to such Account Receivable have not been shipped and delivered to and accepted by the account debtor or the services giving rise to such Account Receivable have not been performed by the Borrower or a Subsidiary, as applicable, and, if applicable, accepted by the account debtor, or the account debtor revokes its acceptance of such goods or services;
(s) owed by an account debtor which is obligated to the Borrower or any of the Subsidiaries respecting Accounts Receivable the aggregate unpaid balance of which exceeds twenty-five percent (25%) of the aggregate unpaid balance of all Accounts Receivable owed to the Borrower or any of the Subsidiaries at such time by all of the Borrower's and the Subsidiaries' account debtors, but only to the extent of such excess;
(t) which is not subject to a first priority and perfected security interest in favor of the Collateral Agent for the benefit of the Lenders except that the Collateral Agent's Liens may be subject to a statutory Lien in respect of First Purchase Payables;
(u) which the Administrative Agent or the Required Lenders in their reasonable discretion determine to be ineligible.
If any Account Receivable at any time ceases to be an Eligible Account Receivable, then such Account Receivable shall promptly be excluded from the calculation of Eligible Accounts Receivable.
Eligible Assignee means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund and (d) any other Person (other than a natural Person) approved by (i) the Administrative Agent, (ii) the Swing Line Lender, (iii) in case of any assignment of a Revolver Commitment, the L/C Issuer, and (iv) unless a Default or Event of Default shall have occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, "Eligible Assignee" shall not include the Borrower, the MLP, any Martin Party, or any of their respective Affiliates or Subsidiaries.
Eligible Inventory means all Inventory excluding any Inventory:
(a) that is not owned by the Borrower or any of the Subsidiaries;
(b) that is not subject to the Collateral Agent's Liens, which are perfected as to such Inventory, or that are subject to any other Lien whatsoever (other than those in respect of First Purchase Payables or the Liens described in clause (d), (l) and (m) (to the extent clause (f) below has been complied with) of Section 7.01 ("Permitted Inventory Liens") provided that such Permitted Inventory Liens described in clause (d), (l) and (m) of Section 7.01 (1) are junior in priority to the Collateral Agent's Liens and (2) do not materially impair the ability of the Collateral Agent to realize on or obtain the full benefit of such Inventory);
(c) that does not consist of finished goods or raw materials;
(d) that is not in good condition, is obsolete, is damaged, is unmerchantable, or does not meet all standards imposed by any governmental authority, having regulatory authority over such goods, their use or sale;
(e) that is located outside the United States of America (or that is in transit from vendors or suppliers);
(f) that is in possession of a bailee or in a facility leased by the Borrower or any of the Subsidiaries, unless (i) the bailee or the lessor has delivered to the Administrative Agent, if requested by the Administrative Agent, a subordination agreement in form and substance satisfactory to the Administrative Agent, or (ii) an amount sufficient in the opinion of the Administrative Agent has been deducted from the value of such Inventory to cover rents, storage, handling and related charges;
(g) that is Inventory placed on consignment;
(h) which the Administrative Agent or the Required Lenders in their reasonable discretion determine to be ineligible.
If any Inventory at any time ceases to be Eligible Inventory, such Inventory shall promptly be excluded from the calculation of Eligible Inventory.
Environmental Law means any applicable Law that relates to (a) the
condition or protection of air, groundwater, surface water, soil, or other
environmental media, (b) the environment, including natural resources or any
activity which affects the environment, (c) the regulation of any pollutants,
contaminants, wastes, substances, and Hazardous Substances, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. Section 9601 et seq.) ("CERCLA"), the Clean Air Act (42
U.S.C. Section 7401 et seq.), the Federal Water Pollution Control Act, as
amended by the Clean Water Act (33 U.S.C. Section 1251 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Section 136 et seq.), the
Emergency Planning and Community Right to Know Act of 1986 (42 U.S.C. Section
11001 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section
1801 et seq.), the National Environmental Policy Act of 1969 (42 U.S.C. Section
4321 et seq.), the Oil Pollution Act (33 U.S.C. Section 2701 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the
Rivers and Harbors Act (33 U.S.C. Section 401 et seq.), the Safe Drinking Water
Act (42 U.S.C. Section 201 and Section 300f et seq.), the Solid Waste Disposal
Act, as amended by the Resource Conservation and Recovery Act of 1976 and the
Hazardous and Solid Waste Amendments of 1984 (42 U.S.C. Section 6901 et seq.),
the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), and analogous
state and local Laws, as any of the foregoing may have been and may be amended
or supplemented from time to time, and any analogous enacted or adopted Law, or
(d) the Release or threatened Release of Hazardous Substances.
ERISA means the Employee Retirement Income Security Act of 1974 and any regulations issued pursuant thereto.
ERISA Affiliate means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions of this Agreement relating to obligations imposed under
Section 412 of the Code).
ERISA Event means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.
Eurodollar Rate means for any Interest Period with respect to any Eurodollar Rate Loan:
(a) the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate that appears on the page (such page currently being page 3750) of the Telerate screen (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or
(b) if the rate referenced in the preceding subsection (a) does not appear on such page or service or such page or service shall cease to be available, the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, or
(c) if the rates referenced in the preceding subsections (a) and (b) are not available, the rate per annum determined by the Administrative Agent as the rate of interest (rounded upward to the next 1/100th of 1%) at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Royal Bank and with a term equivalent to such Interest Period would be offered by Royal Bank's London Branch to major banks in the offshore Dollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period.
Eurodollar Rate Loan means a Committed Loan that bears interest at a rate based on the Eurodollar Rate.
Event of Default means any of the events or circumstances specified in Article VIII.
Evergreen Letter of Credit has the meaning specified in Section 2.14(b)(iii).
Exchange Act means the Securities Exchange Act of 1934, as amended.
Facilities means, collectively, the Revolver Facility and the Term Loan Facility; Facility means either of the Revolver Facility or the Term Loan Facility.
Family means, in respect of any individual, the heirs, legatees, descendants and blood relatives to the third degree of consanguinity of such individual.
Family Trusts means, in respect of any individual, any trusts for the exclusive benefit of such individual, his/her spouse and lineal descendants, so long as such individual has the exclusive right to control each such trust.
Federal Funds Rate means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of 1%) equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers on such day, as published by the
Federal Reserve Bank on the Business Day next succeeding such day; provided that
(a) if such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the
average rate charged to Royal Bank on such day on such transactions as determined by the Administrative Agent.
Fertilizer means fertilizer which is a finished product and ready for sale.
First Purchase Payables means the unpaid amount of any payable obligation of the Borrower or any of the Subsidiaries related to the purchase of hydrocarbons by the Borrower or any of its Subsidiaries which are (in the judgment of the Administrative Agent) secured by a statutory Lien, which shall include but not be limited to the statutory Liens created under the Laws of Texas, New Mexico, Wyoming, Kansas, and Oklahoma, to the extent such payable obligation is not at the time in question covered by a Letter of Credit issued hereunder.
Fixed Assets means the Vessels, real estate, and all other fixed assets, as such term is used in accordance with GAAP, owned by the Borrower, or any of its Subsidiaries.
Foreign Lender has the meaning specified in Section 10.15.
Fund means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
GAAP means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession, that are applicable to the circumstances as of the date of determination, consistently applied. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (b) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.
Governmental Authority means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other legal entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
Guarantors means any Person, including the MLP and every present and future Subsidiary of Borrower and the MLP, which undertakes to be liable for all or any part of the Obligations by execution of a Guaranty, or otherwise.
Guaranty means a Guaranty now or hereafter made by any Guarantor in favor of the Administrative Agent on behalf of the Lenders, substantially in the form of Exhibit E-1 or Exhibit E-2, as may be amended from time to time.
Guaranty Obligation means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other payment obligation of another Person (the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other payment obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other payment obligation of the payment of such Indebtedness or other payment obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other payment obligation, or (iv) entered into for the purpose of assuring in any other manner the obligees in respect of such Indebtedness or other payment obligation of the payment thereof or to protect such obligees against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other payment obligation of any other Person, whether or not such Indebtedness or other payment obligation is assumed by such Person; provided, however, that the term "Guaranty Obligation" shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guaranty Obligation shall be deemed to be the lesser of (a) an amount equal to the stated or determinable outstanding amount of the related primary obligation and (b) the maximum amount for which such guarantying Person may be liable pursuant to the terms of the instrument embodying such Guaranty Obligation, unless the outstanding amount of such primary obligation and the maximum amount for which such guarantying Person may be liable are not stated or determinable, in which case the amount of such Guaranty Obligation shall be the maximum reasonably anticipated liability in respect thereof as determined by the guarantying Person in good faith.
Hazardous Substance means any substance that poses a threat to, or is
regulated to protect, human health, safety, public welfare, or the environment,
including without limitation: (a) any "hazardous substance," "pollutant" or
"contaminant," and any "petroleum" or "natural gas liquids" as those terms are
defined or used under Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ( 42 U.S.C. Sections 9601 et
seq.) ("CERCLA"), (b) "solid waste" as defined by the federal Solid Waste
Disposal Act (42 U.S.C. Sections 6901 et seq.), (c) asbestos or a material
containing asbestos, (d) any material that contains lead or lead-based paint,
(e) any item or equipment that contains or is contaminated by polychlorinated
biphenyls, (f) any radioactive material, (g) urea formaldehyde, (h) putrescible
materials, (i) infectious materials, (j) toxic microorganisms, including mold,
or (k) any substance the presence or Release of which requires reporting,
investigation or remediation under any Environmental Law.
Honor Date has the meaning set forth in Section 2.14(c)(i).
Indebtedness means, as to any Person at a particular time, all of the following:
(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;
(b) the face amount of all letters of credit (including standby and commercial), banker's acceptances, Bank Guaranties, surety bonds, and similar instruments issued for the account of such Person, and, without duplication, all drafts drawn and unpaid thereunder;
(c) net obligations under any Swap Contract in an amount equal to (i)
if such Swap Contract has been closed out, the termination value thereof, or
(ii) if such Swap Contract has not been closed out, the marked-to-market value
thereof determined on the basis of readily available quotations provided by any
recognized dealer in such Swap Contract;
(d) whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services, other than trade accounts payable in the ordinary course of business not overdue by more than 60 days, and indebtedness (excluding prepaid
interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;
(e) Capital Leases and Synthetic Lease Obligations;
(f) Off-Balance Sheet Indebtedness; and
(g) all Guaranty Obligations of such Person in respect of any of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner, unless such Indebtedness is expressly made non-recourse to such Person except for customary exceptions acceptable to the Required Lenders. The amount of any Capital Lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.
Indemnified Liabilities has the meaning set forth in Section 10.05.
Indemnitees has the meaning set forth in Section 10.05.
Initial Financial Statements means the financial statements delivered pursuant to clauses (A) and (B) of Section 4.01(a)(vii).
Interest Coverage Ratio means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the period of the four prior fiscal quarters ending on such date to (b) the sum of (i) Consolidated Interest Charges during such period and (ii) imputed interest charges on Synthetic Leases, of the MLP and its Subsidiaries during such period. For purposes of calculating the Interest Coverage Ratio, Consolidated Interest Charges and imputed interest charges on Synthetic Leases (A) for the fiscal quarter ending September 30, 2002, shall be the pro forma results of the MLP set forth in the financial statements provided by the Borrower to the Administrative Agent and to each Lender, which financial information shall be prepared using a methodology substantially similar to the methodology used in preparing the pro forma results of the MLP as set forth in the MLP Registration Statement and (B) for any fiscal quarter ending on or after December 31, 2002, shall be the actual results of the MLP as set forth in financial statements filed with the Securities and Exchange Commission in the Form 10-K or 10-Q (financial results for the period ended December 31, 2002, shall be adjusted on a pro forma basis as necessary for the period prior to the MLP Offering Closing), in each case with respect to which financial statements the Borrower shall have provided a certificate containing the representations and warranties set forth in Section 5.05(a).
Interest Payment Date means, (a) as to any Loan other than a Base Rate Loan, the last day of each Interest Period applicable to such Loan; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Maturity Date.
Interest Period means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its Committed Loan Notice; provided that:
(a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Rate Loan, such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;
(b) any Interest Period pertaining to a Eurodollar Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and
(c) no Interest Period shall extend beyond the scheduled Maturity Date.
Inventory means, for any of the Borrower and the Subsidiaries, all now owned or hereafter acquired Fertilizer and liquefied petroleum gas (excluding line fill), wherever located, held for sale, each valued at the lower of cost or Market Price, and all documents of title or other documents (as defined in the U.C.C.) representing them.
Investment means, as to any Person, any investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person or (b) a loan, advance or capital contribution to, guaranty of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, less all returns of principal or equity thereon, and shall, if made by the transfer or exchange of property other than cash be deemed to have been made in an amount equal to the fair market value of such property.
Investment Reduction Event means the occurrence of any of the following: (a) Martin Resource, any Martin Party or any Company ceases to own, directly or indirectly, (i) 50% of the membership interest in CF Martin Sulphur General Partner, or (ii) 50% of the ownership interest in any successor entity that controls the management of CF Martin Sulphur, (b) Borrower's percentage equity ownership of CF Martin Sulphur is reduced below 49.5% and, as a result of such reduction, cash distributions received by the Borrower from CF Martin Sulphur are reduced, or (c) any event occurs which triggers an obligation on the part of the MLP, the Borrower, or any of their Subsidiaries to purchase from CF Industries (or an Affiliate of CF Industries) equity interests in CF Martin Sulphur or CF Martin Sulphur General Partner and such obligation is not timely satisfied; provided, that a sale of all of the MLP's, the Borrower's, and their Subsidiaries' equity interests in CF Martin Sulphur or, after such sale, any of the events set forth in (a) or (b), shall not constitute an Event of Default so long as prepayments are made as required under Section 2.04.
IRS means the United States Internal Revenue Service.
Laws means, collectively, all applicable international, foreign, federal, state and local statutes, treaties, rules, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, licenses, authorizations and permits of, any Governmental Authority.
L/C Advance means, with respect to each Lender, such Lender's participation in any L/C Borrowing in accordance with its Pro Rata Share.
L/C Borrowing means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Borrowing.
L/C Credit Extension means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.
L/C Issuer means any affiliate, unit, or agency of Royal Bank or any other Lender which has agreed to issue one or more Letters of Credit at the request of the Administrative Agent (which shall, at the Borrower's request, notify the Borrower from time to time of the identity of such other Lender).
L/C Obligations means, as at any date of determination, the aggregate undrawn face amount of all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings.
Lender has the meaning specified in the introductory paragraph hereto and, as the context requires, includes the L/C Issuer and the Swing Line Lender.
Lender Hedging Agreement means a Swap Contract between a Company and a Lender or an Affiliate of a Lender.
Lending Office means, as to any Lender, the office or offices of such Lender set forth on its Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.
Letter of Credit means any standby letter of credit issued hereunder.
Letter of Credit Application means an application and agreement for the issuance or amendment of a letter of credit in the form from time to time in use by the L/C Issuer.
Letter of Credit Expiration Date means the day that is five days prior to the Maturity Date (or, if such day is not a Business Day, the next preceding Business Day).
Letter of Credit Sublimit means an amount equal to the lesser of (a) the Aggregate Working Capital/Distribution Subfacility Commitments and (b) $5,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Working Capital/Distribution Subfacility Commitments.
Leverage Ratio means, for the MLP and its Subsidiaries on a consolidated basis, the ratio of (a) Consolidated Funded Debt as of the determination date to (b) Consolidated EBITDA for the period of the four fiscal quarters ending on such date, or if such date is not the last day of a fiscal quarter, ending on the last day of the fiscal quarter most recently ended.
Lien means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever to secure or provide for payment of any obligation of any Person, (including any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable Laws of any jurisdiction), including the interest of a purchaser of accounts receivable.
Limited Partnership Agreement (Borrower) means the Amended and Restated Agreement of Limited Partnership of the Borrower, substantially in the form attached as Exhibit 3.4 to the MLP
Registration Statement, as the same may be amended, restated or otherwise modified in accordance with Section 7.14.
Limited Partnership Agreement (MLP) means the First Amended and Restated Agreement of Limited Partnership of the MLP, substantially in the form attached as Appendix A to the MLP Registration Statement, as the same may be amended, restated or otherwise modified in accordance with Section 7.14.
Loan means an extension of credit by a Lender to the Borrower pursuant to Section 2.01, Section 2.02 or Section 2.15.
Loan Documents means this Agreement, each Note, the Master Consent to Assignment, each of the Collateral Documents, the Agent/Arranger Fee Letter, each Committed Loan Notice, each Swing Line Notice, each Compliance Certificate, the Guaranties, any Subordination Agreement, each Letter of Credit Application, and each other agreement, document or instrument delivered by the Borrower or any of its Subsidiaries from time to time in connection with this Agreement and the Notes.
Loan Party means each of the Borrower, each Guarantor, and each Borrower Affiliate that executes one or more Loan Documents.
Majority Lenders means (a) on any date of determination on and after the Closing Date and prior to the date of the initial Borrowing, those Lenders holding more than 50% of the Aggregate Commitments, (b) on any date of determination on and after the date of the initial Borrowing and prior to the Maturity Date, those Lenders holding more than 50% of the sum of (i) the Revolver Commitment plus (ii) the Term Loan Principal Debt; and (c) on any date of determination on or after the Maturity Date, those Lenders holding more than 50% of the Outstanding Amount of Loans.
Maricopa, Arizona Fertilizer Plant means the fertilizer plant owned and operated by the Borrower located in Maricopa, Arizona.
Market Price means on each day a spot price for the Inventory being valued, determined by published prices and methodology approved by Administrative Agent from time to time, adjusted to reflect any differences in grade between the index Inventory and the actual Inventory and to reflect transportation costs or other appropriate location price differential from the actual location to the index location.
Martin Gas Marine means Martin Gas Marine LLC, a Texas limited liability company.
Martin Gas Sales means Martin Gas Sales, Inc., a Texas corporation.
Martin Party means Martin Resource or any Subsidiary of Martin Resource, other than the MLP General Partner, the MLP, the Borrower General Partner, the Borrower and its Subsidiaries.
Martin Resource means Martin Resource Management Corporation, a Delaware corporation.
Martin Resource Change of Control means (a) a change resulting in any person (as such term is used in section 13(d) and section 14(d)(2) of the Exchange Act) or related persons constituting a group (as such term is used in Rule 13d-5 under the Exchange Act, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of such plan), other than Martin Resource and the Designated Martin Shareholders, (i) becoming the "beneficial owners" (as such term is used in Rule 13d-3 under the Exchange Act as in effect
on the date of the Closing), directly or indirectly, of more than 33 1/3% of the total voting power of all classes then outstanding of Martin Resource's voting stock, or (ii) succeeding in having elected, or causing the election or appointment of at least a majority of the members of the Board of Directors of Martin Resource with directors not nominated or appointed by the Designated Martin Shareholders; provided, that, for the purpose of the foregoing definition, a Person shall not be deemed to "beneficially own" securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person's Affiliates until such tendered securities are accepted for purchase or exchange, or (b) the 120th day after Ruben S. Martin (or his Successor) or Scott D. Martin (or his Successor) ceases to be President and Chief Executive Officer of Martin Resource if a Successor is not appointed to act as President and Chief Executive Officer of Martin Resource within such 120 day period.
Master Consent to Assignment means the Master Consent to Assignment, substantially in the form of Exhibit H.
Material Adverse Effect means (a) a material adverse change in, or a material adverse effect upon, the operations, business, assets, liabilities (actual or contingent) or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole or the MLP and its Subsidiaries taken as a whole, (b) a material adverse effect on the ability of the Borrower or the MLP to perform its obligations under the Loan Documents to which it is a party, (c) a material adverse effect upon the legality, validity, binding effect or enforceability against the Borrower, the MLP, or any other Loan Party of any Loan Document, or (d) a material adverse effect on the ability of the Administrative Agent, the Collateral Agent or the Lenders to enforce its or their remedies under any Loan Document.
Material Agreements means the following:
(a) Contribution Agreement,
(b) Omnibus Agreement,
(c) Limited Liability Company Agreement of CF Martin Sulphur General Partner, dated as of November 22, 2000, as amended,
(d) Agreement of Limited Partnership of CF Martin Sulphur dated as of November 22, 2000, as amended,
(e) Terminal Services Agreement dated as of November 1, 2002, by and between the Borrower and Martin Gas Sales,
(f) Contract for Marine Transportation dated as of November 1, 2002, by and between the Borrower and Martin Resource,
(g) Product Storage Agreement (Arcadia Storage Facility), dated as of November 1, 2002, by and between Martin Underground Storage, Inc., a Texas corporation, and the Borrower,
(h) Product Supply Agreement dated as of November 1, 2002, by and between Martin Gas Sales and the Borrower,
(i) Marine Fuel Agreement dated as of November 1, 2002, by and between Midstream Fuel Service, LLC, an Alabama limited liability company, and the Borrower,
(j) Throughput Agreement dated as of November 1, 2002, by and between Martin Gas Sales and the Borrower,
(k) Motor Carrier Agreement dated as of November 1, 2002, by and between the Borrower and Martin Transport, Inc., a Texas corporation,
(l) Assignment and Assumption of Lease and Sublease dated as of November 1, 2002, by and among Martin Gas Sales and the Borrower,
(m) Lease Agreement dated as of December 16, 1976, as amended, by and between Tampa Port Authority and Martin Gas Sales,
(n) Consent and Amendment to Agreement of Limited Partnership of CF Martin Sulphur dated as of October 25, 2002, by and among CF Martin Sulphur Holding Corporation, a Nevada corporation, CF Martin Sulphur General Partner, CF Industries, and the Borrower,
(o) Contribution Agreement dated as of November 20, 2000, by and between CF Martin Sulphur, CF Martin Sulphur General Partner, Martin Resource, Martin Gas Marine, and Martin Transport, Inc.; and
(p) Stanolind Terminal Agreements;
(q) any and all other agreements now or hereafter entered into by and among Martin Resource, the MLP, the Borrower, or any of their respective Subsidiaries, and CF Industries, or any of its affiliates, material to the business of CF Martin Sulphur if the termination of such contract could be reasonably expected to have a Material Adverse Effect, and
(r) any other contract material to the business of the MLP or the Borrower to which the Borrower or any Borrower Affiliate is a party if the termination of such contract could be reasonably expected to have a Material Adverse Effect. "Material Agreement" means each of such Material Agreements.
Maturity Date means (a) the Stated Maturity Date, or (b) such earlier effective date of any other termination, cancellation, or acceleration of all Commitments under this Agreement.
Maximum Amount and Maximum Rate respectively mean, for each Lender, the maximum non-usurious amount and the maximum non-usurious rate of interest which, under applicable Law, such Lender is permitted to contract for, charge, take, reserve, or receive on the Obligations.
Maximum Credit Exposure shall have the meaning set forth in Section 7.15(e).
Midstream Business means marine transportation, terminalling, distribution, and midstream logistical services with respect to hydrocarbon products and by-products, specialty chemicals, and other liquids and manufacture and marketing of sulphur-based fertilizers and related products and other businesses reasonably related thereto.
MLP means Martin Midstream Partners L.P., a Delaware limited partnership.
MLP General Partner means the general partner of the MLP. As of the Closing Date, the general partner of the MLP is Martin Midstream GP LLC, a Delaware limited liability company.
MLP Offering means the initial sale to the public of common units in the MLP pursuant to the MLP Registration Statement.
MLP Offering Closing means the consummation of the sale of common units to the public pursuant to the MLP Registration Statement.
MLP Registration Statement means the Registration Statement on Form S-1 filed on July 1, 2002 with the Securities and Exchange Commission in connection with the sale of common units in the MLP, as may be amended from time to time.
Mortgaged Vessels means the vessels described in the Vessel Mortgages.
Mortgages means the mortgages, deeds of trust, or similar instruments executed by any of the Loan Parties in favor of the Collateral Agent, for the benefit of the Lenders, including without limitation, the Vessel Mortgages, and all supplements, assignments, amendments, and restatements thereto (or any agreement in substitution therefore, and "Mortgage" means each of such Mortgages).
Multiemployer Plan means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding three calendar years, has made or been obligated to make contributions.
Net Cash Proceeds means (a) with respect to any Disposition, cash (including any cash received by way of deferred payment as and when received and payment of amounts due under any insurance policy) received by the Borrower or any of its Subsidiaries in connection with and as consideration therefor, on or after the date of consummation of such transaction, after (i) deduction of Taxes payable in connection with or as a result of such transaction, and (ii) payment of all usual and customary brokerage commissions and all other reasonable fees and expenses related to such transaction (including, without limitation, reasonable attorneys' fees and closing costs incurred in connection with such transaction), and (b) with respect to any Subordinated Indebtedness, proceeds of such Indebtedness after payment of all reasonable closing costs.
Net Worth means, as of any date of determination, for the MLP the difference between (i) net worth of the MLP on that date minus (ii) goodwill of the MLP on that date in excess of $3,000,000, each determined in accordance with GAAP.
Nonrenewal Notice Date has the meaning specified in Section 2.14(b)(iii).
Notes means the Revolver Notes and the Term Notes of the Borrower, substantially in the form of Exhibit B-1 and B-2, respectively, hereto, evidencing the obligation of Borrower to repay the Loans, and "Note" means any one of such promissory notes issued hereunder.
Obligations means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest that accrues after the commencement by or against any Loan Party of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding. In addition, all references to the "Obligations" in the Collateral Documents and in Sections 2.13 and 10.09 of this Agreement shall, in addition to the foregoing, also include all present and future indebtedness, liabilities, and obligations (and all renewals and extensions thereof or any part thereof) now or hereafter owed to any Lender or any Affiliate of a Lender arising pursuant to any Lender Hedging Agreement.
Obligor means the Borrower or any other Person (other than the Administrative Agent, the Collateral Agent, or any Lender) obligated under any Loan Document.
Off-Balance Sheet Indebtedness of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any liability under any sale and leaseback transaction which is not a Capital Lease, or (c) any obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheets of such Person, but excluding from this clause (c) operating leases.
Omnibus Agreement means the Omnibus Agreement dated as of November 1, 2002, among the MLP, the Borrower, the MLP General Partner, and Martin Resource as amended in accordance with Section 7.14.
Organization Documents means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws; (b) with respect to any limited liability company, the certificate of formation and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation with the secretary of state or other department in the state of its formation, in each case as amended from time to time.
Other Taxes has the meaning specified in Section 3.01(b).
Outstanding Amount on any date (i) with respect to Committed Loans and Swing Line Loans, means the aggregate outstanding principal amount thereof after giving effect to any Borrowings and prepayments or repayments occurring on such date, (ii) with respect to any L/C Obligations, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date, and (iii) for purposes of Section 2.11(d) with respect to Obligations under a Lender Hedging Agreement, means the amount then due and payable under such Lender Hedging Agreement.
Participant has the meaning specified in Section 10.07(d).
PBGC means the Pension Benefit Guaranty Corporation.
Pension Plan means any "employee pension benefit plan" (as such term is defined in Section 3(2)(A) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five plan years.
Permitted Acquisition means an Acquisition or Investment by the Borrower or a Subsidiary of the Borrower resulting in ownership of assets inside the United States, or of equity interests in a Domestic Person, so long as the following requirements have been satisfied:
(a) Such Investment results in the Borrower's ownership of a Subsidiary (or such Investment is an Investment in an existing Subsidiary), and the Borrower shall have complied with the requirements of Sections 6.15 and 6.18 as of the date of such Investment;
(b) If a Borrowing is to be made under the Acquisition Subfacility in connection with such Acquisition or Investment, not less than fourteen (14) days prior to the closing of such Acquisition or Investment, the Borrower shall (i) in the case of an Investment in equity interests, deliver historical financial statements of the acquisition target, (ii) deliver to the Administrative Agent pro forma financial statements acceptable to the Administrative Agent and a certificate of a Responsible Officer of the Borrower demonstrating pro forma compliance with Section 7.15 as of the closing of such Acquisition or Investment after giving effect thereto and after giving effect to any Indebtedness (including Obligations) incurred in connection therewith, and (iii) deliver to the Administrative Agent an Appraisal not more than six months old of newly acquired Fixed Assets of the Borrower and the Guarantors after giving effect to such Acquisition or Investment;
(c) Each Investment shall have been approved or consented to by the board of directors or similar governing entity of the Person being acquired; and
(d) As of the closing of such Acquisition or Investment no Default or Event of Default shall exist or occur as a result of, and after giving effect to, such Acquisition or Investment.
Permitted Inventory Liens has the meaning set forth in the definition of Eligible Inventory.
Permitted Liens means Liens permitted under Section 7.01 as described in such Section.
Person means any natural person, trustee, corporation, general partnership, limited partnership, limited liability company, joint stock company, trust, unincorporated organization, bank, business association, firm, joint venture, Governmental Authority, company or other entity.
Plan means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or any ERISA Affiliate.
Principal Payment means a payment of principal (or, in the case of a Capitalized Lease or a Synthetic Lease, Attributable Indebtedness), whether pursuant to an amortization schedule, at maturity, or otherwise.
Pro Rata Share means, at any date of determination, for any Lender with respect to a particular Facility or Subfacility, the percentage (carried out to the ninth decimal place) that its Committed Sum for such Facility or Subfacility bears to the aggregate Committed Sums of all Lenders for such Facility or Subfacility.
Proceeds Account has the meaning set forth in Section 2.04(b)(iii).
Purchase Price means, with respect to any Acquisition, all direct, indirect, and deferred cash and non-cash payments made to or for the benefit of the Person being acquired (or whose assets are being acquired), its shareholders, officers, directors, employees, or Affiliates in connection with such Acquisition, including, without limitation, the amount of any Indebtedness being assumed in connection with such Acquisition and (subject to the limitations on Indebtedness hereunder) seller financing, payments under non-competition or consulting agreements entered into in connection with such Acquisition and similar agreements, all non-cash consideration and the value of any stock, options, or warrants or other rights to acquire stock issued as part of the consideration in such transaction.
Purchased Assets means the assets purchased from Martin Resource and its Subsidiaries and transferred to the MLP, the Borrower, and their respective subsidiaries pursuant to the Contribution Agreement.
Quarterly Distributions means with respect to the Borrower, the distributions by the Borrower of Available Cash (as defined in the Limited Partnership Agreement (Borrower) as in effect on the Closing Date) or with respect to MLP, the distributions by the MLP of Available Cash (as defined in the Limited Partnership Agreement (MLP) as in effect on the Closing Date).
Reduction Amount has the meaning set forth in the definition of Triggering Sale.
Register has the meaning set forth in Section 10.07(c).
Reinvested means used for capital expenditures or Acquisitions in connection with the Midstream Business of a Company.
Related Parties means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, employees, agents, and advisors of such Person and such Person's Affiliates.
Release means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposal, deposit, dispersal, migrating, or other movement into the air, ground, or surface water, or soil.
Reportable Event means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.
Request for Credit Extension means (a) with respect to a Borrowing, conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to an L/C Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Notice.
Required Lenders means (a) on any date of determination on and after the Closing Date and prior to the date of the initial Borrowing, those Lenders holding more than 66 2/3% of the Aggregate Commitments, (b) on any date of determination on and after the date of the initial Borrowing and prior to the Maturity Date, those Lenders holding more than 66 2/3% of the sum of (i) the Revolver Commitment plus (ii) the Term Loan Principal Debt; and (c) on any date of determination on or after the Maturity Date, those Lenders holding more than 66 2/3% of the Outstanding Amount of Loans.
Required Revolver Lenders means (a) on any date of determination on and after the Closing Date and prior to the date of the initial Borrowing, those Lenders holding more than 66 2/3% of the (i) Acquisition Subfacility Commitment and (ii) Working Capital/Distribution Subfacility Commitment (b) on any date of determination on and after the date of the initial Borrowing and prior to the Maturity Date, those Lenders holding more than 66 2/3% of the Revolver Commitment; and (c) on any date of determination on or after the Maturity Date, those Lenders holding more than 66 2/3% of the Revolver Principal Debt.
Required Term Lenders means (a) on any date of determination on and after the Closing Date and prior to the date of the initial Borrowing, those Lenders holding more than 66 2/3% of the Term Loan Facility Commitment (b) on any date of determination on and after the date of the initial Borrowing and prior to the Maturity Date, those Lenders holding more than 66 2/3% of the Term Loan Committed Sum;
and (c) on any date of determination on or after the Maturity Date, those Lenders holding more than 66 2/3% of the Term Loan Principal Debt.
Responsible Officer means the president, chief executive officer, chief financial officer, controller, treasurer or assistant treasurer of a Person. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership, limited liability company, and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.
Restricted Payment by a Person means any dividend or other distribution (whether in cash, securities or other property) with respect to any equity interest in such Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such equity interest or of any option, warrant or other right to acquire any such equity interest.
Restoration Plan means a plan approved by the Administrative Agent under which the Borrower will use Net Cash Proceeds received as the result of payments made as a result of any condemnation or Vessel requisition or under insurance policies to repair, replace, restore, or purchase substitute property for property that has been damaged or destroyed. Such approval shall not be unreasonably, conditioned, delayed or withheld.
Revolver Commitment means an amount (subject to reduction or cancellation as herein provided) equal to the sum of (i) the Working Capital/Distribution Subfacility Commitment, plus (ii) the Acquisition Subfacility Commitment, or as the context may require, means the Lenders' commitments to make Loans under the Revolver Facility pursuant to Section 2.01.
Revolver Facility means the credit facility as described in and subject to the limitations set forth in Section 2.01.
Revolver Lender means, on any date of determination, any Lender that has a Committed Sum under the Revolver Facility or that is owed any Revolver Principal Debt.
Revolver Note means a promissory note in substantially the form of Exhibit B-1, and all renewals and extensions of all or any part thereof.
Revolver Principal Debt means, on any date of determination, the aggregate unpaid principal balance of all Committed Loans under the Revolver Facility.
Rights means rights, remedies, powers, privileges, and benefits.
Royal Bank means Royal Bank of Canada.
Security Agreements means, collectively, the security agreements, or similar instruments, executed by any of the Loan Parties in favor of the Collateral Agent for the benefit of the Lenders, and all supplements, assignments, amendments, and restatements thereto (or any agreement in substitution therefore), and "Security Agreement" means each of such Security Agreements.
Stanolind Terminal Agreements means the agreements described on Schedule 1.01(c).
Stated Maturity Date means November 4, 2005.
Subfacilities means, collectively, the Acquisition Subfacility and the Working Capital/Distribution Subfacility; Subfacility means either of the Acquisition Subfacility or the Working Capital/Distribution Subfacility.
Subordinated Indebtedness has the meaning set forth in Section 7.04(b).
Subordination Agreement has the meaning set forth in Section 7.04(b).
Subsidiary of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. For avoidance of doubt, the Borrower's current 49.5% limited partnership interest in CF Martin Sulphur does not constitute "control." Unless otherwise specified, all references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of the Borrower.
Successor means any Person approved by the Administrative Agent and the Required Lenders. A Successor shall be approved by the Administrative Agent and the Required Lenders if such Person has adequate industry experience and such approval shall not be unreasonably, conditioned, delayed or withheld.
Swap Contract means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a "Master Agreement"), including any such obligations or liabilities under any Master Agreement.
Swap Termination Value means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a) the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include any Lender).
Swing Line means the revolving credit facility made available by the Swing Line Lender pursuant to Section 2.15.
Swing Line Borrowing means a Borrowing of a Swing Line Loan pursuant to
Section 2.15.
Swing Line Lender means Royal Bank of Canada in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.
Swing Line Loan has the meaning specified in Section 2.15(a).
Swing Line Loan Notice means a notice of a Swing Line Borrowing pursuant to Section 2.15(b), which, if in writing, shall be substantially in the form of Exhibit J.
Swing Line Sublimit means an amount equal to the lesser of (a) $3,500,000 and (b) the Working Capital/Distribution Subfacility Commitments. The Swing Line Sublimit is part of, and not in addition to, the Working Capital/Distribution Subfacility Commitments.
Synthetic Lease Obligation means the monetary obligation of a Person under (a) a so-called synthetic or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which are depreciated for tax purposes by such Person. The amount of any Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.
Taxes has the meaning set forth in Section 3.01.
Term Lender means, on any date of determination, any Lender that has a Committed Sum under the Term Loan Facility or that is owed any Term Loan Principal Debt.
Term Loan Commitment means an amount (subject to reduction or cancellation as herein provided) equal to $25,000,000.
Term Loan Facility means the credit facility as described in and subject to the limitations set forth in Section 2.02.
Term Note means a promissory note substantially in the form of Exhibit B-2, and all renewals and extensions of all or any part thereof.
Term Loan Principal Debt means, on any date of determination, the aggregate unpaid principal balance of all Committed Loans under the Term Loan Facility.
Threshold Amount at any time means an amount equal to 5% of the Borrower's consolidated assets measured as of the close of the then most recent fiscal quarter end.
Triggering Sale means any Disposition (including sales of stock of Subsidiaries) (other than a transfer of assets by the Borrower or any Subsidiary of the Borrower to the Borrower or to a Wholly-Owned Subsidiary of the Borrower) with respect to which the Net Cash Proceeds realized by any Company for such Disposition, when aggregated with the Net Cash Proceeds from all such other Dispositions by all Companies occurring since the Closing Date, equals or exceeds the Threshold Amount. The portion of the Net Cash Proceeds in excess of the Threshold Amount is herein called the "Reduction Amount." For purposes of the definition Triggering Sale and Section 2.04(b)(i) and (iii), Dispositions shall not include Dispositions permitted by Section 7.07(a), (b), or (c).
Type means, with respect to a Committed Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.
U.C.C. means the Uniform Commercial Code, as in effect in the state of New York.
Unauthorized Assignment means (a) an assignment by a Martin Party to any Person other than another Martin Party of any of its rights or obligations under a Material Agreement if such assignment could reasonably be expected to have a Material Adverse Effect, or (b) a holder of Liens shall foreclose or there shall occur a transfer in lieu of foreclosure or other involuntary transfer of any interests of a Martin Party in a Material Agreement if such foreclosure could reasonably be expected to have a Material Adverse Effect.
Unfunded Pension Liability means the excess of a Pension Plan's benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan's assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.
Unreimbursed Amount has the meaning set forth in Section 2.14(c)(i).
U.S. Flag Vessels shall have the meaning set forth in Section 5.21(a).
U.S. Vessel Mortgage means the First Preferred Fleet Mortgage executed and delivered by the Borrower on or before the Conditions Effective Date and the First Preferred Fleet Mortgage executed by Martin Gas Marine on or before the Conditions Effective Date, each substantially in the form attached as Exhibit K.
Vessel Mortgages means, collectively, the U.S. Vessel Mortgage and any other vessel mortgage now or hereafter executed by any of the Borrower, the MLP, or their Subsidiaries to the Collateral Agent for the benefit of the Lenders.
Vessel(s) means all vessels owned by the Borrower, the MLP, and their Subsidiaries, from time to time, including, without limitation those vessels listed on Schedule 5.21 and individually, any of such vessels.
Voting Stock means the capital stock (or equivalent thereof) of any class or kind, of a Person, the holders of which are entitled to vote for the election of directors, managers, or other voting members of the governing body of such Person.
Wholly-Owned when used in connection with a Person means any Subsidiary of such Person of which all of the issued and outstanding equity interests (except shares required as directors' qualifying shares) shall be owned by such Person or one or more of its Wholly-Owned Subsidiaries.
Working Capital/Distribution Subfacility has the meaning specified in
Section 2.01(c).
Working Capital/Distribution Subfacility Commitment means an amount equal to the lesser of (i) the Borrowing Base (Working Capital/Distribution Subfacility) and (ii) (subject to reduction or cancellation as herein provided) $25,000,000.
SECTION 1.02 OTHER INTERPRETIVE PROVISIONS.
(a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.
(b) (i) The words "herein" and "hereunder" and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof.
(ii) Unless otherwise specified herein, Article, Section, Exhibit and Schedule references are to this Agreement.
(iii) The term "including" is by way of example and not limitation.
(iv) The term "documents" includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced.
(c) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including;" the words "to" and "until" each mean "to but excluding;" and the word "through" means "to and including."
(d) Section headings herein and the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.
SECTION 1.03 ACCOUNTING TERMS. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the audited financial statements, except as otherwise specifically prescribed herein.
SECTION 1.04 ROUNDING. Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).
SECTION 1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly provided herein, (a) references to agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.
ARTICLE II.
THE COMMITMENTS AND BORROWINGS
SECTION 2.01 REVOLVER LOANS.
(a) Subject to and in reliance upon the terms, conditions, representations, and warranties in the Loan Documents, each Lender severally, but not jointly, agrees to make loans (each such Loan a "Committed Loan") to the Borrower from time to time on any Business Day during the period from the Conditions Effective Date to the Maturity Date (the "Availability Period"), in an aggregate amount not to exceed at any time outstanding the amount of such Lender's Pro Rata Share of one or more Committed Borrowings under (i) the Acquisition Subfacility (further described in Section 2.01(b) below) not to exceed such Lender's Committed Sum under the Acquisition Subfacility, and (ii) the Working
Capital/Distribution Subfacility (further described in Section 2.01(c) below) not to exceed, when aggregated with the Outstanding Amount of the L/C Obligations and Swing Line Loans, such Lender's Committed Sum under the Working Capital/Distribution Subfacility. Such Committed Borrowings may be repaid and reborrowed from time to time in accordance with the terms and provisions of the Loan Documents; provided that, each such Committed Borrowing must occur on a Business Day and no later than the Business Day immediately preceding the Maturity Date.
(b) Committed Loans under the Acquisition Subfacility shall be available to Borrower for the purposes set forth in Section 6.12(b). After giving effect to any Committed Borrowing under the Acquisition Subfacility, the aggregate Outstanding Amount of all Committed Loans under the Acquisition Subfacility shall not exceed the Acquisition Subfacility Commitment then in effect.
(c) Committed Loans under the Working Capital/Distribution Subfacility shall be available to Borrower for the purposes set forth in Section 6.12(c); provided, however, Committed Borrowings under the Working Capital/Distribution Subfacility will be available to fund not more than $2,500,000 in Distribution Loans in any four (4) consecutive fiscal quarters. After giving effect to any Committed Borrowing under the Working Capital/Distribution Subfacility, the aggregate Outstanding Amount of all Committed Loans, Swing Line Loans, and L/C Obligations under the Working Capital/Distribution Subfacility shall not exceed the Working Capital/Distribution Subfacility Commitment then in effect.
SECTION 2.02 TERM LOAN FACILITY. Subject to and in reliance upon the terms, conditions, representations, and warranties in the Loan Documents, each Lender severally, but not jointly, agrees to make Committed Loans to Borrower in a single disbursement on the Conditions Effective Date in aggregate amount not to exceed at any time outstanding the amount of such Lender's Pro Rata Share of the Term Loan Commitment. If all or a portion of the Term Loan Principal Debt is paid or prepaid, then the amount so paid or prepaid may not be reborrowed. Any portion of the Term Loan Commitment that remains undisbursed after the initial disbursement under the Term Loan Facility shall be reduced to zero and cancelled on the date of such initial disbursement.
SECTION 2.03 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.
(a) Each Committed Borrowing, each conversion of Committed Loans from one Type to the other, and each continuation of Committed Loans as the same Type shall be made upon the Borrower's irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 12:00 noon, New York, New York time, (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans, and (ii) one Business Day prior to the conversion of Eurodollar Rate Loans to Base Rate Committed Loans, or one Business Day prior to the requested date of any Borrowing of Base Rate Committed Loans. Each such telephonic notice must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by an authorized officer of the Borrower. Each Committed Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $2,000,000 or a whole multiple of $1,000,000 in excess thereof. Each Committed Borrowing of or conversion to Base Rate Committed Loans shall be in a principal amount of $2,000,000 or a whole multiple of $1,000,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Committed Borrowing, conversion or continuation (as applicable) is under the Term Loan Facility, the Acquisition Subfacility or the Working Capital/Distribution Subfacility, (ii) whether the Borrower is requesting a Committed Borrowing, a conversion of Committed Loans from one Type to the other, or a continuation of Committed Loans as the same Type, (iii) the requested date of the Committed Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iv) the principal amount of Committed Loans to be borrowed, converted or continued, (v) the Type of Committed Loans to be borrowed or to
which existing Committed Loans are to be converted, and (vi) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Committed Loans shall be made or continued as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Borrower requests a Committed Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.
(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of its Pro Rata Share of the applicable Committed Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Committed Loans described in the preceding subsection. In the case of a Committed Borrowing, each Lender shall make the amount of its Committed Loan available to the Administrative Agent in immediately available funds at the Administrative Agent's Office not later than 12:00 Noon, New York, New York time, on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.03 (and, if such Committed Borrowing is the initial Credit Extension, Section 4.01), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Royal Bank with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to the Administrative Agent by the Borrower; provided, however, that if, on the date of the Committed Borrowing there are Swing Line Loans or L/C Borrowings outstanding, then the proceeds of such Borrowing shall be applied, first, to the payment in full of any such L/C Borrowings, second, to the payment in full of any such Swing Line Loans, and third to the Borrower as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of the Interest Period for such Eurodollar Rate Loan. During the existence of a Default or Event of Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders, and the Required Lenders may demand that any or all of the then outstanding Eurodollar Rate Loans be converted immediately to Base Rate Loans.
(d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Eurodollar Rate Loan upon determination of such interest rate. The determination of the Eurodollar Rate by the Administrative Agent shall be conclusive in the absence of manifest error.
(e) After giving effect to all Committed Borrowings, all conversions of Loans from one Type to the other, and all continuations of Committed Loans as the same Type, there shall not be more than six (6) Interest Periods in effect at any given time with respect to Committed Loans.
SECTION 2.04 PREPAYMENTS.
(a) Optional Prepayments. The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay in whole or in part Committed Loans outstanding under the Acquisition Subfacility, the Working Capital/Distribution Subfacility and/or the Term Loan Principal Debt without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 10:00 a.m., New York, New York time, (A) three Business Days prior to any date of prepayment of Eurodollar Rate Loans, and (B) the date of prepayment of Base Rate Committed Loans;
(ii) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $2,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Committed Loans shall be in a principal amount of $2,000,000 or a whole multiple of $1,000,000 in excess thereof. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Committed Loans to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of such Lender's Pro Rata Share of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 3.05. Each such prepayment shall be applied to the Committed Loans of the Lenders in accordance with their respective Pro Rata Shares.
Unless a Default or Event of Default has occurred and is continuing or would arise as a result thereof, any payment or prepayment of the Committed Loans may be reborrowed under the Revolver Facility by the Borrower, subject to the terms and conditions hereof.
(b) Mandatory Prepayments from Net Cash Proceeds.
(i) (A) Except as provided in clause (B) with respect to condemnation, Vessel requisition, or insurance proceeds, if any portion of the Net Cash Proceeds realized by a Company from any Triggering Sale (including any deferred purchase price therefore) has not been Reinvested within one hundred eighty (180) days from the receipt by such Company of such Net Cash Proceeds (including receipt of any deferred payments for any such Triggering Sale or portion thereof, if and when received), then on the Business Day following such one hundred eightieth (180th) day the Commitments shall be permanently reduced, and the Loans shall be prepaid, in an amount equal to the portion of the Reduction Amount that is not so Reinvested. (B) If any portion of the Net Cash Proceeds realized by a Company from any Triggering Sale received as the result of payments made as a result of any condemnation or Vessel requisition or under any insurance policy has not been used in connection with a Restoration Plan, then on the Business Day following the time period for restoration specified in the Restoration Plan the Commitments shall be permanently reduced, and the Loans shall be prepaid, in an amount equal to the portion of the Reduction Amount remaining on deposit in the Proceeds Account. Net Cash Proceeds of a Disposition that equal, when aggregated with Net Cash Proceeds of all Dispositions since the Closing Date, an amount less than the Threshold Amount shall not be required to be used for mandatory prepayments or commitment reductions pursuant to this Section 2.04(b).
(ii) If any Net Cash Proceeds are received by a Company (A) from the issuance or incurrence of Subordinated Indebtedness by a Company, (B) from the Disposition of any equity interests in CF Martin Sulphur owned by a Company, or (C) in respect of the dissolution of CF Martin Sulphur, the Loans shall be prepaid and, in the case of clause (A), the Commitments shall be permanently reduced, immediately upon receipt of such Net Cash Proceeds in an amount equal to the amount of Net Cash Proceeds received in respect of such Subordinated Indebtedness, Disposition, or dissolution whether or not such Disposition or dissolution qualifies as a Triggering Sale.
(iii) Upon receipt by any Company of Net Cash Proceeds from a Triggering Sale, the Borrower shall (or shall cause the applicable Company to) deposit an amount equal to the Reduction Amount into an account or accounts with the Collateral Agent (collectively, the "Proceeds Account"); provided, however, that the Borrower shall not be required to deposit an amount that is more than the amount of the Commitments. In the case of Section 2.04(b)(i)(A), such Reduction Amount shall remain in the Proceeds Account until the earlier of (x) the date such
Reduction Amount is Reinvested, or (y) the one hundred eightieth
(180th) day following the receipt of such Reduction Amount. If such
Reduction Amount is not Reinvested as herein provided, such proceeds
shall, on the Business Day following such one hundred eightieth (180th)
day, be used for prepayment of Loans and any excess shall be refunded
to the Borrower, or, if there are no outstanding Loans or unpaid
outstanding Obligations then due, such Reduction Amount shall be
refunded to the Borrower, and the Commitments shall be permanently
reduced as provided in Section 2.04(b)(i); provided, however, that if
the outstanding Loans are Eurodollar Rate Loans, the Collateral Agent
shall hold such proceeds in the Proceeds Account until the Eurodollar
Rate Loans can be prepaid without incurring funding losses under
Section 3.05; provided, further, that if the Loans have become due and
payable pursuant to Section 8.02 or otherwise, the Collateral Agent
shall, upon the request of the Administrative Agent, deliver funds from
the Proceeds Account to the Administrative Agent which may, without
notice, apply all such funds to the repayment of the Obligations. In
the case of Section 2.04(b)(i)(B), such Reduction Amount shall remain
in the Proceeds Account until the earlier of (x) the date such
Reduction Amount is to be applied in connection with the applicable
Restoration Plan, or (y) the Business Day following the final day of
the applicable Restoration Plan (or in the absence of an applicable
Restoration Plan delivered pursuant to Section 6.07, on a date
identified by the Administrative Agent which shall not be earlier than
180 days after the receipt of such Reduction Amount). If such Reduction
Amount is not used in connection with a Restoration Plan, such proceeds
shall, on the Business Day following the last day of the applicable
Restoration Plan or on a date chosen by the Administrative Agent (which
shall not be earlier than 180 days after the receipt of such Reduction
Amount), as appropriate, be used for prepayment of Loans and any excess
shall be refunded to the Borrower, or, if there are no outstanding
Loans or unpaid outstanding Obligations then due, such Reduction Amount
shall be refunded to the Borrower, and the Commitments shall be
permanently reduced as provided in Section 2.04(b)(i); provided,
however, that if the outstanding Loans are Eurodollar Rate Loans, the
Collateral Agent shall hold such proceeds in the Proceeds Account until
the Eurodollar Rate Loans can be prepaid without incurring funding
losses under Section 3.05; provided, further, that if the Loans have
become due and payable pursuant to Section 8.02 or otherwise, the
Collateral Agent, upon the request of the Administrative Agent, shall
deliver funds from the Proceeds Account to the Administrative Agent
which may, without notice, apply all funds in the Proceeds Account to
repayment of the Obligations.
(iv) The prepayments and commitment reductions provided for in this Section 2.04(b) shall be applied as follows, unless a Default or Event of Default has occurred and is continuing or would arise as a result thereof (whereupon the provisions of Section 2.11(d) shall apply): (A) first, as a payment of all Unreimbursed Amounts then outstanding, until paid in full, (B) second, as a repayment of all Swing Line Loans, then outstanding, until paid in full, (c) third, as a repayment of the Term Loan Principal Debt, until paid in full, and (D) fourth, as a repayment of Revolver Principal Debt, to be allocated on a pro rata basis between the Acquisition Subfacility and the Working Capital/Distribution Subfacility. If any prepayments of Revolver Principal Debt pursuant to Section 2.04(b)(ii) are made, the Revolver Commitment shall be permanently reduced by the amount of such prepayments on a pro rata basis between the Acquisition Subfacility and the Working Capital Distribution Subfacility.
(v) All funds held in the Proceeds Account shall be invested in time deposits or certificates of deposit issued by the Administrative Agent or in investments that constitute Cash Equivalents (provided that the maturities thereof shall not exceed 180 days). All interest and income earned on the amounts held in the Proceeds Account shall be paid to the Borrower at the time the funds therein are applied as provided in this Section 2.04(b).
(vi) The Borrower hereby grants to the Collateral Agent, for the benefit of the Lenders, a lien on and security interest in and to the Proceeds Account and all monies, cash, checks, drafts, certificates of deposit, instruments, investment property, and other items received by Collateral Agent for deposit therein and held therein, as security for the Obligations. The rights granted by this Section 2.04(b)(vi) shall be in addition to the rights of the Collateral Agent under any statutory banker's Lien or the common law right of setoff.
(c) Mandatory Payments/Reductions. (i) If for any reason the Outstanding Amount of all Committed Loans, Swing Line Loans, and L/C Obligations at any time exceeds the Aggregate Commitments then in effect, the Borrower shall immediately prepay Committed Loans and/or Swing Line Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess unless such excess occurs as a result of an event described in clause (ii) of this Section in which case such excess shall be repaid within three Business Days of such excess occurring; and (ii) if for any reason the Outstanding Amount of all Committed Loans, Swing Line Loans, and L/C Obligations under the Working Capital/Distribution Subfacility exceeds the Working Capital/Distribution Subfacility Commitment, the Borrower shall prepay Committed Loans and/or Swing Line Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess within three Business Days of such excess occurring.
(d) Prepayments: Interest/Consequential Loss. All prepayments under
this Section 2.04 shall be made together with accrued interest to the date of
such prepayment on the principal amount prepaid and any amounts due under
Section 3.05.
(e) The Borrower may, upon notice to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 1:00 p.m. New York, New York time on the date of the prepayment, and (ii) any such prepayment shall be in a minimum principal amount of $100,000. Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.
SECTION 2.05 REDUCTION OR TERMINATION OF COMMITMENTS. The Borrower may, upon notice to the Administrative Agent, terminate the Aggregate Commitments or (prior to the Initial Funding Date) permanently reduce the Term Loan Commitment, or permanently reduce the Revolver Commitment to an amount not less than the sum of the Outstanding Amount of the then existing (a) Revolver Principal Debt, (b) L/C Obligations, and (c) Swing Line Loans; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. New York, New York time, five Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $1,000,000 or any whole multiple of $500,000 in excess thereof and (iii) any Revolver Commitment reduction shall be allocated between the Acquisition Subfacility and the Working Capital/Distribution Subfacility in amounts not less than $500,000. The Administrative Agent shall promptly notify the Lenders of any such notice of reduction or termination. Once reduced in accordance with this Section, the Commitments may not be increased. Any reduction of the Revolver Commitment shall be applied to the Commitment of each Lender according to its Pro Rata Share, and any reduction of the Term Loan Commitment shall be applied to the Commitment of each Lender according to its Pro Rata Share. All commitment fees on the portion of the Commitment so terminated which have accrued to the effective date of any termination of Commitments shall be paid on the effective date of such termination.
SECTION 2.06 REPAYMENT OF LOANS.
(a) The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of Committed Loans outstanding on such date.
(b) The Borrower shall repay each Swing Line Loan on the earlier to occur of (i) each Friday during the term hereof or, if any Friday is not a Business Day, the next Business Day following such Friday and (ii) the Maturity Date.
SECTION 2.07 INTEREST.
(a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii) each Base Rate Committed Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate.
(b) The Borrower shall pay interest on all past due amounts at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Law. Accrued and unpaid interest on such past due amounts (including interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.
(d) If the designated rate applicable to any Borrowing exceeds the Maximum Rate, the rate of interest on such Borrowing shall be limited to the Maximum Rate, but any subsequent reductions in such designated rate shall not reduce the rate of interest thereon below the Maximum Rate until the total amount of interest accrued thereon equals the amount of interest which would have accrued thereon if such designated rate had at all times been in effect. In the event that at maturity (stated or by acceleration), or at final payment of the Outstanding Amount of any Committed Loans, Swing Line Loans or L/C Obligations, the total amount of interest paid or accrued is less than the amount of interest which would have accrued if such designated rates had at all times been in effect, then, at such time and to the extent permitted by Law, the Borrower shall pay an amount equal to the difference between (a) the lesser of the amount of interest which would have accrued if such designated rates had at all times been in effect and the amount of interest which would have accrued if the Maximum Rate had at all times been in effect, and (b) the amount of interest actually paid or accrued on such Outstanding Amount.
SECTION 2.08 FEES.
(a) Commitment Fee. The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Pro Rata Share, a commitment fee equal to the Applicable Rate times the actual daily amount by which the Aggregate Committed Sum with respect to the Revolver Facility exceeds the sum of (i) the Outstanding Amount of Committed Loans with respect to the Revolver Facility and (ii) the Outstanding Amount of L/C Obligations. The commitment fee shall accrue at all times from the Closing Date until the Maturity Date and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to
occur after the Closing Date, and on the Maturity Date. The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. The commitment fee shall accrue at all times, including at any time during which one or more of the conditions in Article IV is not met.
(b) Arranger's and Agency Fees. The Borrower shall pay certain fees to the Arranger for the Arranger's own account, and shall pay an agency fee to the Administrative Agent for the Administrative Agent's own account, in the amounts and at the times specified in the letter agreement, dated September 5, 2002 (the "Agent/Arranger Fee Letter"), between the Borrower, the Arranger and the Administrative Agent. Such fees shall be fully earned when paid and shall be nonrefundable for any reason whatsoever.
(c) Lenders' Upfront Fee. On the Conditions Effective Date, the Borrower shall pay to the Administrative Agent, for the account of the Lenders in accordance with their respective Pro Rata Shares, an upfront fee in the agreed amount in accordance with the Agent/Arranger Fee Letter. Such upfront fees are for the credit facilities by the Lenders under this Agreement and are fully earned on the date paid. The upfront fee paid to each Lender is solely for its own account and is nonrefundable for any reason whatsoever.
SECTION 2.09 COMPUTATION OF INTEREST AND FEES. Computation of interest on Base Rate Loans shall be calculated on the basis of a year of 365 or 366 days, as the case may be, and the actual number of days elapsed. Computation of all other types of interest and all fees shall be calculated on the basis of a year of 360 days and the actual number of days elapsed, which results in a higher yield to the payee thereof than a method based on a year of 365 or 366 days. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall bear interest for one day.
SECTION 2.10 EVIDENCE OF DEBT.
(a) The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon. Any failure so to record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of such Lender shall control. Upon the request of any Lender made through the Administrative Agent, such Lender's Loans may be evidenced by one or more Notes. Each Lender may attach schedules to its Note(s) and endorse thereon the date, Type (if applicable), amount and maturity of the applicable Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection
(a), each Lender and the Administrative Agent shall maintain in accordance with
its usual practice accounts or records evidencing the purchases and sales by
such Lender of participations in Letters of Credit and Swing Line Loans. In the
event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such matters, the accounts and records of the Administrative Agent shall
control.
SECTION 2.11 PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent's Office in Dollars and in immediately available funds not later than 12:00 noon, New York, New York time, on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender's Lending Office. All payments received by the Administrative Agent after 12:00 noon, New York, New York time, shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.
(b) Subject to the definition of "Interest Period," if any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.
(c) If no Default or Event of Default exists and if no order of application is otherwise specified in the Loan Documents, payments and prepayments of the Obligations shall be applied first to fees, second to accrued interest then due and payable on the Outstanding Amount of Loans and L/C Obligations, and then to the remaining Obligations in the order and manner as Borrower may direct.
(d) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully the Obligations then due, or if a Default or Event of Default exists, any payment or prepayment shall be applied in the following order: (i) to the payment of enforcement expenses incurred by the Administrative Agent, including Attorney Costs; (ii) to the ratable payment of all other fees, expenses, and indemnities for which the Administrative Agent or the Lenders are entitled to payment but have not yet been paid or reimbursed in accordance with the Loan Documents (as used in this Section 2.11(d)(ii), a "ratable payment" for any Lender or the Administrative Agent shall be, on any date of determination, that proportion which the portion of the total fees, expenses, and indemnities owed to such Lender or the Administrative Agent bears to the total aggregate fees and indemnities owed to all Lenders and the Administrative Agent on such date of determination); (iii) to the ratable payment of accrued and unpaid interest on the Outstanding Amount of Loans and the Outstanding Amount of Obligations under Lender Hedging Agreements (as used in this Section 2.11(d)(iii), "ratable payment" means, for any Lender (or Lender Affiliate, in the case of Lender Hedging Agreements), on any date of determination, that proportion which the accrued and unpaid interest on the Outstanding Amount of Loans and the Outstanding Amount of Obligations under Lender Hedging Agreements owed to such Lender (or Lender Affiliate, in the case of Lender Hedging Agreements) bears to the total accrued and unpaid interest on the Outstanding Amount of Loans and the Outstanding Amount of Obligations under Lender Hedging Agreements owed to all Lenders (and Affiliates, in the case of Lender Hedging Agreements)); (iv) to the ratable payment of the Outstanding Amount of Loans (as used in this Section 2.11(d)(iv), "ratable payment" means for any Lender, on any date of determination, that proportion which the Outstanding Amount of Loans owed to such Lender bears to the Outstanding Amount of Loans owed to all Lenders); (v) to Cash Collateralize the Letters of Credit, and (vi) to the payment of the remaining Obligations then due, if any, in the order and manner the Required Lenders deem appropriate.
(e) Unless the Borrower or any Lender has notified the Administrative Agent prior to the date any payment is required to be made by it to the Administrative Agent hereunder, that the Borrower or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume that the Borrower or such Lender, as the case may be, has timely made such payment and may (but shall
not be so required to), in reliance thereon, make available a corresponding amount to the Person entitled thereto. If and to the extent that such payment was not in fact made to the Administrative Agent in immediately available funds, then:
(i) if the Borrower failed to make such payment, each Lender shall forthwith on demand repay to the Administrative Agent the portion of such assumed payment that was made available to such Lender in immediately available funds, together with interest thereon in respect of each day from and including the date such amount was made available by the Administrative Agent to such Lender to the date such amount is repaid to the Administrative Agent in immediately available funds, at the Federal Funds Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender shall forthwith on demand pay to the Administrative Agent the amount thereof in immediately available funds, together with interest thereon for the period from the date such amount was made available by the Administrative Agent to the Borrower to the date such amount is recovered by the Administrative Agent (the "Compensation Period") at a rate per annum equal to the Federal Funds Rate from time to time in effect. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Committed Loan, included in the applicable Borrowing. If such Lender does not pay such amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent may make a demand therefor upon the Borrower, and the Borrower shall pay such amount to the Administrative Agent, together with interest thereon for the Compensation Period at a rate per annum equal to the rate of interest applicable to the applicable Borrowing. Nothing herein shall be deemed to relieve any Lender from its obligation to fulfill its Commitment or to prejudice any rights which the Administrative Agent or the Borrower may have against any Lender as a result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender with respect to any amount owing under this subsection (e) shall be conclusive, absent manifest error.
(f) If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and the conditions to the applicable Borrowing set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.
(g) The obligations of the Lenders hereunder to make Loans are several and not joint. The failure of any Lender to make any Loan on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan or purchase its participation.
(h) Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
SECTION 2.12 SHARING OF PAYMENTS. If, other than as expressly provided elsewhere herein, any Lender shall obtain on account of the Committed Loans made by it, or the participations in the L/C Obligations, or in Swing Line Loans held by it, any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such fact, and (b) purchase from the other Lenders such participations in the Committed Loans made by them, and/or such subparticipations in the participations in L/C Obligations or Swing Line Loans held by them, as the
case may be, as shall be necessary to cause such purchasing Lender to share the
excess payment in respect of such Committed Loan or such participations, as the
case may be, pro rata with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from the purchasing
Lender, such purchase shall to that extent be rescinded and each other Lender
shall repay to the purchasing Lender the purchase price paid therefor, together
with an amount equal to such paying Lender's ratable share (according to the
proportion of (i) the amount of such paying Lender's required repayment to (ii)
the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.09) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section
shall from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.
SECTION 2.13 PRIORITY OF HEDGING OBLIGATIONS. Any amounts received in satisfaction of any Obligations arising under the Loan Documents, including, without limitation, Obligations under this Agreement and any Lender Hedging Agreement, shall rank pari passu in right of payment and shall be used to repay such Obligations on a pro rata basis.
SECTION 2.14 LETTERS OF CREDIT.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth in this Section 2.14, (1) from time to time on any Business Day during the period from the Conditions Effective Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower or its Subsidiaries, and to amend or renew Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower and its Subsidiaries; provided that the L/C Issuer shall not be obligated to make any L/C Credit Extension with respect to any Letter of Credit, and no Lender shall be obligated to participate in, any Letter of Credit if as of the date of such L/C Credit Extension, (x) the Outstanding Amount of all L/C Obligations and all Loans under the Working Capital/Distribution Subfacility would exceed the Aggregate Commitments under the Working Capital/Distribution Subfacility, (y) the aggregate Outstanding Amount of the Loans of any Lender under the Working Capital/Distribution Subfacility, plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C Obligations plus such Lender's Pro Rata Share of the Outstanding Amount of all Swing Line Loans would exceed such Lender's Working Capital/Distribution Subfacility Commitment, or (z) the Outstanding Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower's ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall be under no obligation to issue any Letter of Credit if:
(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good faith deems material to it;
(B) subject to Section 2.14(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance or last renewal, unless the Required Lenders have approved such expiry date;
(C) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date;
(D) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer generally applicable to all borrowers; or
(E) such Letter of Credit is in a face amount less than $100,000, or is to be used for a purpose other than as described in Section 6.12 or is denominated in a currency other than Dollars.
(iii) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit; Evergreen Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such L/C Application must be received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m., New York, New York time, at least two Business Days (or such later date and time as the L/C Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of
amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may require.
(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Upon receipt by the L/C Issuer of confirmation from the Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer's usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a participation in such Letter of Credit in an amount equal to the product of such Lender's Pro Rata Share times the amount of such Letter of Credit.
(iii) If the Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in it sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an "Evergreen Letter of Credit"); provided that any such Evergreen Letter of Credit must permit the L/C Issuer to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the "Nonrenewal Notice Date") in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such renewal. Once an Evergreen Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the renewal of such Letter of Credit at any time to a date not later than the Letter of Credit Expiration Date; provided, however, that the L/C Issuer shall not permit any such renewal if it has received notice on or before the Business Day immediately preceding the Nonrenewal Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such renewal or (2) from any Lender stating that one or more of the applicable conditions specified in Section 4.03 is not then satisfied and directing the L/C Issuer not to permit such renewal. Notwithstanding anything to the contrary contained herein, the L/C Issuer shall have no obligation to permit the renewal of any Evergreen Letter of Credit at any time.
(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon any drawing under any Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative Agent thereof. Not later than 11:00 a.m., New York time, on the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an "Honor Date"), the Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing. If the Borrower fails to so reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the "Unreimbursed Amount"), and such Lender's Pro Rata Share thereof. In such event, the Borrower shall be deemed to have requested a Committed
Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.03 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Commitments and the conditions set forth in Section 4.03 (other than the delivery of a Committed Loan Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.14(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.
(ii) Each Lender (including the Lender acting as L/C Issuer) shall upon any notice pursuant to Section 2.14(c)(i) make funds available to the Administrative Agent for the account of the L/C Issuer at the Administrative Agent's Office in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m., New York time, on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.14(c)(iii), each Lender that so makes funds available shall be deemed to have made a Base Rate Committed Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not
fully refinanced by a Committed Borrowing of Base Rate Loans because
the conditions set forth in Section 4.03 cannot be satisfied or for any
other reason, the Borrower shall be deemed to have incurred from the
L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount
that is not so refinanced, which L/C Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the
Default Rate. In such event, each Lender's payment to the
Administrative Agent for the account of the L/C Issuer pursuant to
Section 2.14(c)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance
from such Lender in satisfaction of its participation obligation under
this Section 2.14.
(iv) Until each Lender funds its Committed Loan or L/C Advance pursuant to this Section 2.14(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender's Pro Rata Share of such amount shall be solely for the account of the L/C Issuer.
(v) Each Lender's obligation to make Committed Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.14(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default or Event of Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing. Any such reimbursement shall not relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein.
(vi) If any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.14(c) by the time specified in Section 2.14(c)(ii), the L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the Federal Funds Rate from time to time in effect. A certificate of the L/C Issuer submitted to
any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender's L/C Advance in respect of such payment in accordance with Section 2.14(c), if the Administrative Agent receives for the account of the L/C Issuer any payment related to such Letter of Credit (whether directly from the Borrower or otherwise, including proceeds of cash Collateral applied thereto by the Administrative Agent), or any payment of interest thereon, the Administrative Agent will distribute to such Lender its Pro Rata Share thereof in the same funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.14(c)(i) is required to be returned, each Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect.
(e) Obligations Absolute. The obligation of the Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit, and to repay each L/C Borrowing and each drawing under a Letter of Credit that is refinanced by a Borrowing of Loans, shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;
(ii) the existence of any claim, counterclaim, set-off, defense or other right that the Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, that might otherwise constitute a defense available to, or a discharge of, the Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower's instructions or other irregularity, the Borrower will immediately notify the L/C Issuer. The Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. No Agent-Related Person
nor any of the respective correspondents, participants or assignees of the L/C
Issuer shall be liable to any Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Letter of Credit Application. The Borrower hereby
assumes all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit; provided, however, that this
assumption is not intended to, and shall not, preclude the Borrower's pursuing
such rights and remedies as it may have against the beneficiary or transferee at
law or under any other agreement. No Agent-Related Person, nor any of the
respective correspondents, participants or assignees of the L/C Issuer, shall be
liable or responsible for any of the matters described in clauses (i) through
(v) of Section 2.14(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Borrower may have a claim against the L/C Issuer,
and the L/C Issuer may be liable to the Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrower which the Borrower proves were caused by the L/C
Issuer's willful misconduct or gross negligence or the L/C Issuer's willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, the L/C Issuer may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative Agent, (i) if the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, the Borrower shall immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations (in an amount equal to such Outstanding Amount). The Borrower hereby grants the Collateral Agent, for the benefit of the L/C Issuer and the Lenders, a Lien on all such cash and deposit accounts at the Administrative Agent and the Collateral Agent.
(h) Applicability of ISP98. Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), the rules of the "International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each Letter of Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Pro Rata Share a Letter of Credit fee for each Letter of Credit issued equal to the product of the Applicable Rate times the actual daily undrawn amount under each Letter of Credit. Such fee for each Letter of Credit shall be due and payable on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, and on the Letter of Credit Expiration Date. If there is any change in the Applicable Rate during any quarter, the actual daily undrawn amount of each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The Borrower shall pay directly to the L/C Issuer for its own account an annual fronting fee in an amount with respect to each Letter of Credit issued equal to the greater of (i) $500 or (ii) 1/4 of 1% per annum calculated on the daily undrawn face amount thereof. In addition, the Borrower shall pay directly to the L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect. Such fees and charges are due and payable on demand and are nonrefundable.
(k) Conflict with Letter of Credit Application. In the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.
SECTION 2.15 SWING LINE LOANS.
(a) The Swing Line. Subject to the terms and conditions set forth
herein, the Swing Line Lender agrees to make loans (each such loan, a "Swing
Line Loan") to the Borrower from time to time on any Business Day during the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Pro Rata Share of the Outstanding Amount of
Committed Loans and L/C Obligations of the Lender acting as Swing Line Lender,
may exceed the amount of such Lender's Commitment; provided, however, that after
giving effect to any Swing Line Loan, (i) the Amount Outstanding under the
Working Capital/Distribution Subfacility shall not exceed the Aggregate
Commitments under the Working Capital/Distribution Subfacility, and (ii) the
aggregate Outstanding Amount of the Committed Loans under the Working
Capital/Distribution Subfacility of any Lender, plus such Lender's Pro Rata
Share of the Outstanding Amount of all L/C Obligations, plus such Lender's Pro
Rata Share of the Outstanding Amount of all Swing Line Loans shall not exceed
such Lender's Working Capital/Distribution Subfacility Commitment, and provided,
further, that the Borrower shall not use the proceeds of any Swing Line Loan to
refinance any outstanding Swing Line Loan. Within the foregoing limits, and
subject to the other terms and conditions hereof, the Borrower may borrow under
this Section 2.15, prepay under Section 2.04, and reborrow under this Section
2.15. Each Swing Line Loan shall be a Base Rate Loan and shall be outstanding
for no longer than five (5) Business Days. Immediately upon the making of a
Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Swing Line Lender a risk
participation in such Swing Line Loan in an amount equal to the product of such
Lender's Pro Rata Share times the amount of such Swing Line Loan.
(b) Borrowing Procedures. Each Swing Line Borrowing shall be made upon the Borrower's irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 2:00 p.m. New York, New York time on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $100,000 or a whole multiple of $100,000 in excess thereof, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Promptly after receipt by the Administrative Agent of any telephonic Swing Line Loan Notice, the Administrative Agent will notify the Swing Line Lender (by telephone or in writing) of such Swing Line Loan Notice and the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 2:30 p.m. New York, New York time on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the proviso to the first sentence of Section 2.15(a), or (B) that one or more of the applicable conditions specified in Article IV is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 3:00 p.m. New York, New York time on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Borrower at its office by crediting the account of the Borrower on the books of the Swing Line Lender in immediately available funds.
(c) Refinancing of Swing Line Loans.
(i) The Swing Line Lender at any time in its sole and absolute
discretion may request, on behalf of the Borrower (which hereby
irrevocably authorizes the Swing Line Lender to so request on its
behalf), that each Lender make a Base Rate Committed Loan in an amount
equal to such Lender's Pro Rata Share of the amount of Swing Line Loans
then outstanding. Such request shall be made in writing (which written
request shall be deemed to be a Committed Loan Notice for purposes
hereof) and in accordance with the requirements of Section 2.03,
without regard to the minimum and multiples specified therein for the
principal amount of Base Rate Loans, but subject to the unutilized
portion of the Aggregate Commitments and the conditions set forth in
Section 4.03. The Swing Line Lender shall furnish the Borrower with a
copy of the applicable Committed Loan Notice promptly after delivering
such notice to the Administrative Agent. Each Lender shall make an
amount equal to its Pro Rata Share of the amount specified in such
Committed Loan Notice available to the Administrative Agent in
immediately available funds for the account of the Swing Line Lender at
the Administrative Agent's Office not later than 1:00 p.m. on the day
specified in such Committed Loan Notice, whereupon, subject to Section
2.15(c)(ii), each Lender that so makes funds available shall be deemed
to have made a Base Rate Committed Loan to the Borrower in such amount.
The Administrative Agent shall remit the funds so received to the Swing
Line Lender.
(ii) If for any reason any Swing Line Loan cannot be refinanced by such a Committed Borrowing in accordance with Section 2.15(c)(i), the request for Base Rate Committed Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Lenders fund its risk participation in the relevant Swing Line Loan and each Lender's payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.15(c)(i) shall be deemed payment in respect of such participation.
(iii) If any Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.15(c) by the time specified in Section 2.15(c)(i), the Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender
at a rate per annum equal to the Federal Funds Rate from time to time in effect. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.
(iv) Each Lender's obligation to make Committed Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.15(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender, the Borrower or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender's obligation to make Committed Loans pursuant to this Section 2.15(c) is subject to the conditions set forth in Section 4.03. No such funding of risk participations shall relieve or otherwise impair the obligation of the Borrower to repay Swing Line Loans, together with interest as provided herein.
(d) Repayment of Participations.
(i) At any time after any Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Lender its Pro Rata Share of such payment (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender's risk participation was funded) in the same funds as those received by the Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 10.06 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Lender shall pay to the Swing Line Lender its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender.
(e) Interest for Account of Swing Line Lender. The Swing Line Lender shall be responsible for invoicing the Borrower for interest on the Swing Line Loans. Until each Lender funds its Base Rate Committed Loan or risk participation pursuant to this Section 2.15 to refinance such Lender's Pro Rata Share of any Swing Line Loan, interest in respect of such Pro Rata Share shall be solely for the account of the Swing Line Lender.
(f) Payments Directly to Swing Line Lender. The Borrower shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
SECTION 3.01 TAXES.
(a) Any and all payments by the Borrower to or for the account of the Administrative Agent or any Lender under any Loan Document shall be made free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and all liabilities with respect thereto, excluding, in the case of the Administrative Agent
and each Lender, taxes imposed on or measured by its net income, and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the Laws of which the Administrative Agent or such Lender, as the case may be, is organized or maintains its Lending Office (all such non-excluded taxes, duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be required by any Laws to deduct any Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section), each of the Administrative Agent and such Lender receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable Laws, and (iv) within 30 days after the date of such payment, the Borrower shall furnish to the Administrative Agent (which shall forward the same to such Lender) the original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or future stamp, court or documentary taxes and any other excise or property taxes or charges or similar levies which arise from any payment made under any Loan Document or from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document (hereinafter referred to as "Other Taxes").
(c) If the Borrower shall be required to deduct or pay any Taxes or Other Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, the Borrower shall also pay to the Administrative Agent (for the account of such Lender) or to such Lender, at the time interest is paid, such additional amount that such Lender specifies as necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on or measured by net income) such Lender would have received if such Taxes or Other Taxes had not been imposed.
(d) The Borrower agrees to indemnify the Administrative Agent and each Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable under this Section) paid by the Administrative Agent and such Lender, (ii) amounts payable under Section 3.01(c) and (iii) any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. Payment under this subsection (d) shall be made within 30 days after the date the Lender or the Administrative Agent makes a demand therefor.
SECTION 3.02 ILLEGALITY. If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or materially restricts the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the applicable offshore Dollar market, or to determine or charge interest rates based upon the Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Committed Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day of the Interest Period thereof, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the Borrower shall also pay interest on the amount so prepaid or converted. Each Lender agrees to designate a different Lending Office if such designation will avoid the
need for such notice and will not, in the reasonable judgment of such Lender, otherwise be materially disadvantageous to such Lender.
SECTION 3.03 INABILITY TO DETERMINE RATES. If the Administrative Agent determines in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits are not being offered to banks in the applicable offshore Dollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, or adequate and reasonable means do not exist for determining the Eurodollar Rate for such Eurodollar Rate Loan, or (b) if the Required Lenders determine and notify the Administrative Agent that the Eurodollar Rate for such Eurodollar Rate Loan does not adequately and fairly reflect the cost to the Lenders of funding such Eurodollar Rate Loan, then the Administrative Agent will promptly notify the Borrower and all Lenders. Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent revokes such notice. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing, conversion or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Committed Borrowing of Base Rate Loans in the amount specified therein.
SECTION 3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES ON EURODOLLAR RATE LOANS.
(a) If any Lender determines that as a result of a Change in Law, or
such Lender's compliance therewith, there shall be any increase in the cost to
such Lender of agreeing to make or making, funding or maintaining Eurodollar
Rate Loans, or a reduction in the amount received or receivable by such Lender
in connection with any of the foregoing (excluding for purposes of this
subsection (a) any such increased costs or reduction in amount resulting from
(i) Taxes or Other Taxes (as to which Section 3.01 shall govern), (ii) changes
in the basis of taxation of overall net income or overall gross income by the
United States or any foreign jurisdiction or any political subdivision of either
thereof under the Laws of which such Lender is organized or has its Lending
Office, and (iii) reserve requirements contemplated by Section 3.04(c) utilized,
as to Eurodollar Rate Loans, in the determination of the Eurodollar Rate), then
from time to time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such increased cost or reduction.
(b) If any Lender determines a Change In Law regarding capital adequacy has the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of such Lender's obligations hereunder (taking into consideration its policies with respect to capital adequacy and such Lender's desired return on capital), then from time to time upon demand of such Lender (with a copy of such demand to the Administrative Agent), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such reduction.
(c) The Borrower shall pay to each Lender, as long as such Lender shall be required under regulations of the Board to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as "Eurocurrency liabilities"), additional costs on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), which shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least 15 days' prior notice (with a copy to the Administrative Agent) of such additional interest from such Lender. If a Lender fails to give notice 15 days prior to the relevant Interest Payment Date, such additional interest shall be due and payable 15 days from receipt of such notice.
SECTION 3.05 FUNDING LOSSES. Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower; including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the applicable offshore Dollar interbank market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.
SECTION 3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
(a) A certificate of the Administrative Agent or any Lender claiming compensation under this Article III and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, the Administrative Agent or such Lender may use any reasonable averaging and attribution methods.
(b) If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
SECTION 3.07 SURVIVAL. All of the Borrower's obligations under this Article III shall survive termination of the Commitments and payment in full of all the other Obligations.
ARTICLE IV.
CONDITIONS PRECEDENT TO BORROWINGS
SECTION 4.01 CONDITIONS TO INITIAL CREDIT EXTENSION. The obligation of each Lender to fund its portion of the initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) and unless otherwise specified, each properly executed by an
authorized officer of the signing Loan Party, each dated the Conditions Effective Date (or, in the case of certificates of governmental officials, a recent date before the Conditions Effective Date) or the Closing Date, as appropriate, and each in form and substance satisfactory to the Administrative Agent and its legal counsel:
(i) executed counterparts of this Agreement, the Master Consent to Assignment, the Guaranties, the U.S. Vessel Mortgages, the Mortgages executed by the Borrower substantially in the forms of Exhibits L and M and all other Collateral Documents required by the Administrative Agent, each dated as of the Closing Date or as of the Conditions Effective Date;
(ii) Notes executed by the Borrower in favor of each Lender requesting such Notes, each in a principal amount equal to such Lender's Committed Sum, each dated as of the Closing Date or as of the Conditions Effective Date;
(iii) such certificates of resolutions or other action, incumbency certificates and/or other certificates of officers of each Loan Party as the Administrative Agent may require to establish the identities of and verify the authority and capacity of each officer thereof authorized to act in connection with this Agreement and the other Loan Documents to which such Loan Party is a party;
(iv) such evidence as the Administrative Agent may reasonably require to verify that each Loan Party is duly organized or formed, validly existing, and in good standing in the jurisdiction of its organization;
(v) a certificate signed by a Responsible Officer of the
Borrower certifying that (A) the MLP Offering Closing has occurred and
that the gross proceeds of the sale of limited partner units (other
than proceeds paid by the MLP General Partner and Martin Parties) are
not less than $55,000,000, (B) that the representations and warranties
contained in Article V are true and correct in all respects on and as
of such date, (C) no Default or Event of Default has occurred and is
continuing as of such date, (D) since December 31, 2001 there has
occurred no material adverse change in (x) the business, assets,
liabilities (actual or contingent), operations, or condition (financial
or otherwise) of the Borrower or any Guarantor, or (y) any of the
businesses, assets or liabilities acquired or assumed or being acquired
or assumed by the Borrower or any of its Subsidiaries, (E) Purchased
Assets have been conveyed to the Borrower pursuant to the Contribution
Agreement, and the Borrower and its Subsidiaries own the assets and
businesses reflected on the MLP Balance Sheet free and clear of all
Liens other than Permitted Liens and Liens to be released on the
Closing Date (as described in Section 4.01(h)), (F) there is no
litigation, investigation or proceeding known to and affecting the
Borrower or any Borrower Affiliate for which the Borrower is required
to give notice pursuant to Section 6.03(c) (or, if there is any such
litigation, investigation or proceeding, then a notice containing the
information required by Section 6.03(c) shall be given concurrently
with the delivery of the certificate given pursuant to this clause
(v)), and (G) no action, suit, investigation or proceeding is pending
or threatened in any court or before any arbitrator or governmental
authority by or against the Borrower, any Guarantor, the MLP General
Partner, or any of their respective properties, that (x) could
reasonably be expected to materially and adversely affect the Borrower
or any Guarantor, or (y) seeks to affect or pertains to any transaction
contemplated hereby or the ability of the Borrower or any Guarantor to
perform its obligations under the Loan Documents;
(vi) a certificate of a Responsible Officer (A) listing the Material Agreements then in effect, each of which shall be in form and substance satisfactory to the Administrative Agent, and
(B) attaching a copy of each of the listed Material Agreements, and (C)
certifying that each such Material Agreement has been duly executed and
is in full force and effect;
(vii) a certificate of a Responsible Officer providing copies of the following or a copy of the MLP Registration Statement containing the following (A) historical audited financial information for predecessor entities and/or businesses for the three (3) years ended December 31, 2001, and historical unaudited financial information for predecessor entities and/or businesses for the fiscal quarters ended March 31, 2002, and June 30, 2002; and (B) such other financial information as the Administrative Agent may request;
(viii) opinions from (A) Baker Botts L.L.P., counsel to each Loan Party and the General Partner, substantially in the form of Exhibit F-1 hereto, and (B) local counsel to each Loan Party with respect to each deed of trust or mortgage executed by a Loan Party;
(ix) a letter from CT Corporation System, Inc., to accept service of process in the State of New York on behalf of the Borrower and each Guarantor;
(x) a duly completed Compliance Certificate in the form of
Exhibit C signed by a Responsible Officer of the Borrower and a
Responsible Officer of the MLP demonstrating pro forma compliance with
Section 7.15 as of the Closing Date;
(xi) a duly completed Borrowing Base Certificate in the form of Exhibit H signed by a Responsible Officer of the Borrower and a Responsible Officer of the MLP; and
(xii) such other assurances, certificates, documents, consents or opinions as the Administrative Agent, the L/C Issuer, the Swing Line Lender, or the Required Lenders reasonably may require.
(b) Any fees due and payable at the Conditions Effective Date shall have been paid.
(c) The Borrower shall have paid Attorney Costs of the Administrative Agent to the extent invoiced prior to, or on, the Conditions Effective Date.
(d) The Borrower shall be a direct or indirectly wholly-owned subsidiary of the MLP, and Martin Resource shall own at least 51% of the MLP General Partner.
(e) Each Company shall have delivered the following documents:
(i) such Lien searches and abstracts of title as the Administrative Agent shall have requested, and such termination statements or other documents as may be necessary to confirm that the Collateral is subject to no other Liens (other than Permitted Liens and Liens to be released on the Closing Date (as described in Section 4.01(h)) in favor of any Persons;
(ii) funds sufficient to pay any filing or recording tax or fee in connection with any and all UCC-1 financing statements or UCC-3 amendment financing statements, or fees associated with the filing of the Mortgages or amendments to Mortgages;
(iii) evidence that the Collateral Agent has been named as loss payee and mortgagee under all policies of casualty insurance pertaining to the Collateral;
(iv) such consents, estoppels, subordination agreements and other documents and instruments executed by landlords and other Persons party to material contracts relating to any Collateral as to which the Collateral Agent shall be granted a Lien for the benefit of the Lenders, as requested by the Administrative Agent or any Lender;
(v) certificates evidencing all of the issued and outstanding shares of capital stock pledged pursuant to the Collateral Documents, which certificates shall in each case be accompanied by undated stock powers duly executed in blank and, with respect to uncertificated securities pledged pursuant to the Collateral Documents, confirmation and evidence satisfactory to the Administrative Agent that the security interest in such uncertificated securities has been transferred to and perfected by the Collateral Agent for the benefit of the Lenders in accordance with the Uniform Commercial Code; and
(vi) evidence that all other actions necessary or, in the opinion of the Administrative Agent, the Collateral Agent, or the Lenders, desirable to perfect and protect the first priority Lien created by the Collateral Documents (except to the extent otherwise permitted hereunder), and to enhance the Administrative Agent's and the Collateral Agent's ability to preserve and protect its interests in and access to the Collateral, have been taken;
(f) Receipt of (i) a commitment with respect to the Stanolind Terminal
and the Tampa Terminal to issue a mortgagee's title policy issued by a title
company satisfactory to the Administrative Agent in form and substance
satisfactory to the Administrative Agent (including all waivers and endorsements
as the Administrative Agent shall reasonably require), together with the payment
of all premiums for the issuance of such title policies, (ii) surveys with
respect to the real estate Collateral satisfactory to the Administrative Agent,
(iii) certificates of title for each of the U.S. Flag Vessels, (iv) a field
audit and inventory valuation report in form and substance satisfactory to the
Administrative Agent, and (v) other information regarding the Collateral
requested by the Administrative Agent.
(g) The Administrative Agent shall have received from an independent appraiser acceptable to the Administrative Agent an Appraisal setting forth the orderly liquidation value of the Fixed Assets which shall be at least $50,000,000.
(h) Evidence satisfactory to the Administrative Agent that all Assumed Indebtedness will be repaid, and that all liens on the Purchased Assets securing the Assumed Indebtedness shall be released upon the initial funding hereunder.
The Administrative Agent shall notify the Borrower and the Lenders of the Conditions Effective Date, and such notice shall be conclusive and binding.
SECTION 4.02 DEADLINE FOR CONDITIONS EFFECTIVE DATE. If for any reason the Closing Date has not occurred on or before November 30, 2002, or the Conditions Effective Date has not occurred on or before the 5th day after the Closing Date, then, unless otherwise agreed by all Lenders, the Aggregate Commitments shall terminate on and as of such date.
SECTION 4.03 CONDITIONS TO ALL LOANS AND L/C CREDIT EXTENSION. The obligation of each Lender to honor any Committed Loan Notice or Swing Line Notice, and the obligation of the L/C Issuer to issue any Letter of Credit, is subject to the following conditions precedent:
(a) The representations and warranties of the Loan Parties contained in Article V, or which are contained in any document furnished at any time under or in connection herewith, including, but not limited to the Collateral Documents, shall be true and correct on and as of the date of such Loan is made,
continued or converted, as applicable, or such Letter of Credit is issued except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date.
(b) No Default or Event of Default shall exist or would result from such proposed Loan, continuation or conversion, or L/C Credit Extension.
(c) The Administrative Agent and, if applicable, the L/C Issuer or the Swing Line Lender, shall have received a Request for Credit Extension and, if applicable, a Letter of Credit Application in accordance with the requirements hereof.
Each Request for Credit Extension submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.03(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Each of the Borrower and the MLP, and each Guarantor by its execution of a Guaranty, represents and warrants to the Administrative Agent and the Lenders that:
SECTION 5.01 EXISTENCE; QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. As of the Conditions Effective Date, the Borrower is a direct or indirect wholly-owned Subsidiary of the MLP and Martin Resource owns at least 51% of the MLP General Partner. As of the Conditions Effective Date, CF Martin Sulphur is a limited partnership organized, validly existing, and in good standing under the Laws of the State of Delaware, and CF Martin Sulphur General Partner is a limited liability company organized, validly existing, and in good standing under the Laws of the State of Delaware. Each of the MLP General Partner, the Borrower General Partner, and each Loan Party (a) is a corporation, partnership or limited liability company organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all governmental licenses, authorizations, consents and approvals to own its assets, carry on its business and to execute, deliver, and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license, and (d) is in compliance with all Laws, except in each case referred to in clause (c) or this clause (d), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect. Each of the MLP, the Borrower, and their Subsidiaries is a citizen of the United States as defined in Section 2 of the Shipping Act of 1916, as amended, entitled to own and operate the Vessels under their respective Certificates of Documentation, which the MLP, the Borrower, and Martin Gas Marine shall maintain, or cause to be maintained, in full force and effect, and each is duly qualified to engage in coastwise trade.
SECTION 5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person's Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, any material Contractual Obligation to which such Person is a party or any order, injunction, writ or decree of any Governmental Authority to which such Person or its property is subject; or (c) violate any Law relating to such Loan Party.
SECTION 5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority, except for the filings of mortgages and lien notices in connection with the granting of security interests pursuant to the Collateral Documents, is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document.
SECTION 5.04 BINDING EFFECT. This Agreement has been, and each other Loan Document, when delivered hereunder, will have been duly executed and delivered by each Loan Party that is party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium, or other similar laws affecting the enforcement of creditors' rights generally and general principles of equity.
SECTION 5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Initial Financial Statements were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein and except for footnotes with respect to unaudited financial statements included therein. The Initial Financial Statements (i) fairly present the financial condition of the entities therein named and their respective Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance in all material respects with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein and except for footnotes with respect to unaudited financial statements included therein; and (ii) show all material indebtedness and other liabilities, direct or contingent, of the entities therein named and their Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness in accordance with GAAP consistently applied throughout the period covered thereby.
(b) Since December 31, 2001, there has been no event or circumstance that has or could reasonably be expected to have a Material Adverse Effect.
SECTION 5.06 LITIGATION. There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the MLP or the Borrower threatened or contemplated in writing, at law, in equity, in arbitration or before any Governmental Authority, by or against the Borrower or any Borrower Affiliate or against any of their properties or revenues which (a) seek to affect or pertain to this Agreement or any other Loan Document, the borrowing of Loans, the use of the proceeds thereof, or the issuance of Letters of Credit hereunder, or (b) if determined adversely, could reasonably be expected to have a Material Adverse Effect.
SECTION 5.07 NO DEFAULT. Neither the Borrower nor any Borrower Affiliate is in default under or with respect to any Contractual Obligation which could be reasonably expected to have a Material Adverse Effect including any Material Agreement. No Default or Event of Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.
SECTION 5.08 OWNERSHIP OF PROPERTY; LIENS. From and after the Conditions Effective Date, (a) each Loan Party and its Subsidiaries (i) have valid leasehold interests in all its leased real property and (ii) have good title to all its personal and real property (other than its leased real property) necessary or used in the ordinary conduct of its business, except for such defects in title as would not, individually or in the aggregate, have a Material Adverse Effect, and (b) the property of the MLP, the Borrower and their
respective Subsidiaries is subject to no Liens, other than Permitted Liens and Liens to be released on the Closing Date in accordance with Section 4.01(h).
SECTION 5.09 ENVIRONMENTAL COMPLIANCE. The MLP and the Borrower have reasonably concluded that (a) there are no claims alleging potential liability under or responsibility for violation of any Environmental Law except any such claims that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (b) there is no environmental condition or circumstance, such as the presence or Release of any Hazardous Substance, on any property owned, operated or used the Borrower or any Borrower Affiliate that could reasonably be expected to have a Material Adverse Effect, and (c) there is no violation of or by the Borrower or any Borrower Affiliate of any Environmental Law, except for such violations as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 5.10 INSURANCE. The properties of the Borrower and the Borrower Affiliates are insured with financially sound and reputable insurance companies not Affiliates of the Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the Borrower or the Borrower Affiliates operate.
SECTION 5.11 TAXES. The Borrower and the Borrower Affiliates have filed all federal, state and other material tax returns and reports required to be filed, and have paid all federal, state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP. There is no proposed tax assessment against any Borrower Affiliate or any of their respective Subsidiaries that would, if made, have a Material Adverse Effect.
SECTION 5.12 ERISA COMPLIANCE. The representations and warranties set forth in this Section 5.12 shall apply only if the Borrower or an ERISA Affiliate establishes a Plan.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state Laws except
to the extent that noncompliance could not reasonably be expected to have a
Material Adverse Effect. Each Plan that is intended to qualify under Section
401(a) of the Code has received a favorable determination letter from the IRS or
an application for such a letter is currently being processed by the IRS with
respect thereto and nothing has occurred which would prevent, or cause the loss
of, such qualification, except to the extent that nonqualification could not
reasonably be expected to have a Material Adverse Effect. The Borrower and each
ERISA Affiliate have made all required contributions to each Plan subject to
Section 412 of the Code, and no application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code has been made
with respect to any Plan, except to the extent that nonpayment could not
reasonably be expected to have a Material Adverse Effect.
(b) There are no pending or threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. Neither the MLP nor the Borrower nor any ERISA Affiliate has engaged in or permitted to occur and no other party has engaged in or permitted to occur any prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur that could reasonably be expected to have a Material Adverse Effect; (ii) no Pension Plan has any Unfunded Pension Liability that (when aggregated with any other Unfunded Pension Liability) has resulted or could reasonably be expected to result in a Material Adverse Effect; and (iii) neither the Borrower nor any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA that could reasonably be expected to have a Material Adverse Effect.
SECTION 5.13 SUBSIDIARIES AND OTHER INVESTMENTS. As of the Conditions Effective Date the Borrower will have no Subsidiaries other than those specifically disclosed in Schedule 5.13, and will have no equity investment in any other corporation or other entity other than those specifically disclosed in Schedule 5.13. From and after the Conditions Effective Date the MLP has no Subsidiaries other than the Borrower, the Borrower General Partner, and the Borrower's Subsidiaries.
SECTION 5.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT; USE OF PROCEEDS.
(a) Neither the Borrower nor any Borrower Affiliate is engaged nor will it engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board), or extending credit for the purpose of purchasing or carrying margin stock. Margin Stock constitutes less than 25% of those assets of each Loan Party which are subject to any limitation on a sale, pledge, or other restrictions hereunder.
(b) None of the Borrower, any Borrower Affiliate, any Person
controlling the Borrower or any Borrower Affiliate, or any Subsidiary thereof
(i) is a "holding company," or a "subsidiary company" of a "holding company," or
an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
or (ii) is or is required to be registered as an "investment company" under the
Investment Company Act of 1940.
(c) The Borrower will use all proceeds of Credit Extension in the manner set forth in Section 6.12.
SECTION 5.15 DISCLOSURE. All material factual information hereto furnished by or on behalf of the Borrower in writing to the Administrative Agent or any Lender for purposes of or in connection with this Agreement or any transaction contemplated hereby, as modified or supplemented by other information so furnished, is true and accurate in all material respects, and such information is not incomplete by omitting to state any material fact necessary to make such information not misleading. All estimates and projections delivered to the Administrative Agent or any Lender were based upon information that was available at the time such estimates or projections were prepared and believed to be correct and upon assumptions believed to be reasonable.
SECTION 5.16 LABOR MATTERS. There are no actual or threatened strikes, labor disputes, slowdowns, walkouts, or other concerted interruptions of the MLP's, the Borrower's, or any of their Subsidiaries' operations that could reasonably be expected to have a Material Adverse Effect.
SECTION 5.17 COMPLIANCE WITH LAWS. Neither the Borrower nor any Borrower Affiliate is in violation of any Laws, other than such violations which could not, individually or collectively, reasonably be expected to have a Material Adverse Effect. Neither the Borrower nor any Borrower Affiliate has received notice alleging any noncompliance with any Laws, except for such noncompliance which no longer exists, or which non-compliance could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.18 THIRD PARTY APPROVALS. Except for consents obtained prior to the Conditions Effective Date, no material approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any party that is not a party to this Agreement is necessary or required in connection with the transfer of assets to the Borrower pursuant to the Contribution Agreement or in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document.
SECTION 5.19 SOLVENCY. Neither the Borrower and its Subsidiaries on a consolidated basis nor the MLP and its Subsidiaries on a consolidated basis are "insolvent" as such term is used and defined in (i) the United States Bankruptcy Code or (ii) the New York Uniform Fraudulent Conveyance Act.
SECTION 5.20 COLLATERAL.
(a) The provisions of each of the Collateral Documents are effective to create in favor of the Collateral Agent for the benefit of the Lenders, a legal, valid and enforceable first priority security interest in all right, title and interest of each Company in the Collateral described therein, except as otherwise permitted hereunder; and the Collateral Agent is authorized to file financing statements in the offices in all of the jurisdictions listed in the schedule to all Security Agreements and Mortgages.
(b) None of the terms or provisions of any indenture, mortgage, deed of trust, agreement or other instrument to which the Borrower or any Borrower Affiliate is a party or by which the Borrower or any Borrower Affiliate or the property of the Borrower or any Borrower Affiliate is bound prohibit the filing or recordation of any of the Loan Documents or any other action which is necessary or appropriate in connection with the perfection of the Liens on material assets evidenced and created by any of the Loan Documents.
SECTION 5.21 CONCERNING THE VESSELS.
(a) Schedule 5.21 sets forth a true and correct list describing each of the Vessels owned on the Closing Date by the Borrower, the MLP, and their Subsidiaries and correctly sets forth whether each such Vessel is owned by the Borrower, the MLP, or one of their Subsidiaries. Each Vessel has been appropriately registered under the laws of its jurisdiction of registration, including, with respect to each Vessel shown on Schedule 5.21 hereof as being registered under the laws of the United States of America (the "U.S. Flag Vessels"), and as of the Closing Date except as disclosed to the Lenders in writing, none of the Borrower, the MLP, or any of their Subsidiaries own any Vessels registered under the laws of the United States of America other than the U.S. Flag Vessels.
(b) Each Vessel complies with all applicable maritime laws and regulations, including, with respect to each U.S. Flag Vessel, all applicable requirements of the Shipping Act of 1916, as amended and in effect, and all applicable regulations thereunder and all applicable requirements of the maritime laws of the United States of America and all applicable regulations thereunder except in such instances in which the failure to comply therewith could not, individually or collectively, reasonably be expected to have a Material Adverse Effect. Each of the Borrower, the MLP, and their Subsidiaries is a citizen of the United States for purposes of operating each of the U.S. Flag Vessels in the coastwise trade in accordance with Section 2 of the Shipping Act of 1916, as amended and in effect, and the regulations thereunder. Each bareboat or demise charterer of each of the U.S. Flag Vessels operated in the coastwise trade of the United States (i) is a citizen of the United States for purposes of operating and maintaining such U.S. Flag Vessels in the coastwise trade in accordance with Section 2 of the Shipping Act of 1916, as amended and in effect, and the regulations thereunder or (ii) is in compliance with the citizenship requirements set forth in 46 App. U.S.C.A. Section 883-1. Each of the U.S. Flag Vessels listed on Schedule 5.21 attached hereto and which is in operation is covered by a valid Coast Guard Certificate of Inspection, and Schedule
5.21 attached hereto lists the U.S. Flag Vessels which have a load line certificate and which are classed by the American Bureau of Shipping (or any other classification society or societies satisfactory to the Administrative Agent and the Lenders). Each U.S. Flag Vessel operated and maintained as a vessel in the coastwise trade of the United States is so operated in accordance with the Shipping Act of 1916, as amended and in effect, and the regulations thereunder, and all other U.S. Flag Vessels if operated and maintained in the coastwise trade would be eligible to be so operated in accordance with the Shipping Act of 1916, as amended and in effect, and the regulations thereunder. In addition to the information regarding U.S. Flag Vessels, Schedule 5.21 sets forth a list of all other Vessels owned by the Borrower, the MLP, and their Subsidiaries.
(c) Each Vessel subject to a Vessel Mortgage is covered by hull and machinery, protection and indemnity, war risk, loss of earnings and excess liability insurance in accordance with the requirements of such Vessel Mortgage.
SECTION 5.22 INTELLECTUAL PROPERTY; LICENSES, ETC. Each Loan Party owns, or possesses the right to use, all of the material trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights that are reasonably necessary for the operation of its business. To the knowledge of each Loan Party, no such intellectual property infringes upon any rights held by any other Person. No claim or litigation regarding any of the foregoing is pending or, to the best knowledge of each Loan Party, threatened, which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, each of the Borrower and the MLP shall, and shall cause each of their Subsidiaries to:
SECTION 6.01 FINANCIAL STATEMENTS. Deliver to the Administrative Agent and each Lender, in form and detail reasonably satisfactory to the Administrative Agent and the Required Lenders:
(a) within thirty (30) days of the MLP Offering Closing, a consolidated unaudited balance sheet of the MLP and its Subsidiaries as of the MLP Offering Closing, in reasonable detail and certified by a Responsible Officer of the MLP as fairly presenting the financial condition of the MLP and its Subsidiaries;
(b) as soon as available, but in any event within ninety (90) days (or such shorter time as required to be filed with the Securities and Exchange Commission) after the end of each fiscal year of the MLP, consolidated balance sheets of the MLP and its Subsidiaries as at the end of such fiscal year, and the related statements of income and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year of the MLP, if any, all in reasonable detail, audited and accompanied by a report and opinion of KPMG LLP or other independent certified public accountant of nationally recognized standing acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with GAAP and shall not be subject to any qualifications or exceptions as to the scope of the audit nor to any qualifications and exceptions not reasonably acceptable to the Required Lenders (the preceding may be in the form of the MLP's annual report filed on Form 10-K with the Securities and Exchange Commission; December 31 is the fiscal year end of the MLP and the Borrower); and
(c) as soon as available, but in any event within forty-five (45) days (or such shorter time as required to be filed with the Securities and Exchange Commission) after the end of each of the first three fiscal quarters of each fiscal year of the MLP, an unaudited consolidated balance sheet of the MLP and its Subsidiaries as at the end of such fiscal quarter, and the related statements of income and cash flows for such fiscal quarter and for the portion of the MLP's fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year of the MLP, if any, and the corresponding portion of the previous fiscal year of the MLP, if any, all in reasonable detail (the preceding may be in the form of the MLP's annual report filed on Form 10-Q with the Securities and Exchange Commission) and certified by a Responsible Officer of the MLP as fairly presenting the financial condition, results of operations and cash flows of the MLP and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes.
SECTION 6.02 CERTIFICATES; OTHER INFORMATION. Deliver to the Administrative Agent and each Lender, at the expense of the Borrower, in form and detail reasonably satisfactory to the Administrative Agent and the Required Lenders:
(a) concurrently with the delivery of the financial statements referred to in Sections 6.01(b) and (c), a duly completed Compliance Certificate in form of Exhibit C signed by a Responsible Officer of the Borrower who is a senior financial officer and responsible for regulatory reporting and filing and a Responsible Officer of the MLP;
(b) promptly after the same are available, copies of each annual report, proxy or financial statement or other report or written communication sent to the equity owners of the MLP, and copies of all annual, regular, periodic and special reports and registration statements which the MLP may file or be required to file with the Securities and Exchange Commission under Section 13 or 15(d) of the Exchange Act, and not otherwise required to be delivered to the Administrative Agent pursuant hereto;
(c) promptly after execution thereof, copies of Material Agreements and any material amendment thereto;
(d) on October 31 of each year, appraisal reports in form and substance and from appraisers satisfactory to the Administrative Agent (each such report herein, an "Appraisal"), dated as of September 30 of such year and setting forth the then current orderly liquidation values of all Fixed Assets, provided, that if a Material Adverse Effect shall have occurred or a Default or Event of Default shall have occurred and is continuing, the Administrative Agent may obtain additional Appraisals;
(e) as soon as possible, but not later than 12:00 noon New York, New York time, on the last Business Day of each month, a Borrowing Base Certificate certified by a Responsible Officer of the Borrower as fairly presenting the Eligible Accounts Receivable and Eligible Inventory as of the last day of the immediately preceding month, and, if requested by the Administrative Agent or any Lender, a listing and aging of Eligible Accounts Receivable by counterparty, and a Schedule of Eligible Inventory volumes and market rates (with sources);
(f) on October 31 of each year, a field audit and inventory valuation report in form and substance satisfactory to the Administrative Agent (a "Field Audit") dated October 15 of such year and, upon the request of the Administrative Agent and the Required Lenders in their sole discretion, one additional Field Audit to be delivered during such year;
(g) annually, together with the items delivered pursuant to Section 6.01(b) herein, projections of operations for the year commencing the preceding January 1 for the MLP and its Subsidiaries based
upon information that is then currently available and believed to be correct in good faith and upon assumptions believed to be reasonable; and
(h) promptly, such additional information regarding the business, financial or company affairs of any Loan Party as the Administrative Agent, at the request of any Lender, may from time to time reasonably request, which information may include copies of any detailed audit reports, if any, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by independent accountants in connection with the accounts or books of the Borrower or any Subsidiary, or any audit of any of them.
SECTION 6.03 NOTICES. Promptly notify the Administrative Agent and each Lender within ten (10) days of an officer of a Borrower Affiliate having knowledge of any of the following:
(a) of the occurrence of any Default or Event of Default;
(b) of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including any of the following events if such has resulted or could reasonably be expected to result in a Material Adverse Effect: (i) breach or non-performance of, or any default under, a Contractual Obligation of any Loan Party; (ii) any litigation, investigation by or required by a Governmental Authority, proceeding or suspension of licenses or permits between any Loan Party and any Governmental Authority; (iii) any dispute, litigation, investigation or proceeding involving any Loan Party related to any Environmental Law;
(c) of any litigation, investigation or proceeding and affecting the Borrower or any Borrower Affiliate in which (i) the amount involved exceeds (individually or collectively) $3,500,000, or (ii) injunctive relief or other relief is sought, which could be reasonably expected to have a Material Adverse Effect; and
(d) of any material change in accounting policies or financial reporting practices by the Borrower or the MLP; and
(e) of any event that gives any owner of an equity interest in CF Martin Sulphur or CF Martin Sulphur General Partner a right to buy the equity interest of another owner.
Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement or other Loan Document that have been breached.
SECTION 6.04 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall become due and payable, all its obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets and (b) all lawful claims which, if unpaid, would by law become a Lien upon its property, except, in the case of Clause (a) or (b), where (x) the validity thereof are being contested in good faith by appropriate proceedings and (y) adequate reserves in accordance with GAAP are being maintained by the appropriate Loan Party.
SECTION 6.05 PRESERVATION OF EXISTENCE, ETC. (a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization, except in a transaction permitted by Sections 7.06 and 7.07, (b) take all action to maintain all rights,
privileges, permits, licenses and franchises material to the conduct of its business, except in a transaction permitted by Sections 7.06 and 7.07.
SECTION 6.06 MAINTENANCE OF ASSETS AND BUSINESS. (a) Maintain all material properties, equipment, licenses, permits, and franchises necessary for its normal business; (b) keep all of its assets which are necessary to its business in good working order and condition (ordinary wear and tear excepted) and make all necessary repairs thereto and replacements thereof; (c) do all things necessary to obtain, renew, extend, and continue in effect all Authorizations which may at any time and from time to time be necessary for the operation of its business in compliance with applicable Law, except where the failure to so maintain, renew, extend, or continue in effect could not reasonably be expected to have a Material Adverse Effect; (d) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect; and (e) use the standard of care typical in the industry in the operation and maintenance of its facilities.
SECTION 6.07 MAINTENANCE OF INSURANCE. Maintain with responsible
insurance companies insurance with respect to its properties and business
against such casualties and contingencies and of such types and in such amounts
as is customary in the case of similar businesses and which is satisfactory to
the Administrative Agent and the Required Lenders and will (i) furnish to the
Administrative Agent on each anniversary of the Effective Date a certificate or
certificates of insurance from the applicable insurance company evidencing the
existence of insurance required to be maintained by this Agreement and the other
Loan Documents and evidencing that Collateral Agent is listed as sole loss payee
on property insurance and the Administrative Agent, the Collateral Agent and
Lenders are additional insureds on liability insurance, (ii) upon request of the
Administrative Agent, furnish to each Lender at reasonable intervals a
certificate of an Authorized Officer of the Borrower setting forth the nature
and extent of all insurance maintained in accordance with this Section, and
(iii) as soon as possible, but in any event within one hundred eighty days of a
Triggering Sale resulting from an event where payments are made as a result of
any condemnation or Vessel requisition or under an insurance policy described in
this Section 6.07, furnish to the Administrative Agent a Restoration Plan.
SECTION 6.08 COMPLIANCE WITH LAWS AND CONTRACTUAL OBLIGATIONS. (a)
Comply with the requirements of all Laws (including Environmental Laws)
applicable to it or to its business or property, except in such instances in
which (i) such requirement of Law is being contested in good faith or a bona
fide dispute exists with respect thereto; or (ii) the failure to comply
therewith could not be reasonably expected to have a Material Adverse Effect;
(b) comply with all Contractual Obligations, except where the failure to comply
therewith could not be reasonably expected to have a Material Adverse Effect,
and (c) comply with the rules and requirements of any classification society in
which any Vessel is classed except where the failure to comply therewith could
not be reasonably expected to have a Material Adverse Effect.
SECTION 6.09 BOOKS AND RECORDS. Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving its assets and business; and (b) maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over it.
SECTION 6.10 INSPECTION RIGHTS. Permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance
notice to the Borrower; provided, however, that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.
SECTION 6.11 COMPLIANCE WITH ERISA. With respect to each Plan maintained by a Company, do each of the following: (a) maintain each Plan in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state Laws, (b) cause each Plan which is qualified under Section 401(a) of the Code to maintain such qualification, and (c) make all required contributions to any Plan subject to Section 412 of the Code, except to the extent that noncompliance, with respect to each event listed above, could not be reasonably expected to have a Material Adverse Effect.
SECTION 6.12 USE OF PROCEEDS.
(a) Use the proceeds of the Term Loan Facility to finance the purchase of the Purchased Assets, including without limitation, the repayment of the Assumed Indebtedness not repaid with the proceeds of the MLP Offering;
(b) Use the proceeds of the Acquisition Subfacility as follows: to finance Investments and Acquisitions by the Borrower and its Subsidiaries of Persons or assets and Capital Expenditures subject to compliance with this Agreement, including Sections 7.02 and 7.10; and
(c) Use the proceeds (including Letters of Credit) of the Working
Capital/Distribution Subfacility to (i) fund working capital and general
partnership requirements of the Borrower and its Subsidiaries, including without
limitation, payments to Martin Resource pursuant to the Omnibus Agreement for
reimbursement of expenses and corporate overhead, (ii) fund Quarterly
Distributions to the extent permitted by Sections 2.01(c) and 7.08(b) and (c),
(iii) pay fees, costs and expenses owed pursuant to this Agreement and incurred
pursuant to the MLP Offering, and (iv) to finance the purchase of the Purchased
Assets, including without limitation, the repayment of the Assumed Indebtedness
not repaid with the proceeds of the MLP Offering.
SECTION 6.13 MATERIAL AGREEMENTS. Enforce the obligations of the Martin Parties contained in the indemnification provisions of the Omnibus Agreement, and enforce all other obligations of the Martin Parties contained in the Material Agreements to the same extent as they would enforce similar obligations of unrelated third parties.
SECTION 6.14 CONCERNING THE VESSELS. The MLP and the Borrower shall, and shall cause each of their Subsidiaries to, at all times operate each Vessel in compliance in all respects with all applicable governmental rules, regulations and requirements pertaining to such Vessels (including, without limitation, all requirements of the Shipping Act of 1916, as amended and in effect, applicable to each U.S. Flag Vessel) and, to the extent required to be classed, in compliance in all respects with all rules, regulations and requirements of the applicable classification society except in such instances in which the failure to so operate could not reasonably be expected to have a Material Adverse Effect. The MLP and the Borrower shall, and shall cause each of their Subsidiaries to, at all times maintain and shall assure that each demise or bareboat charterer of the U.S. Flag Vessels operated and maintained in the coastwise trade of the United States shall maintain, as required, its citizenship of the United States for purposes of operating each of the U.S. Flag Vessels in the coastwise trade in accordance with Section 2 of the Shipping Act of 1916, as amended and in effect, and the regulations thereunder or the citizenship requirements set forth in 46 App. U.S.C.A. Section 883-1. Upon request of the Administrative Agent, the Borrower shall furnish to the Administrative Agent and the Lenders the certificate of each classification society covering each of the U.S. Flag Vessels listed on Schedule 5.21 attached hereto no later than thirty
(30) days after the end of each fiscal year of the MLP. The MLP and the Borrower shall, and shall cause each of their Subsidiaries to, keep each U.S. Flag Vessel registered under the laws of the United States and each Vessel (other than a U.S. Flag Vessel) flagged under the laws of another jurisdiction and shall maintain in full force and effect the Coast Guard Certificate of Inspection (or the equivalent for any Vessel registered under the laws of another jurisdiction) of each Vessel that is in operation and which requires such a certificate and furnish to the Administrative Agent copies of all renewals and extensions thereof.
SECTION 6.15 GUARANTIES. As an inducement to the Administrative Agent and Lenders to enter into this Agreement, cause each Subsidiary of the Borrower, the MLP and each Subsidiary of the MLP (other than the Borrower) to execute and deliver to the Administrative Agent a Guaranty, each substantially in the form and upon the terms of Exhibit E-1 and Exhibit E-2, respectively, providing for the guaranty of payment and performance of the Obligations. In addition, at the time of the formation or acquisition of any Subsidiary, cause such Subsidiary to execute and deliver to the Administrative Agent (a) a Guaranty substantially in the form and upon the terms of Exhibit E-1, providing for the guaranty of payment and performance of the Obligations, (b) Collateral Documents in form and substance satisfactory to the Administrative Agent creating liens and security interests in all assets and properties of such Subsidiary and in the equity interests in such Subsidiary, and (c) certified copies of such Subsidiary's Organization Documents and opinions of counsel with respect to such Subsidiary and such Guaranty, in substantially the form of Exhibit F-1 hereto, and (d) such other documents and instruments as may be required with respect to such Subsidiary pursuant to Section 6.18.
SECTION 6.16 COMPANY IDENTITY. The MLP and the Borrower shall do or
cause to be done (or refrain from doing or causing to be done, as the case may
be) all things necessary to ensure that the separate legal identity of the
Borrower, the MLP and, except as permitted by Section 7.06, each of their
respective Subsidiaries will at all times be respected and that none of the
Borrower, the MLP, or any of their Subsidiaries will be liable for any
obligations, contractual or otherwise, of the MLP General Partner, Martin
Resource or any other entity in which the MLP General Partner or Martin Resource
owns any equity interest, except as permitted by Sections 5.13 and 7.02. Without
limiting the foregoing, the MLP and the Borrower will, and will cause each of
their respective Subsidiaries to (a) observe all requirements, procedures and
formalities necessary or advisable in order that the MLP, the Borrower and each
of their respective Subsidiaries will for all purposes be considered validly
existing Persons separate and distinct from the MLP General Partner, Martin
Resource and their other subsidiaries, (b) not permit any commingling of the
assets of the MLP General Partner, Martin Resource or any of their other
Subsidiaries with assets of the MLP, the Borrower or any of their respective
Subsidiaries which would prevent the assets of the MLP General Partner, Martin
Resource or any of their other Subsidiaries from being readily distinguished
from the assets of the MLP, the Borrower, and their respective Subsidiaries, and
(c) take reasonable and customary actions to ensure that creditors of the MLP
General Partner, Martin Resource, and their other Subsidiaries are aware that
each such Person is an entity separate and distinct from the MLP, the Borrower,
and their respective Subsidiaries.
SECTION 6.17 VESSEL MORTGAGES. Within one Business Day of the Closing Date an opinion of Baker Botts L.L.P., counsel to each Loan Party executing a Vessel Mortgage, substantially in the form of Exhibit F-2 hereto.
SECTION 6.18 FURTHER ASSURANCES; ADDITIONAL COLLATERAL.
(a) The Borrower and the MLP shall cause the MLP and each Subsidiary of the Borrower and the MLP to take such actions and to execute and deliver such documents and instruments as the Administrative Agent shall require to ensure that the Collateral Agent on behalf of the Lenders shall, at all times, have received currently effective duly executed Loan Documents granting Lien and security
interest in substantially all of the assets of the MLP and each Subsidiary of the Borrower and the MLP, including (i) at least 80% (based on fair market value) of the Vessels and the other fixed assets, and all accounts receivable, inventory, equipment, general intangibles, and deposit accounts, and (ii) all other material assets and properties of the MLP, the Borrower, and their Subsidiaries including all capital stock, partnership, joint venture, membership interests, or other equity interests, provided, (A) equity interests in CF Martin Sulphur will not be pledged until (1) CF Martin Sulphur Organization Documents no longer prohibit the MLP, the Borrower, or their Subsidiaries from granting a Lien and security interest in equity interests in CF Martin Sulphur or (2) Martin Resource, its Subsidiaries, or Affiliates own all the equity interests in CF Martin Sulphur and CF Martin Sulphur General Partner and (B) general partnership interests in the Borrower shall not be pledged by the Borrower General Partner until (1) such time as the Borrower General Partner Organization Documents no longer prohibit the Borrower General Partner from granting a Lien and security interest in the general partnership interests of the Borrower and (2) such pledge shall not result in any material adverse tax consequences to the MLP or its Subsidiaries.
(b) In connection with the actions required pursuant to the foregoing subsection (a), the Borrower and the MLP shall cause the MLP and each Subsidiary of the Borrower and the MLP to execute and deliver such stock certificates, blank stock powers, evidence of corporate authorization, opinions of counsel, current valuations, evidence of title, title opinions, title insurance and other documents, and shall use commercially reasonable efforts to obtain landlord and mortgagee waivers and third party consents, as shall be requested by the Administrative Agent, in each case in form and substance satisfactory to the Administrative Agent.
(c) The Liens required by this Section 6.18 shall be perfected Liens in
favor of the Collateral Agent for the benefit of the Lenders, subject in
priority to no other Liens except Permitted Liens of the type described in
Section 7.01 (other than Section 7.01(h) and, in the case of the Vessels and
other fixed assets required to be pledged pursuant to Section 6.18(a)(i), other
than Section 7.01(b), (h), (i), (j), and (k)). If the Administrative Agent shall
determine that, as of any date, the Borrower or the MLP shall have failed to
comply with this Section 6.18, the Administrative Agent may (and at the
direction of the Required Lenders, shall) notify the Borrower in writing of such
failure and, within 30 days from and after receipt of such written notice by the
Borrower, the Borrower shall execute and deliver to the Administrative Agent
supplemental or additional Loan Documents, in form and substance satisfactory to
the Administrative Agent and its counsel, securing payment of the Notes and the
other Obligations and covering additional assets and properties not then
encumbered by any Loan Documents (together with such other information, as may
be requested by the Administrative Agent, each of which shall be in form and
substance reasonably satisfactory to the Administrative Agent) such that the
Administrative Agent shall have received currently effective duly executed and
perfected Collateral Documents encumbering substantially all of the assets of
the MLP, the Borrower and each of their respective Subsidiaries as required by
Section 6.18(a).
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any Loan or other Obligations shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding, each of the MLP and the Borrower agree that they shall not, nor shall they permit any of their respective Subsidiaries to, directly or indirectly:
SECTION 7.01 LIENS. Create, incur, assume or suffer to exist, any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:
(a) Liens pursuant to any Loan Document;
(b) (i) Liens existing on the Purchased Assets securing the Assumed Indebtedness that will be repaid on the date of the initial funding hereunder with the proceeds of the MLP Offering which shall be released upon such Assumed Indebtedness repayment and (ii) Liens existing on the Conditions Effective Date and listed on Schedule 7.01 and any renewals or extensions thereof, provided that the property covered thereby is not increased, the amount of the Indebtedness secured thereby is not increased, and any of the Indebtedness thereby secured is permitted by Section 7.04(e);
(c) Liens for taxes not yet due or which are being contested in good faith and by appropriate proceedings, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the ordinary course of business which are not overdue for a period of more than thirty (30) days or which are being contested in good faith and by appropriate proceedings, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;
(e) pledges or deposits in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar encumbrances affecting real property which (i) are described in any title policy delivered with respect to the Collateral, or (ii) do not materially interfere with the ordinary conduct of the business of the applicable Person;
(h) judgment Liens not giving rise to an Event of Default;
(i) any Lien existing on any asset (other than stock of a Subsidiary) prior to acquisition thereof by the Borrower or a Subsidiary, and not created in contemplation of such acquisition, provided that (i) no such Lien shall be extended to cover property other than the asset being acquired, and (ii) the Indebtedness thereby secured is permitted by Section 7.04(e);
(j) Liens securing Capitalized Lease obligations provided that the Indebtedness in respect of such Capitalized Lease is permitted under Section 7.04(e);
(k) Purchase money Liens upon or in any property acquired by Borrower or any of its Subsidiaries to secure the deferred portion of the purchase price of such property or to secure Indebtedness incurred to finance the acquisition of such property and refinancings, renewals, and extensions of such Liens, provided that (i) no such Lien shall be extended to cover property other than the property being acquired, and (ii) the Indebtedness thereby secured is permitted by Section 7.04(e);
(l) Liens reserved in or exercisable under any lease or sublease permitted under Section 7.05 to which the Borrower or a Subsidiary is a lessee which secure the payment of rent or compliance with the terms of such lease or sublease; provided, that the rent under such lease or sublease is not then overdue for a period of thirty (30) days;
(m) any interest or title of a lessor under any lease permitted under
Section 7.05 entered into by the Borrower or any Subsidiary in the ordinary
course of its business and covering only the assets so leased;
(n) Liens incurred in the ordinary course of business in connection with margin requirements under Swap Contracts not to exceed in the aggregate $250,000 at any time outstanding;
(o) interests of lessees in leases under which such Person is a lessor, provided such leaseholds are otherwise not prohibited by the terms of this Agreement;
(p) Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of the MLP or any Subsidiary on deposit with or in possession of such bank; and
(q) Liens represented by the escrow of cash or Cash Equivalents, and the earnings thereon, securing the obligations of the Borrower or any of its Subsidiaries under any agreement to acquire, or pursuant to which it acquired, assets Reinvested in accordance with this Agreement or other assets or property which it is permitted to acquire pursuant to Section 7.02 securing the obligations of the Borrower or any of its Subsidiaries to the seller of the property under any agreement pursuant to which the Borrower or any of its Subsidiaries may acquire assets Reinvested in accordance with this Agreement or other assets or property which the Borrower or its Subsidiaries are permitted to acquire pursuant to Section 7.02.
SECTION 7.02 INVESTMENTS AND ACQUISITIONS. Make any Acquisitions or make or own any Investments, except:
(a) Acquisition of assets by the Borrower on the Conditions Effective Date pursuant to the Contribution Agreement;
(b) Investments existing on the Conditions Effective Date and listed in
Section (b) of Schedule 5.13;
(c) cash or Cash Equivalents;
(d) Investments constituting Indebtedness permitted under Section 7.04;
(e) Investments by the MLP in the Borrower;
(f) Investments by the Borrower and its Subsidiaries in any Subsidiary of the Borrower that, prior to such Investment, is a Guarantor;
(g) Investments made after the Closing Date in CF Martin Sulphur which do not exceed $2,500,000 in the aggregate; provided, no additional Investments otherwise permitted under this clause (g) shall be permitted to be made at any time a Default or Event of Default has occurred and is continuing;
(h) trade accounts receivable which are for goods furnished or services rendered in the ordinary course of business;
(i) Permitted Acquisitions by the Borrower or its Subsidiaries;
(j) Investments received in satisfaction or partial satisfaction of accounts receivable from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;
(k) Guaranty Obligations permitted by Section 7.04; and
(l) Investments resulting from transactions permitted by Section 7.06.
SECTION 7.03 HEDGING AGREEMENTS. Enter into any Swap Contracts other than in the ordinary course of business for the purpose of protecting against fluctuations in interest rates, commodity prices, or foreign exchange rates and not for purposes of speculation, provided that the Swap Contract shall not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party.
SECTION 7.04 INDEBTEDNESS. Create, incur, or assume any Indebtedness except:
(a) Indebtedness incurred pursuant to the Loan Documents;
(b) Indebtedness owed by a Subsidiary to the Borrower or to a Wholly-Owned Subsidiary or by the Borrower to a Guarantor, provided, that, to the extent such Indebtedness is evidenced by a promissory note, such note shall be pledged to secure the Obligations and is in the possession of the Collateral Agent;
(c) Other Indebtedness of the Borrower and the MLP ("Subordinated Indebtedness") which Subordinated Indebtedness shall be subordinated to the Obligations pursuant to a subordination agreement containing terms in form and substance satisfactory to the Administrative Agent and the Majority Lenders (a "Subordination Agreement"), provided that such Subordinated Indebtedness shall bear a market rate of interest, shall not require any payment of principal earlier than six (6) months after the Stated Maturity Date, and the Net Cash Proceeds thereof shall be used to prepay the Loans and reduce the Commitments pursuant to Section 2.04(b);
(d) obligations (contingent or otherwise) of the Borrower, the MLP or any Subsidiary existing or arising under any Swap Contract to the extent permitted by Section 7.03; and
(e) Other Indebtedness of the MLP, the Borrower and their respective Subsidiaries not to exceed $5,000,000 in aggregate principal amount outstanding at any time.
Provided, that if any Indebtedness is incurred pursuant to this Section 7.04, both before and after such Indebtedness is created, incurred or assumed, no Default or Event of Default shall exist.
SECTION 7.05 LEASE OBLIGATIONS. Create or suffer to exist any obligations for the payment of rent by such Person as lessee for any property under lease or agreement to lease (other than those constituting Synthetic Lease Obligations or Capital Leases), except for operating leases entered into or assumed by the Borrower or any Subsidiary in the ordinary course of business, provided that, such operating leases will not require the payment of an aggregate amount of annual payments in excess of $5,000,000.
SECTION 7.06 FUNDAMENTAL CHANGES. Merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default or Event of Default exists or would result therefrom:
(a) any Person may merge into the Borrower provided that the Borrower is the surviving entity and the requirements set forth in the definition of Permitted Acquisition (other than clause (a)) with respect to Investments are satisfied;
(b) any Subsidiary may merge with (i) the Borrower, provided that the Borrower shall be the continuing or surviving Person, or (ii) any one or more Subsidiaries, provided that when any Wholly-Owned Subsidiary is merging with another Subsidiary, a Wholly-Owned Subsidiary shall be the continuing or surviving Person;
(c) any Subsidiary may sell all or substantially all of its assets (upon voluntary liquidation or otherwise), to the Borrower or to another Subsidiary; provided that if the seller in such a transaction is a Wholly-Owned Subsidiary, then the purchaser must also be the Borrower or a Wholly-Owned Subsidiary;
(d) any Person (other than the Borrower or a Subsidiary of the Borrower) may merge into any Subsidiary provided that such Subsidiary is the surviving entity and the requirements set forth in the definition of Permitted Acquisition with respect to Investments are satisfied; and
(e) the Borrower and each Subsidiary may make Dispositions permitted by
Section 7.07.
SECTION 7.07 DISPOSITIONS. Make any Disposition or enter into any agreement to make any Disposition, except:
(a) Dispositions by the Borrower or its Subsidiaries of inventory or obsolete equipment in the ordinary course of business;
(b) Dispositions by any Subsidiary to the Borrower, or by any Subsidiary or by the Borrower, to a Wholly-Owned Subsidiary that is a Guarantor;
(c) Dispositions of the Maricopa, Arizona Fertilizer Plant; or
(d) other Dispositions for fair market value, provided no Default or Event of Default then exists or arises as a result thereof, provided that if a prepayment is required by Section 2.04(b)(i), the Borrower shall make such prepayment in accordance with such Section.
SECTION 7.08 RESTRICTED PAYMENTS; DISTRIBUTIONS AND REDEMPTIONS. Declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that:
(a) each Subsidiary may make Restricted Payments to the Borrower and to Wholly-Owned Subsidiaries of the Borrower (and, in the case of a Restricted Payment by a non-wholly-owned Subsidiary, to the Borrower and any Subsidiary and to each owner of capital stock or other equity interest of such Subsidiary on a pro rata basis based on their relative ownership interests);
(b) the Borrower may declare and make Quarterly Distributions of Available Cash as defined in the Limited Partnership Agreement (Borrower) as in effect on the Closing Date (including, without limitation, distributions of the proceeds of Distribution Loans) to the extent such Quarterly Distributions are made in accordance with the Limited Partnership Agreement (Borrower); provided, that at the time each such Quarterly Distribution is made no Default or Event of Default exists or would result therefrom;
(c) the MLP may (i) declare and make Quarterly Distributions of Available Cash as defined in the Limited Partnership Agreement (MLP) as in effect on the Closing Date (including, without
limitation, distributions of the proceeds of Distribution Loans) to the extent such Quarterly Distributions are made in accordance with the Limited Partnership Agreement (MLP) and (ii) purchase units under and in accordance with any MLP Long-Term Incentive Plan (as defined in the Limited Partnership Agreement (MLP)); provided, that at the time each such Quarterly Distribution or purchase is made no Default or Event of Default exists or would result therefrom; and
(d) the MLP may declare and make dividend payments or other distributions payable solely in common units.
SECTION 7.09 ERISA. At any time engage in a transaction which could be
subject to Section 4069 or 4212(c) of ERISA, or permit any Plan maintained by a
Company to (a) engage in any non-exempt "prohibited transaction" (as defined in
Section 4975 of the Code); (b) fail to comply with ERISA or any other applicable
Laws; or (c) incur any material "accumulated funding deficiency" (as defined in
Section 302 of ERISA), which, with respect to each event listed above, could be
reasonably expected to have a Material Adverse Effect.
SECTION 7.10 NATURE OF BUSINESS; CAPITAL EXPENDITURES. Engage in any line of business other than the Midstream Business, or make any Capital Expenditures or Acquisitions or Investments permitted by Section 7.02 except in connection with the Midstream Business. The MLP may not engage in any business other than ownership of the Borrower and the operation of the MLP.
SECTION 7.11 TRANSACTIONS WITH AFFILIATES. Sell, lease, or otherwise transfer any property or assets to, or purchase, lease, or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions in the ordinary course of business and upon fair and reasonable terms no less favorable to the Borrower, the MLP, or such Subsidiary than such Person could obtain in a comparable arm's length transaction with a Person not an Affiliate of the Borrower, the MLP, or such Subsidiary, (b) transactions among the Borrower Affiliates, (c) any Restricted Payment permitted by Section 7.08, or (d) transactions pursuant to the agreements described in clauses (a) through (p) of the definition of Material Agreements, which agreements in the opinion of the Borrower when taken as a whole are fair and reasonable to the Borrower, the MLP, and their Subsidiaries.
SECTION 7.12 BURDENSOME AGREEMENTS. Enter into any Contractual
Obligation that limits the ability of any Subsidiary to make Restricted Payments
to the Borrower or to otherwise transfer property to the Borrower; provided that
the foregoing shall not apply to restrictions and conditions (i) imposed by law
or by any Loan Document, (ii) existing on the date hereof identified on Schedule
7.01 (but shall apply to any extension or renewal of, or any amendment or
modification expanding the scope of, any such restriction or condition), (iii)
contained in agreements relating to a Disposition to a Person who is not an
Affiliate of the MLP or any of its Subsidiaries pending such Disposition,
provided such restrictions and conditions apply only to the property or assets
to be subject to such Disposition and such Disposition is permitted hereunder,
(iv) imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness and (v) customary provisions in leases and
other contracts restricting the assignment thereof.
SECTION 7.13 USE OF PROCEEDS. Use the proceeds of any Loan for purposes other than those permitted by Section 6.12, or use the proceeds of any Loan, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the Board) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.
SECTION 7.14 AMENDMENTS TO MATERIAL AGREEMENTS; AMENDMENT TO OMNIBUS AGREEMENT ADMINISTRATIVE FEE. Permit any amendment to any Borrower Operating Agreement or any Material
Agreement, if such amendment could reasonably be expected to have a Material Adverse Effect. Without limiting the foregoing, no amendment shall be made to the Omnibus Agreement that shall increase the annual $1,000,000 administrative fee paid to Martin Resource (other than (i) adjustments approved by the Conflicts Committee (as defined in the Limited Partnership Agreement (MLP)) to account for adjustments in the nature of the services provided by Martin Resource and/or its Affiliates as a result of acquisitions by the MLP and its Subsidiaries or other expansions of the business of the MLP and its Subsidiaries and (ii) inflation adjustments made pursuant to the terms of the Omnibus Agreement as in effect on the Closing Date).
SECTION 7.15 FINANCIAL COVENANTS.
(a) Interest Coverage Ratio. Permit the Interest Coverage Ratio as of the end of any fiscal quarter to be less than the ratio of 3.0 to 1.0.
(b) Leverage Ratio. Permit the Leverage Ratio at any time to be greater than the ratio of 3.5 to 1.0.
(c) Minimum Net Worth. Permit the Net Worth at any time to be less than $35,000,000.
(d) Current Ratio. Permit the Current Ratio as of the end of any fiscal quarter to be less than the ratio of 1.10 to 1.00.
(e) Fixed Asset Coverage. Permit at any time the orderly liquidation
value of the Fixed Assets subject to the Collateral Documents as set forth in
the most current Appraisal delivered to the Administrative Agent pursuant to
Section 6.02(d) (the "OLV" which value shall be net of any Indebtedness (other
than the Obligations) secured by a Lien on the applicable assets) to be less
than 200% of the sum of Acquisition/Term Outstandings. As used in this Section,
"Acquisition/Term Outstandings" at any time means the sum of (i) the Term Loan
Principal Debt and (ii) Revolver Principal Debt outstanding at such time under
the Acquisition Subfacility. If on any date such OLV is less than 200% of the
Acquisition/Term Outstandings, then the Borrower shall, as soon as possible, but
in any event within thirty (30) days make a mandatory payment of Committed Loans
in an amount sufficient to cause a reduction of the Acquisition/Term
Outstandings such that the OLV is equal to or greater than 200% of the
Acquisition/Term Outstandings.
(f) Adjustments for Acquisitions. For purposes of calculating the Interest Coverage Ratio and the Leverage Ratio, Consolidated EBITDA and Consolidated Interest Charges shall be adjusted on a pro forma basis (in a manner acceptable to the Administrative Agent if unaudited or by an independent certified public accountant of nationally recognized standing acceptable to the Administrative Agent) for any Person or assets sold or acquired and any Indebtedness incurred or assumed after the beginning of any four-fiscal quarter period being measured with respect to such ratios as if such assets had been sold or acquired at the beginning of such four-fiscal quarter period.
SECTION 7.16 CAPITAL EXPENDITURES. Permit (a) annual capital expenditures of the MLP, the Borrower, and their Subsidiaries to exceed the sum of $10,000,000 and the Additional Amount and (b) capital expenditures to be used for purposes other than those related to the Midstream Business. For purposes of this Section 7.16, "Additional Amount" shall mean, for any fiscal year of the MLP, the Borrower, and their Subsidiaries, an amount of capital expenditures equal to $10,000,000 less capital expenditures made for the previous fiscal year (capital expenditures for the previous fiscal year shall not include any portion of the Additional Amount calculated for the previous fiscal year).
SECTION 7.17 SUBORDINATED INDEBTEDNESS. Neither the Borrower nor the MLP will amend documents governing Subordinated Indebtedness unless approved in writing by the Required Lenders. The Borrower shall not make any payments of interest or any other amounts in respect of the Subordinated Indebtedness if a Default or Event of Default shall have occurred and be continuing or would result from such payment. The Borrower will not repay any principal, interest or other indebtedness in respect of the Subordinated Indebtedness, or make any redemption or acquisition for value or defeasance, refinancing or exchange thereof or therefore, or make any payments in contravention of the applicable Subordination Agreement.
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.01 EVENTS OF DEFAULT. Any of the following shall constitute an Event of Default:
(a) Non-Payment. The Borrower fails to pay (i) when and as required to
be paid herein, any amount of principal of any Loan or any L/C Obligation or
(ii) within five (5) Business Days after the same becomes due, any interest on
any Loan, any L/C Obligation, any commitment or other fee due hereunder, or any
other amount payable hereunder or under any other Loan Document; or
(b) Specific Covenants. The Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 6.03(a), 6.05 (with respect to the MLP's and the Borrower's existence), 6.12, or Article VII; or
(c) Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 days after the earlier of (i) the date notice has been given to the Borrower by the Administrative Agent or a Lender or (ii) the date a Responsible Officer knew or reasonably should have known of such Default; or
(d) Representations and Warranties. Any representation or warranty made or deemed made by the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith proves to have been incorrect in any material respect when made or deemed made; or
(e) Cross-Default. (i) The Borrower or any other Loan Party (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guaranty Obligation (other than Indebtedness under Swap Contracts) having an aggregate principal amount (or, in the case of a Capitalized Lease or a Synthetic Lease Obligation, Attributable Indebtedness) (including undrawn or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than (individually or collectively) $3,500,000, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or Guaranty Obligation or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness, the lessor under such Synthetic Lease Obligation or the beneficiary or beneficiaries of such Guaranty Obligation (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased or redeemed (automatically or otherwise) prior to its stated maturity, or such Guaranty Obligation to become payable or cash collateral in respect thereof to be demanded; or (ii) (A) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract)resulting from any event of default under such Swap Contract as to which the Borrower or any other Loan Party is the Defaulting Party (as defined in such Swap Contract)
and the Swap Termination Value owed by the Borrower or any other Loan Party as a result thereof is greater than (individually or collectively) $3,500,000, or (B) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from any Termination Event (as so defined) under such Swap Contract as to which the Borrower or any other Loan Party is an Affected Party (as so defined) and the Swap Termination Value owed by the Borrower and other Loan Party as a result thereof is greater than (individually or collectively) $3,500,000 and such amount is not paid when due under such Swap Contract, or (iii) there occurs an Event of Default (as such term is defined in any Collateral Document); or
(f) Insolvency Proceedings, Etc. (i) (A) The Borrower or any Borrower Affiliate or CF Martin Sulphur or CF Martin Sulphur General Partner institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator, or similar officer for it or for all or any material part of its property or takes any action to effect any of the foregoing; or (B) any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or (C) any proceeding under any Debtor Relief Law relating to any such Person or to all or any part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; (ii) (A) Martin Resource institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property or takes any action to effect any of the foregoing; or (B) any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or (C) any proceeding under any Debtor Relief Law relating to any such Person or to all or any part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding provided, in the case of any event described in this clause (ii), that such event could reasonably be expected to have a Material Adverse Effect; or
(g) Inability to Pay Debts; Attachment. (i) The Borrower or any Borrower Affiliate, CF Martin Sulphur, CF Martin Sulphur General Partner, or any of their respective Subsidiaries becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against property which is a material part of the property of the Borrower and its Subsidiaries taken as a whole, and is not released, vacated or fully bonded within 45 days after its issue or levy; or
(h) Judgments. (i) There is entered against the Borrower or any other Loan Party (other than the MLP General Partner) or (A) a final judgment or order for the payment of money in an aggregate amount exceeding (individually or collectively) $3,500,000 (to the extent not covered by third-party insurance as to which the insurer does not dispute coverage), or (B) any non-monetary final judgment that has or could reasonably be expected to have a Material Adverse Effect and, in either case, (1) enforcement proceedings are commenced by any creditor upon such judgment or order, or (2) there is a period of 30 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; (ii) there is entered against Martin Resource (A) a final judgment or order for the payment of money that could reasonably be expected to have a Material Adverse Effect or (B) any non-monetary final judgment that has or could reasonably be expected to have a Material Adverse Effect and, in either case, (1) enforcement proceedings are commenced by any creditor upon such judgment or order, or (2) there is a period of 30 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or
(i) ERISA. (i) If the Borrower, any other Loan Party or any of their ERISA Affiliates maintains any Pension Plan or any Multiemployer Plan, an ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Borrower or any other Loan Party under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of $3,500,000, or (ii) if there is any Multiemployer Plan, the Borrower, any other Loan Party or any ERISA Affiliate thereof fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of $3,500,000; or
(j) Invalidity of Loan Documents. Any Loan Document, at any time after its execution and delivery and for any reason other than the agreement of all the Lenders or termination of all Commitments and satisfaction in full of all the Obligations, ceases to be in full force and effect, or is declared by a court of competent jurisdiction to be null and void, invalid or unenforceable in any material respect; or any Loan Party denies that it has any or further liability or obligation under any Loan Document (except for a Loan Party released therefrom pursuant to a Disposition or other transaction permitted hereunder), or purports to revoke, terminate or rescind any Loan Document; or
(k) Change of Control. There occurs any Change of Control; or
(l) Dissolution. The Borrower or any Borrower Affiliate shall dissolve, liquidate, or otherwise terminate its existence, except as permitted in Section 7.06; or
(m) Material Agreements. (i) Termination of any Material Agreement or any material provision of any of the foregoing if such termination could reasonably be expected to have a Material Adverse Effect and such agreement or provision is not replaced (prior to such cessation) in a manner that will prevent such Material Adverse Effect; (ii) default by any Person in the performance or observance of any material term of any Material Agreement which is not cured within the applicable cure period specified in such Material Agreement, if such default could reasonably be expected to have a Material Adverse Effect; or (iii) any Unauthorized Assignment shall occur; or
(n) Collateral; Impairment of Security, etc. (i) Any provision of any
Loan Document shall for any reason cease to be valid and binding on or
enforceable against a Loan Party or any Loan Party shall so state in writing or
bring an action to limit its obligations or liabilities thereunder; or (ii) any
Collateral Document shall for any reason (other than pursuant to the terms
thereof) cease to create a valid security interest in the Collateral purported
to be covered thereby or such security interest shall for any reason cease to be
a perfected and first priority security interest subject to Permitted Liens; or
(iii) any provision of a Subordination Agreement shall cease to be effective or
shall not be enforceable, or any holder of Subordinated Indebtedness shall seek
to invalidate any provision of a Subordination Agreement; or
(o) Investment Reduction Event. There occurs any Investment Reduction Event.
SECTION 8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs, the Administrative Agent:
(a) (i) shall, at the request of, or may, with the consent of the Required Term Lenders, declare the commitment of each Term Lender to make Loans under the Term Loan Facility to be terminated, whereupon such commitments shall be terminated; and (ii) shall, at the request of, or may, with the consent of the Required Revolver Lenders declare the commitment of each Revolver Lender to
make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligations shall be terminated;
(b) shall, at the request of, or may, with the consent of the Required Lenders, declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other notice of any kind, all of which are hereby expressly waived by the Borrower;
(c) shall, at the request of, or may, with the consent of the Required Lenders, declare that an amount equal to the then Outstanding Amount of all L/C Obligations be immediately due and payable by the Borrower, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other notice of any kind, all of which are hereby expressly waived by the Borrower, and require that the Borrower deliver such payments to the Administrative Agent to Cash Collateralize the L/C Obligations (in an amount equal to the then Outstanding Amount thereof); and
(d) shall, at the request of, or may, with the consent of the Required Lenders, exercise on behalf of itself and the Lenders all rights and remedies available to it and the Lenders under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
(f)(i) of Section 8.01, the obligation of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions shall automatically
terminate, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and payable, and
an amount equal to the then Outstanding Amount of all L/C Obligations shall be
deemed to be forthwith due and owing by the Borrower to the L/C Issuer and the
Lenders as of the date of such occurrence and the Borrower's obligation to pay
such amounts shall be absolute and unconditional, without regard to whether any
beneficiary of any such Letter of Credit has attempted to draw down all or a
portion of such amount under the terms of a Letter of Credit and, to the fullest
extent permitted by applicable law, shall not be subject to any defense or be
affected by a right of set-off, counterclaim or recoupment which the Borrower
may now or hereafter have against any such beneficiary, the L/C Issuer, the
Administrative Agent, the Lenders or any other Person for any reason whatsoever.
Such payments shall be delivered to and held by the Collateral Agent as cash
collateral securing the L/C Obligations.
ARTICLE IX.
AGENTS
SECTION 9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT AND COLLATERAL AGENT; LENDER HEDGING AGREEMENTS.
(a) Each Lender hereby irrevocably (subject to Section 9.10) appoints, designates and authorizes each of the Administrative Agent and the Collateral Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere herein or in any other Loan Document, neither the Administrative Agent nor the Collateral Agent shall have any duties or responsibilities, except those expressly set forth herein, nor shall either the Administrative Agent or the Collateral Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent or the Collateral Agent. Without
limiting the generality of the foregoing sentence, the use of the term "agent" herein and in the other Loan Documents with reference to the Administrative Agent or the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith until such time (and except for so long) as the Administrative Agent may agree at the request of the Required Lenders to act for the L/C Issuer with respect thereto; provided, however, that the L/C Issuer shall have all of the benefits and immunities (i) provided to the Administrative Agent in this Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and the application and agreements for letters of credit pertaining to the Letters of Credit as fully as if the term "Administrative Agent" as used in this Article IX included the L/C Issuer with respect to such acts or omissions, and (ii) as additionally provided herein with respect to the L/C Issuer.
(c) To the extent any Lender or any Affiliate of a Lender is a party to a Lender Hedging Agreement and accepts the benefits of the Liens in the Collateral arising pursuant to the Collateral Documents, such Lender (for itself and on behalf of any such Affiliates) shall be deemed (i) to appoint Royal Bank, as its nominee and agent, to act for and on behalf of such Lender or Affiliate thereof in connection with the Collateral Documents and (ii) to be bound by the terms of this Article IX.
SECTION 9.02 DELEGATION OF DUTIES. Either the Administrative Agent or the Collateral Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties. Neither the Administrative Agent nor the Collateral Agent shall be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct.
SECTION 9.03 DEFAULT; MASTER CONSENT TO ASSIGNMENT.
(a) Upon the occurrence and continuance of a Default or Event of Default, the Lenders agree to promptly confer in order that Required Lenders or the Lenders, as the case may be, may agree upon a course of action for the enforcement of the rights of the Lenders; and the Administrative Agent and the Collateral Agent shall be entitled to refrain from taking any action (without incurring any liability to any Person for so refraining) unless and until the Administrative Agent or the Collateral Agent, as appropriate, shall have received instructions from Required Lenders. All rights of action under the Loan Documents and all right to the Collateral, if any, hereunder may be enforced by the Administrative Agent and the Collateral Agent and any suit or proceeding instituted by the Administrative Agent or the Collateral Agent in furtherance of such enforcement shall be brought in its name as the Administrative Agent or the Collateral Agent, as applicable, without the necessity of joining as plaintiffs or defendants any other Lender, and the recovery of any judgment shall be for the benefit of the Lenders (and, with respect to Lender Hedging Agreements, Affiliates, if applicable) subject to the expenses of the Administrative Agent and/or the Collateral Agent. In actions with respect to any property of the Borrower or any other Obligor, each of the Administrative Agent and the Collateral Agent is acting for the ratable benefit of each Lender (and, with respect to Lender Hedging Agreement, Affiliates, if applicable). Any and all agreements to subordinate (whether made heretofore or hereafter) other indebtedness or obligations of Borrower to the Obligation shall be construed as being for the ratable benefit of each Lender (and, with respect to Lender Hedging Agreement, Affiliates, if applicable).
(b) Each Lender authorizes and directs the Administrative Agent and the Collateral Agent to enter into the Collateral Documents on behalf of and for the benefit of the Lenders (and, with respect to Lender Hedging Agreement, Affiliates, if applicable).
(c) Except to the extent unanimity (or other percentage set forth in
Section 10.1) is required hereunder, each Lender agrees that any action taken by
the Required Lenders in accordance with the provisions of the Loan Documents,
and the exercise by the Required Lenders of the power set forth herein or
therein, together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Lenders.
(d) Each of the Administrative Agent and the Collateral Agent is hereby authorized on behalf of the Lenders, without the necessity of any notice to or further consent from any Lender, from time to time to take any action with respect to any Collateral or Collateral Documents which may be necessary to perfect and maintain perfected the Liens upon the Collateral granted pursuant to the Collateral Documents.
(e) Neither the Administrative Agent nor the Collateral Agent shall have any obligation whatsoever to any Lender or to any other Person to assure that the Collateral exists or is owned by any Obligor or is cared for, protected, or insured or has been encumbered or that the Liens granted to the Administrative Agent or the Collateral Agent herein or pursuant thereto have been properly or sufficiently or lawfully created, perfected, protected, or enforced, or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure, or fidelity, or to continue exercising, any of the Rights granted or available to the Administrative Agent or the Collateral Agent in this Section 9.03 or in any of the Collateral Documents; it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, the Administrative Agent or the Collateral Agent may act in any manner it may deem appropriate, in its sole discretion, given the Administrative Agent's or the Collateral Agent's own interest in the Collateral as one of the Lenders and that neither the Administrative Agent nor the Collateral Agent shall have any duty or liability whatsoever to any Lender, other than to act without gross negligence or willful misconduct.
(f) The Lenders hereby irrevocably authorize each of the Administrative
Agent and the Collateral Agent, at its option and discretion, to release any
Lien granted to or held by the Administrative Agent or the Collateral Agent upon
any Collateral: (i) constituting property in which no Obligor owned an interest
at the time the Lien was granted or at any time thereafter; (ii) constituting
property leased to an Obligor under a lease which has expired or been terminated
in a transaction permitted under the Loan Document or is about to expire and
which has not been, and is not intended by such Obligor to be, renewed; and
(iii) consisting of an instrument evidencing Indebtedness pledged to the
Administrative Agent or the Collateral Agent (for the benefit of the Lenders),
if the Indebtedness evidenced thereby has been paid in full. In addition, the
Lenders irrevocably authorize the Administrative Agent and the Collateral Agent
to release Liens upon Collateral as contemplated in Section 10.01(c) or (d), or
if approved, authorized, or ratified in writing by the requisite Lenders. Upon
request by the Administrative Agent and/or the Collateral Agent at any time, the
Lenders will confirm in writing the Administrative Agent's and/or the Collateral
Agent's authority to release particular types or items of Collateral pursuant to
this Section 9.03.
(g) In furtherance of the authorizations set forth in this Section 9.03, each Lender hereby irrevocably appoints each of the Administrative Agent and the Collateral Agent its attorney-in-fact, with full power of substitution, for and on behalf of and in the name of each such Lender, (i) to enter into Collateral Documents (including, without limitation, any appointments of substitute trustees under any Collateral Documents), (ii) to take action with respect to the Collateral and Collateral Documents to perfect, maintain, and preserve the Liens securing the Obligations, and (iii) to execute instruments of
release or to take other action necessary to release Liens upon any Collateral to the extent authorized in paragraph (f) hereof. This power of attorney shall be liberally, not restrictively, construed so as to give the greatest latitude to the Administrative Agent's and the Collateral Agent's power, as attorney, relative to the Collateral matters described in this Section 9.03. The respective powers and authorities herein conferred on the Administrative Agent and the Collateral Agent may be exercised by each of the Administrative Agent and/or the Collateral Agent through any Person who, at the time of the execution of a particular instrument, is an officer of such agent. The power of attorney conferred by this Section 9.03(g) is granted for valuable consideration and is coupled with an interest and is irrevocable so long as the Obligations, or any part thereof, shall remain unpaid or the Lenders are obligated to make any Borrowings under the Loan Documents.
SECTION 9.04 LIABILITY OF ADMINISTRATIVE AGENT. No Agent-Related Person shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct in connection with its duties expressly set forth herein), or (b) be responsible in any manner to any Lender or participant for any recital, statement, representation or warranty made by any Loan Party or any officer thereof, contained herein or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for the creation, perfection or priority of any Liens purported to be created by any of the Loan Documents, or the validity, genuineness, enforceability, existence, value or sufficiency of any collateral security, or to make any inquiry respecting the performance by the Borrower of its obligations hereunder or under any other Loan Document, or for any failure of any Loan Party or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lender or participant to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party or any Affiliate thereof.
SECTION 9.05 RELIANCE BY ADMINISTRATIVE AGENT.
(a) Each of the Administrative Agent and the Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to any Loan Party), independent accountants and other experts selected by the Administrative Agent or the Collateral Agent. Each of the Administrative Agent and the Collateral Agent shall be fully justified in failing or refusing to take any action under any Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Each of the Administrative Agent and the Collateral Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders or all the Lenders, if required hereunder, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and participants. Where this Agreement expressly permits or prohibits an action unless the Required Lenders otherwise determine, the Administrative Agent and/or the Collateral Agent shall, and in all other instances, the Administrative Agent and/or the Collateral Agent may, but shall not be required to, initiate any solicitation for the consent or a vote of the Lenders.
(b) For purposes of determining compliance with the conditions specified in Section 4.01, each Lender that has funded its Pro Rata Share of the Borrowing(s) on the Conditions Effective Date (or, if there is no Borrowing made on such date, each Lender other than Lenders who gave written objection to the Administrative Agent prior to such date) shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter either sent by the Administrative Agent to such Lender for consent, approval, acceptance or satisfaction, or required hereunder to be consented to or approved by or acceptable or satisfactory to a Lender.
SECTION 9.06 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the account of the Lenders, unless the Administrative Agent shall have received written notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default." The Administrative Agent will notify the Lenders of its receipt of any such notice. The Administrative Agent shall take such action with respect to such Default or Event of Default as may be directed by the Required Lenders in accordance with Article VIII; provided, however, that unless and until the Administrative Agent has received any such direction, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in the best interest of the Lenders.
SECTION 9.07 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT. Each Lender acknowledges that no Agent-Related Person has made any representation or warranty to it, and that no act by the Administrative Agent or the Collateral Agent hereinafter taken, including any consent to and acceptance of any assignment or review of the affairs of any Loan Party or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender as to any matter, including whether Agent-Related Persons have disclosed material information in their possession. Each Lender represents to the Administrative Agent and the Collateral Agent that it has, independently and without reliance upon any Agent-Related Person and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Loan Parties and their respective Subsidiaries, and all applicable bank or other regulatory Laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to the Borrower hereunder. Each Lender also represents that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrower and the other Loan Parties. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent or the Collateral Agent herein, neither the Administrative Agent nor the Collateral Agent shall have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any of the Loan Parties or any of their respective Affiliates which may come into the possession of any Agent-Related Person.
SECTION 9.08 INDEMNIFICATION OF ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT. Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand each Agent-Related Person (to the extent not reimbursed by or on behalf of any Loan Party and without limiting the obligation of any Loan Party to do so), pro rata, and hold harmless each Agent-Related Person from and against any and all Indemnified Liabilities incurred by it; provided, however, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Person's gross negligence or willful misconduct; provided, however, that no action taken in accordance with the directions of the Required Lenders shall be deemed to constitute gross negligence or willful misconduct for purposes of this Section. Without limitation of the foregoing, each Lender shall reimburse each of the Administrative Agent and the Collateral Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including Attorney Costs) incurred by each of the Administrative Agent and each of the Collateral Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Administrative Agent and/or the Collateral Agent is not reimbursed for such expenses by or on behalf of the Borrower. The undertaking in this Section shall survive termination of the Commitments, the payment of all Obligations hereunder and the resignation or replacement of the Administrative Agent and/or the Collateral Agent.
SECTION 9.09 ADMINISTRATIVE AGENT AND COLLATERAL AGENT IN THEIR INDIVIDUAL CAPACITIES. Royal Bank and its Affiliates may make loans to, accept deposits from, acquire equity interests in (any equity interests acquired shall be held by a Royal Bank Affiliate) and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with each of the Loan Parties and their respective Affiliates as though Royal Bank were not the Administrative Agent, the Collateral Agent, or the L/C Issuer hereunder and without notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, Royal Bank or its Affiliates may receive information regarding any Loan Party or its Affiliates (including information that may be subject to confidentiality obligations in favor of such Loan Party or such Affiliate) and acknowledge that neither the Administrative Agent nor the Collateral Agent shall be under no obligation to provide such information to them. With respect to its Loans, Royal Bank shall have the same rights and powers under this Agreement as any other Lender and may exercise such rights and powers as though it were not the Administrative Agent, the Collateral Agent, or the L/C Issuer, and the terms "Lender" and "Lenders" include Royal Bank in its individual capacity.
SECTION 9.10 SUCCESSOR AGENTS.
(a) The Administrative Agent may resign as Administrative Agent upon 30 days' notice to the Lenders with a copy of such notice to the Borrower. If the Administrative Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a successor administrative agent for the Lenders which successor administrative agent shall be consented to by the Borrower at all times other than during the existence of an Event of Default. If no successor administrative agent is appointed prior to the effective date of the resignation of the Administrative Agent, the Administrative Agent may appoint, after consulting with the Lenders and the Borrower, a successor administrative agent from among the Lenders. Upon the acceptance of its appointment as successor administrative agent hereunder, such successor administrative agent shall succeed to all the rights, powers and duties of the retiring Administrative Agent and the term "Administrative Agent" shall mean such successor administrative agent and the retiring Administrative Agent's appointment, powers and duties as Administrative Agent shall be terminated. After any retiring Administrative Agent's resignation hereunder as Administrative Agent, the provisions of this Article IX and Sections 10.03 and 10.13 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement. If no successor administrative agent has accepted appointment as Administrative Agent by the date which is thirty (30) days following a retiring Administrative Agent's notice of resignation, the retiring Administrative Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.
(b) The Collateral Agent may resign as Collateral Agent upon 30 days' notice to the Lenders with a copy of such notice to the Borrower. If the Collateral Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a successor collateral agent for the Lenders which successor collateral agent shall be consented to by the Borrower at all times other than during the existence of an Event of Default. If no successor collateral agent is appointed prior to the effective date of the resignation of the Collateral Agent, the Collateral Agent may appoint, after consulting with the Lenders and the Borrower, a successor collateral agent from among the Lenders. Upon the acceptance of its appointment as successor collateral agent hereunder, such successor collateral agent shall succeed to all the rights, powers and duties of the retiring Collateral Agent and the term "Collateral Agent" shall mean such successor collateral agent and the retiring Collateral Agent's appointment, powers and duties as Collateral Agent shall be terminated. After any retiring Collateral Agent's resignation hereunder as Collateral Agent, the provisions of this Article IX and Sections 10.03 and 10.13 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Collateral Agent under this Agreement. If no successor collateral agent has accepted appointment as Collateral Agent by the date which is thirty (30) days following a retiring Collateral Agent's notice of resignation, the retiring Collateral Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Collateral Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.
(c) If the Collateral Agent deems it necessary or advisable to appoint a substitute Collateral Agent that qualifies as citizen of the United States under Section 2 of the Shipping Act of 1916, as amended and then in effect, then the Collateral Agent shall appoint a substitute Collateral Agent. Each Lender that qualifies to serve as Collateral Agent pursuant to this Section 9.12 agrees to accept appointment as Collateral Agent.
SECTION 9.11 OTHER AGENTS; LEAD MANAGERS. None of the Lenders or other Persons identified on the facing page or signature pages of this Agreement as a "co-agent," any other type of agent (other than the Administrative Agent and the Collateral Agent), "lead arranger," or "book runner" shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of the Lenders so identified shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender acknowledges that it has not relied, and will not rely, on any of the Lenders so identified in deciding to enter into this Agreement or in taking or not taking action hereunder.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01 AMENDMENTS, RELEASE OF COLLATERAL, ETC.
(a) No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall, unless in writing and signed by each of the Lenders directly affected thereby and by the Borrower, and acknowledged by the Administrative Agent, do any of the following:
(i) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02);
(ii) postpone any date fixed by this Agreement or any other Loan Document for any payment or mandatory prepayment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document;
(iii) reduce the principal of, or the rate of interest
specified herein on, any Loan or L/C Borrowing or (subject to clause
(ii) of the proviso below) any fees or other amounts payable hereunder
or under any other Loan Document, provided, however, that only the
consent of the Required Lenders shall be necessary to amend the
definition of "Default Rate" or to waive any obligation of the Borrower
to pay interest at the Default Rate;
(iv) change the percentage of the Aggregate Commitments or of the aggregate unpaid principal amount of the Loans and L/C Obligations which is required for the Lenders or any of them to take any action hereunder;
(v) change the Pro Rata Share of any Lender;
(vi) Release a material amount of Collateral or release any
Guarantor from a Guaranty (except as otherwise permitted under this
Section 10.01);
(vii) amend this Section, or Section 2.12, or any provision herein providing for unanimous consent or other action by all the Lenders; or
(viii) change the allocation of payments between the Revolver Facility and the Term Loan Facility.
and, provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Required Lenders or all the Lenders, as the case may be, affect the rights or duties of the L/C Issuer under this Agreement or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Required Lenders or all the Lenders, as the case may be, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (iii) the Agent/Arranger Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, any Lender that has failed to fund any portion of the Loans or participation in L/C Obligations required to be funded by it hereunder shall not have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Pro Rata Share of such Lender may not be increased without the consent of such Lender, and (iv) no amendment, waiver, or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement.
(b) Any amendment to any Loan Document which purports to (i) decrease
the amount of any mandatory prepayment or commitment reduction required by
Section 2.04 or (ii) change this Section 10.01(b), must be by an instrument in
writing executed by Borrower, the Administrative Agent, the Required Revolver
Lenders, and the Required Term Lenders.
(c) Upon any sale, transfer, or disposition of Collateral which is
permitted pursuant to the Loan Documents, and upon ten (10) Business Days' prior
written request by the Borrower (which request must be accompanied by (i) true
and correct copies of all material documents of transfer or disposition,
including any contract of sale, (ii) a preliminary closing statement and
instructions to the title company, if any, (iii) all requested release
instruments in form and substance satisfactory to the Administrative Agent) and
(iv) if required, written consent of the requisite Lenders, the Administrative
Agent (or the Collateral
Agent, as applicable) shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of Liens granted to the Collateral Agent for the benefit of the Lenders pursuant hereto in such Collateral. Neither the Administrative Agent nor the Collateral Agent shall be required to execute any release instruments on terms which, in the Administrative Agent's or the Collateral Agent's opinion, would expose the Administrative Agent or the Collateral Agent to liability or create any obligation or entail any consequence other than the release of liens without recourse or warranty. No such release shall impair the Administrative Agent's or the Collateral Agent's lien on the proceeds of sale of such Collateral.
(d) If all outstanding Loans and other Obligations have been indefeasibly paid in full and the Commitments have terminated or have been reduced to zero, and, subject to Section 10.01(e) all Lender Hedging Agreement have terminated, each of the Administrative Agent and the Collateral Agent agrees to, and the Lenders hereby instruct the Administrative Agent or the Collateral Agent, as applicable, to, at the Borrower's expense, execute such releases of the Collateral Documents as the Borrower shall reasonably request and this Agreement shall be deemed terminated except that such termination shall not relieve the Borrower of any obligation to make any payments to the Administrative Agent, the Collateral Agent, or any Lender required by any Loan Document to the extent accruing, or relating to an event occurring, prior to such termination.
(e) Notwithstanding any provision herein to the contrary, if the Commitments have been terminated, and the only outstanding Obligations are amounts owed pursuant to one or more Lender Hedging Agreements, the Administrative Agent or the Collateral Agent, as applicable, will, and is hereby authorized to, (A) release the Liens created under the Loan Documents and (B) release all Guaranties of the Borrower, provided, that contemporaneously with such release, (i) the Borrower (and, if applicable, the Subsidiary that is a party to such Lender Hedging Agreements) (A) executes a margin agreement in form and substance acceptable to such Lender(s) (or its Affiliates) that are parties to such Lender Hedging Agreements (the "Lender Counterparties") and (B), if required, provides collateral in the form of cash or a letter of credit having an aggregate value acceptable to such Lender Counterparties, and (ii) if such Lender Hedging Agreement is executed by a Subsidiary of the Borrower and the Borrower and the MLP are not parties thereto, the Borrower and the MLP execute a guaranty covering such Subsidiary's obligations thereunder, such guaranty to be in form and substance satisfactory to the Lender Counterparties. Any release under this Section 10.01(e) must be in writing and signed by the Administrative Agent.
SECTION 10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder and under the other Loan
Documents shall be in writing (including by facsimile transmission) and mailed,
faxed or delivered, to the address, facsimile number or (subject to subsection
(c) below) electronic mail address specified for notices on Schedule 10.02 (for
the Borrower, any Guarantor, the Administrative Agent, and the Collateral Agent)
or on the Administrative Questionnaire (for the other Lenders); or, in the case
of the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent,
the Swing Line Lender, or the L/C Issuer, to such other address as shall be
designated by such party in a notice to the other parties, and in the case of
any other party, to such other address as shall be designated by such party in a
notice to the Borrower, the Administrative Agent, the Collateral Agent, the
Swing Line Lender, and the L/C Issuer. All such notices and other communications
shall be deemed to be given or made upon the earlier to occur of (i) actual
receipt by the intended recipient and (ii) (A) if delivered by hand or by
courier, when signed for by the intended recipient; (B) if delivered by mail,
four Business Days after deposit in the mails, postage prepaid; (C) if delivered
by facsimile, when sent and receipt has been confirmed by telephone; and (D) if
delivered by electronic mail (which form of delivery is subject to the
provisions of subsection (c) below), when delivered; provided,
however, that notices and other communications to the Administrative Agent or the L/C Issuer pursuant to Article II shall not be effective until actually received by such Person. Any notice or other communication permitted to be given, made or confirmed by telephone hereunder shall be given, made or confirmed by means of a telephone call to the intended recipient at the number specified in accordance with this Section, it being understood and agreed that a voicemail message shall in no event be effective as a notice, communication or confirmation hereunder.
(b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may be transmitted and/or signed by facsimile. The effectiveness of any such documents and signatures shall, subject to applicable Law, have the same force and effect as manually-signed originals and shall be binding on all Loan Parties, the Administrative Agent, the Collateral Agent, and the Lenders. The Administrative Agent may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided, however, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and internet and intranet websites may be used only to distribute routine communications, such as financial statements and other information, and to distribute Loan Documents for execution by the parties thereto, and shall not be recognized hereunder for any other purpose.
(d) Reliance by Administrative Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices (including telephonic Committed Loan Notices and Swing Line Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. The Borrower shall indemnify each Agent-Related Person and each Lender from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower. All telephonic notices to and other communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.
SECTION 10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender, the Administrative Agent, or the Collateral Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein or therein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
SECTION 10.04 ATTORNEY COSTS; EXPENSES AND TAXES. The Borrower agrees
(a) to pay or reimburse the Administrative Agent and the Collateral Agent for
all costs and expenses incurred in connection with the development, preparation,
negotiation, syndication, administration and execution of this Agreement and the
other Loan Documents, including the filing, recording, refiling or rerecording
of any Mortgage, any pledge agreement and any Security Agreement and/or any
Uniform Commercial Code financing statements relating thereto and all
amendments, supplements and modifications to any thereof and any and all other
documents or instruments of further assurance required to be filed or recorded
or refiled or rerecorded by the terms hereof or of any mortgage, any pledge
agreement or any security agreement, and any amendment, waiver, consent or other
modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or reimburse the
Administrative Agent, the Collateral Agent, and each
Lender for all costs and expenses incurred in connection with the enforcement, attempted enforcement, or preservation of any rights or remedies under this Agreement or the other Loan Documents (including all such costs and expenses incurred during any workout or restructuring in respect of the Obligations and during any legal proceeding, including any proceeding under any Debtor Relief Law), including all Attorney Costs. The foregoing costs and expenses shall include all search, filing, recording, title insurance and appraisal charges and fees and taxes related thereto, and other out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent, and the cost of independent public accountants and other outside experts retained by the Administrative Agent, the Collateral Agent, or any Lender. The agreements in this Section shall survive the termination of the Commitments and repayment of all the other Obligations.
SECTION 10.05 INDEMNIFICATION. Whether or not the transactions
contemplated hereby are consummated, each of the Borrower, the MLP, and each
other Guarantor (by execution of a Guaranty), jointly and severally, agrees to
indemnify, save and hold harmless each Agent-Related Person, each Co-Agent
Related Person, each Arranger, each Lender, the Swing Line Lender, the L/C
Issuer and their respective Affiliates, directors, officers, employees, counsel,
agents and attorneys-in-fact (collectively the "Indemnitees") from and against:
(a) any and all claims, demands, actions or causes of action that are asserted
against any Indemnitee by any Person (other than the Administrative Agent, Swing
Line Lender, or any Lender) relating directly or indirectly to a claim, demand,
action or cause of action that such Person asserts or may assert against any
Loan Party, any Affiliate of any Loan Party or any of their respective officers
or directors, arising out of or relating to, the Loan Documents, the
Commitments, the use or contemplated use of the proceeds of any Loans, or the
relationship of any Loan Party, the Administrative Agent, the Lenders, the Swing
Line Lender, and the L/C Issuer under this Agreement or any other Loan Document;
(b) any and all claims, demands, actions or causes of action that may at any
time (including at any time following repayment of the Obligations and the
resignation of the Administrative Agent, Swing Line Lender, or the replacement
of any Lender) be asserted or imposed against any Indemnitee, arising out of or
relating to, the Loan Documents, the Commitments, the use or contemplated use of
the proceeds of any Loans, or the relationship of any Loan Party, the
Administrative Agent, the Lenders, the Swing Line Lender, and the L/C Issuer
under this Agreement or any other Loan Document; (c) without limiting the
foregoing, any and all claims, demands, actions or causes of action, judgments
and orders, penalties and fines that are asserted or imposed against any
Indemnitee, (i) under the application of any Environmental Law applicable to the
Borrower or any of its Subsidiaries or any of their properties or assets,
including the treatment or disposal of Hazardous Substances on any of their
properties or assets, (ii) as a result of the breach or non-compliance by the
Borrower or any Subsidiary with any Environmental Law applicable to the Borrower
or any Subsidiary, (iii) due to past ownership by the Borrower or any Subsidiary
of any of their properties or assets or past activity on any of their properties
or assets which, though lawful and fully permissible at the time, could result
in present liability, (iv) due to the presence, use, storage, treatment or
disposal of Hazardous Substances on or under, or the escape, seepage, leakage,
spillage, discharge, emission or Release from, any of the properties owned or
operated by the Borrower or any Subsidiary (including any liability asserted or
arising under any Environmental Law), regardless of whether caused by, or within
the control of, the Borrower or such Subsidiary, or (v) due to any other
environmental, health or safety condition in connection with the Loan Documents;
(d) any administrative or investigative proceeding by any Governmental Authority
arising out of or related to a claim, demand, action or cause of action
described in subsection (a), (b) or (c) above; and (e) any and all liabilities
(including liabilities under indemnities), losses, costs or expenses (including
Attorney Costs and settlement costs) that any Indemnitee suffers or incurs as a
result of the assertion of any foregoing claim, demand, action, cause of action
or proceeding, or as a result of the preparation of any defense in connection
with any foregoing claim, demand, action, cause of action or proceeding, in all
cases, WHETHER OR NOT ARISING OUT OF THE STRICT LIABILITY OR NEGLIGENCE OF AN
INDEMNITEE, and whether or not an Indemnitee is a party to such claim, demand,
action, cause of action or proceeding (all the foregoing, collectively, the
"Indemnified Liabilities"); provided that no
Indemnitee shall be entitled to indemnification for any claim to the extent
caused by its own gross negligence or willful misconduct. The agreements in this
Section shall survive and continue for the benefit of the indemnitees at all
times after the Borrower's acceptance of the Lenders' commitments for the Senior
Credit Facility, whether or not the Conditions Effective Date shall occur and
shall survive the termination of the Commitments and repayment of all the other
Obligations.
SECTION 10.06 PAYMENTS SET ASIDE. To the extent that the Borrower makes
a payment to the Administrative Agent or any Lender, or the Administrative Agent
or any Lender exercises its right of set-off, and such payment or the proceeds
of such set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect.
SECTION 10.07 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that neither the Borrower nor the MLP may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender and no Lender may assign or otherwise transfer
any of its rights or obligations hereunder except (i) to an Eligible Assignee in
accordance with the provisions of paragraph (b) of this Section, (ii) by way of
participation in accordance with the provisions of paragraph (d) of this Section
or (iii) by way of pledge or assignment of a security interest subject to the
restrictions of paragraph (f) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in paragraph (d) of this
Section and, to the extent expressly contemplated hereby, the Related Parties of
each of the Administrative Agent and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided that (i) except in the case of an assignment of the entire remaining amount of the assigning Lender's Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the outstanding principal balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5,000,000, in the case of any assignment in respect of a Loan under the Revolver Facility, or $1,000,000, in the case of any assignment of a Loan under the Term Loan Facility, unless each of the Administrative Agent and, so long as no Default or Event of Default has occurred and is continuing, the Borrower otherwise consent (each such consent not to be unreasonably withheld or delayed); (ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loans or the Commitment assigned except that this clause (ii) shall not prohibit the assignment of a proportionate part of the assigning Lender's rights and obligations in respect of either the Revolver Facility or the Term Loan Facility (i.e. an assignment need not be ratable as between the Revolver Facility and the Term Loan Facility, but assignments of the Revolver Facility shall be ratable as between the Acquisition Subfacility and the Working Capital/Distribution Subfacility) and shall not apply to rights in respect of Swing Line Loans, (iii) any assignment of a Revolver Commitment must be approved by the Administrative Agent and the L/C Issuer unless the Person that is the proposed assignee is itself a Lender with a Revolver Commitment (whether or not the proposed assignee would otherwise qualify as an Eligible Assignee); and (iv) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500, and the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire. Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.07, 10.04 and 10.05 with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or the Borrower or any of the Borrower's Affiliates
or Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans (including such Lender's participation in L/C
Obligations and/or Swing Line Loans) owing to it); provided that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver that would (i) postpone any date upon
which any payment of money is scheduled to be paid to such Participant, (ii)
reduce the principal, interest, fees or other amounts payable to such
Participant, or (iii) release the MLP from its Guaranty. Subject to subsection
(e) of this
Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.09 as though it were a Lender, provided such Participant agrees to be subject to Section 2.12 as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment under Section 3.01 or 3.04 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower's prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 3.01 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 10.15 as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Notes, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
(g) If the consent of the Borrower to an assignment or to an Eligible Assignee is required hereunder (including a consent to an assignment which does not meet the minimum assignment threshold specified in clause (i) of the proviso to the first sentence of Section 10.07(b)), the Borrower shall be deemed to have given its consent five Business Days after the date notice thereof has been delivered by the assigning Lender (through the Administrative Agent) unless such consent is expressly refused by the Borrower prior to such fifth Business Day.
(h) Notwithstanding anything to the contrary contained herein, if at any time Royal Bank assigns all of its Commitment and Loans pursuant to subsection (b) above, Royal Bank may, (i) upon 30 days' notice to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days' notice to the Borrower, resign as Swing Line Lender. In the event of any such resignation as L/C Issuer or Swing Line Lender, the Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided, however, that no failure by the Borrower to appoint any such successor shall affect the resignation of Royal Bank as L/C Issuer or Swing Line Lender. Royal Bank shall retain all the rights and obligations of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund participations in Unreimbursed Amounts pursuant to Section 2.14(c)). If Royal Bank resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Committed Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c).
SECTION 10.08 CONFIDENTIALITY. Each Lender agrees that it will not
disclose without the prior consent of the Borrower (other than to directors,
officers, employees, auditors, accountants, counsel or other professional
advisors of the Administrative Agent, the Collateral Agent, or any Lender) any
information with respect to the MLP, the Borrower or its Subsidiaries, which is
furnished pursuant to this Agreement or the transactions contemplated hereby,
provided that any Lender may disclose any such information (a) (i) as has become
generally available to the public other than as a result of a breach of this
Section 10.08, (ii) was or becomes available to Royal Bank on a nonconfidential
basis prior to its disclosure pursuant hereto or (iii) is obtained by Royal Bank
on a non-confidential basis from a source
other than the Borrower provided that such source is not known to Royal Bank to
be subject to an obligation of confidentiality with respect to such information,
(b) as may be required in any report, statement or testimony submitted to or
required by any municipal, state or federal regulatory body having or claiming
to have jurisdiction over such Lender or submitted to or required by the Board
or the Federal Deposit Insurance Corporation or similar organizations (whether
in the United States of America or elsewhere) or their successors, (c) as may be
required in response to any summons or subpoena in connection with any
litigation, (d) in order to comply with any law, order, regulation or ruling
applicable to such Lender, (e) to any Eligible Assignee of or Participant in, or
any prospective Eligible Assignee of or Participant in, any of its rights or
obligations under this Agreement, provided that such Eligible Assignee or
Participant or prospective Eligible Assignee or Participant executes an
agreement containing provisions substantially the same as those contained in
this Section 10.08, (f) in connection with the exercise of any remedy by such
Lender following an Event of Default pertaining to the Loan Documents, (g) in
connection with any litigation involving such Lender pertaining to the Loan
Documents, (h) to any Lender or the Administrative Agent, or (i) to any
Affiliate (other than any Affiliate of any Lender that is a broker dealer) of
any Lender who is involved with the transactions contemplated hereby (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such information and obligated to keep such
information confidential on the same terms as set forth in this Section 10.08).
SECTION 10.09 SET-OFF. In addition to any rights and remedies of the Lenders provided by law, upon the occurrence and during the continuance of any Event of Default, each Lender is authorized at any time and from time to time, without prior notice to the Borrower or any other Loan Party, any such notice being waived by the Borrower (on its own behalf and on behalf of each Loan Party) to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness at any time owing by, such Lender to or for the credit or the account of the respective Loan Parties against any and all Obligations owing to the Administrative Agent and the Lenders, now or hereafter existing, irrespective of whether or not the Administrative Agent or such Lender shall have made demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set-off and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application.
SECTION 10.10 INTEREST RATE LIMITATION. It is the intention of the parties hereto to comply with applicable usury laws; accordingly, notwithstanding any provision to the contrary in this Agreement or in any of the other Loan Documents securing the payment hereof or otherwise relating hereto, in no event shall this Agreement or such other Loan Documents require the payment or permit the payment, taking, reserving, receiving, collection, or charging of any sums constituting interest under applicable laws, if any, which exceed the maximum amount permitted by such laws. If any such excess interest is called for, contracted for, charged, taken, reserved, or received in connection with the Loans or in any of the Loan Documents securing the payment thereof or otherwise relating thereto, or in any communication by the Administrative Agent or the Lenders or any other person to the Borrower or any other Person, or in the event all or part of the principal or interest thereof shall be prepaid or accelerated, so that under any of such circumstances or under any other circumstance whatsoever the amount of interest contracted for, charged, taken, reserved, or received on the amount of principal actually outstanding from time to time pursuant to the Agreement shall exceed the maximum amount of interest permitted by applicable usury laws, then in any such event it is agreed as follows: (i) the provisions of this paragraph shall govern and control, (ii) neither the Borrower nor any other Person or entity now or hereafter liable for the payment of the Obligations shall be obligated to pay the amount of such interest to the extent such interest is in excess of the maximum amount of interest permitted by applicable usury laws, (iii) any such excess which is or has been received notwithstanding this paragraph shall be credited against the then unpaid principal
balance hereunder or, if the Loans have been or would be paid in full, refunded to the Borrower, and (iv) the provisions of this Agreement and the other Loan Documents securing the payment hereof and otherwise relating hereto, and any communication to the Borrower, shall immediately be deemed reformed and such excess interest reduced, without the necessity of executing any other document, to the maximum lawful rate allowed under applicable laws as now or hereafter construed by courts having jurisdiction hereof or thereof. Without limiting the foregoing, all calculations of the rate of the interest contracted for, charged, taken, reserved, or received in connection with the Loans or this Agreement which are made for the purpose of determining whether such rate exceeds the maximum lawful rate shall be made to the extent permitted by applicable laws by amortizing, prorating, allocating and spreading during the period of the full term of the Loans, including all prior and subsequent renewals and extensions, all interest at any time contracted for, charged, taken, reserved, or received. The terms of this paragraph shall be deemed to be incorporated in every document and communication relating to the Loans or any other Loan Document.
SECTION 10.11 COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
SECTION 10.12 INTEGRATION. This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agent or the Lenders in any other Loan Document shall not be deemed a conflict with this Agreement. Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof.
SECTION 10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent, the Collateral Agent, and each Lender, regardless of any investigation made by the Administrative Agent, the Collateral Agent, or any Lender or on their behalf and notwithstanding that the Administrative Agent, the Collateral Agent, or any Lender may have had notice or knowledge of any Default or Event of Default at the time of any Borrowing, and shall continue in full force and effect as long as any Loan or any other Obligation shall remain unpaid or unsatisfied.
SECTION 10.14 SEVERABILITY. Any provision of this Agreement and the other Loan Documents to which the Borrower is a party that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions thereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 10.15 FOREIGN LENDERS. Each Lender that is a "foreign corporation, partnership or trust" within the meaning of the Code (a "Foreign Lender") shall deliver to the Administrative Agent, prior to receipt of any payment subject to withholding under the Code (or after accepting an assignment of an interest herein), two duly signed completed copies of either IRS Form W-8BEN or any successor thereto (relating to such Person and entitling it to an exemption from, or reduction of, withholding tax on all payments to be made to such Person by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments to be made to such Person by the Borrower
pursuant to this Agreement) or such other evidence satisfactory to the Borrower and the Administrative Agent that such Person is entitled to an exemption from, or reduction of, U.S. withholding tax. Thereafter and from time to time, each such Person shall (a) promptly submit to the Administrative Agent such additional duly completed and signed copies of one of such forms (or such successor forms as shall be adopted from time to time by the relevant United States taxing authorities) as may then be available under then current United States laws and regulations to avoid, or such evidence as is satisfactory to the Borrower and the Administrative Agent of any available exemption from or reduction of, United States withholding taxes in respect of all payments to be made to such Person by the Borrower pursuant to this Agreement, (b) promptly notify the Administrative Agent of any change in circumstances which would modify or render invalid any claimed exemption or reduction, and (c) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of applicable Laws that the Borrower make any deduction or withholding for taxes from amounts payable to such Person. If such Person fails to deliver the above forms or other documentation, then the Administrative Agent may withhold from any interest payment to such Person an amount equivalent to the applicable withholding tax imposed by Sections 1441 and 1442 of the Code, without reduction. If any Governmental Authority asserts that the Administrative Agent did not properly withhold any tax or other amount from payments made in respect of such Person, such Person shall indemnify the Administrative Agent therefor, including all penalties and interest, any taxes imposed by any jurisdiction on the amounts payable to the Agent under this Section, and costs and expenses (including Attorney Costs) of the Administrative Agent. The obligation of the Lenders under this Section shall survive the payment of all Obligations and the resignation or replacement of the Administrative Agent.
SECTION 10.16 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW RULES OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATION LAW) AND APPLICABLE FEDERAL LAW; AND THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) THE MLP, THE BORROWER, ANY OTHER PARTY HERETO, AND EACH GUARANTOR, BY EXECUTION OF A GUARANTY, AGREES AS TO THIS SECTION 10.16(b). ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE MLP, THE BORROWER, THE ADMINISTRATIVE AGENT, THE SWING LINE LENDER, THE L/C ISSUER, AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE MLP, THE BORROWER, THE ADMINISTRATIVE AGENT, THE SWING LINE LENDER, THE L/C ISSUER, AND THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE MLP, THE BORROWER, THE ADMINISTRATIVE AGENT, THE SWING LINE LENDER, THE L/C ISSUER, AND THE LENDERS EACH WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, AND CONSENT TO THE SERVICE OF PROCESS IN ANY SUCH LEGAL ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS SET FORTH IN SCHEDULE 10.02, SUCH SERVICE TO BECOME EFFECTIVE TEN DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, THE SWING LINE LENDER, THE L/C ISSUER OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH OF THE MLP, THE BORROWER, AND EACH GUARANTOR, BY ITS EXECUTION OF A GUARANTY, HEREBY IRREVOCABLY APPOINTS CT CORPORATION SYSTEM, WITH AN ADDRESS AT 111 EIGHTH AVENUE, 13TH FLOOR, NEW YORK, NEW YORK 10011 (THE "NEW YORK PROCESS AGENT") AS PROCESS AGENT IN ITS NAME, PLACE AND STEAD TO RECEIVE AND FORWARD SERVICE OF ANY AND ALL WRITS, SUMMONSES AND OTHER LEGAL PROCESS IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE STATE OF NEW YORK, AGREES THAT SUCH SERVICE IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE UPON THE NEW YORK PROCESS AGENT, AND AGREES TO TAKE ALL SUCH ACTION AS MAY BE NECESSARY TO CONTINUE SAID APPOINTMENT IN FULL FORCE AND EFFECT.
SECTION 10.17 WAIVER OF RIGHT TO TRIAL BY JURY, ETC. EACH PARTY TO THIS AGREEMENT AND EACH GUARANTOR, BY EXECUTION OF A GUARANTY, HEREBY (a) EXPRESSLY AND IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES TO THE LOAN DOCUMENTS OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE COMPANIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY; AND (b) EXPRESSLY AND IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH ACTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES, PROVIDED THAT THE WAIVER CONTAINED IN THIS CLAUSE (b) SHALL NOT APPLY TO THE EXTENT THAT THE PARTY AGAINST WHOM DAMAGES ARE SOUGHT HAS ENGAGED IN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
SECTION 10.18 MASTER CONSENT TO ASSIGNMENT. The Lenders hereby authorize the Administrative Agent to enter into the Master Consent to Assignment and each Lender agrees to be bound by all of the terms and provisions of the Master Consent to Assignment to the same extent as if it were a signatory thereto.
SECTION 10.19 ENTIRE AGREEMENT. This Agreement and the other Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties.
[REMAINDER OF PAGE INTENTIONALLY BLANK;
SIGNATURES BEGIN ON NEXT PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
MARTIN OPERATING PARTNERSHIP L.P.,
a Delaware limited partnership, as Borrower
By: MARTIN OPERATING GP LLC,
its General Partner
By: MARTIN MIDSTREAM PARTNERS L.P.,
its Sole Member
By: MARTIN MIDSTREAM GP LLC,
its General Partner
By: /s/ RUBEN S. MARTIN ------------------------------------- Ruben S. Martin, III President and Chief Executive Officer |
MARTIN MIDSTREAM PARTNERS L.P.,
a Delaware limited partnership, as Guarantor
By: MARTIN MIDSTREAM GP LLC,
its General Partner
By: /s/ RUBEN S. MARTIN --------------------------------------------- Ruben S. Martin, III President and Chief Executive Officer |
[THIS IS A SIGNATURE PAGE TO THE
MARTIN OPERATING PARTNERSHIP CREDIT AGREEMENT]
ROYAL BANK OF CANADA, as Administrative Agent and Collateral Agent
By: /s/ R.J. MCFARLANE ----------------------------------- Name: R.J. MCFARLANE ------------------------------ Title: Vice President ----------------------------- |
[THIS IS A SIGNATURE PAGE TO THE
MARTIN OPERATING PARTNERSHIP CREDIT AGREEMENT]
ROYAL BANK OF CANADA, as a Lender, as L/C Issuer, and as Swing Line Lender
By: /s/ LORNE GARTNER ----------------------------------- Lorne Gartner Vice President |
[THIS IS A SIGNATURE PAGE TO THE
MARTIN OPERATING PARTNERSHIP CREDIT AGREEMENT]
COMERICA BANK - TEXAS, as a Lender
By: /s/ PAUL L. STRANGE ----------------------------------- Name: PAUL L. STRANGE ------------------------------ Title: SVP ----------------------------- |
[THIS IS A SIGNATURE PAGE TO THE
MARTIN OPERATING PARTNERSHIP CREDIT AGREEMENT]
SOUTHWEST BANK OF TEXAS, N.A., as a Lender
By: /s/ STEPHEN A. KENNEDY ----------------------------------- Name: Stephen A. Kennedy ---------------------------- Title: Senior Vice President ---------------------------- |
[THIS IS A SIGNATURE PAGE TO THE
MARTIN OPERATING PARTNERSHIP CREDIT AGREEMENT]
WHITNEY NATIONAL BANK, as a Lender
By: /s/ JAMES L. HACKER --------------------------------- Name: James L. Hacker ---------------------------- Title: Senior Vice President -------------------------- |
[THIS IS A SIGNATURE PAGE TO THE
MARTIN OPERATING PARTNERSHIP CREDIT AGREEMENT]
HIBERNIA NATIONAL BANK, as a Lender
By: /s/ SPENCER GAGNET --------------------------------------- Name: Spencer Gagnet --------------------------------- Title: Senior Vice President -------------------------------- |
[THIS IS A SIGNATURE PAGE TO THE
MARTIN OPERATING PARTNERSHIP CREDIT AGREEMENT]
EXHIBIT 10.2
EXECUTION COPY
CONTRIBUTION, CONVEYANCE AND ASSUMPTION AGREEMENT
This Contribution, Conveyance and Assumption Agreement (this "Agreement") dated effective as of October 31, 2002, is entered into by and among Martin Resource Management Corporation, a Texas corporation ("MRMC"), Martin Resource LLC, a Delaware limited liability company ("Martin LLC"), Martin Midstream GP LLC, a Delaware limited liability company (the "GP"), Martin Midstream Partners L.P., a Delaware limited partnership (the "MLP"), Martin Operating GP LLC, a Delaware limited liability company (the "Operating GP"), Martin Operating Partnership L.P., a Delaware limited partnership (the "Operating Partnership"), Martin Gas Marine LLC, a Texas limited liability company ("Marine LLC"), Martin Resources, Inc., a Texas corporation ("Resources"), Martin L.P. Gas, Inc., a Texas corporation ("MLP Gas"), Martin Gas Sales LLC, a Texas limited liability company ("MGSLLC"), Martin Transport, Inc., a Texas corporation ("Transport"), CF Martin Sulphur Holding Corporation, a Nevada corporation ("CFM-SHC"), and Midstream Fuel Service LLC, an Alabama limited liability company ("Midstream LLC").
RECITALS
WHEREAS, prior to the date hereof, MRMC formed Martin LLC, as a wholly-owned direct subsidiary, which in turn formed the GP, and contributed $1,000 to it as a capital contribution in exchange for all of the membership interests in the GP;
WHEREAS, in turn Martin LLC and the GP formed the MLP, with the GP contributing $20 to it as a capital contribution in exchange for a 2% general partner interest and Martin LLC contributing $980 to it as a capital contribution in exchange for a 98% limited partner interest in the MLP;
WHEREAS, in turn Martin LLC formed the Operating GP, and contributed $1,000 to it as a capital contribution in exchange for all of the membership interests in the Operating GP;
WHEREAS, in turn Martin LLC and the Operating GP formed the Operating Partnership, with the Operating GP contributing $1.00 in exchange for a 0.1% general partner interest and Martin LLC contributing $999.0 in exchange for a 99.9% limited partner interest in the Operating Partnership;
WHEREAS, Martin Gas Sales, Inc., a Texas corporation, converted under Texas law into MGSLLC;
WHEREAS, Midstream Fuel Services, Inc., an Alabama corporation, converted under Alabama law into Midstream LLC;
WHEREAS, Martin Gas Marine, Inc., a Texas corporation, converted under Texas law into Marine LLC;
WHEREAS, each of the following transactions shall occur as of 12:01 A.M. Eastern Time on November 1, 2002, or on such other date prior to the day of the closing of the offering of Common Units of the MLP (the "Closing") as is mutually agreed upon by the parties hereto:
1. MRMC will contribute all of the outstanding membership interests in Marine LLC (the "Marine Interest") and all of the outstanding common stock of Resources (the "Resources Common Stock") to Martin LLC as a capital contribution.
2. MGSLLC will contribute all of the outstanding common stock (the "MLP Gas Common Stock") of MLP Gas to the Operating Partnership in exchange for a 1.14% limited partner interest in the Operating Partnership;
3. Martin LLC will contribute the Marine Interest and the Resources Common Stock to the Operating Partnership in exchange for a 50.13% limited partner interest in the Operating Partnership;
4. The Operating Partnership will cause each of Resources and MLP Gas to merge with and into the Operating Partnership, with the Operating Partnership being the surviving entity.
5. MGSLLC will contribute to the Operating Partnership (i) certain LPG Assets, as set forth in the Bill of Sale described in Section 2.6 below, (ii) certain real property and assets associated with the Mt. Belview Railrack facility, (iii) all assets and property at MGSLLC's facility at 4118 Pendola Point Road, Tampa, Florida, including that certain Ground Lease Agreement between MGSI and the Tampa Port Authority, and (iv) certain real property and assets associated with the Stanolind Terminal, (all such assets set forth in this paragraph referred to collectively as, the "LPG Assets") in exchange for a 27.10% limited partner interest in the Operating Partnership;
6. Midstream LLC will contribute to the Operating Partnership those assets set forth in the Bill of Sale described in Section 2.7 below (collectively, the "Tenn-Tom Towing Assets") in exchange for a 14.30% limited partner interest in the Operating Partnership;
7. Marine LLC will transfer to the Operating Partnership (i) a 25.05% interest in CF Martin Sulphur L.L.C. and (ii) certain office equipment and vehicles (the "Marine Retained Equipment"), as more fully described in a Bill of Sale to be executed by Marine LLC in favor of the Operating Partnership (the "Marine Retained Equipment Bill of Sale"). All of the assets and properties described in this recital are collectively referred to herein as the "Marine Retained Assets";
8. The Operating Partnership will distribute to Martin LLC
(i)(A) the Marine Retained Assets, as more fully described in a Bill of Sale to
be executed by the Operating Partnership in favor of Martin LLC (the "Retained
Assets Bill of Sale"), and (ii)(A) a 50.00% limited partner interest in
Continental Sulfur Company LLC, (B) the lease for the facility located
in Hondo, Texas, together with all of the improvements and assets located at such location, all as to be more fully described in an Assignment of Lease and Bill of Sale to be executed by the Operating Partnership in favor of Martin LLC (collectively, the "Hondo Conveyance Documents"), and (C) the real estate, improvements and assets comprising the facility located at Troy, Alabama, all as to be more fully described in a Special Warranty Deed and Bill of Sale to be executed by the Operating Partnership in favor of Martin LLC (collectively, the "Troy Conveyance Documents"). All of the assets and properties described in this recital are collectively referred to herein as the "Retained Assets";
WHEREAS, on October 30, 2002, or on such other date as is mutually agreed upon by the parties hereto, Transport shall sell the 7.3 shares of the Common Stock of CFM-SHC (the "Transport Owned Shares") held by Transport to MGSLLC in exchange for 40 shares of the Common Stock of MRMC;
WHEREAS, each of the following transactions shall occur as of 12:01 am Eastern Time on November 3, 2002, or on such other date as is mutually agreed upon by the parties hereto (the "Dissolution Effective Time"):
1. Marine LLC and MGSLLC shall cause CFM-SHC to dissolve under the laws of Nevada, and in such dissolution, CFM-SHC shall distribute its assets, including its 49.5% limited partner interest in CF Martin Sulphur L.P., on a pro rata basis to Marine LLC and MGSLLC;
2. MGSLLC shall contribute the interest in CF Martin Sulphur L.P. that it received upon the dissolution of CFM-SHC to the Operating Partnership in exchange for a 7.33% limited partner interest in the Operating Partnership;
WHEREAS, each of the following transactions shall occur as of 12:01 A.M. Eastern Time on the Closing (the "Closing Day Effective Time"):
1. MGSLLC will contribute its 35.57% limited partner interest in the Operating Partnership to the MLP in exchange for 1,543,797 subordinated units of the MLP representing limited partnership interests in the MLP ("Subordinated Units");
2. Midstream LLC will contribute its 14.30% limited partner interest in the Operating Partnership to the MLP in exchange for 620,644 Subordinated Units;
3. Martin LLC will contribute (i) a 2.00% limited partner
interest in the Operating Partnership to the GP as a capital contribution, and
(ii) a 48.13% limited partner interest in the Operating Partnership and all of
its interest in the Operating GP to the MLP in exchange for 2,088,921
Subordinated Units of the MLP;
4. The GP will contribute the 2.00% limited partner interest in the Operating Partnership it received from Martin LLC to the MLP in exchange for (a) a continuation of its 2.00% general partner interest in the MLP and (b) the issuance of incentive distribution rights to the GP;
5. The MLP will redeem the original 98% limited partner interest in the MLP held by Martin LLC for $980 in cash.
WHEREAS, following the Closing, the Operating Partnership will cause Marine LLC to merge with and into the Operating Partnership, with the Operating Partnership being the Surviving Entity.
NOW, THEREFORE, in consideration of their mutual undertakings and agreements hereunder, the parties to this Agreement undertake and agree as follows:
ARTICLE I
RECORDATION
SECTION 1.1 RECORDATION OF EVIDENCE OF OWNERSHIP OF ASSETS. In connection with the conveyances and mergers that are referred to in the recitals to this Agreement, the parties to this Agreement acknowledge that certain jurisdictions in which the assets of the applicable parties to such conveyances and mergers are located may require that documents be recorded by the entities resulting from such conveyances and mergers in order to evidence title to the assets owned by such entities. All such documents shall evidence such new ownership and are not intended to modify, and shall not modify, any of the terms, covenants and conditions herein set forth.
ARTICLE II
MERGERS, CONTRIBUTIONS AND DISTRIBUTIONS OF VARIOUS ASSETS
SECTION 2.1 CONTRIBUTION OF MARINE INTEREST AND RESOURCES COMMON STOCK BY MRMC TO MARTIN LLC. At the Contribution Effective Time, MRMC hereby grants, contributes, transfers, assigns and conveys to Martin LLC, its successors and assigns, all right, title and interest in and to (i) the Marine Interest and (ii) the Resources Common Stock as a capital contribution.
SECTION 2.2 CONTRIBUTION OF MLP GAS COMMON STOCK TO THE OPERATING PARTNERSHIP. At the Contribution Effective Time, MGSLLC hereby grants, contributes, transfers, assigns and conveys to the Operating Partnership, its successors and assigns, all right, title and interest in and to the MLP Gas Common Stock in exchange for a 1.14% limited partner interest in the Operating Partnership.
SECTION 2.3 CONTRIBUTION OF MARINE INTEREST AND RESOURCES
COMMON STOCK TO THE OPERATING PARTNERSHIP. At the Contribution Effective Time,
Martin LLC hereby grants, contributes, transfers, assigns and conveys to the
Operating Partnership, its successors and assigns, all right, title and interest
in and to (i) the Marine Interest and (ii) the Resources Common Stock in
exchange for a 50.13% limited partner interest in the Operating Partnership.
SECTION 2.4 MERGER OF RESOURCES INTO THE OPERATING PARTNERSHIP. Pursuant to the Agreement and Plan of Merger attached hereto as Exhibit A, at the Contribution Effective
Time, the Operating Partnership shall cause Resources to merge with and into the Operating Partnership, with the Operating Partnership being the surviving entity.
SECTION 2.5 MERGER OF MLP GAS INTO THE OPERATING PARTNERSHIP. Pursuant to the Agreement and Plan of Merger attached hereto as Exhibit B, at the Contribution Effective Time, the Operating Partnership shall cause MLP Gas to merge with and into the Operating Partnership, with the Operating Partnership being the surviving entity.
SECTION 2.6 CONTRIBUTION OF LPG ASSETS BY MGSLLC TO THE OPERATING PARTNERSHIP. At the Contribution Effective Time, MGSLLC hereby grants, contributes, transfers, assigns and conveys to the Operating Partnership, its successors and assigns, all right, title and interest in and to the LPG Assets, and the Operating Partnership hereby accepts the LPG Assets in exchange for a 27.10% limited partner interest in the Operating Partnership. In order to give full effect to the foregoing grant, contribution, transfer, assignment and conveyance, MGSLLC, as grantor, and the Operating Partnership, as grantee, shall execute a Bill of Sale in the form attached hereto as Exhibit C together with such other bills of sale, special warranty deeds, conveyances or other documents required to transfer the LPG Assets in the jurisdictions in which they are located.
SECTION 2.7 CONTRIBUTION OF TENN-TOM TOWING ASSETS BY
MIDSTREAM LLC TO THE OPERATING PARTNERSHIP. At the Contribution Effective Time,
Midstream LLC hereby grants, contributes, transfers, assigns and conveys to the
Operating Partnership, its successors and assigns, all right, title and interest
in and to the Tenn-Tom Towing Assets, and the Operating Partnership hereby
accepts the Tenn-Tom Towing Assets in exchange for a 14.30% limited partner
interest in the Operating Partnership. In order to give full effect to the
foregoing grant, contribution, transfer, assignment and conveyance, Midstream
LLC, as grantor, and the Operating Partnership, as grantee, shall execute a Bill
of Sale in the form attached hereto as Exhibit D together with any other bills
of sale, conveyances or other documents required by the United States Department
of Transportation or the United States Coast Guard to transfer the Tenn-Tom
Towing Assets.
SECTION 2.8 DISTRIBUTION OF THE MARINE RETAINED ASSETS BY
MARINE LLC TO THE OPERATING PARTNERSHIP. At the Contribution Effective Time,
Marine LLC hereby grants, distributes, transfers, assigns and conveys to the
Operating Partnership, its successors and assigns, all right, title, and
interest in and to the Marine Retained Assets. In order to give effect to the
foregoing grant, distribution, transfer, assignment and conveyance, Marine LLC,
as grantor, and the Operating Partnership, as grantee, shall execute (i) such
assignment documents as are necessary to transfer the 25.050% interest in CF
Martin Sulphur L.L.C. and (ii) the Marine Retained Equipment Bill of Sale,
together with any other bills of sale, conveyances or other documents as are
necessary to transfer the Marine Retained Assets to the Operating Partnership.
SECTION 2.9 DISTRIBUTION OF THE RETAINED ASSETS BY THE
OPERATING PARTNERSHIP TO MARTIN LLC. At the Contribution Effective Time, the
Operating Partnership hereby grants, distributes, transfers, assigns and conveys
to Martin LLC, its successors and assigns, all right, title, and interest in and
to the Retained Assets. In order to give full effect to the foregoing grant,
distribution, transfer, assignment and conveyance, the Operating
Partnership, as grantor, and Martin LLC, as grantee, shall execute (i) such assignment documents as are necessary to transfer the 25.050% interest in CF Martin Sulphur L.L.C., (ii) the Retained Assets Bill of Sale, (iii) the Hondo Conveyance Documents, and (iv) the Troy Conveyance Documents, together with any other bills of sale, conveyances or other documents as are necessary to transfer the Retained Assets.
SECTION 2.10 PURCHASE OF TRANSPORT OWNED SHARES BY MGSLLC FROM TRANSPORT. On October 30, 2002, or such other date as is mutually agreed upon by the parties hereto, Transport hereby grants, contributes, transfers, assigns and conveys to MGSLLC, its successors and assigns, all right, title and interest in an to the Transport Owned Shares in exchange for 40 shares of the Common Stock of MRMC.
SECTION 2.11 DISSOLUTION AND LIQUIDATION OF CFM-SHC. At the Dissolution Effective Time, CFM-SHC shall liquidate, and hereby grants, distributes, transfers, assigns and conveys to each of Marine LLC and MGSLLC, their successors and assigns, on a pro-rata basis in accordance with the percentage ownership that each of Marine LLC and MGSLLC hold in CFM-SHC, all right, title and interest in and to all assets held by CFM-SHC, including its 49.5% limited partner interest in CF Martin Sulphur L.P.
SECTION 2.12 CONTRIBUTION OF CF MARTIN SULPHUR L.P. LIMITED PARTNER INTEREST BY MGSLLC TO THE OPERATING PARTNERSHIP. At the Dissolution Effective Time, MGSLLC hereby grants, contributes, transfers, assigns and conveys to the Operating Partnership, its successors and assigns, all right, title and interest in an to the limited partner interest in CF Martin Sulphur L.P. that it received pursuant to Section 2.11 in exchange for a 7.33% limited partner interest in the Operating Partnership.
SECTION 2.13 CONTRIBUTION OF OPERATING PARTNERSHIP INTEREST BY MGSLLC TO THE MLP. At the Closing Day Effective Time, MGSLLC hereby grants, contributes, transfers, assigns and conveys to the MLP, its successors and assigns, all right, title and interest of MGSLLC in and to all of its 35.57% limited partner interest in the Operating Partnership in exchange for 1,543,797 Subordinated Units of the MLP.
SECTION 2.14 CONTRIBUTION OF OPERATING PARTNERSHIP INTEREST BY MIDSTREAM LLC TO THE MLP. At the Closing Day Effective Time, Midstream LLC hereby grants, contributes, transfers, assigns and conveys to the MLP, its successors and assigns, all right, title and interest of Midstream LLC in and to its 14.30% limited partner interest in the Operating Partnership in exchange for 620,644 Subordinated Units of the MLP.
SECTION 2.15 CONTRIBUTION OF OPERATING PARTNERSHIP INTEREST BY MARTIN LLC TO THE GP. At the Closing Day Effective Time, Martin LLC hereby grants, contributes, transfers, assigns and conveys to the GP, its successors and assigns, all right, title and interest of Martin LLC in and to a 2.00% limited partner interest in the Operating Partnership as a contribution to the capital of the GP.
SECTION 2.16 CONTRIBUTION OF OPERATING PARTNERSHIP INTEREST BY THE GP TO THE MLP. At the Closing Day Effective Time, the GP hereby grants, contributes, transfers,
assigns and conveys to the MLP, its successors and assigns, all right, title and interest of the GP in and to the 2.00% limited partner interest in the Operating Partnership that it received from Martin LLC (following the transaction set forth in Section 2.15 above) in exchange for (a) a continuation of its 2% general partner interest in the MLP and (b) the issuance to it by the MLP of the incentive distribution rights under the First Amended and Restated Agreement of Limited Partnership of the MLP.
SECTION 2.17 CONTRIBUTION OF OPERATING PARTNERSHIP INTEREST AND THE OPERATING GP INTEREST BY MARTIN LLC TO THE MLP. At the Closing Day Effective Time, Martin LLC hereby grants, contributes, transfers, assigns and conveys to the MLP, its successors and assigns, all right, title and interest of Martin LLC in and to (a) all of the remaining 48.13% limited partner interest in the Operating Partnership held by Martin LLC and (b) the 100% membership interest in the Operating GP held by Martin LLC to the MLP in exchange for 2,088,921 Subordinated Units of the MLP.
SECTION 2.18 REDEMPTION OF MARTIN LLC'S LIMITED PARTNER INTEREST IN THE MLP. At the Closing Day Effective Time, the MLP hereby redeems from Martin LLC all of Martin LLC's original 98% limited partner interest in the MLP (exclusive of any Subordinated Units or other interests that Martin LLC has received pursuant to the terms of this Article II), and in exchange therefore, the MLP hereby pays to Martin LLC $980 in cash.
SECTION 2.19 MERGER OF MARINE LLC INTO THE OPERATING PARTNERSHIP. Pursuant to the Agreement and Plan of Merger attached hereto as Exhibit E, at the effective time set forth in such Agreement and Plan of Merger, the Operating Partnership shall cause Marine LLC to merge with and into the Operating Partnership, with the Operating Partnership being the surviving entity.
ARTICLE III
ASSUMPTION OF CERTAIN LIABILITIES
SECTION 3.1 ASSUMPTION OF LIABILITIES AND OBLIGATIONS BY THE OPERATING PARTNERSHIP AND THE MLP.
(a) In connection with the contribution of the Tenn-Tom Towing Assets by Midstream LLC and the LPG Assets by MGSLLC to the Operating Partnership, as well as all of the assets (other than the Retained Assets) acquired by the Operating Partnership in connection with the mergers of Marine LLC, Resources and MLP Gas into the Operating Partnership, the Operating Partnership hereby assumes and agrees to duly and timely pay, perform and discharge all obligations and liabilities incurred with respect to the Contributed Assets, that arise from and after the date of this Agreement, to the full extent that either Midstream LLC, MGSLLC, Marine LLC, Resources or MLP Gas would have been obligated to pay, perform and discharge such obligations and liabilities in the future, were it not for the execution and delivery of this Agreement; provided, however, that said assumption and agreement to duly and timely pay, perform and discharge such obligations and liabilities shall not increase the obligation of the Operating Partnership with respect to such obligations and liabilities beyond that of any
of Midstream as to the Tenn-Tom Towing Assets, MGSLLC as to the LPG Assets, or Marine LLC, Resources or MLP Gas as to the assets (other than the Retained Assets) acquired by the Operating Partnership in connection with such mergers, to the extent of such interest conveyed by any of Midstream LLC, MGSLLC, Marine LLC, Resources or MLP Gas. For purposes of this Agreement, the term "Contributed Assets" shall mean, collectively, the Tenn-Tom Towing Assets, the LPG Assets and all of the assets acquired by the Operating Partnership in connection with the mergers of Marine LLC, Resources and MLP Gas, but excluding the Retained Assets.
(b) In connection with the transfers of the Contributed Assets to the Operating Partnership, and the transfers of the Operating Partnership interests to the MLP, the Operating Partnership and the MLP will assume the existing debt as set forth on Schedule 3.1 attached hereto.
ARTICLE IV
TITLE MATTERS
SECTION 4.1 ENCUMBRANCES. The distributions of the Contributed Assets in connection with the mergers of Marine LLC, Resources and MLP Gas into the Operating Partnership, under this Agreement are made expressly subject to all recorded and unrecorded liens, encumbrances, agreements, defects, restrictions, adverse claim and all laws, rules, regulations, ordinances, judgments and orders of governmental authorities or tribunals having or asserting jurisdiction over the applicable Contributed Assets, and operations conducted in connection therewith, in each case to the extent the same are valid and enforceable and affect such Contributed Assets, including, without limitation, (a) all matters that a current visual inspection of such Contributed Assets would reflect, and (b) the liabilities assumed by the Operating Partnership with respect to such Contributed Assets.
SECTION 4.2 Disclaimer of Warranties; Subrogation; Waiver of Bulk Sales Laws.
(a) (i) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, THE MLP AND THE OPERATING PARTNERSHIP ACKNOWLEDGE AND AGREE THAT MRMC, MIDSTREAM LLC, MGSLLC, MARINE LLC, RESOURCES, AND MLP GAS HAVE NOT MADE, DO NOT MAKE, AND SPECIFICALLY NEGATE AND DISCLAIM, ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, ORAL OR WRITTEN, PAST OR PRESENT (ALL OF WHICH ARE EXPRESSLY DISCLAIMED BY MRMC, MIDSTREAM LLC, MGSLLC, MARINE LLC, RESOURCES AND MLP GAS), REGARDING (1) THE TITLE, VALUE, NATURE, QUALITY OR CONDITION OF THE CONTRIBUTED ASSETS, (2) THE INCOME TO BE DERIVED FROM THE CONTRIBUTED ASSETS, (3) THE SUITABILITY OF THE CONTRIBUTED ASSETS FOR ANY AND ALL ACTIVITIES AND USES WHICH THE MLP MAY CONDUCT THEREON, (4) THE COMPLIANCE OF OR BY THE CONTRIBUTED ASSETS, OR THEIR
OPERATIONS WITH ANY LAWS (INCLUDING WITHOUT LIMITATION ANY ZONING, ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS), OR (5) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE CONTRIBUTED ASSETS.
(ii) THE MLP AND THE OPERATING PARTNERSHIP ACKNOWLEDGE AND AGREE THAT THEY HAVE HAD THE OPPORTUNITY TO INSPECT THE CONTRIBUTED ASSETS, AND THAT THEY ARE RELYING SOLELY ON THEIR OWN INVESTIGATION OF THE CONTRIBUTED ASSETS, AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY MRMC, MIDSTREAM LLC, MGSLLC, MARINE LLC, RESOURCES OR MLP GAS. MRMC, MIDSTREAM LLC, MGSLLC, MARINE LLC, RESOURCES AND MLP GAS ARE NOT LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE CONTRIBUTED ASSETS, FURNISHED BY ANY AGENT, EMPLOYEE, SERVANT OR THIRD PARTY.
(iii) THE MLP AND THE OPERATING PARTNERSHIP ACKNOWLEDGE THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE CONTRIBUTION OF THE CONTRIBUTED ASSETS, AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS", "WHERE IS" BASIS WITH ALL FAULTS AND THE CONTRIBUTED ASSETS, ARE CONTRIBUTED OR DISTRIBUTED AND CONVEYED BY MIDSTREAM, MGSI, MARINE LLC, RESOURCES AND MLP GAS SUBJECT TO THE FOREGOING. THIS PARAGRAPH SHALL SURVIVE SUCH CONTRIBUTION OR DISTRIBUTION AND CONVEYANCE OR THE TERMINATION OF THIS AGREEMENT.
(iv) THE PROVISIONS OF THIS SECTION 4.2 HAVE BEEN NEGOTIATED BY MRMC, MIDSTREAM LLC, MGSLLC, MARINE LLC, RESOURCES, MLP GAS, THE MLP AND THE OPERATING PARTNERSHIP AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES OF MRMC, MIDSTREAM LLC, MGSLLC, MARINE LLC, RESOURCES AND MLP GAS, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE CONTRIBUTED ASSETS, THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE.
(b) The distributions and contributions of the Contributed Assets, made under this Agreement are made with full rights of substitution and subrogation of the Operating Partnership, and all persons claiming by, through and under the Operating Partnership, to the extent assignable, in and to all covenants and warranties by the predecessors-in-title of Midstream LLC, MGSLLC, Marine LLC, Resources and MLP Gas, and with full subrogation of all rights accruing under applicable statutes of limitation and all rights of action of warranty against all former owners of the Contributed Assets.
(c) Midstream LLC, MGSLLC, Marine LLC, Resources, MLP Gas, the MLP, the GP, the Operating Partnership and Operating GP agree that the disclaimers contained in this Section 4.2 are "conspicuous" disclaimers. Any covenants implied by statute or law by the use of the words "grant," "convey," "bargain," "sell," "assign," "transfer," "deliver," or "set over" or any of them or any other words used in this Agreement or any exhibits hereto are hereby expressly disclaimed, waived or negated.
(d) Each of the parties hereto hereby waives compliance with any applicable bulk sales law or any similar law in any applicable jurisdiction in respect of the transactions contemplated by this Agreement. "Laws" means any and all laws, statutes, ordinances, rules or regulations promulgated by a governmental authority, orders of a governmental authority, judicial decisions, decisions of arbitrators or determinations of any governmental authority or court.
ARTICLE V
FURTHER ASSURANCES
SECTION 5.1 FURTHER ASSURANCES. From time to time after the date hereof, and without any further consideration, Midstream LLC, MGSLLC, Martin LLC, the GP, the MLP, the Operating GP and the Operating Partnership shall execute, acknowledge and deliver all such additional deeds, assignments, bills of sale, conveyances, instruments, notices, releases, acquittances and other documents, and will do all such other acts and things, all in accordance with applicable law, as may be necessary or appropriate more fully and effectively to vest in the Operating Partnership and the MLP and their successors and assigns beneficial and record title to the Contributed Assets hereby contributed and assigned to the Operating Partnership or intended so to be and to more fully and effectively carry out the purposes and intent of this Agreement.
SECTION 5.2 OTHER ASSURANCES. From time to time after the date hereof, and without any further consideration, each of the parties to this Agreement shall execute, acknowledge and deliver all such additional instruments, notices and other documents, and will do all such other acts and things, all in accordance with applicable law, as may be necessary or appropriate to more fully and effectively carry out the purposes and intent of this Agreement.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 HEADINGS; REFERENCES; INTERPRETATION. All article and section headings in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words "hereof," "herein" and "hereunder" and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole, including without limitation, all exhibits attached hereto, and not to any particular provision of this Agreement. All references herein to articles, sections, and exhibits shall, unless the context requires a different construction, be deemed to be references to the articles, sections and exhibits of this Agreement, respectively, and all such Exhibits attached hereto are hereby incorporated herein and made a part hereof for all purposes. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender,
shall include all other genders, and the singular shall include the plural and vice versa. The use herein of the word "including" following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as "without limitation," "but not limited to," or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter.
SECTION 6.2 SUCCESSORS AND ASSIGNS. The Agreement shall be binding upon and inure to the benefit of the parties signatory hereto and their respective successors and assigns.
SECTION 6.3 NO THIRD PARTY RIGHTS. The provisions of this Agreement are intended to bind the parties signatory hereto as to each other and are not intended to and do not create rights in any other person or confer upon any other person any benefits, rights or remedies and no person is or is intended to be a third party beneficiary of any of the provisions of this Agreement.
SECTION 6.4 COUNTERPARTS. This Agreement may be executed in any number of counterparts, all of which together shall constitute one agreement binding on the parties hereto.
SECTION 6.5 GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Texas applicable to contracts made and to be performed wholly within such state without giving effect to conflict of law principles thereof, except to the extent that it is mandatory that the law of some other jurisdiction, shall apply.
SECTION 6.6 SEVERABILITY. If any of the provisions of this Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate the entire Agreement. Instead, this Agreement shall be construed as if it did not contain the particular provision or provisions held to be invalid, and an equitable adjustment shall be made and necessary provision added so as to give effect to the intention of the parties as expressed in this Agreement at the time of execution of this Agreement.
SECTION 6.7 AMENDMENT OR MODIFICATION. This Agreement may be amended or modified from time to time only by the written agreement of all the parties hereto.
SECTION 6.8 INTEGRATION. This Agreement, together with that certain Omnibus Agreement dated of even date herewith, to be entered into by and among MRMC, certain of MRMC's subsidiaries, the MLP, the GP, the Operating Partnership and the Operating GP (the "Omnibus Agreement"), supersedes all previous understandings or agreements between the parties, whether oral or written, with respect to its subject matter. This document is an integrated agreement which contains the entire understanding of the parties. No understanding, representation, promise or agreement, whether oral or written, other than those contained in the Omnibus Agreement, is intended to be or shall be included in or form part of this Agreement
unless it is contained in a written amendment hereto executed by the parties hereto after the date of this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date first above written.
MARTIN RESOURCE MANAGEMENT CORPORATION
By: /s/ Robert D. Bondurant Robert D. Bondurant Chief Financial Officer |
MARTIN MIDSTREAM GP LLC
By: /s/ Robert D. Bondurant Robert D. Bondurant Chief Financial Officer |
MARTIN MIDSTREAM PARTNERS L.P.
By: MARTIN MIDSTREAM GP LLC
By: /s/ Robert D. Bondurant Robert D. Bondurant Chief Financial Officer |
MARTIN GAS MARINE LLC
By: Martin Resource Management Corporation
As Sole Member
By: /s/ Robert D. Bondurant Robert D. Bondurant Chief Financial Officer |
MARTIN RESOURCES, INC.
By: /s/ Robert D. Bondurant Robert D. Bondurant Chief Financial Officer |
MARTIN GAS SALES LLC
By: Martin Resource Management Corporation
As Sole Member
By: /s/ Robert D. Bondurant Robert D. Bondurant Chief Financial Officer |
MARTIN L.P. GAS, INC.
By: /s/ Robert D. Bondurant Robert D. Bondurant Chief Financial Officer |
MARTIN TRANSPORT, INC.
By: /s/ Robert D. Bondurant Robert D. Bondurant Chief Financial Officer |
MARTIN RESOURCE LLC
By: Martin Resource Management Corporation
As Sole Member
By: /s/ Robert D. Bondurant Robert D. Bondurant Chief Financial Officer |
CF MARTIN SULPHUR HOLDING CORPORATION
By: /s/ Robert D. Bondurant Robert D. Bondurant Chief Financial Officer |
MIDSTREAM FUEL SERVICE LLC
By: Martin Resource Management Corporation
As Sole Member
By: /s/ Ruben S. Martin, III Name: Ruben S. Martin, III Title: President |
MARTIN OPERATING GP LLC
By: Martin Resource LLC
As Sole Member
By: Martin Resource Management Corporation
As Sole Member
By: /s/ Ruben S. Martin, III Name: Ruben S. Martin, III Title: President |
MARTIN OPERATING PARTNERSHIP L.P.
By: Martin Operating GP LLC, its General
Partner
By: Martin Resource LLC,
As Sole Member
By: Martin Resource Management
Corporation
As Sole Member
By: /s/ Robert D. Bondurant Robert D. Bondurant Chief Financial Officer |
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
BETWEEN
MARTIN RESOURCES, INC.
AND
MARTIN OPERATING PARTNERSHIP L.P.
DATED AS OF NOVEMBER 1, 2002
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of November 1], 2002, but effective as of the Effective Time (as defined in Section 1.2), between Martin Resources, Inc., a Texas corporation ("Resources"), and Martin Operating Partnership L.P., a Delaware limited partnership (the "Partnership");
WITNESSETH:
WHEREAS, the Board of Directors of Resources has determined that it is in the best interests of Resources and its sole shareholder to effectuate a merger whereby Resources will be merged with and into the Partnership with the Partnership being the surviving entity (the "Merger");
WHEREAS, Martin Operating GP LLC, a Delaware limited liability company and the General Partner of the Partnership (the "General Partner"), has determined that it is in the best interests of the Partnership and its partners to effectuate the Merger;
WHEREAS, the Board of Directors of Resources and the sole member of the General Partner have each approved the Merger, upon the terms and subject to the conditions set forth in this Agreement; and
NOW, THEREFORE, in consideration of the foregoing and of the covenants and agreements contained herein, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Subject to the terms and conditions of this Agreement, and in accordance with the Texas Business Corporation Act (the "TBCA") and the Delaware Revised Uniform Limited Partnership Act (the "DRULPA"), at the Effective Time, Resources shall be merged with and into the Partnership in accordance with this Agreement, and the separate corporate existence of Resources shall thereupon cease. The Partnership shall continue as the surviving entity in the Merger (sometimes hereinafter referred to as the "Surviving Entity"), and all the properties, rights, privileges, powers and franchises of Resources shall vest in the Surviving Entity without any transfer or assignment having occurred, and all debts, liabilities and duties of Resources shall attach to the Surviving Entity, all in accordance with the TBCA and the DRULPA.
Section 1.2 Filing Certificate of Merger; Effective Time. As soon as
practicable following the satisfaction or, to the extent permitted by applicable
law, waiver of the conditions set forth in Article IV, if this Agreement shall
not have been terminated prior thereto as provided in Section 5.1, Resources and
the Partnership shall cause (i) articles of merger meeting the requirements of
Section 5.04 of the TBCA (the "Articles of Merger") and (ii) a certificate of
merger meeting the requirements of Section 17-211 of the DRULPA (together with the Articles of Merger, the "Merger Filings") to be properly executed and filed in accordance with each such section. The Merger shall become effective at the later of (1) the time of filing of the Merger Filings with the Secretaries of State of the States of Texas and Delaware and (2) at 12:01 Eastern time on November 1, 2002 (the "Effective Time").
ARTICLE II
SURVIVING ENTITY
Section 2.1 Name of Surviving Entity. The name of the Surviving Entity shall be "Martin Operating Partnership L.P."
Section 2.2 Certificate of Limited Partnership of Surviving Entity. The Certificate of Limited Partnership of the Partnership shall continue to be the Certificate of Limited Partnership of the Surviving Entity until amended as provided therein and under the DRULPA.
ARTICLE III
CANCELLATION OF COMMON STOCK
Section 3.1 Cancellation of Common Stock in the Merger. At the Effective Time, by virtue of the Merger and without any action on the part of Resources or the sole shareholder of Resources, (i) each issued and outstanding share of Common Stock shall be automatically cancelled, and (ii) each issued share, if any, held by Resources as a treasury share shall be cancelled without receipt of any consideration therefor.
ARTICLE IV
CONDITIONS PRECEDENT
The respective obligation of each party to effect the Merger is subject to the satisfaction or waiver of the following conditions:
(a) None of the parties hereto shall be subject to any decree, order or injunction of a court of competent jurisdiction, U.S. or foreign, which prohibits the consummation of the Merger.
(b) Other than the filing of the Merger Filings provided for under Article I, all material consents, appeals, authorizations of, or filings or registrations with and notices to any governmental or regulatory authority required of Resources and the Partnership or any of their subsidiaries to consummate the Merger and the other transactions contemplated hereby, shall have been made or obtained.
(c) Any consents required under instruments evidencing indebtedness and any consents required under any contracts to which Resources or any subsidiary of Resources is a party, shall have been obtained.
ARTICLE V
TERMINATION, AMENDMENT AND WAIVER
Section 5.1 Termination. This Agreement may be terminated at any time prior to the Effective Time by action of the Board of Directors of Resources or the General Partner.
Section 5.2 Effect of Termination. In the event of termination of this Agreement as provided in Section 5.1, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of Resources or the Partnership.
Section 5.3 Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
Section 5.4 Waiver. At any time prior to the Effective Time, the parties may waive compliance by the other parties with any of the agreements contained in this Agreement, or may waive any of the conditions to consummation of the Merger contained in this Agreement. Any agreement on the part of a party to any such waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.
ARTICLE VI
GENERAL PROVISIONS
Section 6.1 Assignment; Binding Effect; Benefit. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement.
Section 6.2 Entire Agreement. This Agreement and any documents delivered by the parties in connection herewith constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings among the parties with respect thereto. No addition to or modification of any provision of this Agreement shall be binding upon any party hereto unless made in writing and signed by all parties hereto.
Section 6.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its rules of conflict of laws.
Section 6.4 Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all
such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by all of the parties hereto.
Section 6.5 Headings. Headings of the Articles and Sections of this Agreement are for the convenience of the parties only and shall be given no substantive or interpretative effect whatsoever.
IN WITNESS WHEREOF, Resources and the Partnership have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first written above.
MARTIN RESOURCES, INC.
MARTIN OPERATING PARTNERSHIP L.P.
By: Martin Operating GP LLC
Its General Partner
By: Martin Resource LLC
Its Sole Member
By: Martin Resource Management
Corporation
Its Sole Member
EXHIBIT B
AGREEMENT AND PLAN OF MERGER
BETWEEN
MARTIN L.P. GAS, INC.
AND
MARTIN OPERATING PARTNERSHIP L.P.
DATED AS OF NOVEMBER 1, 2002
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of November 1, 2002, but effective as of the Effective Time (as defined in Section 1.2), between Martin L.P. Gas, Inc., a Texas corporation ("MLPG"), and Martin Operating Partnership L.P., a Delaware limited partnership (the "Partnership");
WITNESSETH:
WHEREAS, the Board of Directors of MLPG has determined that it is in the best interests of MLPG and its sole shareholder to effectuate a merger whereby MLPG will be merged with and into the Partnership with the Partnership being the surviving entity (the "Merger");
WHEREAS, Martin Operating GP LLC, a Delaware limited liability company and the General Partner of the Partnership (the "General Partner"), has determined that it is in the best interests of the Partnership and its partners to effectuate the Merger;
WHEREAS, the Board of Directors of MLPG and the sole member of the General Partner have each approved the Merger, upon the terms and subject to the conditions set forth in this Agreement; and
NOW, THEREFORE, in consideration of the foregoing and of the covenants and agreements contained herein, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Subject to the terms and conditions of this Agreement, and in accordance with the Texas Business Corporation Act (the "TBCA") and the Delaware Revised Uniform Limited Partnership Act (the "DRULPA"), at the Effective Time, MLPG shall be merged with and into the Partnership in accordance with this Agreement, and the separate corporate existence of MLPG shall thereupon cease. The Partnership shall continue as the surviving entity in the Merger (sometimes hereinafter referred to as the "Surviving Entity"), and all the properties, rights, privileges, powers and franchises of MLPG shall vest in the Surviving Entity without any transfer or assignment having occurred, and all debts, liabilities and duties of MLPG shall attach to the Surviving Entity, all in accordance with the TBCA and the DRULPA.
Section 1.2 Filing Certificate of Merger; Effective Time. As soon as
practicable following the satisfaction or, to the extent permitted by applicable
law, waiver of the conditions set forth in Article IV, if this Agreement shall
not have been terminated prior thereto as provided in Section 5.1, MLPG and the
Partnership shall cause (i) articles of merger meeting the requirements of
Section 5.04 of the TBCA (the "Articles of Merger") and (ii) a certificate of
merger meeting the requirements of Section 17-211 of the DRULPA (together with
the Articles
of Merger, the "Merger Filings") to be properly executed and filed in accordance with each such section. The Merger shall become effective at the later of (1) the time of filing of the Merger Filings with the Secretaries of State of the States of Texas and Delaware and (2) at 12:01 a.m. Eastern time on November 1, 2002 (the "Effective Time").
ARTICLE II
SURVIVING ENTITY
Section 2.1 Name of Surviving Entity. The name of the Surviving Entity shall be "Martin Operating Partnership L.P."
Section 2.2 Certificate of Limited Partnership of Surviving Entity. The Certificate of Limited Partnership of the Partnership shall continue to be the Certificate of Limited Partnership of the Surviving Entity until amended as provided therein and under the DRULPA.
ARTICLE III
CANCELLATION OF COMMON STOCK
Section 3.1 Cancellation of Common Stock in the Merger. At the Effective Time, by virtue of the Merger and without any action on the part of MLPG or the sole shareholder of MLPG, (i) each issued and outstanding share of Common Stock shall be automatically cancelled, and (ii) each issued share, if any, held by MLPG as a treasury share shall be cancelled without receipt of any consideration therefor.
ARTICLE IV
CONDITIONS PRECEDENT
The respective obligation of each party to effect the Merger is subject to the satisfaction or waiver of the following conditions:
(a) None of the parties hereto shall be subject to any decree, order or injunction of a court of competent jurisdiction, U.S. or foreign, which prohibits the consummation of the Merger.
(b) Other than the filing of the Merger Filings provided for under Article I, all material consents, appeals, authorizations of, or filings or registrations with and notices to any governmental or regulatory authority required of MLPG and the Partnership or any of their subsidiaries to consummate the Merger and the other transactions contemplated hereby, shall have been made or obtained.
(c) Any consents required under instruments evidencing indebtedness and any consents required under any contracts to which MLPG or any subsidiary of MLPG is a party, shall have been obtained.
ARTICLE V
TERMINATION, AMENDMENT AND WAIVER
Section 5.1 Termination. This Agreement may be terminated at any time prior to the Effective Time by action of the Board of Directors of MLPG or the General Partner.
Section 5.2 Effect of Termination. In the event of termination of this Agreement as provided in Section 5.1, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of MLPG or the Partnership.
Section 5.3 Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
Section 5.4 Waiver. At any time prior to the Effective Time, the parties may waive compliance by the other parties with any of the agreements contained in this Agreement, or may waive any of the conditions to consummation of the Merger contained in this Agreement. Any agreement on the part of a party to any such waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.
ARTICLE VI
GENERAL PROVISIONS
Section 6.1 Assignment; Binding Effect; Benefit. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement.
Section 6.2 Entire Agreement. This Agreement and any documents delivered by the parties in connection herewith constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings among the parties with respect thereto. No addition to or modification of any provision of this Agreement shall be binding upon any party hereto unless made in writing and signed by all parties hereto.
Section 6.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its rules of conflict of laws.
Section 6.4 Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may
consist of a number of copies hereof each signed by less than all, but together signed by all of the parties hereto.
Section 6.5 Headings. Headings of the Articles and Sections of this Agreement are for the convenience of the parties only and shall be given no substantive or interpretative effect whatsoever.
IN WITNESS WHEREOF, MLPG and the Partnership have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first written above.
MARTIN L.P. GAS, INC.
MARTIN OPERATING PARTNERSHIP L.P.
By: Martin Operating GP LLC
Its General Partner
By: Martin Resource LLC
Its Sole Member
By: Martin Resource Management
Corporation
Its Sole Member
EXHIBIT C
CONVEYANCE, ASSIGNMENT
AND BILL OF SALE
Recording Requested by and When Recorded Return to: Baker Botts L.L.P., 2001 Ross Avenue, Dallas, Texas 75201, Attn: Chad D. Burkhardt.
CONVEYANCE, ASSIGNMENT AND BILL OF SALE
This Conveyance, Assignment and Bill of Sale (this "Conveyance"), effective as of 12:01 A.M. Eastern Time on November 1, 2002 (the "Effective Date"), is from MARTIN GAS SALES LLC, a Texas limited liability company (herein called "Grantor"), and in favor of MARTIN OPERATING PARTNERSHIP L.P., whose mailing address is 4200 Stone Road, Kilgore Texas 75662 (herein called "Grantee").
ARTICLE I
GRANTING AND HABENDUM CLAUSES
1.1 GRANTING AND HABENDUM CLAUSES. For good and valuable consideration, the receipt and sufficiency of which Grantee hereby acknowledges, Grantor hereby contributes, conveys, assigns, transfers, delivers, and sets over unto Grantee, its successors and assigns, all right, title, interests and estate of Grantor in and to the following described property, to-wit:
ALL OF THE ASSETS SET FORTH ON SCHEDULE A ATTACHED HERETO
The property described in this Section 1.1 shall be referred to herein collectively as the "Subject Property".
TO HAVE AND TO HOLD the Subject Property, subject to the terms and conditions hereof, unto Grantee, its successors and assigns, forever.
ARTICLE II
ENCUMBRANCES AND WARRANTY DISCLAIMERS
2.1 PERMITTED ENCUMBRANCES. This Conveyance is made and accepted expressly subject to (a) all liens, charges, encumbrances, contracts, agreements, instruments, obligations, defects, restrictions, security interests, options or preferential rights to purchase, adverse claims, reservations, exceptions, easements, rights-of-way, conditions, leases, other matters affecting the Subject Property or to which it is subject; and (b) to all matters that a current on the ground survey or visual inspection would reflect.
2.2 CONTRIBUTION AGREEMENT. This Conveyance is expressly made subject to the terms and conditions of that certain Contribution, Conveyance and Assumption Agreement dated as of October __, 2002, among Grantor, Grantee and the other parties thereto (the "Contribution Agreement"). All capitalized terms used herein shall have the meanings given to such terms in the Contribution Agreement, unless otherwise defined herein. Nothing contained in this
Conveyance shall in any way affect the provisions set forth in the Contribution Agreement nor shall this Conveyance expand or contract any rights or remedies under the Contribution Agreement. This Conveyance is intended only to effect the transfer of the Subject Property to Grantee as provided for in the Contribution Agreement and shall be governed entirely in accordance with the terms and conditions of the Contribution Agreement. In the event of a conflict between the terms of this Conveyance and the terms of the Contribution Agreement, the terms of the Contribution Agreement shall prevail.
2.3 DISCLAIMER OF WARRANTIES; SUBROGATION. Except as expressly provided herein or in the Contribution Agreement, this Conveyance is made, and is accepted by Grantee, without warranty of title, express, implied or statutory, and without recourse, but with full substitution and subrogation of Grantee, and all persons claiming by, through, and under Grantee, to the extent assignable, in and to all covenants and warranties by the predecessors in title of Grantor and with full subrogation of all rights accruing under applicable statutes of limitation or prescription and all rights of action of warranty against all former owners of the Subject Property. Except as expressly provided herein or in the Contribution Agreement, any covenants implied by statute or by the use of the words "convey", "sell", "assign", "transfer", "deliver", or "set over" or any of them or any other words used in this Conveyance, are hereby expressly disclaimed, waived and negated.
ARTICLE III
MISCELLANEOUS
3.1 FURTHER ASSURANCES. Grantor and Grantee agree to take all such further actions and to execute, acknowledge and deliver all such further documents that are necessary or useful in carrying out the purposes of this Conveyance. So long as authorized by applicable law so to do, Grantor agrees to execute, acknowledge and deliver to Grantee all such other additional instruments, notices, affidavits, deeds, conveyances, assignments and other documents and to do all such other and further acts and things as may be necessary or useful to more fully and effectively grant, bargain, assign, convey, transfer and deliver to Grantee the Subject Property conveyed hereby or intended so to be conveyed.
3.2 SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARY. This Conveyance shall be binding upon, and shall and inure to the benefit of, Grantor and Grantee and their successors and assigns. The provisions of this Conveyance are not intended to and do not create rights in any other person or entity or confer upon any other person or entity any benefits, rights or remedies and no person or entity is or is intended to be a third party beneficiary of any of the provisions of this Conveyance.
3.3 GOVERNING LAW. This Conveyance and the legal relations between the parties shall be governed by, and construed in accordance with, the laws of the State of Texas, excluding any conflict of law rule which would refer any issue to the laws of another jurisdiction, except when it is mandatory that the law of the jurisdiction wherein the Subject Property is located shall apply.
3.4 HEADINGS; REFERENCES; DEFINED TERMS. All Section headings in this Conveyance are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words "hereof", "herein" and "hereunder" and words of similar import, when used in this Conveyance, shall refer to this Conveyance as a whole, including, without limitation, all Schedules and Exhibits attached hereto, and not to any particular provision of this Conveyance.
3.5 COUNTERPARTS. This Conveyance may be executed in any number of counterparts, all of which together shall constitute one agreement binding on the parties hereto.
3.6 SEVERABILITY. If any of the provisions of this Conveyance are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate the entire agreement. Instead, this Conveyance shall be construed as if it did not contain the particular provision or provisions held to be invalid and an equitable adjustment shall be made and necessary provision added so as to give effect to the intention of the parties as expressed in this Conveyance at the time of execution of this Conveyance.
IN WITNESS WHEREOF, this Conveyance has been duly executed by the parties hereto on the dates of the acknowledgments set forth below, to be effective, however, as of the Effective Date.
GRANTOR:
MARTIN GAS SALES LLC,
By: Martin Resource LLC,
Its sole member
By: Martin Resource Management
Corporation,
Its sole member
GRANTEE
MARTIN OPERATING PARTNERSHIP L.P.
By: Martin Operating GP LLC,
Its general partner
By: Martin Resource LLC,
Its sole member
By: Martin Resource Management Corporation,
Its sole member
THE STATE OF TEXAS ) ) COUNTY OF _________ ) |
This instrument was acknowledged before me on the ____ day of
___________, 2002, by ______________, ______________ of [.], on behalf of and in
[HIS/HER] capacity as __________ of [.].
NOTARY PUBLIC
My Commission Expires:
THE STATE OF TEXAS ) ) COUNTY OF _________ ) |
This instrument was acknowledged before me on the ____ day of
___________, 2002, by ______________, ______________ of [.], on behalf of and in
[HIS/HER] capacity as __________ of [.].
My Commission Expires:
SCHEDULE A
EXHIBIT D
CONVEYANCE, ASSIGNMENT
AND BILL OF SALE
Recording Requested by and When Recorded Return to: Baker Botts L.L.P., 2001 Ross Avenue, Dallas, Texas 75201, Attn: Chad D. Burkhardt.
CONVEYANCE, ASSIGNMENT AND BILL OF SALE
This Conveyance, Assignment and Bill of Sale (this "Conveyance"), effective as of 12:01 A.M. Eastern Time on November 1, 2002 (the "Effective Date"), is from MIDSTREAM FUEL SERVICE LLC, an Alabama limited liability company (herein called "Grantor"), and in favor of MARTIN OPERATING PARTNERSHIP L.P., whose mailing address is 4200 Stone Road, Kilgore Texas 75662 (herein called "Grantee").
ARTICLE I
GRANTING AND HABENDUM CLAUSES
1.1 GRANTING AND HABENDUM CLAUSES. For good and valuable consideration, the receipt and sufficiency of which Grantee hereby acknowledges, Grantor hereby contributes, conveys, assigns, transfers, delivers, and sets over unto Grantee, its successors and assigns, all right, title, interests and estate of Grantor in and to the following described property, to-wit:
ALL OF THE ASSETS SET FORTH ON SCHEDULE A ATTACHED HERETO
The property described in this Section 1.1 shall be referred to herein collectively as the "Subject Property".
TO HAVE AND TO HOLD the Subject Property, subject to the terms and conditions hereof, unto Grantee, its successors and assigns, forever.
ARTICLE II
ENCUMBRANCES AND WARRANTY DISCLAIMERS
2.1 PERMITTED ENCUMBRANCES. This Conveyance is made and accepted expressly subject to (a) all liens, charges, encumbrances, contracts, agreements, instruments, obligations, defects, restrictions, security interests, options or preferential rights to purchase, adverse claims, reservations, exceptions, easements, rights-of-way, conditions, leases, other matters affecting the Subject Property or to which it is subject; and (b) to all matters that a current on the ground survey or visual inspection would reflect.
2.2 CONTRIBUTION AGREEMENT. This Conveyance is expressly made subject to the terms and conditions of that certain Contribution, Conveyance and Assumption Agreement dated as of October __, 2002, among Grantor, Grantee and the other parties thereto (the "Contribution Agreement"). All capitalized terms used herein shall have the meanings given to such terms in the Contribution Agreement, unless otherwise defined herein. Nothing contained in this
Conveyance shall in any way affect the provisions set forth in the Contribution Agreement nor shall this Conveyance expand or contract any rights or remedies under the Contribution Agreement. This Conveyance is intended only to effect the transfer of the Subject Property to Grantee as provided for in the Contribution Agreement and shall be governed entirely in accordance with the terms and conditions of the Contribution Agreement. In the event of a conflict between the terms of this Conveyance and the terms of the Contribution Agreement, the terms of the Contribution Agreement shall prevail.
2.3 DISCLAIMER OF WARRANTIES; SUBROGATION. Except as expressly provided herein or in the Contribution Agreement, this Conveyance is made, and is accepted by Grantee, without warranty of title, express, implied or statutory, and without recourse, but with full substitution and subrogation of Grantee, and all persons claiming by, through, and under Grantee, to the extent assignable, in and to all covenants and warranties by the predecessors in title of Grantor and with full subrogation of all rights accruing under applicable statutes of limitation or prescription and all rights of action of warranty against all former owners of the Subject Property. Except as expressly provided herein or in the Contribution Agreement, any covenants implied by statute or by the use of the words "convey", "sell", "assign", "transfer", "deliver", or "set over" or any of them or any other words used in this Conveyance, are hereby expressly disclaimed, waived and negated.
ARTICLE III
MISCELLANEOUS
3.1 FURTHER ASSURANCES. Grantor and Grantee agree to take all such further actions and to execute, acknowledge and deliver all such further documents, including all bills of sales and other instruments as are required by the United States Department of Transportation or the United States Coast Guard to transfer any of the Subject Assets, that are necessary or useful in carrying out the purposes of this Conveyance. So long as authorized by applicable law so to do, Grantor agrees to execute, acknowledge and deliver to Grantee all such other additional instruments, notices, affidavits, deeds, conveyances, assignments and other documents and to do all such other and further acts and things as may be necessary or useful to more fully and effectively grant, bargain, assign, convey, transfer and deliver to Grantee the Subject Property conveyed hereby or intended so to be conveyed.
3.2 SUCCESSORS AND ASSIGNS; NO THIRD PARTY BENEFICIARY. This Conveyance shall be binding upon, and shall and inure to the benefit of, Grantor and Grantee and their successors and assigns. The provisions of this Conveyance are not intended to and do not create rights in any other person or entity or confer upon any other person or entity any benefits, rights or remedies and no person or entity is or is intended to be a third party beneficiary of any of the provisions of this Conveyance.
3.3 GOVERNING LAW. This Conveyance and the legal relations between the parties shall be governed by, and construed in accordance with, the laws of the State of Texas, excluding any conflict of law rule which would refer any issue to the laws of another jurisdiction, except when it is mandatory that the law of the jurisdiction wherein the Subject Property is located shall apply.
3.4 HEADINGS; REFERENCES; DEFINED TERMS. All Section headings in this Conveyance are for convenience only and shall not be deemed to control or affect the meaning or construction of any of the provisions hereof. The words "hereof", "herein" and "hereunder" and words of similar import, when used in this Conveyance, shall refer to this Conveyance as a whole, including, without limitation, all Schedules and Exhibits attached hereto, and not to any particular provision of this Conveyance.
3.5 COUNTERPARTS. This Conveyance may be executed in any number of counterparts, all of which together shall constitute one agreement binding on the parties hereto.
3.6 SEVERABILITY. If any of the provisions of this Conveyance are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate the entire agreement. Instead, this Conveyance shall be construed as if it did not contain the particular provision or provisions held to be invalid and an equitable adjustment shall be made and necessary provision added so as to give effect to the intention of the parties as expressed in this Conveyance at the time of execution of this Conveyance.
IN WITNESS WHEREOF, this Conveyance has been duly executed by the parties hereto on the dates of the acknowledgments set forth below, to be effective, however, as of the Effective Date.
GRANTOR:
MARTIN MIDSTREAM LLC,
By: Martin Resource Management Corporation,
Its sole member
GRANTEE
MARTIN OPERATING PARTNERSHIP L.P.
By: Martin Operating GP LLC,
Its general partner
By: Martin Resource LLC,
Its sole member
By: Martin Resource Management Corporation,
Its sole member
THE STATE OF TEXAS ) ) COUNTY OF _________ ) |
This instrument was acknowledged before me on the ____ day of
___________, 2002, by ______________, ______________ of [.], on behalf of and in
[HIS/HER] capacity as __________ of [.].
NOTARY PUBLIC
My Commission Expires:
THE STATE OF TEXAS ) ) COUNTY OF _________ ) |
This instrument was acknowledged before me on the ____ day of
___________, 2002, by ______________, ______________ of [.], on behalf of and in
[HIS/HER] capacity as __________ of [.].
My Commission Expires:
SCHEDULE A
EXHIBIT E
AGREEMENT AND PLAN OF MERGER
BETWEEN
MARTIN GAS MARINE LLC
AND
MARTIN OPERATING PARTNERSHIP L.P.
DATED AS OF NOVEMBER 1, 2002
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of November __, 2002, but effective as of the Effective Time (as defined in Section 1.2), between Martin Gas Marine LLC, a Texas limited liability company ("Marine"), and Martin Operating Partnership L.P., a Delaware limited partnership (the "Partnership");
WITNESSETH:
WHEREAS, the sole member of Marine has determined that it is in the best interests of Marine sole member to effectuate a merger whereby Marine will be merged with and into the Partnership with the Partnership being the surviving entity (the "Merger");
WHEREAS, Martin Operating GP LLC, a Delaware limited liability company and the General Partner of the Partnership (the "General Partner"), has determined that it is in the best interests of the Partnership and its partners to effectuate the Merger;
WHEREAS, the sole member of Marine and the sole member of the General Partner have each approved the Merger, upon the terms and subject to the conditions set forth in this Agreement; and
NOW, THEREFORE, in consideration of the foregoing and of the covenants and agreements contained herein, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE VII
THE MERGER
Section 1.1 The Merger. Subject to the terms and conditions of this Agreement, and in accordance with the Texas Limited Liability Company Act (the "TLLCA") and the Delaware Revised Uniform Limited Partnership Act (the "DRULPA"), at the Effective Time, Marine shall be merged with and into the Partnership in accordance with this Agreement, and the separate corporate existence of Marine shall thereupon cease. The Partnership shall continue as the surviving entity in the Merger (sometimes hereinafter referred to as the "Surviving Entity"), and all the properties, rights, privileges, powers and franchises of Marine shall vest in the Surviving Entity without any transfer or assignment having occurred, and all debts, liabilities and duties of Marine shall attach to the Surviving Entity, all in accordance with the TBCA and the DRULPA.
Section 1.2 Filing Certificate of Merger; Effective Time. As soon as practicable following the satisfaction or, to the extent permitted by applicable law, waiver of the conditions set forth in Article IV, if this Agreement shall not have been terminated prior thereto as provided in Section 5.1, Marine and the Partnership shall cause (i) articles of merger meeting the requirements of the TLLCA (the "Articles of Merger") and (ii) a certificate of merger meeting the requirements of Section 17-211 of the DRULPA (together with the Articles of Merger, the "Merger Filings") to be properly executed and filed in accordance with each such section. The
Merger shall become effective at the later of (1) the time of filing of the Merger Filings with the Secretaries of State of the States of Texas and Delaware and (2) at 12:01 a.m. Eastern time on November __, 2002 (the "Effective Time").
ARTICLE II
SURVIVING ENTITY
Section 2.1 Name of Surviving Entity. The name of the Surviving Entity shall be "Martin Operating Partnership L.P."
Section 2.2 Certificate of Limited Partnership of Surviving Entity. The Certificate of Limited Partnership of the Partnership shall continue to be the Certificate of Limited Partnership of the Surviving Entity until amended as provided therein and under the DRULPA.
ARTICLE III
CANCELLATION OF COMMON STOCK
Section 3.1 Cancellation of Membership Interests in the Merger. At the Effective Time, by virtue of the Merger and without any action on the part of Marine or the sole member of Marine, all outstanding membership interests in Marine shall be automatically cancelled.
ARTICLE IV
CONDITIONS PRECEDENT
The respective obligation of each party to effect the Merger is subject to the satisfaction or waiver of the following conditions:
(a) None of the parties hereto shall be subject to any decree, order or injunction of a court of competent jurisdiction, U.S. or foreign, which prohibits the consummation of the Merger.
(b) Other than the filing of the Merger Filings provided for under Article I, all material consents, appeals, authorizations of, or filings or registrations with and notices to any governmental or regulatory authority required of Marine and the Partnership or any of their subsidiaries to consummate the Merger and the other transactions contemplated hereby, shall have been made or obtained.
(c) Any consents required under instruments evidencing indebtedness and any consents required under any contracts to which Marine or any subsidiary of Marine is a party, shall have been obtained.
ARTICLE V
TERMINATION, AMENDMENT AND WAIVER
Section 5.1 Termination. This Agreement may be terminated at any time prior to the Effective Time by action of the sole member of Marine or the General Partner.
Section 5.2 Effect of Termination. In the event of termination of this Agreement as provided in Section 5.1, this Agreement shall forthwith become void and have no effect, without any liability or obligation on the part of Marine or the Partnership.
Section 5.3 Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.
Section 5.4 Waiver. At any time prior to the Effective Time, the parties may waive compliance by the other parties with any of the agreements contained in this Agreement, or may waive any of the conditions to consummation of the Merger contained in this Agreement. Any agreement on the part of a party to any such waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.
ARTICLE VI
GENERAL PROVISIONS
Section 6.1 Assignment; Binding Effect; Benefit. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Notwithstanding anything contained in this Agreement to the contrary, nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement.
Section 6.2 Entire Agreement. This Agreement and any documents delivered by the parties in connection herewith constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings among the parties with respect thereto. No addition to or modification of any provision of this Agreement shall be binding upon any party hereto unless made in writing and signed by all parties hereto.
Section 6.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without regard to its rules of conflict of laws.
Section 6.4 Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all
such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by all of the parties hereto.
Section 6.5 Headings. Headings of the Articles and Sections of this Agreement are for the convenience of the parties only and shall be given no substantive or interpretative effect whatsoever.
IN WITNESS WHEREOF, Marine and the Partnership have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first written above.
MARTIN GAS MARINE LLC
By: Martin Operating Partnership L.P.
Its Sole member
By: Martin Operating GP LLC
Its General Partner
By: Martin Midstream Partnership L.P.,
Its Sole Member
By: Martin Midstream GP LLC
MARTIN OPERATING PARTNERSHIP L.P.
By: Martin Operating GP LLC
Its General Partner
By: Martin Midstream Partnership L.P.,
Its Sole Member
By: Martin Midstream GP LLC
SCHEDULE 3.1
DESCRIPTION OF ASSUMED INDEBTEDNESS
1. $17,700,000 of the Indebtedness outstanding under that certain Amended and Restated Credit Agreement dated April 16, 2001, by and among Martin Resource Management Corporation ("Martin Resource"), certain subsidiaries of Martin Resource, the lenders from time to time party thereto and JP Morgan Chase Bank, as administrative agent for the lenders.
2. Term loan, in the original principal amount of $25,000,000, pursuant to that certain Credit Agreement dated April 16, 2001, by and among Martin Resource, certain subsidiaries of Martin Resource and General Electric Capital Corporation, for Itself and as Agent for Certain Participants.
3. Senior subordinated notes due December 15, 2006, in an aggregate principal amount of $30,000,000, issued by Martin Resource to J.P. Morgan Partners (SBIC), LLC pursuant to a Senior Subordinated Note Purchase Agreement dated as of December 16, 1998.
4. Promissory note by Martin Gas Marine, Inc. ("MGM") dated September 25, 1997 in favor of U.S. Bancorp Equipment Finance, Inc. (f/k/a U.S. Bancorp Leasing & Financial) ("U.S. Bancorp") in the original principal amount of $12,000,000.
5. Indebtedness of MGM under the (i) Amended and Restated Schedule No. 002 to Master Charter Agreement, dated December 30, 1997, between MGM and U.S. Bancorp, requiring 120 monthly payments, which currently are $20,849.93 and increase to $25,483.25 beginning with the 61st payment and (ii) Amended and Restated Schedule No. 003 to Master Charter Agreement, dated December 30, 1997, between MGM and U.S. Bancorp, requiring 120 monthly payments, which currently are $20,849.93 and increase to $25,483.25 beginning with the 61st payment.
EXHIBIT 10.3
EXECUTION COPY
OMNIBUS AGREEMENT
BETWEEN
MARTIN RESOURCE MANAGEMENT CORPORATION,
MARTIN MIDSTREAM GP LLC,
MARTIN MIDSTREAM PARTNERS L.P.
AND
MARTIN OPERATING PARTNERSHIP L.P.
OMNIBUS AGREEMENT
THIS OMNIBUS AGREEMENT is entered into as of November 1, 2002 by and among Martin Resource Management Corporation, a Texas corporation ("MRMC"), Martin Midstream GP LLC, a Delaware limited liability company (the "General Partner"), Martin Midstream Partners L.P., a Delaware limited partnership (the "Partnership"), and Martin Operating Partnership L.P. (the "Operating Partnership"). The above-named entities are sometimes referred to in this Agreement each as a "Party" and collectively as the "Parties."
RECITALS:
WHEREAS, MRMC and its Affiliates (as defined herein) formed the Partnership, the General Partner and the Operating Partnership for the purpose of conducting of the Business (as defined below);
WHEREAS, certain assets and services used by MRMC or its Affiliates in the conduct of the Business prior to the formation of the Partnership were not transferred to the Partnership;
WHEREAS, the Parties desire to ensure the continued effective operation of the Business, and the Parties recognize that the continued effective operation of the Business requires that MRMC provide certain management and employee services to the Business as set forth in this Agreement;
WHEREAS, the Parties desire to evidence their understanding, as more fully set out in this Agreement, with respect to those business opportunities that MRMC will not engage in for so long as the Partnership is an Affiliate of MRMC unless the Partnership has declined to engage in any such business opportunity for its own account and the procedures whereby such business opportunities are to be offered to the Partnership and accepted or declined;
WHEREAS, the Operating Partnership owns a 49.5% limited partner interest in CF Martin Sulphur, L.P., a Delaware limited partnership ("CF Martin") and the Parties desire to evidence their understanding, as more fully set out in this Agreement, regarding the exercise by MRMC of its rights in relation to the management and operation of CF Martin through MRMC's ownership of 50% of C.F. Martin Sulphur, L.L.C., a Delaware limited liability company and the general partner of CF Martin (the "CF Martin GP"); and
WHEREAS, the Parties desire to evidence other agreements and relationships, as more fully set out in this Agreement, with respect to the transfer of the Business to the Partnership and the Operating Partnership as well as the operation of the Business by the Partnership and the Operating Partnership.
NOW THEREFORE, in consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto hereby agree as follows:
EXECUTION COPY
ARTICLE I
DEFINITIONS
DEFINITIONS. As used in this Agreement, the following terms shall have the respective meanings set forth below:
"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.
"Agreement" means this Omnibus Agreement, as it may be
amended, modified, or supplemented from time to time in accordance with
Section 6.8 hereof.
"Allocated General and Administrative Expenses" means expenses associated with general and administrative services provided by MRMC and its Subsidiaries (other than the Partnership and its Subsidiaries), including, but not limited to, certain management, engineering, accounting, finance, information technology, insurance, human resource, administration of employee benefit plans and other shared corporate services, that are allocated to the Partnership by MRMC on the same basis as these types of expenses are allocated among MRMC and its Subsidiaries (other than the Partnership and its Subsidiaries).
"Assets" means the "Contributed Assets" as such term is defined in the Contribution Agreement.
"Business" means (i) providing marine transportation, terminalling, distribution and midstream logistical services for hydrocarbon products and by-products, and (ii) manufacturing and marketing fertilizers and related sulfur-based products.
"CF Martin" is defined in the Recitals to this Agreement.
"CF Martin GP" is defined in the Recitals to this Agreement.
"CF Martin GP Agreement" means the Limited Liability Company Agreement of CF Martin GP, dated November 22, 2000, as amended to date.
"CF Martin LP Agreement" means the Agreement of Limited Partnership of C.F. Martin, dated November 22, 2000, as amended to date.
"Closing Date" means the date of the closing of the Partnership's initial public offering of Common Units of the Partnership.
"Conflicts Committee" is defined in the Partnership Agreement.
EXECUTION COPY
"Consumer Price Index" means the "Consumer Price Index for Urban Wage Earners and Clerical Workers (1967 = 100)" specified for "All Item - United States" compiled by the Bureau of Labor Statistics for the United States.
"control" means the possession, directly or indirectly, 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.
"Contribution Agreement" means the Contribution, Conveyance and Assumption Agreement, dated October 31, 2002, by and among various MRMC Entities, the Partnership, the Operating Partnership, the General Partner and Martin Operating GP LLC, a Delaware limited liability company.
"Covered Environmental Losses" is defined in Section 3.1(a).
"Environmental Laws" means all federal, state, and local laws, statutes, rules, regulations, orders, and ordinances, now or hereafter in effect, relating to protection of human health and the environment including, without limitation, the federal Comprehensive Environmental Response, Compensation, and Liability Act, the Superfund Amendments Reauthorization Act, the Resource Conservation and Recovery Act, the Clean Air Act, the Federal Water Pollution Control Act, the Toxic Substances Control Act, the Oil Pollution Act, the Safe Drinking Water Act, the Hazardous Materials Transportation Act, and other environmental conservation and protection laws, each as amended from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"General Partner" is defined in the introduction to this Agreement.
"Hazardous Substance" means any substance that is designated, defined, or classified as a hazardous waste, hazardous material, pollutant, contaminant, or toxic or hazardous substance, or that is otherwise regulated under any Environmental Law, including, without limitation, any hazardous substance as defined under the Comprehensive Environmental Response, Compensation, and Liability Act.
"Indemnified Party" means the Partnership Entities or the MRMC Entities, as the case may be, in their capacity as the parties entitled to indemnification in accordance with Article III.
"Indemnifying Party" means either the Partnership Entities or the MRMC Entities, as the case may be, in its capacity as the parties from whom indemnification may be sought in accordance with Article III.
"Indirect Expenses Limit" is defined in Section 4.2(a).
"J.V. Management Rights" is defined in Section 6.2.
EXECUTION COPY
"Losses" means any losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs, and expenses (including, without limitation, court costs and reasonable attorney's and expert's fees) of any and every kind or character.
"Martin Manager" is defined in the CF Martin GP Agreement.
"MRMC" is defined in the introduction to this Agreement.
"MRMC Entities" means MRMC and each of its Subsidiaries (other than the General Partner, the Partnership and any Subsidiary of the Partnership).
"Names and Marks" means the tradenames and logos attached hereto on Schedule 1.
"Offer" is defined in Section 2.3(b).
"Partnership" is defined in the introduction to this Agreement.
"Partnership Agreement" means the First Amended and Restated Agreement of Limited Partnership of the Martin Midstream Partners L.P., dated as of, and in the form on, the Closing Date. No amendment or modification to the Partnership Agreement subsequent to the Closing Date shall be given effect for the purposes of this Agreement unless consented to by each of the Parties to this Agreement.
"Partnership Entities" means the Partnership, the General Partner, and each Subsidiary of the Partnership.
"Party" and "Parties" is defined in the introduction to this Agreement.
"Pass-Through Environmental Losses" is defined in Section 3.1(b).
"Person" means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other entity.
"Restricted Portion" is defined in Section 2.2(c)(iv).
"Retained Assets" means, collectively, (i) any assets and investments owned by any of the MRMC Group that were not conveyed, contributed or otherwise transferred to any of the Partnership Entities prior to or on the Closing Date, and (ii) the "Retained Assets" as such term is defined in the Contribution Agreement.
"Services" is defined in Section 4.1.
EXECUTION COPY
"Subject Assets" is defined in Section 2.2(c).
"Subsidiary" means, with respect to any Person, (a) a
corporation of which more than 50% of the Voting Power is owned,
directly or indirectly, at the date of determination, by such Person,
by one or more Subsidiaries of such Person or a combination thereof,
(b) a partnership (whether general or limited) in which such Person or
a Subsidiary of such Person is, at the date of determination, a general
or limited partner of such partnership, but only if more than 50% of
the partnership interests of such partnership (considering all of the
partnership interests of the partnership as a single class) is owned,
directly or indirectly, at the date of determination, by such Person,
by one or more Subsidiaries of such Person, or a combination thereof,
or (c) any other Person (other than a corporation or a partnership) in
which such Person, one or more Subsidiaries of such Person, or a
combination thereof, directly or indirectly, at the date of
determination, has (i) at least a majority ownership interest or (ii)
the power to elect or direct the election of a majority of the
directors or other governing body of such Person.
"Venture Interest" is defined in the CF Martin LP Agreement.
"Voting Stock" means securities of any class of a Person entitling the holders thereof to vote on a regular basis in the election of members of the board of directors or other governing body of such Person.
ARTICLE II
BUSINESS OPPORTUNITIES
2.1 RESTRICTED ACTIVITIES. For so long as MRMC controls the General Partner, or any subsequent general partner of the Partnership and except as permitted by Section 2.2, MRMC shall be prohibited from engaging in, directly or indirectly through an Affiliate, whether by acquisition, construction or otherwise, the Business.
2.2 PERMITTED EXCEPTIONS. Notwithstanding any provision of Section 2.1 to the contrary, MRMC and its Affiliates may engage in the following activities under the following circumstances:
(a) The ownership and/or operation of any of the Retained Assets (including replacements of and modifications or additions to the Retained Assets) and the conduct of the businesses operated by MRMC and its Affiliates on the Closing Date that were not transferred to the Partnership Entities and that are described on Schedule 2.2(a);
(b) The operation on behalf of a member of any Partnership Entity of any asset or group of assets owned by any Partnership Entity;
(c) The ownership and/or operation of any asset or group of related assets used in a Business that are acquired or constructed by MRMC or any of its Affiliates (other than any of the Partnership Entities) after the date of this Agreement (the "Subject Assets") if:
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(i) the fair market value of the Subject Assets (as determined in good faith by the Board of Directors of MRMC) is less than $5.0 million at the time of such acquisition by any of the MRMC Entities or completion of construction, as the case may be;
(ii) in the case of an acquisition of Subject Assets with a fair market value (as determined in good faith by the Board of Directors of MRMC) equal to or greater than $5.0 million at the time of such acquisition by MRMC, the Partnership has been offered the opportunity to purchase the Subject Assets within 90 days of such acquisition in accordance with Section 2.3(b) and the Partnership (with the concurrence of the Conflicts Committee) has elected not to purchase the Subject Assets;
(iii) in the case of the construction of Subject Assets with a fair market value (as determined in good faith by the Board of Directors of MRMC) equal to or greater than $5.0 million at the time of completion of construction, the Partnership has been offered the opportunity to purchase the Subject Assets in accordance with Section 2.3(b) and the Partnership (with the concurrence of the Conflicts Committee) has elected not to purchase the Subject Assets; or
(iv) in case of the acquisition or construction of any Subject Assets, a portion of which participate in a Business (the "Restricted Portion"), where the Restricted Portion has a fair market value (as determined in good faith by the Board of Directors of MRMC) that is (i) greater than $5.0 million and (ii) less than 20% of the aggregate value of the business or assets acquired or constructed (as determined in good faith by the Board of Directors of MRMC), the Partnership is offered the opportunity to purchase the Subject Assets related to the Restricted Portion in accordance with Section 2.3(b) and the Partnership (with the concurrence of the Conflicts Committee) has elected not to purchase such Subject Assets.
2.3 PROCEDURES.
(a) If any of the MRMC Entities becomes aware of an opportunity to purchase Subject Assets described in Section 2.2(c)(ii), then as soon as practicable, MRMC shall notify the General Partner of such opportunity and deliver to the General Partner all information prepared by or on behalf of MRMC relating to such potential purchase. As soon as practicable but in any event within 30 days after receipt of such notification and information, the General Partner, on behalf of the Partnership, shall notify MRMC that either (i) the General Partner, on behalf of the Partnership, has elected, with the approval of the Conflicts Committee, not to cause any of the Partnership Entities to pursue the opportunity to acquire such Subject Assets, or (ii) the General Partner, on behalf of the Partnership, has elected to cause any of the Partnership Entities to pursue the opportunity to acquire such Subject Assets. If, at any time, the General Partner abandons such opportunity with the approval of the Conflicts Committee (as evidenced in writing by the General Partner following the request of MRMC), MRMC may pursue such opportunity. Any Subject Assets that are permitted to be purchased by MRMC pursuant to this Section 2.3(a) must be so purchased (i) within 12 months of the time MRMC becomes able to pursue such opportunity in accordance with the provisions of this Section 2.3(a) and (ii) on terms
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not materially more favorable to MRMC than were offered to the Partnership. If either of these conditions are not satisfied, the opportunity must be reoffered to the Partnership in accordance with this Section 2.3(a).
(b) If any MRMC Entity constructs or acquires Subject Assets as described in Section 2.2(c)(iii) and (iv), then not later than 90 days after the consummation of the completion of construction or acquisition by any MRMC Entity of the Subject Assets, as the case may be, MRMC shall notify the General Partner in writing of such construction or acquisition and offer the Partnership Entities the opportunity to purchase the Subject Assets or, in the case of Subject Assets described in Section 2.2(c)(iv), the Subject Assets related to the Restricted Portion, in each case for their fair market value in accordance with this Section 2.3 (the "Offer"). The Offer shall set forth MRMC's proposed terms relating to the construction or purchase of such Subject Assets by any of the Partnership Entities. MRMC will provide all information concerning the business, operations and finances of such Subject Assets as may be reasonably requested by the General Partner. As soon as practicable, but in any event within 60 days after receipt of such written notification, the General Partner shall notify MRMC in writing that either (i) the General Partner has elected, with the approval of the Conflicts Committee, not to cause any of the Partnership Entities to purchase such Subject Assets, in which event MRMC shall be forever free to continue to own or operate such Subject Assets; provided, however, that any future acquisitions or opportunities related to such particular Subject Assets (except for expansions of existing facilities and except as provided in Section 2.2(c)(i)) shall be subject to the procedures set forth in this Section 2.3, or (ii) the General Partner has elected to cause any of the Partnership Entities to purchase such Subject Assets, in which event the procedures outlined in this Section 2.3 shall apply.
(c) After the receipt of such Offer by the General Partner, MRMC and the General Partner shall negotiate in good faith the terms on which such Subject Assets will be sold to a Partnership Entity. If MRMC and the General Partner (with the concurrence of the Conflicts Committee) are able to agree on the fair market value of the Subject Assets that are subject to the Offer and the other terms of the Offer within 60 days after receipt by the General Partner of the Offer, one or more of the Partnership Entities shall purchase such Subject Assets for the agreed upon fair market value as soon as commercially practicable after such agreement has been reached.
(d) If MRMC and the General Partner are unable to agree on the fair market value of the Subject Assets that are subject to the Offer or the other terms of the Offer within 60 days after receipt by the General Partner of the Offer, MRMC and the General Partner will engage a mutually agreed upon, nationally recognized investment banking firm to determine the fair market value of such Subject Assets. Such investment banking firm will determine the fair market value of such Subject Assets within 30 days of its engagement and furnish MRMC and the General Partner its determination. The fees and expenses of the investment banking firm will be split equally between MRMC and the Partnership Entities. Once the investment banking firm has submitted its determination of the fair market value of the Subject Assets, the General Partner will have the right, but not the obligation, subject to the approval of the Conflicts Committee, to cause one or more of the Partnership Entities to purchase such Subject Assets pursuant to the Offer as modified by the determination of the investment banking firm. If the General Partner elects to cause one or more of the Partnership Entities to purchase such Subject
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Assets, then such Partnership Entities shall purchase such Subject Assets pursuant to the Offer as modified by the determination of the investment banking firm as soon as commercially practicable after such determination. If the General Partner elects not to cause any of the Partnership Entities to purchase such Subject Assets, MRMC shall be forever free to continue to own or operate such Subject Assets; provided, however, that any future acquisitions or opportunities related to such Subject Assets (except for expansions of existing facilities and except as provided in Section 2.2(c)(i)) shall be subject to the procedures set forth in this Section 2.3.
2.4 SCOPE OF PROHIBITION. Except as provided in this Article II and the Partnership Agreement, each of MRMC and its Affiliates shall be free to engage in any business activity whatsoever, including those that may be in direct competition with any Partnership Entity.
2.5 ENFORCEMENT. MRMC agrees and acknowledges that the Partnership Entities do not have an adequate remedy at law for the breach by MRMC of the covenants and agreements set forth in this Article II, and that any breach by MRMC of the covenants and agreements set forth in Article II would result in irreparable injury to the Partnership Entities. MRMC further agree and acknowledge that any member of the Partnership Entities may, in addition to the other remedies which may be available to the Partnership Entities, file a suit in equity to enjoin MRMC from such breach, and consent to the issuance of injunctive relief under this Agreement.
ARTICLE III
INDEMNIFICATION
3.1 ENVIRONMENTAL INDEMNIFICATION.
(a) Subject to the limitations contained in this Section 3.1(a), MRMC shall indemnify, defend and hold harmless each of the Partnership Entities from and against environmental and toxic tort Losses suffered or incurred by any of the Partnership Entities by reason of or arising out of:
(i) any violation or correction of violation of Environmental Laws associated with the Assets or the Retained Assets, or
(ii) any event or condition associated with the ownership or operation of the Assets or the Retained Assets (including, without limitation, the presence of Hazardous Substances on, under, about or migrating to or from the Assets or the Retained Assets or the disposal or release of Hazardous Substances generated by operation of the Assets or the Retained Assets at non-Asset locations) including, without limitation, (A) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action required or necessary under Environmental Laws, (B) the cost or expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws, and (C) the cost and expense for any environmental or toxic tort pre-trial, trial, or appellate legal or litigation support work;
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but only to the extent that such violation complained of under Section 3.1(a)(i) or such events or conditions included under Section 3.1(a)(ii) occurred before the Closing Date and only to the extent that a written notice of such violation, event or condition is given to MRMC by the Partnership within five years following the Closing Date (collectively, "Covered Environmental Losses"). In no event shall the aggregate liability of MRMC pursuant to this Section 3.1(a) exceed $7,500,000.
(b) MRMC shall indemnify, defend and hold harmless any of the Partnership Entities from and against any Losses suffered or incurred by any of the Partnership Entities to the extent that MRMC is entitled to and receives indemnification, is defended or held harmless against any such Losses from any third-party pursuant to any agreement between any third-party and MRMC (collectively, "Pass-Through Environmental Losses"). In furtherance of such agreement, MRMC agrees to use its best commercially reasonable efforts to pursue, for the benefit of the Partnership Entities, any such indemnification with respect to which it might be entitled if requested by the Partnership; provided that, the Partnership shall reimburse MRMC for all costs and expenses incurred in connection with pursuing such indemnity on behalf of the Partnership.
(c) The Partnership shall indemnify, defend and hold harmless MRMC from and against Losses suffered or incurred by any of the MRMC Entities by reason of or arising out of:
(i) any violation or correction of violation of Environmental Laws associated with the Assets, or
(ii) any event or condition associated with ownership or operation of the Assets (including, but not limited to, the presence of Hazardous Substances on, under, about or migrating to or from the Assets or the disposal or release of Hazardous Substances generated by operation of the Assets at non-Asset locations) including, without limitation, (A) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation, or other corrective action required or necessary under Environmental Laws, (B) the cost or expense of the preparation and implementation of any closure, remedial, corrective action, or other plans required or necessary under Environmental Laws, and (C) the cost and expense for any environmental or toxic tort pre-trial, trial, or appellate legal or litigation support work;
and regardless of whether such violation complained of under Section 3.1(c)(i) or such events or conditions included under Section 3.1(c)(ii) occurred before or after the Closing Date, except to the extent that any of the foregoing are Covered Environmental Losses or Pass-Through Environmental Losses for which the Partnership Entities are entitled to indemnification from MRMC under this Article III.
3.2 Additional Indemnification
(a) In addition to and not in limitation of the indemnification provided under Sections 3.1(a), 3.1(b) and 5.5, MRMC shall indemnify, defend, and hold harmless the
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Partnership Entities from and against any Losses suffered or incurred by the Partnership Entities by reason of or arising out of:
(i) any events and conditions associated with the ownership or operation of the Retained Assets, whether occurring before or after the Closing Date,
(ii) the failure of the Partnership Entities to be the owner of such valid leasehold interests or fee ownership interests in and to the Assets as are necessary to enable the Partnership Entities to continue to own and operate the Assets and the Business in the same manner that the Assets and the Business were owned and operated by the MRMC Entities during the one-year period immediately prior to the Closing date to the extent that MRMC is notified of any of the foregoing within four years after the Closing Date,
(iii) the failure of the Partnership Entities to have any consent or permit necessary to allow the Partnership Entities to own or operate the Assets and the Business in the same manner that the Assets and the Business were owned and operated by the MRMC Entities during the one-year period immediately prior to the Closing date to the extent that MRMC is notified of any of the foregoing within three years after the Closing Date,
(iv) the currently pending legal actions against MRMC set forth on Schedule 3.2 hereto, and
(v) all federal, state and local income tax liabilities attributable to the operation of the Assets prior to the Closing Date, including any such income tax liabilities of MRMC that may result from the consummation of the transactions contemplated by the Contribution Agreement.
(b) In addition to and not in limitation of the indemnification provided under Sections 3.1(c) and 5.5, or under the Partnership Agreement, the Partnership shall indemnify, defend, and hold harmless the MRMC Entities from and against any Losses suffered or incurred by any of the MRMC Entities by reason of or arising out of events and conditions associated with:
(i) the operation of the Assets and the Business, and
(ii) the performance of the Services by MRMC and/or its employees pursuant to this Agreement (provided that MRMC is not in breach of this Agreement),
in each case occurring on or after the Closing Date (other than Covered Environmental Losses which are provided for under Section 3.1), unless in any such case such indemnification would not be permitted under Section 7.7 of the Partnership Agreement.
3.3 INDEMNIFICATION PROCEDURES.
(a) The Indemnified Party agrees that within a reasonable period of time after it becomes aware of facts giving rise to a claim for indemnification under this Article III, it will
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provide notice thereof in writing to the Indemnifying Party, specifying the nature of and specific basis for such claim.
(b) The Indemnifying Party shall have the right to control all aspects of the defense of (and any counterclaims with respect to) any claims brought against the Indemnified Party that are covered by the indemnification under this Article III, including, without limitation, the selection of counsel, determination of whether to appeal any decision of any court and the settling of any such matter or any issues relating thereto; provided however, that no such settlement shall be entered into without the consent of the Indemnified Party unless it includes a full release of the Indemnified Party from such matter or issues, as the case may be.
(c) The Indemnified Party agrees to cooperate fully with the Indemnifying Party, with respect to all aspects of the defense of any claims covered by the indemnification under this Article III, including, without limitation, the prompt furnishing to the Indemnifying Party of any correspondence or other notice relating thereto that the Indemnified Party may receive, permitting the name of the Indemnified Party to be utilized in connection with such defense, the making available to the Indemnifying Party of any files, records or other information of the Indemnified Party that the Indemnifying Party considers relevant to such defense and the making available to the Indemnifying Party of any employees of the Indemnified Party; provided however, that in connection therewith the Indemnifying Party agrees to use reasonable efforts to minimize the impact thereof on the operations of the Indemnified Party. In no event shall the obligation of the Indemnified Party to cooperate with the Indemnifying Party as set forth in the immediately preceding sentence be construed as imposing upon the Indemnified Party an obligation to hire and pay for counsel in connection with the defense of any claims covered by the indemnification set forth in this Article III; provided however, that the Indemnified Party may, at its own option, cost and expense, hire and pay for counsel in connection with any such defense. The Indemnifying Party agrees to keep any such counsel hired by the Indemnified Party reasonably informed as to the status of any such defense, but the Indemnifying Party shall have the right to retain sole control over such defense.
(d) In determining the amount of any Losses for which the Indemnified Party is entitled to indemnification under this Agreement, the gross amount of the indemnification will be reduced by (i) any insurance proceeds realized or to be realized by the Indemnified Party, and such correlative insurance benefit shall be net of any incremental insurance premium that becomes due and payable by the Indemnified Party as a result of such claim and (ii) all amounts recovered or recoverable by the Indemnified Party under contractual indemnities from third parties.
ARTICLE IV
SERVICES AND RELATED PARTY TRANSACTIONS
4.1 SERVICES. During the term of this Agreement, MRMC agrees to provide (either directly or through its Subsidiaries) on behalf of the General Partner in accordance with Article VII of the Partnership Agreement, the employees or independent contractors, corporate staff, support services and administrative services necessary to operate the Business (the "Services"). MRMC shall perform the Services in a manner that is substantially identical in nature and quality to the services performed by MRMC for the Business during the one-year period immediately
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prior to the Closing Date. The General Partner and the Partnership agree that MRMC shall be reimbursed for all costs and expenses incurred in connection with the performance of the Services as if it were the General Partner in accordance with Section 7.4(b) and 7.6(c) of the Partnership Agreement, subject to the limitations set forth in Section 4.2 of this Agreement.
4.2 GENERAL AND ADMINISTRATIVE REIMBURSEMENT.
(a) Except as provided in Section 4.2(b) below, the amount for which MRMC shall be entitled to reimbursement from the Partnership pursuant to the last sentence of Section 4.1 for Allocated General and Administrative Expenses shall not exceed $1.0 million in the aggregate in the first year following the date of this Agreement (the "Indirect Expenses Limit). Thereafter, the Indirect Expenses Limit shall be increased annually by no more than the percentage increase in the Consumer Price Index for the applicable year. Additionally, MRMC and the General Partner may agree, with the consent of the Conflicts Committee, to further increases to the Indirect Expenses Limit in order to account for adjustments in the nature of the Services as the result of acquisitions by the Partnership or other expansions of the Business.
(b) Notwithstanding Section 4.2(a), the Indirect Expenses Limit will not apply to (i) the cost of any third party legal, accounting or advisory services received, or the direct expenses of MRMC incurred in connection with acquisition or business development opportunities evaluated on behalf of the Partnership; or (ii) expenses directly attributable to the operation of the Partnership, its assets or the Business.
4.3 DESIGNATION OF AGENTS. In connection with the provision of the Services by the employees of MRMC, the General Partner, on behalf of the Partnership, hereby appoints and empowers MRMC and each current and future employee of MRMC who is fulfilling a job function for the Partnership in connection with the conduct by the Partnership of its business in the ordinary course, as agent of the Partnership with full power and authority to execute and deliver on behalf of the Partnership, any documents, contracts, governmental filings or other instruments commensurate with, but limited to, such job function. The power and authority granted pursuant to this Section 4.3 to a person described in the preceding sentence will be valid only for so long as such person is employed by MRMC.
4.4 RIGHT TO OPERATE. MRMC shall have the right, but not the obligation, to act as operator of the Partnership's facilities to the same extent it acted as operator of such facilities prior to the effective date of this Agreement for so long as MRMC has responsibilities associated with such facilities.
4.5 RELATED PARTY TRANSACTIONS. Each of MRMC, the General Partner, the Partnership and the Operating Partnership agree that the execution or material amendment of any "significant Martin agreement" (as such term is defined below) must be approved by the Conflicts Committee. The term "significant Martin agreement" means any agreement between the General Partner, the Partnership or the Operating Partnership, on the one hand, and any Martin Entity, on the other hand, that requires aggregate annual payments to or from any Martin Entity or Martin Entities in excess of the Indirect Expense Limit.
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ARTICLE V
USE OF THE NAMES AND MARKS
5.1 GRANT OF LICENSE. MRMC hereby grants to the Partnership and the Partnership hereby accepts, a nontransferable, nonexclusive royalty-free right and license to use the Names and Marks in connection with the Business during the term of this Agreement.
5.2 USE. All use of and reference to the Names and Marks by the Partnership shall be generally approved by MRMC prior to such use or reference, and all such use and reference shall conform with such instructions and quality standards as MRMC from time to time may issue. MRMC shall have 30 days from the submission of approval to approve or disapprove of the use or reference. Failure on the part of MRMC to act within such 30-day period shall be deemed to constitute approval. In no event shall use of or reference to the Names and Marks be inconsistent in form or content with the sole ownership of the Names and Marks by MRMC. All use of the Names and Marks by the Partnership, its agents, servants, employees and vendees, shall inure solely to the benefit of MRMC. MRMC shall have the right to make reasonable inspection of the Partnership's services rendered in connection with the Names and Marks to protect the goodwill of MRMC associated with the Names and Marks.
5.3 VARIATIONS. The Partnership shall not adopt and commence using any variations of the Names and Marks, or any other names and marks confusingly similar thereto, without the prior approval of MRMC. MRMC shall have 30 days from the submission of approval to approve or disapprove of the variation. Failure on the part of MRMC to act within such 30-day period shall be deemed to constitute approval.
5.4 NONTRANSFERABLE. The license granted to the Partnership to use the Names and Marks is not assignable or transferable, and it shall not inure to the benefit of any other Person, including, without limitation, a trustee in bankruptcy or any other successor to the Partnership, whether by operation of law or otherwise; provided, however, that the Partnership shall be entitled to sublicense the Names and Marks to any of its Subsidiaries.
5.5 INDEMNITY. The Partnership agrees to be solely responsible for and to defend and indemnify MRMC from and against any and all claims, demands and causes of action, and all Losses sustained in connection therewith, arising out of, resulting from or related to the use of the Names and Marks in the Business, even if such claim, demand or cause of action is based on the sole, partial or concurrent negligence of MRMC, except that MRMC shall defend and indemnify the Partnership from and against all claims, demands or causes of action for trademark infringement arising from the use of the Names and Marks by the Partnership. If requested by MRMC, the Partnership shall retain counsel reasonably satisfactory to MRMC to represent MRMC, and the Partnership shall pay the fees and expenses of such counsel relating to such claim, demand, or cause of action. MRMC shall be consulted with respect to all matters concerning such claim, demand, or cause of action, and settlement of such claim, demand, or cause of action shall not be made without the prior written approval of MRMC.
5.6 DISCLAIMER OF WARRANTIES. MRMC DISCLAIMS ANY AND ALL WARRANTIES, CONDITIONS OR REPRESENTATIONS (EXPRESS OR IMPLIED, ORAL OR WRITTEN) WITH RESPECT TO THE LICENSE IN THIS ARTICLE V, OR ANY PART
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THEREOF, INCLUDING ANY AND ALL IMPLIED WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS OR SUITABILITY FOR ANY PURPOSE (WHETHER THE PARTY KNOWS, HAS REASON TO KNOW, HAS BEEN ADVISED, OR IS OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE) WHETHER ALLEGED TO ARISE BY LAW, BY REASON OF CUSTOM OR USAGE IN THE TRADE OR BY COURSE OF DEALING.
ARTICLE VI
MISCELLANEOUS
6.1 INSURANCE MATTERS. MRMC hereby agrees to cause each of the Partnership Entities to be named as additional insureds in MRMC's current insurance program, which is described on Schedule 6.1 attached hereto. Each of the Partnership Entities shall pay for its allocated cost of that insurance coverage in an amount equal to MRMC's cost of insuring the assets and operations of Partnership Entity and generally in accordance with the allocations and methodology described in Schedule 6.1.
6.2 MANAGEMENT OF CF MARTIN.
(a) Except as set forth below and to the extent allowed by applicable law, MRMC agrees that it will, and (when applicable) it will use commercially reasonable efforts to cause each of the MRMC Entities and each Martin Manager to, exercise its J.V. Management Rights (as such term is defined below) in a manner that it reasonably believes is in the best interests of the Partnership. For purposes of this Agreement, the term "J.V. Management Rights" shall mean the exercise by each of the Martin Entities or any Martin Manager of any voting right or consent right granted by the CF Martin GP Agreement and the CF Martin LP Agreement, including but not limited to, the exercise of rights contained in Section 4.3 of the CF Martin LP Agreement (relating to distributions by CF Martin) and Article X of the CF Martin LP Agreement (relating to transfers). Notwithstanding anything to the contrary in this Agreement, no Martin Manager shall be required to act in any manner that he or she reasonably believes would (i) violate law, or (ii) constitute a breach of a fiduciary or similar duty that such Martin Manager owes to CF Martin GP or CF Martin, or any of its members or partners, respectively.
(b) MRMC agrees to promptly provide the Partnership with a copy of any notice it receives as a result of Article X of the CF Martin LP Agreement.
(c) Except as provided for in this Section 6.2(c), MRMC agrees that no member of the MRMC Group will either sell its Venture Interest, nor purchase the Venture Interest of a third party, pursuant to Sections 10.1, 10.2, 10.5, 10.6 or 10.7 of the CF Martin LP Agreement without the written consent of the Partnership. In addition, MRMC agrees that it will exercise its rights contained in Section 10.2, 10.5, 10.6 or 10.7 of the CF Martin LP Agreement only as directed by the Partnership. As between the MRMC Group and the Partnership, in the event MRMC and the Partnership agree to purchase the Venture Interest of a third party, the purchase price for and ownership of such Venture Interest shall be allocated between the MRMC Group and the Partnership in accordance with their respective ownership percentages in CF Martin and MRMC shall pay, or cause the applicable MRMC Entity to pay, its proportionate share of the purchase price of the Venture Interest to be purchased by MRMC or such MRMC
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Entity. Notwithstanding the foregoing, in no event will MRMC or any MRMC Entity be prohibited by this Agreement from selling its Venture Interest when required to do so by the terms of the CF Martin LP Agreement or the CF Martin GP Agreement.
(d) MRMC agrees that it will not, and it will cause each of the MRMC Entities to not, vote in favor of or otherwise consent to any amendment of the CF Martin LP Agreement without the prior written consent of the Partnership.
6.3 CHOICE OF LAW; SUBMISSION TO JURISDICTION. This Agreement shall be subject to and governed by the laws of the State of Texas, excluding any conflicts-of-law rule or principle that might refer the construction or interpretation of this Agreement to the laws of another state. Each Party hereby submits to the jurisdiction of the state and federal courts in Dallas County, Texas.
6.4 NOTICE. All notices or requests or consents provided for by, or permitted to be given pursuant to, this Agreement must be in writing and must be given by depositing same in the United States mail, addressed to the Person to be notified, postpaid, and registered or certified with return receipt requested or by delivering such notice in person or by telecopier or telegram to such Person. Notice given by personal delivery or mail shall be effective upon actual receipt. Notice given by telegram or telecopier shall be effective upon actual receipt if received during the recipient's normal business hours, or at the beginning of the recipient's next business day after receipt if not received during the recipient's normal business hours. All notices to be sent to a Party pursuant to this Agreement shall be sent to or made at the address set forth below such Party's signature to this Agreement, or at such other address as such Party may stipulate to the other parties in the manner provided in this Section 6.4.
6.5 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the Parties relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written, relating to the matters contained herein.
6.6 TERMINATION. This Agreement, other than the provisions of Article III, shall terminate if (i) the General Partner or any successor general partner of the Partnership is not an Affiliate of MRMC or (ii) the Partnership Entities no longer own and/or operate all or substantially all of the Assets or the Business. Termination of this Agreement shall not terminate any Indemnifying Party's continuing obligation of indemnification pursuant to Article III of this Agreement which obligations shall survive as provided in Article III. In the event of termination of this Agreement, the license granted by Article V hereof shall automatically cease. As promptly as practicable (but in no event more than 180 days) following the termination of this Agreement, the Partnership shall cease all use of the Names and Marks and any and all other names and marks confusingly similar thereto. Termination of the license granted by Article V hereof shall not terminate the Partnership's continuing obligation of indemnification under Section 5.5 hereof. Upon termination of this Agreement, MRMC shall have the right, but not the obligation, to continue as operator of the Partnership's facilities to the same extent it acted as operator of such facilities on behalf of the Partnership prior to the termination of this Agreement for so long as MRMC has responsibilities associated with such facilities, or the operation thereof.
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6.7 EFFECT OF WAIVER OR CONSENT. No waiver or consent, express or implied, by any Party to or of any breach or default by any Person in the performance by such Person of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such Person of the same or any other obligations of such Person hereunder. Failure on the part of a Party to complain of any act of any Person or to declare any Person in default, irrespective of how long such failure continues, shall not constitute a waiver by such Party of its rights hereunder until the applicable statute of limitations period has run.
6.8 AMENDMENT OR MODIFICATION. This Agreement may be amended or modified from time to time only by the written agreement of all the Parties hereto; provided however, that the Partnership may not, without the prior approval of the Conflicts Committee, agree to any amendment or modification of this Agreement. Each such instrument shall be reduced to writing and shall be designated on its face an "Amendment" or an "Addendum" to this Agreement.
6.9 ASSIGNMENT. No Party shall have the right to assign its rights or obligations under this Agreement without the consent of the other Parties hereto.
6.10 COUNTERPARTS. This Agreement may be executed in any number of counterparts with the same effect as if all signatory parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument.
6.11 SEVERABILITY. If any provision of this Agreement or the application thereof to any Person or circumstance shall be held invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.
6.12 FURTHER ASSURANCES. In connection with this Agreement and all transactions contemplated by this Agreement, each signatory party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.
6.13 LAWS AND REGULATIONS. Notwithstanding any provision of this Agreement to the contrary, no Party this Agreement shall be required to take any act, or fail to take any act, under this Agreement if the effect thereof would be to cause such Party to be in violation of any applicable law, statute, rule or regulation.
6.14 NEGOTIATION OF RIGHTS OF LIMITED PARTNERS, ASSIGNEES, AND THIRD PARTIES. The provisions of this Agreement are enforceable solely by the Parties to this Agreement, and no limited partner, member, assignee or other Person of the Partnership or General Partner shall have the right, separate and apart from the Partnership or the General Partner, to enforce any provision of this Agreement or to compel any Party to this Agreement to comply with the terms of this Agreement.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on, and effective as of, the date first written above.
MARTIN MIDSTREAM PARTNERS, L.P.
By: MARTIN MIDSTREAM GP L.L.C.,
On behalf of itself and on behalf of Partnership
as its General Partner
By: /s/ Ruben S. Martin, III Ruben S. Martin, III President |
MARTIN OPERATING PARTNERSHIP L.P.
By: Martin Operating GP LLC,
its general partner;
By: Martin Resource LLC,
its sole member;
By: Martin Resource Management
Corporation,
its sole member;
By: /s/ Ruben S. Martin, III Ruben S. Martin, III President |
MARTIN RESOURCE MANAGEMENT
CORPORATION
By: /s/ Ruben S. Martin, III Ruben S. Martin, III President |
EXECUTION COPY
SCHEDULE 1
TRADENAMES AND LOGOS
Attached
EXECUTION COPY
SCHEDULE 2.2(a)
RETAINED BUSINESSES
The operations, assets and activities related to the businesses and operations related to the business activities described on page 87 of the Martin Midstream Partners, L.P. Prospectus, dated October 31, 2002.
EXECUTION COPY
SCHEDULE 3.2
LITIGATION
All pending legal actions existing as of the Closing Date.
EXECUTION COPY
SCHEDULE 6.1
INSURANCE PROGRAM
Attached
EXHIBIT 10.4
MOTOR CARRIER AGREEMENT
This MOTOR CARRIER AGREEMENT (hereinafter referred to as "Agreement") made as the 1st day of November, 2002, between MARTIN OPERATING PARTNERSHIP L.P. (hereinafter referred to as "SHIPPER"), a Delaware limited partnership, and MARTIN TRANSPORT, INC. (hereinafter referred to as "CARRIER"), a Texas corporation, for the interstate and unregulated intrastate transportation of petroleum or other bulk liquid products (hereinafter referred to as "COMMODITIES"), by tank truck, in the contiguous United States, shall be under the terms and conditions hereinafter set forth. This Agreement shall be subject to amendment and/or modification by Addendum hereafter executed by both SHIPPER and CARRIER and attached hereto and made a part hereof.
1. AGREEMENT
A. General: CARRIER agrees to accept interstate and unregulated intrastate lawful shipments of the subject COMMODITIES tendered to it by SHIPPER, pursuant to this Agreement and to transport such COMMODITIES to the destination or destinations designated by SHIPPER, provided such points of origin and destination are within the scope of CARRIER's operating authority subject to the rates and provisions of the applicable Schedule of Actual Rates and Charges as provided in the Addendum and Exhibit A, which are attached hereto and made a part hereof.
B. Licenses, Laws and Regulations: CARRIER, at its sole cost, and expense, shall procure and maintain all licenses and permits required by local, state, or federal authorities with respect to the transportation and related services rendered hereunder and shall comply with all applicable laws and regulations pertaining to such transportation and services.
2. EFFECTIVE DATE AND TERM
The initial term of this Agreement shall be effective for a three year period beginning on the commencement date (as herein defined) and shall continue in effect thereafter on an annual basis, until canceled by either party upon thirty (30) days prior written notice to the other party. For the purposes of this Agreement, the "commencement date" shall be November 1, 2002.
3. EQUIPMENT
CARRIER shall provide all equipment necessary to perform the
transportation required hereunder, which equipment shall: (i)
be suitable for particular transportation required, (ii)
include any special equipment that is requested by SHIPPER and
agreed to by CARRIER when the shipping order is placed, and
(iii) comply with the specifications for equipment for such
transportation prescribed by any applicable governmental
regulations (including those of the United States Department
of Transportation). CARRIER shall maintain, and at all times
make available to SHIPPER, sufficient suitable equipment to
transport SHIPPER'S COMMODITIES.
4. CARRIER'S PERFORMANCE
A. General: CARRIER agrees to accept from SHIPPER, and provide
transportation services for all COMMODITIES required by
SHIPPER, during each annual period of the initial term of this
agreement. All transportation hereunder shall be performed:
(i) at Carrier's sole expense, (ii) to the best of CARRIER's
knowledge, in full compliance with all applicable governmental
laws, ordinances, regulations, orders licenses, permits, and
all requirements of CARRIER's insurance, and (iii) with
maximum dispatch consistent with the CARRIER's best judgment
as to safety and efficiency, except as is specifically
provided to the contrary elsewhere in this Agreement.
B. Services: It is understood that the CARRIER shall secure the services of, supervise and be responsible for all persons operating trucking equipment hereunder and CARRIER shall hold SHIPPER harmless from any claim, except for SHIPPER negligence, including fees in defense thereof, by drivers for wages, industrial accidents, workers compensation, withholding and unemployment taxes, or any other actions arising from the performance of this contract which shall be subject to Section 8(C) below.
C. Drivers: CARRIER's drivers shall comply with all reasonable operational procedures requested by SHIPPER. CARRIER's drivers shall promptly report all commodity spills, shortages (less routine heels) or accidents which occur in the course of the performance of this Agreement. In the interest of safety, CARRIER's drivers shall not unload COMMODITIES until the SHIPPER, its agents or employees shall have inspected the shipping orders and have directed the driver to and specified the proper unloading facilities.
5. SHIPPER'S PERFORMANCE
A. Minimum Amount: SHIPPER agrees, during each annual period of the initial term of this Agreement, to offer for shipment, a minimum of one thousand (1000) tons of COMMODITIES. It is understood by CARRIER that the minimum tonnage designation is for planning purposes only and is not intended as a "take or pay" commitment by SHIPPER.
B. Payment: CARRIER shall bill SHIPPER for the freight charges on all shipments as soon after delivery of such shipments as sufficient information is received to prepare such invoices. All invoices for linehaul expenses are to be paid in full within ten (10) days of receipt by SHIPPER of CARRIER's invoice or such other notification as is mutually agreeable to the parties. Payments to CARRIER by SHIPPER hereunder shall be sent to the following address:
Martin Transport, Inc. P. O. Box 191 Kilgore, Texas 75663
6. COMPUTATION OF CHARGES
Freight charges shall be computed on the actual basis of the rates provided in the applicable Schedule of Actual Rates and Charges set forth on Exhibit A attached hereto, subject to the terms and conditions contained therein.
7. TERMINATION
A. Non-performance: In the event of non-performance by SHIPPER or CARRIER, as the case may be, of any of the obligations contained in the Agreement, SHIPPER or CARRIER as the complaining party shall provide written notice of such non-performance to the other party. The non-performing party shall then have (14) days from the date of such notice within which to remedy the non-performance. Thereafter, if the non-performance remains uncorrected or if an acceptable remedy is not reached within fourteen (14) days of such notice, the complaining party may terminate this Agreement at any time upon giving the non-performing party seven (7) days prior written notice. If this Agreement is terminated in accordance with this subsection, all obligations of the parties, as contained in this Agreement and the Addendum and Exhibits hereto, shall be terminated; provided, SHIPPER shall continue to be responsible for all sums due to CARRIER for services received prior to the date of termination.
B. Default or Insolvency: If a petition in bankruptcy should be filed by CARRIER, or if CARRIER should be adjudicated as bankrupt, or if CARRIER should make a general assignment for the benefit of creditors, or if a receiver should be appointed on account of the insolvency of CARRIER, SHIPPER may, without prejudice to any other right of remedy, terminate this Agreement upon giving CARRIER at least five (5) days prior written notice to such termination. CARRIER shall have the same rights as SHIPPER under this item.
8. INSURANCE AND INDEMNITY
A. Liability: CARRIER shall be responsible for any loss, damage or destruction of shipments tendered to it by SHIPPER from the time such shipments are loaded at the delivery point until accepted by SHIPPER as evidenced by unloading at destination point. CARRIER shall reimburse SHIPPER for loss, damage or injury to the COMMODITIES except when such loss, damage or injury is caused by the wrongful act or negligence of SHIPPER, its agents or employees in which case SHIPPER, its agents or employees shall bear it's proportionate share of responsibility for all loss, damage or injury and all consequential and incidental damages related thereto.
B. Insurance: CARRIER shall maintain at all times Worker's Compensation Insurance fully complying with the law of every jurisdiction to which CARRIER is subject, Employer's Liability Insurance in amounts not less than $250,000 and automotive and general public liability insurance against injury or death in amounts of not less than $3,000,000 for any one person and $10,000,000 for any one accident or occurrence and against property damage in amounts not less than $250,000 for any one accident or occurrence. All liability insurance policies obtained or maintained by CARRIER to meet the requirements of this Agreement shall name SHIPPER as an additional insured as to the operations of CARRIER under this Agreement and shall contain severability of interests provisions. Promptly after execution of this Agreement, CARRIER shall furnish SHIPPER properly executed certificates of insurance evidencing that the insurance
coverages and limits required by this Agreement are in effect. If any insurance provided pursuant to this Agreement expires during the term of the Agreement, renewal certificates of insurance shall be furnished by CARRIER to SHIPPER 30 days prior to the date of expiration. In addition, certified, true and exact copies of all insurance policies required under this Agreement shall be provided to SHIPPER by CARRIER, on timely basis if requested by SHIPPER. All such certificates and policies shall contain provisions that thirty (30) days' written notice by registered or certified mail shall be given the SHIPPER of any cancellation, intent not to renew, or reduction in the policies' coverages, except in the application of the aggregate limits provisions. CARRIER or any party liable on accounts of loss of or damage to any of said transported COMMODITIES shall have the full benefit of any insurance that may have been effected upon or on account of said COMMODITIES, insofar as this shall not void the contracts or policies of insurance. CARRIER shall not be obligated to reimburse the claimant for any premium paid therein.
C. Indemnity: CARRIER shall be responsible for, and shall indemnify, defend and save harmless SHIPPER and its owned, controlled, affiliated, subsidiary, associated, interrelated and operated companies and the stockholders, directors, officers, agents, employees and representatives of each from and against, any and all claims, demands and causes of action brought by any and all persons, including without limitation, CARRIER's officers, agents, employees, representatives, or subcontractors or any third parties, and against any and all judgments in respect thereto on account of personal injury or death or on account of property damage or destruction or loss arising out of the negligence or willful misconduct of CARRIER, its officers, employees, agents, representatives and subcontractors.
SHIPPER shall be responsible for, and shall indemnify, defend and save harmless CARRIER and its owned, controlled, affiliated, subsidiary, associated, interrelated and operated companies and the stockholders, directors, officers, agents, employees and representatives of such from and against, any and all claims, demands and causes of action brought by any and all persons, including without limitation, SHIPPER's officers, agents, employees, representatives, or subcontractors or by any third parties, and against any and all judgments in respect thereto on account of personal injury or death or on account of property damage or destruction or loss arising out of the negligence or willful misconduct of SHIPPER, its officers, employees, agents, representatives and subcontractors.
Where personal injury, death, or loss of or damage to property is the result of the joint negligence or misconduct of CARRIER and SHIPPER, each party's duty of indemnification shall be in proportion to its allocable share of such joint negligence or misconduct.
9. FORCE MAJEURE
Either CARRIER or SHIPPER shall be excused from performance of its obligations hereunder in the event and to the extent that such performance is delayed or prevented by any circumstances reasonably beyond its control, including by fire, explosion, interruption of raw materials, equipment source or fuel supply, strike or other labor dispute, riot or other civil disturbance, or act or omission of any governmental authority.
10. LIMITATIONS OF LIABILITY
CARRIER's obligations under this Agreement shall always be subject to any limitations imposed by applicable laws, regulations or other of any governmental authority. In no event shall CARRIER be responsible for any loss, damage, destruction or delay of shipments which occurs by reason of any act of God, terrorist attack, labor disturbance, strike, war, riot or civil disturbance, prohibition by government agency of the movement of goods or any other such similar causes which affect the obligations or performance of CARRIER, and CARRIER shall not be liable for any loss, damage, destruction or delay occurring while the COMMODITIES are stopped and held in transit upon the request of SHIPPER or from riots or strikes. CARRIER shall not be liable for delay causes by highway obstruction, faulty or impassible highway or lack of capacity on any highway, bridge or ferry.
11. AGREEMENT CONCLUSIVE
SHIPPER shall arrange for shipments to be tendered to CARRIER on a standard uniform bill of lading or other such document as may be mutually agreed to between CARRIER and SHIPPER, i.e., scale weight ticket, subject to the conditions of this Agreement and the attached Addendum or Exhibits. In the event there is a conflict between the terms of this Agreement and any schedule or bill of lading otherwise applicable to CARRIER and SHIPPER respecting the movements contemplated hereunder, the terms of this Agreement and the attached Addendum or Exhibits shall be construed as controlling the intent of the parties.
12. ASSIGNMENT
This Agreement and all Addends or Amendments hereto shall be binding upon and inure to the benefit of the successors of SHIPPER and CARRIER. Neither party may assign its rights under this Agreement without the non-assigning party's written approval. However, notwithstanding the above, the parties may assign their right, duties, obligations and interests in and to this Agreement to a parent, subsidiary, affiliate or sister corporation; provided, however, the parties shall not be thereby relieved of the responsibilities or obligations hereunder.
13. CONFIDENTIALITY
The terms of this Agreement shall be held in strict confidence by SHIPPER and CARRIER and shall not be disclosed to any third party, provided, however, SHIPPER shall have the right to disclose the terms to it's freight auditors, provide that a binding confidentiality agreement is continually maintained between SHIPPER and each such freight auditor.
14. WAIVER
Failure of either party to insist, in one or more instances, upon performance of any of the terms of this Agreement, or the waiver by either party of any term or right of the other party hereunder, will not be deemed or construed as a waiver or a relinquishment of any such term or right.
15. APPLICABLE LAW
This Agreement is to be construed in accordance with the laws of the State of Texas without giving effect to the principles of conflict laws. Any legal actions filed may be brought only to the state or federal courts in Texas.
16. NOTICE
Notice, as may be required hereunder, by either party of this Agreement to the other party shall be deemed to have been accomplished on date of delivery by the United States mail as evidenced by date of return receipt, when sent by certified mail, postage prepaid, to the following addresses:
SHIPPER
Martin Operating Partnership L.P.
4200 Stone Road
Kilgore, Texas 75662
CARRIER
Martin Transport, Inc.
P. O. Box 191
Kilgore, Texas 75663
17. COMPLIANCE WITH NEGOTIATED RATES ACT OF 1993:
CARRIER represents to SHIPPER that CARRIER has complied with (and will continue to comply with) all provisions of the Negotiated Rates Act of 1993, including but not limited to Section 6 thereof. This Agreement provides service designed to meet the distinct needs of the SHIPPER, including price and service considerations tailored to the SHIPPER's needs.
18. ENTIRE CONTRACT
Except for the provisions of the schedules and Addenda or Amendments made a part hereof by reference, this instrument embodies the entire Agreement and understanding between SHIPPER and CARRIER as of the effective date of this Agreement, and there are no agreements, understandings, conditions, warranties or representations, oral of written, express or implied, with reference to the subject matter hereof that are not merged herein or superseded hereby as of the effective date of this Agreement. This Agreement may be modified only in writing signed by other parties.
19. AUTHORITY
Each party represents to the other that is has full authority and the necessary approval to enter into and perform this Agreement in accordance with its terms.
IN WITNESS THEREOF, the parties have caused this Agreement to be signed by their duly authorized representatives.
MARTIN OPERATING PARTNERSHIP L.P. MARTIN TRANSPORT, INC. (SHIPPER) (CARRIER) BY: Martin Operating GP LLC, its general BY: /s/ Ruben S. Martin, III partner TITLE: President BY: Martin Resource LLC, its sole member DATE: Nov. 1, 2002 BY: Martin Resource Management WITNESS: /s/ Chad Burkhardt Corporation, its sole member BY: /s/ Ruben S. Martin, III NAME: Ruben S. Martin, III TITLE: President DATE: Nov. 1, 2002 WITNESS: /s/ Chad Burkhardt |
ADDENDUM TO MOTOR CARRIER AGREEMENT
CONTRACT SCHEDULE OF ACTUAL RATES AND CHARGES
Schedule of rates, charges, rules and other provisions (hereinafter referred to as "Addendum") which govern that certain MOTOR CARRIER AGREEMENT (hereinafter referred to as "Agreement"), dated the 1st day of November, 2002, to which this Addendum is attached, by and between Martin Operating Partnership L.P. (hereinafter referred to as "SHIPPER" and Martin Transport, Inc. (hereinafter referred to as "CARRIER").
Except as otherwise specifically provided in this Addendum to the contrary, the rates, rules and charges published in CARRIER's Rules and Regulations attached as Exhibit B shall govern the transportation, by tank truck, in interstate and unregulated intrastate commerce, of petroleum or other bulk liquid products (hereinafter referred to as "COMMODITIES"), to and from points in the contiguous United States. Reissues or revisions of the subject Rules and Regulations subsequent to the date of this Agreement shall be applicable to this Agreement and shall become a part hereof effective with the acceptance by SHIPPER of each reissue or revision.
Each shipment tendered to CARRIER is deemed to be a tender to CARRIER as a contract motor carrier and is subject to the terms, conditions and provisions of this Agreement and to the provisions of law applicable to contract motor carriage.
1. RECEIPTS AND BILLS OF LADING
Each shipment will be evidenced by a receipt in the form specified by SHIPPER and will be signed by CARRIER or CARRIER's agent or employee showing the kind and quantity of freight received by CARRIER at origin, but the absence or loss of any such receipt will not relieve CARRIER of its obligations and responsibilities with respect to any shipment made hereunder. If SHIPPER elects to use a bill of lading, manifest or other form of freight receipt or contract, that includes any terms, conditions and provisions that conflict with this Agreement, the terms and conditions of this Agreement will supersede. Upon delivery of each shipment made hereunder, CARRIER shall obtain a receipt, in a form specified or approved by SHIPPER, showing the kind and quantity of freight delivered to the CONSIGNEE of such shipment at the destination specified by SHIPPER and the time of such delivery, and CARRIER shall cause such receipt to be signed by such receiving personnel or by such agent or employee at such destination.
2. RATES AND CHARGES
Applicable Rates: Exhibit A affixed hereto and made a part hereof specifies the rates applicable to shipments by tank truck of "COMMODITIES" hereunder.
3. DUTIES OF CARRIER AT DESTINATION
Drivers and employees, agents, contractors or subcontractors of CARRIERS shall, during loading and unloading and at all times while on the premises of SHIPPER, consignor or consignee, comply with all safety laws, regulations and rules applicable to the facility, and of which it has actual or constructive knowledge, including but not limited to vacating the vehicles during loading and unloading and remaining in assigned areas.
4. DELIVERY
A. Shipments Not Delivered.
i. Any shipment or part thereof which for any reason is refused, rejected or otherwise not accepted, received or claimed shall be held by CARRIER for further instructions from SHIPPER.
ii. In such event, CARRIER shall contact SHIPPER and request further transportation instructions, including the location for delivery and the desired delivery time.
iii. The freight charges for any further movement for a shipment not delivered shall be computed in accordance with the CARRIER's Rules and Regulations or jointly agreed to freight charges.
B. Shipment Delivery: Unless instructed otherwise by SHIPPER, CARRIER shall connect product hose to trailer discharges outlet, operate equipment on trailer to discharge product, and remain in immediate attendance of trailer during product off-loading procedure.
5. SPECIAL SERVICES
Safety Equipment: Safety equipment which is utilized or worn by drivers or which is required by law or reasonably necessary or desirable for the safe transportation, delivery, loading, or unloading of transported "COMMODITIES" shall be the responsibility of, and provided by CARRIER at no charge to SHIPPER.
6. EQUIPMENT
A. Inspection: CARRIER's equipment offered to SHIPPER for loading of the "COMMODITIES" to be transported is subject to inspection for suitability and cleanliness by SHIPPER at SHIPPER's discretion. The cleanliness or suitability of equipment shall meet SHIPPER's standards of acceptability and SHIPPER shall have the right to reject such equipment for loading and require CARRIER to comply with SHIPPER's standard. SHIPPER's standards shall be reasonable and conform to others in the industry.
B. Lead Time: CARRIER shall provide all requested transportation services, provided CARRIER has received notice at least twenty-four (24) hours prior to the time which the services are requested.
7. MISCELLANEOUS
In the performance of transportation service hereunder, CARRIER shall be an independent contractor and not an agent or employee of SHIPPER and CARRIER agrees, at its expense, to furnish suitable equipment to transport the "COMMODITIES", tendered hereunder and to assume all costs and expenses incidental to the transportation of such "COMMODITIES", including, but not limited to, all costs and expenses incidental to or arising out of maintenance, repair or operation of equipment, labor, fuel supplies, insurance and/or accident.
The provisions of the Agreement shall, in the event of conflict with this Addendum, control.
MARTIN OPERATING PARTNERSHIP L.P. MARTIN TRANSPORT INC. (SHIPPER) (CARRIER) BY: Martin Operating GP LLC, its general BY: Ruben S. Martin, III partner TITLE: President BY: Martin Resource LLC, its sole member DATE: Nov. 1, 2002 BY: Martin Resource Management WITNESS: /s/ Adam Gallegos Corporation, its sole member BY: /s/ Ruben S. Martin, III NAME: Ruben S. Martin, III TITLE: President DATE: Nov. 1, 2002 WITNESS: /s/ Adam Gallegos |
EXHIBIT A
The below rates are hereby adopted as the applicable charges as provided for in this Agreement between the identified parties and is herein made a part of the Agreement.
MILEAGE SCALE
TO BE PROVIDED
POINT TO POINT RATES WITHIN U.S.
Origin Consignee Destination Miles Rate
TO BE PROVIDED
RATE ADJUSTMENTS
All rates as shown in this EXHIBIT A, are to remain in effect without change for a period of one year from the "commencement date". Exceptions to this rate provision will occur only when due to circumstances beyond the control of the CARRIER, a cost item is imposed which would normally affect any similar private trucking operation (an "Industry Cost Adjustment"). These items may be reflected in, but not limited to, taxes on fuel, workers compensation tax increases, etc.
It is agreed between the parties that beginning with the second year a rate adjustment will be implemented at least on an annual basis. Both parties recognize that costs may change during the initial one-year period and agree to fairly negotiate such rate changes. In the event that both parties cannot satisfactorily agree on an appropriate annual rate adjustment within thirty (30) days of each anniversary of the Agreement, then the cost item will be adjusted in accordance with the following index.
The Gross National Product (GNP) Implicit Price Deflator which is indexed quarterly and published by the U.S. Department of Commerce, Economic Statistical Administration, Bureau of Economic Analysis. The most recently published Implicit Price Deflator index as of the "commencement date" shall be the basis for all future rate adjustments.
Industry Cost Adjustments also carry forward in addition to annual rate adjustments. Additionally, Industry Cost Adjustments will be made as required during the term of the Agreement.
FUEL ADJUSTMENT CHARGES
Fuel adjustment shall be as shown in Attachment I.
INSURANCE SURCHARGES
Three percent (3%) of line haul charges to cover increased insurance cost due to the events of September 11, 2001.
GENERAL CONDITIONS
Standard accessory charges shall be as shown in Attachment II.
EXHIBIT 10.5
TERMINAL SERVICES AGREEMENT
THIS TERMINAL SERVICES AGREEMENT is made and entered into as of the of November 1, 2002 (the "Effective Date"), by and between MARTIN OPERATING PARTNERSHIP L.P. (hereinafter referred to as "Owner"), and MARTIN GAS SALES LLC (hereinafter referred to as "Customer").
WITNESSETH:
WHEREAS, the Owner operates a marine terminal facility located 4118 Pendola Point Road in Tampa, Florida (the "Terminal Facility") under the terms of that certain Agreement of Lease, dated December 16, 1976, between Owner, as assignee, and the Tampa Port Authority (the "Port Authority Lease"); and
WHEREAS, the Customer is in the petroleum products ("Products") distribution business; and
WHEREAS, it is the desire of the Owner and the Customer that the Customer's Product be throughput at the Terminal Facility and that the Owner provide unloading, handling, storage, out-loading and other terminal services with respect to the Customer's Product at the Terminal Facility, all on the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Owner and the Customer agree that the Owner shall provide the hereinafter described terminal services with respect to the Customer's Product at the Terminal Facility, on the terms and conditions hereinafter provided:
1. TERM OF AGREEMENT. The term of this Agreement shall begin on the Effective Date and shall end on the third anniversary of the Effective Date. Thereafter, the term shall automatically renew from year to year, unless either party gives written notice at least thirty (30) days prior to the expiration of the applicable term.
2. OWNER'S DUTIES. In consideration of the compensation provided in Section 3 hereof, the Owner shall provide the following services ("Customer Services') to the Customer at the Terminal Facility:
(a) UNLOADING. HANDLING AND STORAGE SERVICES. The Customer shall deliver Product (consisting of # 2 fuel oil) to the Terminal Facility by marine vessel. All such deliveries shall fully comply with the terms and conditions of the Port Authority Lease. The Owner shall unload the Customer's Product from such marine vessels in accordance with prevailing industry
standards relating to the handling of petroleum products. The Owner shall transfer the Product to, store the Product in, the following storage tank at the Terminal Facility:
TANK NUMBER CAPACITY ----------- -------- Tank #5 80,000 barrels |
Tank #5 shall be reserved and dedicated at all times for the exclusive use of Customer.
(b) OUT-LOADING SERVICES. The Customer's Product may be removed from the Terminal Facility by marine vessel or truck. The Owner shall provide all out-loading services necessary to permit the Customer to transfer Product from the storage tanks at the Terminal Facility to the Customer's designated trucks or marine vessels for removal from the Terminal Facility.
(c) INVENTORY SERVICES. The Owner shall provide to the Customer daily inventory reports of Customer's Product, containing reports as to receipts and withdrawals of Customer Product, and the balance as of the close of business of the immediately preceding day.
3. OWNER'S COMPENSATION. For the terminal services performed by it hereunder, the Owner shall receive the following compensation from the Customer:
(a) TANK LEASE FEE. The Customer shall pay the Owner the following compensation for services (the "Tank Lease Fee"). This fee shall be fixed during the first year of this Agreement and thereafter adjusted according to Section 3(c) below:
TANK LEASE FEE ---- --------- Tank #5 $20,000.00 per month |
(b) WHARFAGE: DOCKAGE AND DEMURRAGE. The Tank Lease Fee does not include wharfage fees to the Tampa Port Authority. The Customer shall pay wharfage fees along with any other fees due to or required by the Tampa Port Authority, including future increases in the fees. Dock scheduling and usage shall also be subject to the regulations of the Tampa Port Authority.
(c) TANK FEE ADJUSTMENTS. The Tank Lease Fee shall be adjusted annually as follows. The Tank Lease Fee shall be adjusted (both upward and downward as hereinafter provided) by a factor equal to the increase or
decrease, as the case may be, in the Consumer Price Index. The adjustment shall be calculated annually in October of each year, commencing in October 2003 based on Consumer Price Index statistics for the two preceding Septembers. The adjustment shall be calculated as follows: The Tank Lease Fee in effect shall be multiplied by a factor equal to the amount of the increase or decrease, as the case may be, in the Consumer Price Index for the immediately preceding month of September, over the Consumer Price Index for September of the preceding year. For purposes hereof, the term "Consumer Price Index" shall mean the "Consumer Price Index for Urban Wage Earners and Clerical Workers (1967=100)" specified for "All Items. United States" compiled by the Bureau of Labor Statistics of the United States Department of Labor (the "Index"). In event the Index shall be converted to a different standard reference base or otherwise revised, the determination of the percentage change shall be made with the use of such conversion factor, formula or table for converting the Index as may be published by the Bureau of Labor Statistics or, if said Bureau shall not publish the same, then as shall be reasonably determined by the parties.
4. TITLE TO PRODUCT. Title to all of the Customer's Product received, stored and handled by the Owner at the Terminal Facility shall remain at all times in the name of the Customer. The Customer agrees not to deliver for storage at the Terminal Facility any Product which may not be lawfully stored on the premises of the Terminal Facility or any Product injurious to the premises or facilities, or which would render the facilities unfit, after cleaning, for the proper storage of similar products, or Products.
5. ASSIGNMENT. Neither party shall assign this Agreement without the express written consent of the other party.
6. FACILITY. TANK AND EQUIPMENT CONDITION. The Owner shall, at its sole cost and expense, provide and maintain all handling and storage equipment and facilities necessary to the performance of its services hereunder, including without limitation the storage tank, in compliance with prevailing industry standards and all applicable Laws (as such term is defined in Section 7 below) as they may exist from time to time.
7. CUSTOMERS COMPLIANCE WITH LAWS. In the conduct of its business on the premises of the Terminal Facility, the Customer shall comply in all material respects with all federal, state and local laws, ordinances, decrees, orders, regulations, permits or other requirements having the force of law (hereinafter, the "Laws").
8. ENTIRE AGREEMENT AND AMENDMENT. This Terminal Services Agreement shall constitute the entire agreement concerning the subject hereof between the parties superseding all previous agreements, negotiations and representations made prior or contemporaneous to the date hereof. This Agreement shall be modified or amended
only by written agreement executed by both parties hereto.
9. CONTROLLING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas.
EXECUTED as of the date first set forth above.
MARTIN GAS SALES LLC - FUEL OIL SALES
BY: MARTIN RESOURCE MANAGEMENT CORPORATION,
ITS SOLE MEMBER
BY: /s/ RUBEN S. MARTIN, III NAME: RUBEN S. MARTIN, III TITLE: PRESIDENT |
MARTIN OPERATING PARTNERSHIP L.P.
BY: MARTIN OPERATING GP LLC, ITS GENERAL PARTNER
BY: MARTIN RESOURCE LLC, ITS SOLE MEMBER
BY: MARTIN RESOURCE MANAGEMENT CORPORATION,
ITS SOLE MEMBER
BY: /s/ RUBEN S. MARTIN, III NAME: RUBEN S. MARTIN, III TITLE: PRESIDENT |
EXHIBIT 10.6
THROUGHPUT AGREEMENT
THIS THROUGHPUT AGREEMENT (the "Agreement") is made and entered into as of the of November 1, 2002 (the "Effective Date"), by and between MARTIN GAS SALES LLC (the "Owner"), and Martin Operating Partnership L.P. (the "Customer").
WITNESSETH:
WHEREAS, the Owner owns a liquefied petroleum gas ("LPG") truck loading and unloading and pipeline distribution terminal facility located at Mont Belvieu, Texas (the "Terminal Facility"); and
WHEREAS, the Customer is in the LPG products ("Products") distribution business; and
WHEREAS, it is the desire of the Owner and the Customer that the Customer be provided with sole access to and use of the Terminal Facility, all on the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Owner and the Customer agree that the Owner shall provide the Customer with sole access to and use of the Terminal Facility, on the terms and conditions hereinafter provided:
1. TERM OF AGREEMENT. The term of this Agreement shall begin on the Effective Date and shall end on the third anniversary of the Effective Date. Thereafter, the term shall automatically renew from year to year, unless either party gives written notice at least thirty (30) days prior to the expiration of the applicable term.
2. OWNER'S DUTIES. In consideration of the compensation provided in Section 3 hereof, the Owner shall provide Customer with sole access to and use of the Terminal Facility.
3. OWNER'S COMPENSATION.
(a) For the sole access to and use of the Terminal Facility, the Owner shall receive total compensation of $400,000 per year ("Annual Compensation") subject to adjustment as set forth in subsection (b) below. The Customer shall remit payment for 1/12 of the Annual Compensation each month payable on the last day of the month.
(b) The Annual Compensation shall remain as stated in subsection (a) until the first anniversary of the Effective Date. Thereafter, the Annual Compensation shall be adjusted annually (both upward and downward as hereinafter provided) by a factor equal to the increase or decrease, as the case may be, in the Consumer Price Index. The adjustment shall be calculated annually in November of each year, commencing in
November, 2003. The adjustment shall be calculated as follows: the Annual Fee in effect shall be multiplied by a factor equal to the amount of the increase or decrease, as the case may be, in the Consumer Price Index for the immediately preceding month of October, over the Consumer Price Index for October of the preceding year. For purposes hereof, the term "Consumer Price Index" shall mean the "Consumer Price Index for Urban Wage Earners and Clerical Workers (1967=100)" specified for "All Items. United States" compiled by the Bureau of Labor Statistics of the United States Department of Labor (the "Index"). In event the Index shall be converted to a different standard reference base or otherwise revised, the determination of the percentage change shall be made with the use of such conversion factor, formula or table for converting the Index as may be published by the Bureau of Labor Statistics or, if said Bureau shall not publish the same, then as shall be reasonably determined by the parties.
4. TITLE TO PRODUCT. Title to all of the Product received, stored and handled at the Terminal Facility shall remain at all times in the name of the Customer. The Customer agrees not to deliver for storage at the Terminal Facility any Product which may not be lawfully stored on the premises of the Terminal Facility or any Product injurious to the premises or facilities, or which would render the facilities unfit, after cleaning, for the proper storage of similar products, or Products.
5. ASSIGNMENT. Neither party shall assign this Agreement without the express written consent of the other party.
6. FACILITY, TANK AND EQUIPMENT CONDITION. The Owner shall, at its sole cost and expense, provide and maintain all handling and storage equipment and facilities necessary to the performance of its services hereunder in compliance with prevailing industry standards and all applicable Laws (as such term is defined in Section 7 below) as they may exist from time to time.
7. CUSTOMERS COMPLIANCE WITH LAWS. In the conduct of its business on the premises of the Terminal Facility, the Customer shall comply in all material respects with all federal, state and local laws, ordinances, decrees, orders, regulations, permits or other requirements having the force of law (the "Laws").
8. ENTIRE AGREEMENT AND AMENDMENT. This Agreement shall constitute the entire agreement concerning the subject hereof between the parties superseding all previous agreements, negotiations and representations made prior or contemporaneous to the date hereof. This Agreement shall be modified or amended only by written agreement executed by both parties hereto.
9. CONTROLLING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas.
EXECUTED as of the date first set forth above.
MARTIN GAS SALES LLC
By: Martin Resource Management Corporation
Its Sole Member
By: /s/ Ruben S. Martin, III Name: Ruben S. Martin, III Title: President |
MARTIN OPERATING PARTNERSHIP L.P.
By: MARTIN OPERATING GP LLC
Its General Partner
By: Martin Resource LLC
Its Sole Member
By: Martin Resource Management Corporation
Its Sole Member
By: /s/ Ruben S. Martin, III Name: Ruben S. Martin, III Title: President |
EXHIBIT 10.7
CONTRACT FOR MARINE TRANSPORTATION
Martin Operating Partnership L.P. (hereinafter called "Owner") agrees to provide transportation services to Martin Resource Management Corporation and its affiliates (hereinafter called "Charterer") in bulk on board its marine vessels, under the following terms and conditions:
1.TERM This agreement shall have a three-year term, commencing on November 1, 2002 (the "Commencement Date"). Thereafter, the agreement shall automatically renew for successive one-year periods unless either party terminates this agreement by providing written notice of such termination to the other party at least 30 days prior to the expiration of the then-applicable term. 2. VESSELS SUBJECT TO THIS CONTRACT 1) M/V Dani Mayes, 2) M/V Joel Smith, 3) M/V Mary Edwards, 4) M/V Martin Challenger, and 5) barges associated with such vessels (collectively, such vessels and barges are referred to herein as the "Vessels"). The Vessels shall be operated and equipped in compliance with applicable Coast Guard regulations. 3. SPOT CONTRACTS Owner and Charterer agree that the Charterer's use of the Vessels under this agreement will be on a spot-contract basis and based on the then-availability of the Vessels. Each individual use of a vessel shall be evidenced by a written agreement between the parties, which agreement will contain the following information: 1) The origination (load) and destination (discharge) ports. |
2) The cargo to be transported.
3) The volume to be transported.
4) The shipping rate or rates.
5) The term of the contract.
4. RATES The parties agree that the rates and related terms charged by Owner to Charterer under any individual spot contract will be on then-applicable market terms. 5. MINIMUM USE Charterer agrees that for the initial three-year term of this agreement, it will execute enough spot contracts under this agreement so that owner receives the "Base Revenue Amount" (as such term is defined below) under this agreement during each 12-month period following the Commencement Date. The term "Base Revenue Amount" means the difference of $5,600,000 minus all "Freight Revenue" (as defined below) received from third parties during the applicable 12-month period. The term "Freight Revenue" means any revenue generated from the sale of any services using the vessels, including revenues relating to freight charges, demurrage, charter hire, heating charges, fleeting charges, insurance surcharges, tanking cleaning charges, tankerman fees, port or harbor charges and similar charges. If Owner does not receive the Base Revenue Amount for any such 12-month |
period, Charterer agrees to pay Owner any deficiency within 30 days following the applicable anniversary of the Commencement Date.
6. BARGE COVERAGE
TERMS The "Barge Coverage Terms" attached hereto as Exhibit A to apply to this contract and are hereby incorporated herein by reference. |
MARTIN OPERATING PARTNERSHIP L.P. MARTIN RESOURCE MANAGEMENT CORPORATION By: Martin Operating GP LLC, its general partner By: Martin Resource LLC, its sole member By: Martin Resource Management Corporation, its sole member By: /s/ Ruben S. Martin, III By: /s/ Ruben S. Martin, III Its: President Its: President Ruben S. Martin, III Ruben S. Martin, III |
BARGE COVERAGE TERMS
RIDER TO BE MADE A PART OF THE CONTRACT FOR MARINE TRANSPORTATION DATED [o] BETWEEN OWNER AND CHARTERER.
1. OFFHIRE. The Vessel shall be declared offhire in the event of any delay in performance due to the inability to deliver full services as the result of medical emergencies, groundings outside the channel markers, maintenance, inspections, mechanical failures and breakdowns or time spent waiting on crew readiness. During offhire periods all charges for the Vessel, including boat and barges, shall cease. The Vessel shall not be considered offhire in the event of navigational delays, including locking and docking, groundings within the channel markers, or delays due to weather.
2. INVOICING & PAYMENT. Owner shall receive payment for service rendered with thirty (30) day invoice. All other rebillable items, including, but not limited to, shifting invoices, fleeting invoices, shore tanker man charges, fresh air apparatus rental and the like shall be due net upon receipt and payable to Owner's designated bank.
3. DEMISE OF CHARTER. The Master of a Vessel, although appointed by and
in the employ of the Owner and subject to the Owner's direction and control,
shall observe the orders of the Charterer in connection with the Charterer's
agencies, arrangements, and employment of the Vessel's services hereunder.
NOTHING IN THIS CLAUSE OR ELSEWHERE IN THIS AGREEMENT SHALL BE CONSTRUED AS
CREATING A DEMISE OF THE VESSEL TO CHARTERER OR AS VESTING CHARTERER WITH ANY
CONTROL OVER THE PHYSICAL OPERATION OR NAVIGATION OF THE VESSEL.
4. POLLUTION PREVENTION. Owner will in the case of an escape or discharge of oil or other product or threat of escape or discharge of oil or other product from the Vessel into navigable waters of the United States in which the Vessel is operating (whether or not caused by Vessel's negligence), promptly undertake such measures as are reasonably necessary which may be required by applicable laws, rules and regulations to prevent pollution damage from thereby arising and to mitigate any such damage. If an escape of discharge of oil or other product occurs from the Vessel into the navigable waters of the United States or when an escape or discharge of oil or other products from the Vessel causes or threatens to cause pollution damage, or when there is the threat of an escape or discharge of oil (i.e., a grave and imminent danger of the escape or discharge of oil which, if it occurred, would create a serious danger of pollution damage), Charterer may at option, and upon notice to Owner and on the conditions set forth herein below, undertake such measures as are reasonably necessary to prevent or mitigate resulting pollution damages, unless Owner promptly undertakes same. Charterer shall keep Owner advised of the measure intended to be taken by it. Any of the aforementioned measures actually taken by the Charterer shall be at Owner's expense (except to the extent that such escape or discharge was caused or contributed to by Charterer). Provided that if Owner believes that such measures should not be undertaken or should be discontinued, Owner may so notify Charterer and thereafter Charterer, if it elects to continue said cleanup measures, shall do so at its own risk and expense.
5. INDEMNITY. Owner covenants and agrees to fully defend, protect, indemnify and hold harmless Charterer, its employees and agents from and against each and every claim, demand or cause of action and any liability, cost, expense (including, but not limited to, reasonable attorney's fees and expenses incurred in the defense of Charterer), damage or loss in connection therewith, which may be made or asserted by Owner, or Owner's employees or agents, subcontractors, or any third parties including, but not limited to Charterer's agents, servants or employees on account of personal injury or death or property damage to the extent of Owner's negligence.
Charterer covenants and agrees to fully defend, protect, indemnify and hold harmless, Owner, its employees and agents from and against each and every claim, demand or cause of action and any liability, cost, expense (including, but not limited to, reasonable attorney's fees and expenses incurred in the defense of Owner), damage or loss in connection therewith, which may be made or asserted by Charterer or Charterer's employees or agents, subcontractors, or any third parties including, but not limited to Owner's
agents, servants or employees on account of personal injury or death or property damage to the extent of Charterer's negligence.
6. ARBITRATION. Each party will select their own arbitrator. Then the two arbitrators will select a third arbitrator. In the event these two arbitrators cannot agree on a third arbitrator then a state district judge in Gregg County, TX will select the third arbitrator.
7. INSURANCE: Subject to availability to pollution bonds at commercially acceptable rates and certificates of financial responsibility from underwriters, during the period of this agreement, Owner shall make all reasonable attempts to comply with all financial capability, responsibility, security or like laws, regulations and/or requirements of whatsoever kind relating to the Vessels with respect to oil and/or other pollution damage applicable to the Vessel entering, leaving, remaining at or passing through any ports or places or waters in the performance of this agreement. Subject as aforesaid, Owner at its sole risk and expense shall make all reasonable attempts to arrange by bond, insurance or otherwise and obtain all such certificates or other documentary evidence and take all such other action, as may be necessary, to satisfy such laws, regulations and/or other requirements. Owner warrants that they have in place at the Commencement Date coverage for oil pollution of U.S. $500,000,000.
Hull and Protection and Indemnity coverage shall be carried with first class underwriter by Owner for Owner's account, with Charterer named as additional assure. Owner shall also carry, at Owner's expense, American Club, or other water pollution coverage, as required by law.
8. COMPLIANCE: Upon delivery, Owner warrants that the Vessel will be in compliance with all applicable government regulations.
9. CHARTERER'S REPRESENTATIVES: Charterer's representatives may board the Vessel at any convenient place to observe cargo-handling operations, to inspect logs and certificates, and to confirm that Owner is fulfilling its obligations under this agreement.
10. OUTTURN: Any shortage in outturn (unless resulting from a condition described in Force Majeure Clause above), in excess of one-half of one percent (0.5%) in volume shall be for the account of Owner on an evaluation declared by the Charterer at the time of discharging provided that Owner shall not be liable for any shortage in outturn unless a comparison of barge ullage figures at loading port and at discharge port established that a volume loss in excess of one-half of one percent (0.5%) has actually occurred.
11. DRUG & ALCOHOL ABUSE POLICY: Owner warrants that it has a policy on Drug and Alcohol Abuse applicable to the Vessel which meets and exceeds the standards set forth by the U.S. Coast Guard. Owner further warrants that this Policy will remain in effect during the term of this agreement and Owner shall exercise diligence to ensure that Policy is complied with.
12. CONDITIONS OF EQUIPMENT: The Owner shall, before and at commencement of each voyage, exercise due diligence to make the entire Vessel seaworthy and in good operating condition, properly manned, equipped and supplied for the voyage, and to make the pipes, pumps and coils tight, staunch, strong and in every respect fit for the voyage, and to make the tanks and other spaces in which cargo is to be carried fit and safe for its carriage and preservation. Owner will provide, at the time of delivery and thereafter keep in force during the period of this agreement, a valid and subsisting certificate or other permit issued by the United States Coast Guard (or other governmental bureau or department having jurisdiction thereof) approving the barges for the transportation and carriage of inflammable liquids having a Reid Vapor Pressure of less than fourteen (14) pounds per square inch. Owner warrants that the barge is capable of discharging at a rate of twenty-five hundred (2,500) barrels per hour or is able to maintain one hundred (100) PSI at the rail; otherwise, the Vessel shall be considered off-hire for all excess pumping time.
13. WHARFAGE AND DOCKAGE: Owner's equipment shall be free of wharfage and dockage charges at loading and discharging ports.
14. SUBLET: Charterer has the right to sublet the Vessel for third party work and act as deponent owner; however, Charterer shall always remain responsible for the fulfillment of this agreement in all its terms and conditions.
15. GENERAL AVERAGE: Notwithstanding anything herein to the contrary, in the event of accident, danger, damage or disaster before or after the commencement of the voyage resulting from any cause whatsoever, whether due to negligence or not, for which, or for the consequences of which, the Vessel including her barge or barges, are not responsible by statute, contract, or otherwise, the cargo and its barge, jointly and severally, shall contribute in General Average to the payment of any sacrifices, losses or expenses of a General Average nature that may be made or incurred, by a barge or its cargo, and in a like manner, shall pay salvage and special charges incurred in respect to the common safety of both cargo and its barge. If a salving vessel is owned or operated by the Owner, salvage shall be paid for as fully as if the salving vessels belong to strangers, General Average shall be adjusted, stated and settled according to York-Antwerp Rules 1974, Excluding Rule XXII thereof, at such port or place in the United States as may be selected by barge owners with cargo owner's approval, and as to matters not provided for by the rules mentioned, according to the laws and usages of the Port of New York.
16. FORCE MAJEURE: The Vessel, its captain and Owner shall not, unless otherwise in this agreement expressly provided, be responsible for any loss or damage arising or resulting from: any act, default or barratry of the captain, pilots, mariners, or other servants of the Owner in the navigation or management of the vessel; fire, unless caused by the personal design or neglect of the Owner; collision, stranding or peril, danger or accident of navigable waters; saving or attempting to save life or property; wastage in weight or bulk, or any other loss or damage arising from inherent defect, quality or vice of the cargo; any act or omission of the Charterer, Owner, shipper or consignee of the cargo, their agents or representatives; insufficiency or inadequacy of marks; explosion, bursting of boilers, breakage of shafts, or any latent defect in hull, equipment or machinery; unseaworthiness of the Vessel unless caused by want or due diligence on the part of the Owner to make the Vessel seaworthy or to have it properly manned, equipped and supplied; or from any other cause of whatsoever kind arising without the actual fault of privity of the Owner. And neither the Vessel, its captain or Owner, nor the Charterer, shall, unless otherwise in this agreement expressly provided, be responsible for any loss or damage or delay or failure in performing hereunder arising or resulting from; act of God, act of war; act of public enemies, pirates or assailing thieves; acts of terrorism; arrest or restraint of princes, rulers of people, or seizure under legal process provided bond is promptly furnished to release the Vessel or cargo; strike or lockout or stoppage or restraint of labor from whatever cause, either partial or general, or riot or civil commotion.
EXHIBIT 10.8
PRODUCT STORAGE AGREEMENT
ARCADIA STORAGE FACILITY
THIS PRODUCT STORAGE AGREEMENT is entered into as of the 1st day of November, 2002 ("Effective Date") by and between MARTIN UNDERGROUND STORAGE, INC. ("LESSOR"), and MARTIN OPERATING PARTNERSHIP L.P., ("CUSTOMER"). The parties agree to the following:
WITNESSETH
1. PRODUCT STORAGE. For and in consideration of the rates and fees to be paid by CUSTOMER to LESSOR as provided herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, LESSOR hereby agrees to lease storage space at its underground storage facility situated in Arcadia, Louisiana, for the storage of up to, but not to exceed, the maximum quantity of propane specification product ("Product") set forth in Exhibit "A" which is attached hereto and made a part hereof (the "Lease Volume"). LESSOR represents and warrants that it has full right, power and authority to extend and deliver the storage services described in this Agreement. Each of the parties hereto represents and warrants that it has full power and authority to make, enter and perform its obligations under this Agreement.
2. Definitions. For the purpose of this Agreement, the following terms and expressions shall have the following meanings:
'AFFILIATE' means, of any Person, a Person Controlling, Controlled by or under common Control with, directly or indirectly, through one or more intermediaries, such Person. Any Person shall be deemed to be an Affiliate of any specified Person if such Person owns 50% or more of the voting securities of the specified Person, if the specified Person owns fifty percent (500/o) or more of the voting securities of such Person, or if fifty percent (50~/o) or more of the voting securities of the specified Person and such Person are under common Control.
"AGREEMENT" shall mean this Product Storage Agreement.
"BARREL" shall mean forty-two (42) U. 5. Gallons.
"BASE RATE" shall have the meaning specified in Section 12 hereinafter.
"BUSINESS DAY" shall mean a Day on which Federal Reserve member banks in Houston, Texas are open for business.
"CONTROL" of a non-natural Person means the power, directly or indirectly, to (i) elect, appoint or cause the election or appointment of at least a majority of the members of the board of directors of such Person (or if such Person is a noncorporate Person, Persons having similar powers), or (ii) direct or cause the direction of the management and policies of such Person, in
either case through beneficial ownership of the capital stock (or similar ownership interests) of such Person or otherwise.
"DAY OR DAILY" shall mean a twenty-four (24) hour period commencing 12:01 a.m. local clock time, and extending until 12:00 midnight local clock time.
"EFFECTIVE DATE" shall mean the date on which CUSTOMER may begin to store Products under this Agreement as set forth in Exhibit "A".
"FACILITIES" shall mean the underground storage facilities owned by LESSOR, at Arcadia, Louisiana, including, but not limited to, all storage caverns, related surface and subsurface equipment, and loading and unloading terminals.
"FORCE MAJEURE" shall have the meaning specified in Section 18 hereinafter.
"GALLON" shall mean one U.S. Gallon, which is the unit of volume used for the purpose of measurement of liquid. One (1) U.S. liquid Gallon contains two hundred thirty-one (231) cubic inches when the liquid is at a temperature of sixty degrees Fahrenheit (600F) and at the Vapor pressure of the liquid being measured.
"LEASE VOLUME" shall have the meaning specified in Section 1 above.
"MONTH" or "MONTHLY" shall mean a period commencing at 12:01
a.m. local clock time on the first Day of a calendar Month and
extending until 12:00 midnight local clock time on the last Day of the
calendar Month.
"OFFSPEC PRODUCT" shall have the meaning specified in Section 4 hereinafter.
"PERSON" means any individual, corporation, partnership, limited partnership, limited liability partnership, limited liability company (whether domestic or foreign), joint venture, association, joint-stock company, trust, estate, custodian, trustee, executor, administrator, nominee, entity in a representative capacity, unincorporated, organization, or governmental agency or authority.
"RECEIVING PIPELINE" shall have the meaning specified in
Section 5 hereinafter.
"STORAGE RATE" shall have the meaning specified in Section 11(a).
"YEAR" or "YEARLY" shall mean a period of 365 consecutive Days', provided, however that any Year which contains the date of February 29 shall consist of 366 consecutive Days.
3. TERM. The term of this agreement shall commence on the Effective Date and shall terminate as specified in Exhibit "A". Unless a new storage agreement is entered into or this agreement is renewed, at the expiration or termination of this Agreement, CUSTOMER shall remove all Products stored hereunder
on or before the last Day of the term of this Agreement subject to the payment
of all accrued storage fees and other charges hereunder and LESSOR's lien as set
forth herein. In the event CUSTOMER fails to remove its Products at the
expiration of the term of this Agreement, LESSOR shall have the right to sell
all or any portion of such Products on terms and at such prices as LESSOR, in
its sole discretion, deems appropriate under the then existing circumstances. If
LESSOR sells all or a portion of CUSTOMER's Products under the terms of this
Section 3, within sixty (60) Days of its receipt of the proceeds derived from
the sale of such Products, LESSOR shall remit same to CUSTOMER less (i) all of
LESSOR'S costs and expenses associated with any such sales, (ii) a sales
commission equal to five percent (5%) of the gross proceeds of such sales, and
(iii) any fees then due and owing by CUSTOMER to LESSOR.
4. PRODUCT SPECIFICATIONS.
(a) All deliveries of Products by CUSTOMER hereunder shall meet LESSOR specifications for the type of Products stored, as such specifications may change from time to time, the most current of which are set forth in Exhibit "B" attached hereto and made a part hereof. LESSOR or its designee reserves the right to perform an analysis of CUSTOMER's Products prior to accepting same for storage, but assumes no responsibility for doing so, and may refuse to accept delivery of such Products if it is contaminated or otherwise fails to conform with the applicable specifications ("0ffspec Product"). If LESSOR accepts into storage Offspec Product delivered by or on behalf of CUSTOMER, CUSTOMER shall reimburse LESSOR for the reasonable costs and expenses incurred in handling such Offspec Product. CUSTOMER shall be bound by the testing results obtained from analysis of CUSTOMER's Products, if any, performed by or on behalf of LESSOR.
(b) CUSTOMER AGREES TO AND DOES INDEMNIFY FULLY AND HOLD HARMLESS LESSOR AND ITS PARENTS, SUBSIDIARIES AND AFFILIATES AND ITS AND THEIR AGENTS, OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, SUCCESSORS AND ASSIGNS FROM AND AGAINST ANY AND ALL LIABILITIES, LOSSES, DAMAGES, DEMANDS, CLAIMS, PENALTIES, FINES, ACTIONS, SUITS, LEGAL, ADMINISTRATIVE OR ARBITRATION OR ALTERNATIVE DISPUTE RESOLUTION PROCEEDINGS, JUDGMENTS, ORDERS, DIRECTIVES, INJUNCTIONS, DECREES OR AWARDS OF ANY JURISDICTION, COSTS AND EXPENSES (INCLUDING, BUT NOT LIMITED TO, ATTORNEYS' FEES AND RELATED COSTS) ARISING OUT OF OR IN ANY MANNER RELATED TO CUSTOMER DELIVERING OR CAUSING TO BE DELIVERED INTO LESSOR'S FACILITIES ANY OFFSPEC PRODUCTS.
5. PRODUCT DELIVERY AND REDELIVERIES.
(a) LESSOR will not accept delivery of Propane that has been odorized. CUSTOMER represents that it shall not tender for delivery and storage Propane that has been odorized.
(b) Products redelivered to CUSTOMER out of LESSOR'S Facilities will only be made on the request of CUSTOMER's designated representative or duly authorized agent. LESSOR will not recognize sales, assignments or transfers of title to Products while in storage unless made in a manner approved by LESSOR in advance and then only to another person or entity that has entered into a valid storage
agreement with LESSOR. Products redelivered by LESSOR hereunder shall be redelivered into any common carrier pipeline currently connected to LESSOR'S Facilities or into tank trucks. LESSOR'S redelivery of Products to CUSTOMER shall be subject to operating conditions, rates of delivery, delivery pressures, scheduling, etc. of the pipeline in which CUSTOMER requests Products be delivered into (the "Receiving Pipeline"). Custody of the Products delivered or redelivered hereunder shall be deemed to be transferred at the pipeline connection of the Receiving Pipeline, or the loading flange if loaded into tank trucks, as applicable. CUSTOMER shall use its best efforts to give LESSOR reasonable notice of deliveries or withdrawals of Products. LESSOR shall not be required to receive or redeliver Products unless it has been given at least fifteen (15) Days advance written notice of such Products delivery or redelivery, but always subject to the physical capabilities of LESSOR'S Facilities and other customers scheduled redeliveries. Measurement of Products delivered or redelivered hereunder shall take place as near to the points of delivery or redelivery as practicable to LESSOR and shall be made by LESSOR or its designee in accordance with LESSOR'S or its designee's standard measurement procedures and shall conform to good measurement practices in the industry. All measurements made by LESSOR or its designee shall be binding on the parties hereto unless proven to be in error. CUSTOMER shall have the right to witness all such measurements. If deliveries of Products for storage are made by CUSTOMER through the use of tank cars or trucks, LESSOR shall have the right to prorate tank car or truck shipments in proportion to the Lease Volume for which each CUSTOMER has contracted, if deemed necessary by LESSOR in its sole discretion. Tank trucks will be handled on a first in first out basis. All tank trucks shall be suitable for loading and unloading at LESSOR'S Facilities and shall be certified as such by CUSTOMER as provided in Section 6 hereinafter.
Any quantity of Propane taken by CUSTOMER in excess of CUSTOMER's Propane storage balance will be considered as an unauthorized withdrawal of Propane. CUSTOMER shall have five (5) days from unauthorized withdrawal to restock the excess amount withdrawn. When LESSOR determines a CUSTOMER has withdrawn unauthorized volumes, CUSTOMER will be prevented from further withdrawals. Withdrawal privileges will be reinstated only after the CUSTOMER re-stocks the excess withdrawal or paid for the excess withdrawal and CUSTOMER has physical volumes in place to withdraw.
6. PRORATION. LESSOR shall exercise its best efforts to withdraw and deliver on any one-day the total of each CUSTOMER's requests for such day. If, however, all of the withdrawal requests exceed the total volume which can withdraw from storage and deliver, the Propane deliverable on each day shall be prorated. Proration of withdrawals down the pipeline and proration of withdrawals by transport truck will be handled as two separate allocations.
(a) Proration will be determined based on daily activity. Should proration become necessary, the customer will be notified twenty-four (24) hours in advance by phone and/or FAX.
(b) Proration will be based on the CUSTOMER's throughput during the previous twelve (12) months as a percentage of the total throughput. This percentage will then be applied to the total daily output capacity of the transport truck withdrawal facilities or the pipeline withdrawal facilities.
7. TRANSPORTATION EQUIPMENT. CUSTOMER agrees that all trucks used by CUSTOMER and third party carriers on CUSTOMER's behalf to make deliveries or withdrawals at the Facilities shall meet or exceed all federal, state and municipal safety, operating and insurance requirements and further agrees to certify same and to provide copies of all government approvals to LESSOR or its designee before the trucks will be accepted at LESSOR'S Facilities. CUSTOMER and all third party carriers acting on behalf of CUSTOMER shall have executed a Terminal Access Agreement before they will be allowed to enter the Facilities.
8. STENCHING. LESSOR will odorize or cause to be odorized all shipments of propane out of storage by tank truck in accordance with standard industry practice (currently 1.5 pounds ethyl mercaptan per 10,000 Gallons), or as required by governmental agencies having proper jurisdiction, and will odorize shipments of other Products if requested in writing by CUSTOMER to do so. CUSTOMER agrees to pay LESSOR for providing this odorization service the fees set forth in Exhibit "A". CUSTOMER ACCEPTS ALL RESPONSIBILITY FOR IMPROPER AMOUNTS OF MALODORANT SUBSEQUENT TO SHIPMENT, THE DISSIPATION OF MALODORANT OR THE INTRODUCTION OF THE PROPER MALODORANT AND, WHERE LESSOR OR ITS DESIGNEE PROVIDES DOCUMENTATION OF THE ODORIZATION REQUIRED BY THIS AGREEMENT, CUSTOMER AGREES TO DEFEND, INDEMNIFY AND HOLD LESSOR AND ITS PARENTS, SUBSIDIARIES AND AFFILIATES AND ITS AND THEIR AGENTS, OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, SUCCESSORS AND ASSIGNS HARMLESS FROM ANY AND ALL LIABILITIES, LOSSES, DAMAGES, DEMANDS, CLAIMS, PENALTIES, FINES, ACTIONS, SUITS, LEGAL, ADMINISTRATIVE OR ARBITRATION OR ALTERNATIVE DISPUTE RESOLUTION PROCEEDINGS, JUDGMENTS, ORDERS, DIRECTIVES, INJUNCTIONS, DECREES OR AWARDS OF ANY JURISDICTION, COSTS AND EXPENSES (INCLUDING ATTORNEY'S FEES AND ANY COST OR EXPENSE OF INCIDENT INVESTIGATION) OR ANY LIABILITY ARISING FROM ANY CLAIMS OF WHATEVER KIND DUE TO INJURIES OR DAMAGES WHICH OCCUR AFTER DELIVERY TO CUSTOMER AND ARISE IN CONNECTION WITH CUSTOMER'S OR ITS CUSTOMER'S TRANSPORTATION, STORAGE, USE, HANDLING, OR RESALE OF PRODUCTS COVERED HEREUNDER. THIS INDEMNIFICATION OBLIGATION INCLUDES AMONG ANY OTHER CLAIMS, THOSE COMPRISING LACK OF OR INADEQUATE WARNING MATERIALS, IMPROPER AMOUNTS, USE OR TYPE OF ODORANT, "ODORANT FADING," LACK OF WARNING ON SUPPLEMENTAL WARNING SYSTEMS (SUCH AS GAS DETECTORS) AND IMPROPER TRAINING OR MONITORING OF CUSTOMER'S WARNING AND/OR TRAINING PROGRAMS. CUSTOMER'S INDEMNITY OBLIGATION SHALL BE APPLICABLE EVEN IF SUCH DAMAGES ARE DETERMINED TO HAVE BEEN PARTLY CAUSED BY THE FAULT OF LESSOR OR IF LIABILITY WITHOUT FAULT IS IMPOSED ON LESSOR, THE ONLY EXCEPTION TO SUCH OBLIGATION BEING WHERE THE FAULT OF LESSOR IS DETERMINED TO BE THE SOLE CAUSE OF SUCH DAMAGES.
9. LOSS ALLOWANCE. Due to normal operating losses which occur in receiving Products for storage, storing such Products and redelivering Products out of storage, CUSTOMER'S withdrawals from storage shall be limited to the percent of the Products delivered to LESSOR hereunder specified in Exhibit "A".
10. TRANSPORTATION COSTS TO AND FROM STORAGE. All transportation charges and other expenses incurred in connection with (i) CUSTOMER's delivery of Products to LESSOR'S Facility for storage and (ii) CUSTOMER's receipt of Products from storage shall be paid by CUSTOMER directly to such transporter.
11. STORAGE AND HANDLING CHARGES.
(a) CUSTOMER shall pay LESSOR the Storage Rate as set forth in Exhibit "A", without regard as to whether any Products have actually been or will be delivered by CUSTOMER to LESSOR for storage hereunder. CUSTOMER shall also pay LESSOR Monthly the other rates, fees and charges set forth in Exhibit "A", including, but not limited to, Throughput Charges and Redelivery Fees, if any.
(b) If at the end of any Month (i) the volume of a particular
Product stored by CUSTOMER exceeds the storage volume of such Product
allocated for that Month as designated by CUSTOMER as provided herein
(the initial allocation of which is set forth in Exhibit "A", and/or
(ii) the total volume of all Products stored by CUSTOMER exceeds the
Lease Volume, CUSTOMER shall pay to LESSOR the Excess Storage Fee as
set forth in Exhibit "A".
(c) If at the expiration or termination of this Agreement CUSTOMER continues to have Products in storage (which the parties expressly do not contemplate and LESSOR in no way condones) which was delivered into storage under the terms of this agreement, then CUSTOMER shall pay to LESSOR an Excess Storage Fee as set forth in Exhibit "A" each Month thereafter based on the highest balance of all Products held in storage at any time during such Month. LESSOR'S acceptance of funds pursuant to this Section shall (i) in no way be construed as a renewal of this Agreement, provided, however, CUSTOMER shall continue to be bound by all terms and conditions of this Agreement as long as any of CUSTOMER'S Products remains in storage or (ii) in no way effect LESSOR'S rights to sell CUSTOMER'S Products as provided for in Section 3 above and any other rights that CUSTOMER may have.
(d) Nothing in this Section 11 shall be construed to create an obligation on LESSOR to accept more Products into storage in excess of the Lease Volume. At any time there is an unauthorized excess balance, LESSOR may by telephone notice to CUSTOMER require CUSTOMER to remove such excess balance within three Business Days and if any excess balance remains at the end of such period, then CUSTOMER shall reimburse LESSOR for any costs or liabilities incurred by LESSOR as a result thereof.
12. INVOICING AND PAYMENTS. Each Month during the term of this Agreement, LESSOR shall invoice CUSTOMER for all amounts owed by CUSTOMER to LESSOR hereunder and CUSTOMER shall pay to LESSOR the amounts due no later than ten (10) Days after CUSTOMER'S receipt of invoice therefore. If the Day on which any payment is due is not a Business Day, then the relevant payment shall be due upon the immediately preceding Business Day, except if such payment due date is a Sunday or Monday, then the relevant payment shall be due upon the immediately succeeding Business Day. Any amounts which remain due and owing after the due date shall bear interest thereon at a per annum rate of
interest equal to the lower of the "Prime Rate" of interest as quoted from time to time by the Wall Street Journal or its successor, plus two percent, or the maximum lawful rate of interest (the "Base Rate"). If a good faith dispute arises as to the amount payable in any statement, the amount not in dispute shall be paid. If CUSTOMER elects to withhold any payment otherwise due as a consequence of a good faith dispute, CUSTOMER shall provide LESSOR with written notice of its reasons for withholding payment. The parties hereto agree to use all reasonable efforts to resolve any such disputes in a timely manner. If it is subsequently determine, whether by mutual agreement of the parties or otherwise, that CUSTOMER is required to pay all or any portion of the disputed amounts to LESSOR, in addition to paying over such amounts, CUSTOMER also shall pay interest accrued on such amounts at the Base Rate from the original due date until paid in full.
13. LIEN FOR UNPAID CHARGES. CUSTOMER hereby grants unto LESSOR a lien against any Products of CUSTOMER remaining in storage at any time for any unpaid amounts, excluding any unpaid amounts disputed in good faith, which may be owing by CUSTOMER to LESSOR hereunder. LESSOR specifically reserves the right to refuse to redeliver Products stored by CUSTOMER at any time that there remains any amounts due and owing by CUSTOMER to LESSOR according to the terms hereof except to the extent such amounts are being disputed in good faith by CUSTOMER. Without prejudice to any other remedies that LESSOR may have at law, in equity and/or pursuant to the terms and provisions hereof, LESSOR may enforce the lien granted herein by public or private sale of any or all of CUSTOMER's Products remaining in storage and at any time or place and on any terms which LESSOR, in its sole discretion, deems commercially reasonable after giving CUSTOMER not less than five (5) Days notice of such sale.
14. TITLE TO STORED PRODUCT. It is understood and agreed that (i) title to the Products stored hereunder shall remain in CUSTOMER, subject to being commingled with like Products belonging to LESSOR and/or other parties, which CUSTOMER hereby grants unto LESSOR the right to do so, and ii) Products redelivered to CUSTOMER by LESSOR may not be identical Products delivered by CUSTOMER into LESSOR'S Facilities, but shall be considered as fungible goods meeting the same quality specifications. With respect to Products in storage pursuant to this agreement, it is specifically agreed as follows:
(a) In the event there should be any loss of Products (other than normal operating losses) from LESSOR Facilities and such loss is not attributable to the failure of LESSOR or its designee to exercise that degree of care as would be exercised by a reasonably careful Person under like circumstances, then CUSTOMER shall be prorated by LESSOR on the basis of the ratio of CUSTOMER's stored Products to the total volumes of like stored Products in such Facilities, including those volumes owned by CUSTOMER and LESSOR.
(b) In the event there should be a loss from storage and it is ultimately determined that such loss was solely attributable to LESSOR'S or its designee's failure to exercise that degree of care as would be exercised by a reasonably careful Person under like circumstances, then, subject to the provisions of Section 16 hereinafter, it is agreed that LESSOR shall have the option, in its sole discretion, to replace CUSTOMER's lost volumes with like Products or to pay CUSTOMER the fair market value of such lost Products at the time of the loss.
15. TAXES. CUSTOMER shall be responsible for the payment of any and all ad valorem or other taxes or assessments levied or assessed on and attributable to CUSTOMER's Products in storage pursuant to this agreement, provided however, that LESSOR shall have the right, but not the obligation, to pay such taxes on behalf of CUSTOMER (but at a like rate no greater than that paid by LESSOR on its own like Products in storage) and CUSTOMER agrees to reimburse LESSOR for any such taxes paid by LESSOR within ten (10) Days from the date of LESSOR'S invoice therefore.
16. LIMITATION OF LIABILITY.
(a) LESSOR shall not be liable to CUSTOMER for any loss of or injury to the Products stored by CUSTOMER, however caused, unless such loss or injury directly results from the failure of LESSOR or its designee to exercise that degree of care as would be exercised by a reasonably careful man under like circumstances. If any such loss or injury could not have been avoided through the exercise of such care as a reasonably careful man would exercise under like circumstances, LESSOR shall not be liable for such loss or injury.
(b) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, LESSOR SHALL NOT BE RESPONSIBLE FOR ANY PRODUCT LOSSES OR DAMAGES TO THE PRODUCT OR FOR ANY CLAIMS UNDER ANY INDEMNITY OBLIGATIONS THAT LESSOR MAY HAVE AS SET FORTH IN THIS AGREEMENT IN EXCESS OF THE STORAGE FEES AND RATES PAID BY CUSTOMER TO LESSOR AS PROVIDED HEREIN, IT BEING UNDERSTOOD AND AGREED THAT SUCH FEES ARE BASED ON A PER UNIT CHARGE AND, ACCORDINGLY, FOR THE PURPOSE OF THIS AGREEMENT, SATISFY ALL REQUIREMENTS OF THE UNIFORM COMMERCIAL CODE AND OTHER SIMILAR LAWS FOR LIMITATION OF LIABILITY. THE FOREGOING SHALL APPLY WHETHER OR NOT SUCH CLAIMS ARE FOUNDED IN WHOLE OR IN PART UPON THE NEGLIGENCE OF LESSOR OR IF LIABILITY WITHOUT FAULT IS IMPOSED ON LESSOR. LESSOR SHALL NOT BE RESPONSIBLE FOR OBTAINING INSURANCE TO COVER THE PRODUCTS STORED HEREUNDER.
(c) CUSTOMER AGREES TO DEFEND, INDEMNIFY AND HOLD LESSOR AND ITS AFFILIATES AND ITS AND THEIR RESPECTIVE AGENTS, OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, SUCCESSORS AND ASSIGNS HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS WHICH ARISE IN CONNECTION WITH CUSTOMER'S TRANSPORTATION, STORAGE, USE, OR HANDLING OF PRODUCTS AFTER DELIVERY OF CUSTODY, POSSESSION AND CONTROL OF SUCH PRODUCT TO CUSTOMER. CUSTOMER'S INDEMNITY OBLIGATION HEREUNDER SHALL BE APPLICABLE EVEN IF SUCH CLAIMS ARE DETERMINED TO HAVE BEEN PARTLY CAUSED BY THE NEGLIGENCE OF LESSOR OR IF LIABILITY WITHOUT FAULT IS IMPOSED ON LESSOR, THE ONLY EXCEPTION TO SUCH OBLIGATION BEING WHERE THE NEGLIGENCE OF LESSOR IS DETERMINED TO BE THE SOLE CAUSE OF SUCH CLAIMS.
(d) FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED IN THIS AGREEMENT, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY HEREUNDER, AND THE OBLIGOR'S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION, AND ALL OTHER REMEDIES OR DAMAGES ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN, THE OBLIGOR'S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, EXCLUDING LOST PROFITS, AND SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY HEREUNDER, AND ALL OTHER REMEDIES OR DAMAGES ARE WAIVED. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY UNDER ANY PROVISION OF THIS AGREEMENT FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY, OR INDIRECT DAMAGES IN TORT, CONTRACT OR OTHERWISE.
17. NOTICE OF CLAIM AND FILING OF SUIT. Claims by CUSTOMER and all
other persons claiming, by, through or under CUSTOMER, must be presented in
writing to LESSOR within a reasonable time, and in no event later than sixty
(60) Days after (i) CUSTOMER's Product is redelivered or removed from LESSOR'S
Facilities or (ii) CUSTOMER is notified by LESSOR that loss of or injury to
Products has occurred, whichever is shorter. No action may be maintained by
CUSTOMER and any other persons claiming by, through or under CUSTOMER, against
LESSOR for loss of or injury to Products stored in LESSOR'S Facilities unless a
written claim therefore is received by LESSOR within the time periods set forth
herein and such action is commenced within twenty-four (24) Months after (a)
CUSTOMER's Products is redelivered or removed from LESSOR'S Facilities or (b)
CUSTOMER is notified by LESSOR that loss of or injury to Products has occurred
whichever is shorter. In the situation where LESSOR notifies CUSTOMER of a loss
or, injury to Products, the time limits for making written claims and the
maintaining of actions after notice, as set forth herein, begin on the date such
notice is sent by LESSOR.
18. FORCE MAJEURE. In the event either party is rendered unable, wholly or in part, by Force Majeure to carry out its obligations under this Agreement, it is agreed that upon such party's giving notice and reasonably full particulars of such Force Majeure in writing to the other party after the occurrence of the cause relied on, then the obligations (except for the obligation to pay money due hereunder) of the party giving such notice, so far as and to the extent that they are affected by such Force Majeure, shall be suspended during the continuance of any inability so caused, but for no longer period, and such cause shall so far as possible be remedied with all reasonable dispatch. The term "Force Majeure" as used herein shall mean acts of God, strikes, lockouts, or other industrial disturbances, acts of the public enemy, wars, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, tornadoes, hurricanes, or storms, tornado, hurricane, or storm warnings which in any party's reasonable judgment require the precautionary shutdown of a facility, floods, washouts, arrests or restraints of the government, either federal or state, civil or military, civil disturbances, explosions, sabotage, breakage, or accident to equipment, machinery or lines of pipe, freezing of machinery, equipment or lines of pipe, electric power shortages, inability of any party to obtain necessary permits and/or permissions due to existing or future rules, orders, laws or governmental authorities (both federal, state and local), or any other causes, whether of the kind herein enumerated or otherwise, which were not reasonably foreseeable, and which are not within the control of the party claiming suspension and which such party is unable to overcome by the
exercise of due diligence. The term "Force Majeure" shall also include those instances in which either party hereto is delayed in acquiring, at reasonable cost and after the exercise of reasonable diligence, (i) materials and supplies required for the purpose of constructing and maintaining facilities, when such party is obligated to do so for the performance of its obligations under this Agreement, or (ii) permits or permission from any governmental agency required for the purpose of (a) constructing and maintaining such facilities or (b) acquiring materials or supplies required for such purpose. It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the discretion of the party having the difficulty, and that the above requirement that any Force Majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to the demands of opposing Parties when such course is inadvisable in the discretion of the party having difficulty.
19. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. Notwithstanding the foregoing, CUSTOMER shall not assign or sublet this Agreement in whole or in part without the express written consent of LESSOR; provided, however, LESSOR shall have the right to assign this Agreement to any of its Affiliates, and to any future owner or owners of the Facilities without the necessity of obtaining from CUSTOMER any consent thereto. Further provided, however, CUSTOMER shall have the right to assign this Agreement to any of its Affiliates, but any such assignment shall in no way relieve or release CUSTOMER from any obligations hereunder whether accrued before or after any such assignment.
20. NO COMMISSIONS, FEES OR REBATES. No director, employee or agent of either party shall give or receive any commission, fee, rebate gift or entertainment of significant cost or value in connection with this Agreement. Any representative or representative(s) authorized by either party may audit the applicable records of the other party for the purpose of determining whether there has been compliance with this Section.
21. SEVERABILITY. This Agreement and the operations hereunder shall be subject to the valid and applicable federal and state laws and the valid and applicable orders, laws, local ordinances, rules, and regulations of any local, state or federal authority having jurisdiction, but nothing contained herein shall be construed as a waiver of any right to question or contest any such order, laws, rules, or regulations in any forum having jurisdiction in the premises. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under the present or future laws effective during the term of this Agreement, (i) such provision will be fully severable, (ii) this Agreement will be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part of this Agreement, and (iii) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there will be added automatically as a part of this Agreement a provision similar in terms to such illegal, invalid, or unenforceable provision as may be possible and as may be legal, valid, and enforceable. If a provision of this Agreement is or becomes illegal, invalid, or unenforceable in any jurisdiction, the foregoing event shall not affect the validity or enforceability in that jurisdiction of any other provision of this Agreement nor the validity or enforceability in other jurisdictions of that or any other provision of this Agreement.
22. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE
PARTIES ARISING OUT OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED, ENFORCED, AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS.
23. AUTHORIZATION. CUSTOMER hereby authorizes LESSOR to release its identity as a leased storage customer, who is interested in participating in in-well activity.
24. ENTIRE AGREEMENT WAIVER. This Agreement, including, without limitation, all exhibits hereto, integrates the entire understanding between the Parties with respect to the subject matter covered and supersedes all prior understandings, drafts, discussions, or statements, whether oral or in writing, expressed or implied, dealing with the same subject matter. This Agreement may not be amended or modified in any manner except by a written document signed by both parties that expressly amends this Agreement. No waiver by either party hereto of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver unless expressly provided. No waiver shall be effective unless made in writing and signed by the party to be charged with such wavier.
25. SETOFFS AND COUNTERCLAIMS. Except as otherwise provided herein, each party hereto reserves to itself all rights, set-offs, counterclaims, and other remedies and/or defenses which it is or may be entitled to arising from or out of this Agreement or as otherwise provided by law.
26. NO PARTNERSHIP, ASSOCIATION, ETC. Nothing contained in this Agreement shall be construed to create an association, trust, partnership, or joint venture or impose a trust or partnership duty, obligation, or liability on or with regard to either party.
27. EXHIBITS. All Exhibits attached hereto are incorporated herein by reference as fully as though contained in the body hereof. If any provision of any Exhibit conflicts with the terms and provisions hereof, the provisions of this Agreement shall prevail.
28. PRINCIPLES OR CONSTRUCTION AND INTERPRETATION. In construing this Agreement, the following principles shall be followed:
(a) no consideration shall be given to the fact or presumption that one Party had a greater or lesser hand in drafting this Agreement;
(b) examples shall not be construed to limit, expressly or by implication, the matter they illustrate;
(c) the word "includes" and its syntactical variants mean "includes, but is not limited to" and corresponding syntactical variant expressions; and
(d) the plural shall be deemed to include the singular and vice versa, as applicable.
29. NOTICE. Any notice or other communication provided for in this Agreement or any notice which either party may desire to give to the other shall be in writing and shall be deemed to have been properly given if and when sent by facsimile transmission, delivered by hand, or if sent by mail, upon deposit in the United States mail, either U.S. Express Mail, registered mail or certified mail, with all postage fully prepaid, or if sent by courier, by delivery to a bonded courier with charges paid in accordance with the customary arrangements established by such courier, in each case addressed to the parties at the following addresses:
If to LESSOR:
MARTIN UNDERGROUND STORAGE, INC.
P.O. BOX 191
Kilgore, Texas 75663-0191 Attn: Matt Yost Phone: (903) 983-6200 Fax: (903) 983-6237 |
If to CUSTOMER:
MARTIN OPERATING PARTNERSHIP L.P.
P.O. BOX 191
Kilgore, TX 75663-0191
Attn: Tom E. Redd
Phone: (903)983-6248
Fax: (903)983-6237
or at such other address as either party shall designate by written notice to the other. A notice sent by facsimile shall be deemed to have been received by the close of the Business Day following the Day on which it was transmitted and confirmed by transmission report or such earlier time as confirmed orally or in writing by the receiving party. Notice by U.S. Mail, whether by U.S. Express Mail, registered mail or certified mail, or by overnight courier shall be deemed to have been received by the close of the second Business Day after the Day upon which it was sent, or such earlier time as is confirmed orally or in writing by the receiving party. Any party may change its address or facsimile number by giving notice of such change in accordance herewith.
[SIGNATURES CONTINUED ON NEXT PAGE]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first above written.
Agreed to and Accepted this 1st Day of November of 2002.
MARTIN UNDERGROUND STORAGE, INC.
By: /s/ Ruben S. Martin, III Name: Ruben S. Martin, III Title: President |
MARTIN OPERATING PARTNERSHIP L.P.
By: Martin Operating GP LLC
Its: General Partner
By: Martin Resource LLC
Its: Sole Member
By: Martin Resource Management
Corporation
Its: Sole Member
By: /s/ Ruben S. Martin, III Name: Ruben S. Martin, III Title: President |
EXHIBIT "A"
TO
PRODUCT STORAGE AGREEMENT
THIS PRODUCT STORAGE AGREEMENT, along with the General Terms and Conditions set forth in the agreement to which this Exhibit is attached, shall constitute our mutual agreement to lease space in facilities owned or controlled by LESSOR.
1. CUSTOMER: Martin Operating Partnership L.P. 2. TERM: Three years from the date of this agreement, automatically renewable from year to year, unless either party gives written notice at least thirty (30) days prior to the expiration of the applicable term. 3. PRODUCTS: Propane and Butane 4. STORAGE FACILITY: Martin Underground, Arcadia, LA 5. LEASE VOLUMES: 300,000 barrels 6. STORAGE RATE: See Below 7. THROUGHPUT FEE: $.025 per gallon until the first anniversary of this agreement, and then adjusted as set forth in Section 14 of this Exhibit A below. Applies only to movements out of storage via truck or pipeline. 8. QUANTITY EXEMPT FROM THROUGHPUT FEE: None 9. EXCESS STORAGE FEE: N/A 10. RETURN PERCENTAGE: Based on volume received PIPELINE: 100% TRUCKS: 100% 11. RECEIPT FEES: None at Storage Facility. CUSTOMER shall pay any and all PIPELINE: Pipeline tariff fees for own account. TRUCKS: None 12. DELIVERY FEES PIPELINE: $.025 per gallon per Throughput Fee referenced above. TRUCKS: $.025 per gallon per Throughput Fee referenced above. 13. SCHEDULING: CUSTOMER shall be required to schedule all movements through LESSOR or its designee's Product Movement Group. Delivery orders for CUSTOMER's account will only be set up to cover Volumes that are |
physically in the storage account. 14. FEE ADJUSTMENTS After the first anniversary of this Agreement, the Throughput Fee shall be adjusted annually (both upward and downward as hereinafter provided) by a factor equal to the increase or decrease, as the case may be, in the Consumer Price Index. The adjustment shall be calculated annually in [October] of each year, commencing in October 2003 based on Consumer Price Index statistics for the two preceding Septembers. The adjustment shall be calculated as follows: The Throughput Fee in effect shall be multiplied by a factor equal to the amount of the increase or decrease, as the case may be, in the Consumer Price Index for the immediately preceding month of September, over the Consumer Price Index for September of the preceding year. For purposes hereof, the term "Consumer Price Index" shall mean the "Consumer Price Index for Urban Wage Earners and Clerical Workers (1967=100)" specified for "All Items. United States" compiled by the Bureau of Labor Statistics of the United States Department of Labor (the "Index"). In event the Index shall be converted to a different standard reference base or otherwise revised, the determination of the percentage change shall be made with the use of such conversion factor, formula or table for converting the Index as may be published by the Bureau of Labor Statistics or, if said Bureau shall not publish the same, then as shall be reasonably determined by the parties. |
EXHIBIT "B"
PRODUCT STORAGE AGREEMENT
SPECIFICATION
HD-5 PROPANE PRODUCT
Component or Characteristic Allowable Test Method -------------- --------- ----------- Propane 90% Liquid Volume, Minimum ASTM D-2163 Propylene 5% Liquid Volume, Maximum ASTM D-2163 Butanes & Heavier 2.5% Liquid Volume, Maximum ASTM D-2163 Total Sulfur 123 PPM, by weight, Maximum ASTM D-2784 Hydrogen Sulfide 2 PPM, by volume, Maximum ASTM D-2377 Moisture Pass ASTM D-2713 Residual Matter: .05 Maximum on 100 ML Evaporation ASTM D-2158 Pass Oil Stain Observation Vapor Pressure Reid 208 PSIG, Maximum ASTM D-1267 Method @ 100(Degrees)F Volatile Reside -37(Degrees) Maximum ASTM D1837 Temperature @ 95% Evaporation Corrosion @ 100(Degrees)F No. 1 Copper Strip, Maximum ASTM D-1838 |
NOTE:
o ASTM test methods are latest revision
o LESSOR reserves the right to change specifications in order to meet specifications in primary downstream markets
o If conflicting test method result exists, LESSOR result will prevail
EXHIBIT 10.9
MARINE FUEL AGREEMENT
This MARINE FUEL AGREEMENT is made and entered into this the 1st day of November, 2002 by and between Midstream Fuel Service LLC, an Alabama limited liability company, hereinafter referred to as "Midstream," and Martin Operating Partnership L.P., a Delaware partnership, hereinafter referred to as "Customer." Midstream and Customer agree as follows:
1. For and in consideration of the conditions set forth herein, and upon the terms and conditions hereinafter described, Midstream does hereby agree to supply Customer High Sulfur Diesel ASTM D-975 No. 2 to Customer at Midstream's docks in Mobile, Alabama; Theodore, Alabama; and Pascagoula, Mississippi. The term of this agreement for three years, commencing November 1, 2002. After the initial term, the term shall automatically renew from year to year, unless either party gives written notice at least thirty (30) days prior to the expiration of the initial term or of any renewal term.
2. Customer agrees to purchase from Midstream one hundred percent (100%) its High Sulfur Diesel fuel requirements that occur in the Mobile, Theodore, or Pascagoula areas, during the term of this agreement. Midstream agrees to sell Customer High Sulfur Diesel ASTM D-975 No. 2 at its applicable dock, at a price per gallon equal to Midstream's Average Inventory Cost in effect on the date of delivery, plus $0.035 per gallon. Additional charges will apply for deliveries made to locations other than Midstream's docks. Payments shall be sent to Midstream at P.O. Box 911649, Dallas, Texas 75391-1649, or to such other address as Midstream shall designate in writing.
3. Midstream's Standard Conditions of Sale as set forth on Exhibit A shall govern the terms and conditions of sales of High Sulfur Diesel ASTM D-975 No. 2 to Customer by Midstream.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed the date first mentioned above.
MIDSTREAM FUEL SERVICE LLC
By: Martin Resource Management Corporation
Its: Sole manager
By: /s/ Ruben S. Martin, III Ruben S. Martin, III Its: President |
MARTIN OPERATING PARTNERSHIP L.P.
By: Martin Operating GP LLC
Its: General Partner
By: Martin Resource LLC
Its: Sole Member
By: Martin Resource
Management Corporation
Its: Sole Member
By: /s/ Ruben S. Martin, III Ruben S. Martin, III Its: President |
EXHIBIT 10.10
PRODUCT SUPPLY AGREEMENT
This agreement is entered into on this 1st day of November 2002, between Martin Gas Sales LLC (hereinafter referred to as "Seller") with corporate office located at 4200 Stone Road, Kilgore, TX 75662 and Martin Operating Partnership L.P. (hereinafter referred to as "Buyer") with corporate office located at 4200 Stone Road, Kilgore, TX 75662.
1. DEFINITIONS
1.1 "Product" shall mean 93% or 98% sulfuric acid as shown in Exhibit A.
2. AGREEMENT TERM
2.1 The term (hereinafter referred to as the "Initial Term") of this Agreement shall be three (3) years beginning on July 1, 2002. After the Initial Term, the term shall automatically renew from year to year, unless either party gives written notice at least thirty (30) days prior to the expiration of the Initial Term or of any renewal term. If any Product deliveries are made before the indicated beginning date, that Product will also be covered by this Agreement.
3. QUANTITY
3.1 Seller agrees to supply and Buyer agrees to purchase from Seller, 100% of Buyer's Plainview, Texas plant requirements, currently estimated at 8,000 tons per month. Seller also recognizes that Buyer may choose not to run the Plainview, Texas plant based on market conditions and Seller will adjust supply depending on Buyer's needs.
4. PRICING
4.1 Seller agrees to supply Buyer with Product at a price equal to Seller's best available cost plus $4/short ton.
4.2 Additionally, if Seller requires truck tons F.O.B. Buyer's plant, Buyer agrees to provide tons to Seller at Buyer's cost plus $4/ton.
5. PAYMENT TERMS
5.1 All invoices will be paid net thirty (30) days from shipment by Seller.
6. SEVERABILITY
6.1 If any provision of this Agreement is found to be illegal or unenforceable,
Such provision shall be deemed not to part of this Agreement and this Agreement shall continue in full force and effect, but shall be interpreted to give effect to the extent feasible to the original written intent of the parties.
7. ENTIRE AGREEMENT
7.1 This Agreement sets forth the entire Agreement between Seller and Buyer with respect to Product. This Agreement supercedes and cancels all prior and contemporaneous agreements and understanding between the parties, whether oral or written, relating to this product. Exhibit A attached hereto is made a part hereof and are incorporated herein by reference.
8. CONTROLLING LAW
8.1 This Agreement shall be governed by and construed in accordance with the laws of the State of Texas.
IN WITNESS WHEREOF the duly authorized parties hereto as of the date first set forth above have duly executed this Agreement.
MARTIN GAS SALES LLC
By: Martin Resource Management Corporation
Its Sole Member
By: /s/ Ruben S. Martin, III Name: Ruben S. Martin, III Title: President |
MARTIN OPERATING PARTNERSHIP L.P.
By: Martin Operating GP LLC, its general partner
By: Martin Resource LLC, its sole member
By: Martin Resource Management Corporation, its sole member
By: /s/ Ruben S. Martin, III Name: Ruben S. Martin, III Title: President |
EXHIBIT "A"
MARTIN GAS SALES, INC.
93% AND 98% GRADE SULFURIC ACID SPECIFICATIONS
Typical Guaranteed Maximum Element Analysis 98% ------- -------- ------------------ H2S04 98.5% 97.8 - 99.5% H2S04 93.5% 92.8 - 94.2% Iron (Fe) 15 ppm 50 ppm Sulphur Dioxide (SO(2)) <25 ppm 50 ppm Nitrates 5 ppm <50 ppm Heavy Metals <5 ppm 20 ppm |
EXHIBIT 10.11
MARTIN MIDSTREAM PARTNERS L.P.
LONG-TERM INCENTIVE PLAN
SECTION 1. Purpose of the Plan.
The Martin Midstream Partners L.P. Long-Term Incentive Plan (the "Plan") is intended to promote the interests of Martin Midstream Partners L.P., a Delaware limited partnership (the "Partnership"), by providing to Employees and Directors of Martin Midstream GP LLC, a Delaware limited liability company (the "Company") and its Affiliates who perform services for the Partnership, incentive compensation awards for superior performance that are based on Units. The Plan is also contemplated to enhance the ability of the Company and its Affiliates to attract and retain the services of individuals who are essential for the growth and profitability of the Partnership and to encourage them to devote their best efforts to the business of the Partnership, thereby advancing the interests of the Partnership.
SECTION 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth below:
"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.
"Award" means an Option or Phantom Unit granted under the Plan, and shall include any DER granted with respect to a Phantom Unit.
"Award Agreement" means the agreement entered into between the Partnership and the Participant evidencing the terms and conditions of the Award.
"Board" means the Board of Directors of the Company.
"Change in Control" shall be deemed to have occurred upon the occurrence of one or more of the following events: (i) any sale, lease, exchange or other transfer (in one or a series of related transactions) of all or substantially all of the assets of the Partnership, the Company or the Operating Partnership to any Person or its Affiliates, other than the Partnership, the Company or any of their Affiliates, (ii) any merger, reorganization, consolidation or other transaction pursuant to which more than 50% of the combined voting power of the equity interests in either the Company or Martin Resource Management Corporation ceases to be owned by Persons who own such interests, respectively, as of the date immediately prior to the effective date of the initial public offering of Units, or (iii) the general partner (whether the Company or any other Person) of the Partnership ceases to be an Affiliate of Martin Resource Management Corporation.
"Committee" means the Compensation Committee of the Board or such other committee of the Board appointed by the Board to administer the Plan.
"DER" means a right, granted in tandem with a Phantom Unit, to receive an amount in cash equal to, and at the same time as, the cash distributions made by the Partnership with respect to a Unit during the period such Phantom Unit is outstanding.
"Director" means a member of the Board or the board of directors or managers of an Affiliate who is not an Employee.
"Employee" means any employee of the Company or an Affiliate, as determined by the Committee.
"Exchange Act" means the Securities Exchange Act of 1934.
"Fair Market Value" means the closing sales price of a Unit on the date of determination (or if there is no trading in the Units on such date, the closing sales price on the last date the Units were traded) as reported in The Wall Street Journal (or other reporting service approved by the Committee). In the event Units are not publicly traded at the time a determination of Fair Market Value is required to be made hereunder, the determination of Fair Market Value shall be made in good faith by the Committee.
"Option" means an option to purchase Units granted under the Plan.
"Participant" means any Employee or Director granted an Award under the Plan.
"Partnership Agreement" means the Amended and Restated Agreement of Limited Partnership of Martin Midstream Partners L.P.
"Person" means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, governmental agency or political subdivision thereof or other entity.
"Phantom Unit" means a phantom (notional) unit granted under the Plan which upon vesting entitles the Participant to receive a Unit or an amount of cash equal to the Fair Market Value of a Unit, whichever is determined by the Committee.
"Plan" means this Martin Midstream Partners L.P. Long-Term Incentive Plan, as amended from time to time.
"Restricted Period" means the period established by the Committee with respect to an Award during which the Award remains subject to forfeiture (i.e., it is not vested) and is not exercisable by or payable to the Participant; provided, however, that the Restricted Period with respect to any Award may not terminate prior to the end of the Subordination Period (as defined in the Partnership Agreement) except (i) at the same time and in the same proportion as subordinated units are converted into Units, or (ii) upon a Change in Control.
"Rule 16b-3" means Rule 16b-3 promulgated by the SEC under the Exchange Act, or any successor rule or regulation thereto as in effect from time to time.
"SEC" means the Securities and Exchange Commission, or any successor thereto.
"Unit" means a Common Unit of the Partnership.
SECTION 3. Administration.
The Plan shall be administered by the Committee. A majority of the Committee shall constitute a quorum, and the acts of the members of the Committee who are present at any meeting thereof at which a quorum is present, or acts unanimously approved by the members of the Committee in writing, shall be the acts of the Committee. Subject to the following and any applicable law, the Committee, in its sole discretion, may delegate any or all of its powers and duties under the Plan (provided the Chief Executive Officer is a member of the Board), including the power to grant Awards under the Plan, to the Chief Executive Officer of the Company (provided that the Chief Executive Officer is a member of the Board), subject to such limitations on such delegated powers and duties as the Committee may impose, if any. Upon any such delegation all references in the Plan to the "Committee", other than in Section 7, shall be deemed to include the Chief Executive Officer; provided, however, that such delegation shall not limit the Chief Executive Officer's right to receive Awards under the Plan. Notwithstanding the foregoing, the Chief Executive Officer may not grant Awards to, or take any action with respect to any Award previously granted to, himself, a person who is an officer subject to Rule 16b-3 or a member of the Board (including the Chief Executive Officer). Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of Units to be covered by Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled, exercised, canceled, or forfeited; (vi) interpret and administer the Plan and any instrument or agreement relating to an Award made under the Plan; (vii) establish, amend, suspend, or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (viii) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons, including the Company, the Partnership, any Affiliate, any Participant, and any beneficiary of any Award.
SECTION 4. Units.
(a) Units Available. Subject to adjustment as provided in Section 4(c), the number of Units with respect to which (i) Phantom Units may be granted under the Plan is 241,667 and (ii) the number of Units with respect to which Options may be granted under the Plan is 483,333. If any Option or Phantom Unit is forfeited or otherwise terminates or is canceled without the
delivery of Units, then the Units covered by such Award, to the extent of such forfeiture, termination or cancellation, shall again be Units with respect to which an Option or Phantom Unit, as the case may be, may be granted.
(b) Sources of Units Deliverable Under Awards. Any Units delivered pursuant to an Award shall consist, in whole or in part, of Units acquired in the open market, from any Affiliate, or from the Partnership, or any combination of the foregoing, as determined by the Committee in its discretion.
(c) Adjustments. In the event that the Committee determines that any distribution (whether in the form of cash, Units, other securities, or other property), recapitalization, split, reverse split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Units or other securities of the Partnership, issuance of warrants or other rights to purchase Units or other securities of the Partnership, or other similar transaction or event affects the Units such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Units (or other securities or property) with respect to which Awards may be granted, (ii) the number and type of Units (or other securities or property) subject to outstanding Awards, and (iii) the grant or exercise price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award; provided, that the number of Units subject to any Award shall always be a whole number.
SECTION 5. Eligibility.
Any Employee who performs services for the benefit of the Partnership as determined by the Committee, or any Director shall be eligible to be designated a Participant and receive an Award under the Plan.
SECTION 6. Awards.
(a) Options. The Committee shall have the authority to determine the Employees and Directors to whom Options shall be granted, the number of Units to be covered by each Option, the purchase price therefor, the Restricted Period and the conditions and limitations applicable to the exercise of the Option, including the following terms and conditions and such additional terms and conditions, as the Committee shall determine, that are not inconsistent with the provisions of the Plan.
(i) Exercise Price. The purchase price per Unit purchasable under an Option shall be determined by the Committee at the time the Option is granted and may not be less than its Fair Market Value as of the date of grant.
(ii) Time and Method of Exercise. The Committee shall determine the Restricted Period with respect to an Option, which may include, without limitation, accelerated vesting upon the achievement of specified performance goals, and the method
or methods by which payment of the exercise price with respect thereto
may be made or deemed to have been made, which may include, without
limitation: (a) cash, (b) check acceptable to the Company, (c) a
"cashless-broker" exercise through procedures approved by the Company,
(d) a full recourse note from the Participant in a form acceptable to
the Company, provided that such note shall bear a "market" rate of
interest to preclude variable accounting for financial accounting
purposes, and shall not be made to any Director or executive Employee
of the Company, Partnership or any Affiliate, or (e) any combination
thereof, having a Fair Market Value on the exercise date equal to the
relevant exercise price.
(iii) Forfeiture. Except as otherwise provided in the terms of the Option grant, upon termination of a Participant's employment with the Company and its Affiliates or membership on the Board, whichever is applicable, for any reason during the applicable Restricted Period, all Options shall be forfeited by the Participant. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant's Options.
(b) Phantom Units. The Committee shall have the authority to determine the Employees and Directors to whom Phantom Units shall be granted, the number of Phantom Units to be granted to each such Participant, the Restricted Period, the conditions under which the Phantom Units may become vested or forfeited, which may include, without limitation, the accelerated vesting upon the achievement of specified performance goals, and such other terms and conditions as the Committee may establish with respect to such Awards including whether DERs are granted with respect to such Phantom Units.
(i) DERs. Phantom Units granted under the Plan may include a tandem DER grant.
(ii) Forfeiture. Except as otherwise provided in the terms of the Phantom Units grant, upon termination of a Participant's employment with the Company and its Affiliates or membership on the Board, whichever is applicable, for any reason during the applicable Restricted Period, all Phantom Units shall be forfeited by the Participant. The Committee may, in its discretion, waive in whole or in part such forfeiture with respect to a Participant's Phantom Units.
(iii) Lapse of Restrictions. Upon or as soon as reasonably practical following the vesting of each Phantom Unit, the Participant shall be entitled to receive from the Company one Unit or cash equal to the Fair Market Value of a Unit, as determined by the Committee in its discretion.
(c) General.
(i) Awards May Be Granted Separately or Together. Awards may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for any other Award granted under the Plan or any award granted under any other plan of the Company or any Affiliate. Awards granted in addition to or in
tandem with other Awards or awards granted under any other plan of the Company or any Affiliate may be granted either at the same time as or at a different time from the grant of such other Awards or awards.
(ii) Limits on Transfer of Awards.
(A) Except as provided in (C) below, each Option shall be exercisable only by the Participant during the Participant's lifetime, or by the person to whom the Participant's rights shall pass by will or the laws of descent and distribution.
(B) Except as provided in (C) below, no Award and no right under any such Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate.
(C) To the extent specifically provided by the Committee in any Award Agreement, an Option may be transferred by a Participant without consideration to immediate family members or related family trusts, limited partnerships or similar entities but only on such terms and conditions as the Committee may from time to time establish.
(iii) Term of Awards. The term of each Award shall be for such period as may be determined by the Committee.
(iv) Unit Certificates. All certificates for Units or other securities of the Partnership delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the SEC, any stock exchange upon which such Units or other securities are then listed, and any applicable federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
(v) Consideration for Grants. Awards may be granted for such consideration, including services, as the Committee determines.
(vi) Delivery of Units or other Securities and Payment by
Participant of Consideration. Notwithstanding anything in the Plan or
any grant agreement to the contrary, delivery of Units pursuant to the
exercise or vesting of an Award may be deferred for any period during
which, in the good faith determination of the Committee, the Company is
not reasonably able to obtain Units to deliver pursuant to such Award
without violating the rules or regulations of any applicable law or
securities exchange. No Units or other securities shall be delivered
pursuant to any Award until payment in full of any amount required to
be paid pursuant to the Plan or the applicable Award Agreement
(including, without limitation, any exercise price or tax withholding)
is received by the Company. Such payment may be made by such method or
methods and
in such form or forms as the Committee shall determine, including, without limitation, cash, other Awards, withholding of Units, cashless-broker exercises with simultaneous sale, or any combination thereof; provided that the combined value, as determined by the Committee, of all cash and cash equivalents and the Fair Market Value of any such Units or other property so tendered to the Company, as of the date of such tender, is at least equal to the full amount required to be paid to the Company pursuant to the Plan or the applicable Award agreement.
(vii) Change in Control. Upon a Change in Control or such period prior thereto as may be established by the Committee, all Awards shall automatically vest and become payable or exercisable, as the case may be, in full. In this regard, all Restricted Periods shall terminate and all performance criteria, if any, shall be deemed to have been achieved at the maximum level. To the extent an Option is not exercised upon a Change in Control, the Committee may, in its discretion, cancel such Award without payment or provide for a replacement grant with respect to such Award on such terms as it deems appropriate.
SECTION 7. Amendment and Termination.
Except to the extent prohibited by applicable law:
(a) Amendments to the Plan. Except as required by the rules of the
principal securities exchange on which the Units are traded and subject to
Section 7(b) below, the Board or the Committee may amend, alter, suspend,
discontinue, or terminate the Plan in any manner, including increasing the
number of Units available for Awards under the Plan, without the consent of any
partner, Participant, other holder or beneficiary of an Award, or other Person;
provided, however, that no amendment to the Plan may be made without the
approval of a Unit Majority (as defined in the Partnership Agreement) that would
accelerate vesting to prior to the end of the Subordination Period, except as
provided in the current definition of Restricted Period.
(b) Amendments to Awards. Subject to Section 7(a), the Committee may waive any conditions or rights under, amend any terms of, or alter any Award theretofore granted, provided no change, other than pursuant to Section 7(c), in any Award shall materially reduce the benefit to a Participant without the consent of such Participant.
(c) Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee is hereby authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 4(c) of the Plan) affecting the Partnership or the financial statements of the Partnership, or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan.
SECTION 8. General Provisions.
(a) No Rights to Award. No Person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of Participants. The terms and conditions of Awards need not be the same with respect to each recipient.
(b) Withholding. The Company or any Affiliate is authorized to withhold from any Award, from any payment due or transfer made under any Award or from any compensation or other amount owing to a Participant the minimum required amount of any applicable federal and state income and employment taxes payable in respect to the grant of an Award, its exercise, or any payment or transfer under an Award or under the Plan. Such withholding shall, at the sole discretion of the Committee, consist in whole or in part of: cash, Units, Units that would otherwise be issued pursuant to such Award or other property.
(c) No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Affiliate or to remain on the Board, as applicable. Further, the Company or an Affiliate may at any time dismiss a Participant from employment, free from any liability or any claim under the Plan.
(d) Governing Law. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Delaware without regard to its conflict of laws principles.
(e) Severability. If any provision of the Plan or any Award becomes invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
(f) Other Laws. The Committee may refuse to issue or transfer any Units or other consideration under an Award if, in its sole discretion, it determines that the issuance or transfer of such Units or such other consideration might violate any applicable law or regulation, the rules of the principal securities exchange on which the Units are then traded, or entitle the Partnership or an Affiliate to recover the same under Section 16(b) of the Exchange Act, and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary.
(g) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any participating Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any participating Affiliate pursuant to an award, such right shall be no greater than the right of any general unsecured creditor of the Company or any participating Affiliate.
(h) No Fractional Units. No fractional Units shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Units or whether such fractional Units or any rights thereto shall be canceled, terminated, or otherwise eliminated.
(i) Headings. Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
(j) Facility of Payment. Any amounts payable hereunder to any person under legal disability or who, in the judgment of the Committee, is unable to properly manage his financial affairs, may be paid to the legal representative of such person, or may be applied for the benefit of such person in any manner that the Committee may select, and the Company shall be relieved of any further liability for payment of such amounts.
(k) Gender and Number. Words in the masculine gender shall include the feminine gender, the plural shall include the singular and the singular shall include the plural.
SECTION 9. Term of the Plan.
The Plan shall be effective on the date of its approval by the Board and shall continue until the date terminated by the Board or the date Units are no longer available for the payment of Awards under the Plan, whichever occurs first. However, unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award granted prior to such termination, and the authority of the Board or the Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive any conditions or rights under such Award, shall extend beyond such termination date.
EXHIBIT 10.12
EXECUTION COPY
ASSIGNMENT AND ASSUMPTION OF LEASE AND SUBLEASE
This ASSIGNMENT AND ASSUMPTION OF LEASE AND SUBLEASE (this "Assignment") is dated effective as of 12:01 a.m. on November 1, 2002 (the "Effective Time"), by and among Martin Gas Sales LLC, a Texas limited liability company formerly known as Martin Gas Sales, Inc., a Texas corporation, prior to its conversion to a limited liability company under Article 5.17 of the Texas Business Corporation Act (the "Assignor"), and Martin Operating Partnership L.P., A Delaware limited partnership ("Assignee").
WITNESSETH
WHEREAS, the Tampa Port Authority, a body politic and corporate under and by virtue of the Laws of the State of Florida, and of Hillsborough County, and, as the governing body of the Hillsborough County Port District, as landlord ("Landlord"), and Assignor, as tenant, are parties to that certain Lease Agreement, dated as of December 16, 1976, as amended by eight amendments thereto, including the Consent to Assignment and Attornment Agreement dated March 30, 1995, between, the Tampa Port Authority, Martin Gas Sales, Inc., and Boliden Chemicals, Inc., (which Lease Agreement, together with all modifications, amendments and supplements thereto, is hereinafter referred to collectively as the "Lease"), a copy of which is attached hereto as Exhibit A, pursuant to which Landlord leases to Assignor, and Assignor leases from Landlord, the property situated in Hillsborough County, Florida, and commonly referred to as "4118 Pendola Point Road," consisting of approximately 9.94 acres as more particularly described and set forth in Exhibit "A" to the Lease (the "Premises");
WHEREAS, Tenant has subleased a portion of the Premises (such portion referred to herein as the "Subleased Premises") to CF Martin Sulphur, LP, a Delaware limited partnership ("CF"), pursuant to that certain Sublease Agreement between Tenant and CF, dated as of November 22, 2000 (the "Sublease"), a copy of which is attached as Exhibit B;
WHEREAS, pursuant to the terms of that certain Contribution, Conveyance and Assumption Agreement, dated as of the Effective Time, to which Assignor and Assignee are parties, Assignee is acquiring Assignor's right, title and interest in and to certain assets of Assignor, including all right, title and interest in, to and under the Lease and the Sublease, including Assignor's post Effective Time liabilities and obligations under the Lease and the Sublease;
WHEREAS, in connection with the foregoing, Assignor desires to assign the Lease and the Sublease to Assignee, and Assignee desires to accept the assignment of the Lease and the Sublease from Assignor and to assume and be bound by all of the terms, conditions, provisions, obligations, covenants and duties of Assignor under the Lease and the Sublease from and after the Effective Time; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee hereby covenant and agree as follows:
1. Assignment. As of the Effective Time, Assignor hereby grants, assigns and transfers to Assignee, its successors and assigns, all of Assignor's right, title and interest in, to and under the Lease and the Sublease (including, without limitation, any options under the Lease and the Sublease and any rights to extend or renew the Lease and the Sublease), and Assignee accepts from Assignor all of Assignor's right, title and interest in, to and under the Lease and the Sublease.
2. Assumption of Obligations. As of the Effective Time, Assignee hereby assumes and agrees to be bound by and to perform and fulfill all of the terms, conditions, provisions, obligations, covenants and duties required to be performed and fulfilled by Assignor under the Lease and the Sublease from and after the Effective Time as if Assignee was an original party thereto, including, without limitation, any and all post Effective Time payment or performance obligations due under the Lease and the Sublease.
3. Representations of Assignor. Assignor represents to Assignee as follows:
a. The Lease and the Sublease attached hereto as Exhibit A, and Exhibit B, respectively, are true, correct and complete copies of the Lease and the Sublease;
b. The Lease and the Sublease are in full force and effect and have not been modified, amended or supplemented except as set forth therein;
c. Other than the Lease, there are no other agreements, whether written or oral, between Landlord and Assignor regarding the Premises or Assignor's obligations thereunder;
d. Other than the Sublease and that certain Easement Agreement between Sublessee and Tenant dated as of November 22, 2000, there are no other agreements, whether written or oral, between Assignor and Sublessee regarding the Subleased Premises or Assignor's or Sublessee's obligations thereunder;
e. No default or breach by Assignor or Landlord has occurred and is continuing under the Lease, and no event has occurred and is continuing which, with or without the giving of notice or the lapse of time, or both, would constitute a default thereunder;
f. No default or breach by Assignor or Sublessee has occurred and is continuing under the Sublease, and no event has occurred and is continuing which, with or without the giving of notice or the lapse of time, or both, would constitute a default thereunder;
g. The current term of the Lease expires on December 15, 2006, unless sooner terminated (or extended) as provided in the Lease;
h. The current term of the Sublease expires on December 14, 2006, unless sooner terminated (or extended) as provided in the Sublease; and
i. To Assignor's knowledge, neither Landlord nor Sublessee has filed a petition in bankruptcy or has been subject to an involuntary petition in bankruptcy which has been dismissed or made an assignment for the benefit of creditors.
4. Successors and Assigns. This Assignment shall be binding on and inure to the benefit of the parties hereto, and their respective successors and assigns, provided that this Section 4 shall not be construed to permit any future assignments of the Lease or the Sublease or any subletting of the Premises or the Subleased Premises except as expressly permitted by the Lease or the Sublease, as the case may be.
5. Counterparts. This Assignment may be signed in counterparts, each of which shall be deemed an original and all of which, when taken together, shall constitute one and the same instrument.
6. Governing Law. This Assignment shall be governed by and construed in accordance with the laws of the State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed this assignment as of the Effective Time.
ATTEST: ASSIGNOR: MARTIN GAS SALES LLC By: /s/ Chad D. Burkardt Name: Chad D. Burkhardt By: Martin Resource Management Corporation Its Sole Member ATTEST: By: /s/ Robert Bondurant Robert Bondurant Chief Financial Officer By: /s/ Adam Gallegos Name: Adam Gallegos ATTEST: ASSIGNEE: MARTIN OPERATING PARTNERSHIP L.P. By: /s/ Chad D. Burkhardt Name: Chad D. Burkhardt By: Martin Operating GP LLC Its General Partner ATTEST: By: Martin Resource LLC Its Sole Member By: /s/ Adam Gallegos By: Martin Resource Management Corporation Name: Adam Gallegos Its Sole Member By: /s/ Robert Bondurant Robert Bondurant Chief Executive Officer |
STATE OF TEXAS, COUNTY OF DALLAS, TO WIT:
On this 1st day of November, 2002, before me, a notary public of said State and County, personally appeared Robert Bondurant, who acknowledged himself to be Chief Financial Officer of Martin Resource Management Corporation, the sole member of Martin Gas Sales LLC and that he being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited liability company by himself as an officer thereof.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Adam Gallegos Notary Public My Commission Expires: 10-17-2004 |
STATE OF TEXAS, COUNTY OF DALLAS, TO WIT:
On this 1st day of November, 2002, before me, a notary public of said State and County, personally appeared Robert Bondurant, who acknowledged himself to be Chief Financial Officer of Martin Resource Management Corporation, the sole member of Martin Resource LLC, the sole member of Martin Operating GP LLC, the general partner of Martin Operating Partnership L.P., and that he, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the company by himself as noted above.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Adam Gallegos Notary Public My Commission Expires: 10-17-2004 |
EXHIBIT A
THE LEASE
[TAMPA PORT AUTHORITY LETTERHEAD]
LANDLORD ESTOPPEL CERTIFICATE
November 8, 2000,
Re: Ground Lease Agreement dated December 16, 1976, together with all amendments thereto (collectively, the "LEASE")
Landlord: Tampa Port Authority ("LANDLORD") Tenant: Martin Gas Sales, Inc ("TENANT") Premises: All that certain parcel or parcels of land, the same being situated in Hillsborough County, Florida, and commonly referred to as "4118 Pendola Point Road", consisting of approximately 9.94 acres as more particularly described and set forth in Exhibit "A" of that certain ground lease agreement dated December 16, 1976. (the "PREMISES"). |
Gentlemen:
The Tampa Port Authority is the current Landlord under the Lease. We give you this certificate to permit you to rely on it as conclusive evidence of the matters stated below. We warrant and represent to you as follows:
1. Attached hereto as Schedule A is a true, correct and complete copy of the Lease, including all amendments and modifications. The attached lease documents represent the entire agreement between Landlord and Tenant as of the date of this certificate and the Lease has not been otherwise assigned, amended, supplemented or modified except for the Landlord's consent to a sublease with CF Martin Sulphur, LP, a Delaware limited partnership, for operation of the sulphur facilities on the site. The Lease is the only lease between the Tenant and the Landlord affecting the Premises.
2. On the date of this certificate the Lease is in full force and effect according to its terms.
3. No action or proceeding has been instituted by the Landlord against the Tenant under the Lease in any federal or state court, and on the date of this certificate, the Landlord has no actual knowledge of a default by the Tenant under the Lease. The Landlord has not examined the Premises to verify the condition thereof or to verify that no nonmonetary defaults exist. Landlord has not given or received a notice of default under the Lease.
4. Landlord hereby acknowledges that the Tenant intends to sublease a portion of the Premises to CF Martin Sulphur LP pursuant to the terms of the document attached hereto as Schedule A-1 (the "Sublease"). The Landlord has consented to the grant of the Sublease.
5. The person signing this letter on behalf of Landlord is a duly authorized agent of the Landlord.
We understand that you will rely on the certifications set forth above.
Sincerely,
LANDLORD:
TAMPA PORT AUTHORITY, a body politic and
corporate under and by virtue of the Laws of
the State of Florida, and of Hillsborough
County, and, as the governing body of the
Hillsborough County Port District
By: /s/ [ILLEGIBLE] ----------------------------------- Name: [ILLEGIBLE] -------------------------------- Title: [ILLEGIBLE] ------------------------------- |
CEK:bap
AMENDMENT NO. 8 TO AGREEMENT OF LEASE
This Amendment No. 8 to Agreement of Lease ("AMENDMENT") made and entered into as of this 16th day of December, 1996, by and between the TAMPA PORT AUTHORITY, a body politic and corporate organized and existing under the laws of the State of Florida ("LESSOR"), and MARTIN GAS SALES, INC., a Texas corporation ("LESSEE"), successor in interest to Boliden Chemicals, Inc., a Delaware corporation.
WITNESSETH:
WHEREAS, the Lessee currently leases approximately ten (10) acres of land at Port Sutton ("PREMISES") from Lessor under the terms and provisions of a December 16, 1976 Agreement of Lease ("ORIGINAL LEASE"), as amended on May 21, 1980 ("FIRST AMENDMENT"), October 10, 1980 ("SECOND AMENDMENT") August 15, 1984 ("THIRD AMENDMENT") July 13, 1987 ("FOURTH AMENDMENT"), December 5, 1988 ("FIFTH AMENDMENT"), February 16, 1989 ("SIXTH AMENDMENT"), May 13, 1992 ("SEVENTH AMENDMENT") and March 30, 1995 (Original Lease, as amended, is collectively referred to as the "LEASE"); and,
WHEREAS, Paragraph 23 of the Lease provides that the Lessee shall have the option to extend the Lease for ten (10) years and provides that in the event of an extension, the rental rate, the inbound and outbound wharfage guarantees and the minimum charge relative to the Vessel Moorings System shall be increased in the manner set forth in Paragraph 23; and,
WHEREAS, Lessee has notified the Lessor of its intent to exercise the final ten (10) year renewal term; and,
WHEREAS, the parties wish to amend the Lease to document the ten (10) year renewal term, to increase the rental rate, the wharfage guarantees, and the Vessel Moorings System charge, and to modify Lessee's permitted use of the Premises to allow for Lessee's handling of anhydrous ammonia at the Premises.
NOW, THEREFORE, in consideration of the covenants contained herein and the sum of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby covenant and agree as follows:
1. All of the foregoing recitals are incorporated by reference to the same force and effect as if repeated in this Paragraph.
2. The term of the Lease is hereby extended ten (10) years commencing on December 16, 1996 and ending on December 15, 2006.
3. The first sentence of Paragraph 3 of the Original Lease is hereby deleted and replaced with the following sentence:
The leased premises shall be used solely and only for the storage and handling of petroleum products, sulfuric acid, molten sulphur, asphalt and derivatives thereof and anhydrous ammonia.
4. The Lease, as amended by Article 3, Paragraph 1(a)(i) of the First Amendment, Article 2 of the Fourth Amendment, Article 2 of the Fifth Amendment, and Article 2 of the Seventh Amendment, is further amended to provide that:
The bare land rental rate shall be increased to $84,480.00 annually, to be paid in twelve (12) equal monthly installments of $7,040.00, together with any applicable sales and/or rental tax due thereon, due and payable in advance of each month.
5. This Lease, as amended by Article 3, Paragraph 1(a)(ii) of the First Amendment, Article 2 of the Second Amendment, Article 3 of the Fourth Amendment, Article 3 of the Fifth Amendment, Article 2 of the Sixth Amendment and Article 3 of the Seventh Amendment, is further amended to provide that:
The wharfage rate for petroleum products, sulfuric acid, and anhydrous ammonia shall be assessed at the established rate of the Tampa Port Authority's tariffs, as amended from time to time, and shall apply towards Lessee's minimum annual wharfage guarantees.
Once Lessee has reached its outbound wharfage guarantee limit, the applicable outbound wharfage rate shall be reduced to fifty percent (50%) of the Tampa Port Authority's tariff rate for the remaining portion of the Lease year.
Wharfage Guarantees shall be increased as follows:
a. The wharfage guarantee for inbound movements of petroleum products, sulfuric acid, molten sulphur, asphalt and derivatives thereof and anhydrous ammonia shall be $84,480.00 annually, together with any applicable sales or other tax due thereon.
b. The wharfage guarantee for outbound movements of petroleum products, sulfuric acid, molten sulphur, asphalt and derivatives thereof and anhydrous ammonia shall be $18,665.00 annually, together with any applicable sales or other tax due thereon.
6. The Lease, as amended by Article 3, Paragraph 2(b) of the First Amendment, Article 3 of the Second Amendment, Article 4 of the Fifth Amendment, and Article 4 of the Seventh Amendment, is further amended to provide that the Vessel Mooring Charge (in lieu of dockage charge) shall be $32,920.00 annually, together with any applicable sales or other tax due thereon.
7. Except as herein expressly amended, all other terms, conditions and covenants of the Lease, as previously amended, shall remain the same.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized officers on the day and year first above written.
Signed, sealed and delivered TAMPA PORT AUTHORITY in the presence of: By: /s/ ROBERT N. STEINER /s/ [ILLEGIBLE] ------------------------------- ----------------------------------- ROBERT N. STEINER Its: Port Director /s/ [ILLEGIBLE] ----------------------------------- MARTIN GAS SALES, INC., a Texas corporation /s/ [ILLEGIBLE] ----------------------------------- By: /s/ RUBEN S. MARTIN, III ------------------------------- /s/ JAMES E. McINTYRE RUBEN S. MARTIN, III ----------------------------------- Its: President [CORPORATE SEAL] |
CONSENT TO ASSIGNMENT AND ATTORNMENT AGREEMENT
Subject to the terms and conditions hereinafter set forth, TAMPA PORT AUTHORITY ("Lessor") hereby consents to the Assignment and Assumption Agreement between BOLIDEN CHEMICALS, INC., ("BCI"), whose address is 3379 Peachtree Road, Suite 300, Atlanta, GA 30326 and MARTIN GAS SALES, INC., ("Lessee"), whose address is P. O. Box 191, Kilgore, TX 75663-0192, dated March 28, 1995 ("Assignment") and attached hereto as Exhibit "A," upon the following terms and conditions:
Background
A. BCI currently leases approximately ten (10) acres of land situated in Tampa, Florida ("Premises") from Lessor under the terms and provisions of a December 16, 1976 Lease Agreement, as amended May 21, 1980, October 10, 1980, August 15, 1984, July 13, 1987, December 5, 1988, February 16, 1989, and May 13, 1992 ("collectively referred to as the Lease"):
B. This Consent is required by the Lease, and issued at the express request of BCI and Martin Gas Sales, Inc. This Consent replaces BCI with Martin Gas Sales, Inc. as "Lessee" under the Lease from and after the effective date of the Assignment and does not in any way expand the obligations of BCI under the Lease existing prior to the effective date of this Consent.
C. The basic rent, supplemental payments and other fees currently payable by BCI to Lessor pursuant to the Lease are as follows:
1. Bare Land Rent: $66,948.00 ann./$5,579.00 mo.
2. Wharfage Rate: The wharfage rate for petroleum and sulphuric acid shall be assessed at the Tampa Port Authority's established rate and shall apply toward Lessee's minimum annual wharfage guarantees.
Once Lessee has reached its outbound wharfage guarantee limit the applicable outbound wharfage rate shall be reduced to fifty (50) percent of the tariff rate for the remaining portion of the lease year.
3. Wharfage Guarantee:
a. The wharfage guarantee for inbound movements of petroleum and sulphuric acid products shall be $66,948.00 annually.
b. The wharfage guarantee for outbound movements of petroleum and sulphuric acid products shall be $14,784.00 annually.
4. Vessel Mooring Charge:
Vessel Mooring Charge (in lieu of dockage charge) shall be $26,088.00 annually, to be paid monthly in advance at a rate of $2,174.00.
Terms and Conditions of Consent
The Assignment is hereby approved by Lessor, subject to the terms of the Lease and the terms of this Consent:
1. The Lease, as described above, is in full force and effect and, to Lessor's knowledge, no default exists thereunder.
2. Lessor hereby consents to the Assignment, provided that the consent of Lessor evidenced hereby is subject to the following:
a) Unless otherwise expressly stated in this Consent, nothing in the Assignment shall supersede or limit the continued effectiveness of the provisions of the Lease, which provisions remain in full force and effect. In the event of any conflict between the provisions of the Lease and the Assignment, the Lease shall control.
b) The execution and delivery of this Consent shall not affect the rights of Lessor under the Lease with respect to future subleases, transfers or assignments of the Lease.
c) Lessor shall be entitled to prompt written notice from Lessee and BCI of any amendment, modification, or termination of the Assignment by either party thereto.
d) Notwithstanding the execution and delivery of this Consent, no person or entity, heretofore so liable in whole or in part, is to be deemed released hereby from liability to Lessor for the full and due performance of the Lease, provided that Lessor agrees to look first to Martin Gas Sales Inc., as Lessee, for fulfillment of all performance obligations applicable to Lessee under the Lease from and after the effective date of the Assignment, and shall seek such performance from BCI under the Lease only in the event Lessee fails or refuses in such performance, and, provided further, as between Lessor and BCI but not otherwise, that BCI shall be fully released and forever discharged from all obligations under the Lease as of and from and after the Lease expiration date, i.e., December 15, 1996, except for any costs and expenses, including attorneys' fees resulting from any violations of federal, state or local laws, statutes, rules, regulations or ordinances during the term of the Lease up to March 28, 1995.
e) No provision of the Assignment shall be held to impose upon Lessor any obligations or liabilities not expressly provided for in the Lease.
3. Notwithstanding any contrary provision of the Lease:
(A) Paragraph No. 7 of the Agreement of Lease is hereby amended by adding with the following:
INSURANCE
During the life of this Lease, from and after March 28, 1995, Lessee shall provide, pay for, and maintain with insurance companies satisfactory to the Lessor, the types of insurance described herein.
(a) Insurance Requirements. All insurance shall be from responsible insurance companies eligible to do business in the State of Florida. All Liability Policies shall provide that the Lessor is an Additional Insured as to the operations of Lessee under this Lease and shall also provide the Severability of Interest Provision. The insurance coverages and the limits required must be evidenced by properly executed Certificates of Insurance on forms which are to be furnished by the Lessor. The Certificate must be personally manually signed
by the Authorized Representative of the insurance company shown in the Certificate with proof that he/she is an authorized representative thereof. In addition, certified, true and exact copies of all insurance policies required shall be provided the Lessor, on a timely basis, if requested by the Lessor. The required policies of insurance shall be performable in Hillsborough County, Florida, and shall be construed in accordance with the laws of the State of Florida.
Thirty (30) days prior written notice by registered or certified mail shall be given the Lessor of any cancellation, intent not to renew, or reduction in the policies' coverage amount in the application of the Aggregate Limits Provisions. In the event of a reduction in any Aggregate Limit, Lessee shall take immediate steps to have it reinstated to not less than the minimum amount specified in the Lease. If at any time the Lessor requests a written statement from the insurance company as to any impairments to the Aggregate Limit, Lessee shall promptly authorize and have delivered such statement to the Lessor. Lessee shall make up any impairment when known to it to the extent necessary to maintain the minimum Aggregate Limit specified above. Lessee authorizes the Lessor and its Insurance Consultant to confirm all information furnished the Lessor, as to its compliance with its Bond and Insurance Requirements, with Lessee's insurance agents, brokers, surety and insurance carriers. All insurance coverages of Lessee shall be primary to any insurance or self-insurance program carried by the Lessor for this Lease.
No occupancy of the Premises shall commence at the Premises unless and until the required Certificates of Insurance are in effect.
If any General Liability Insurance required herein is to be issued or renewed on a "claims made" form as opposed to the "occurrence" form, the retroactive date for coverage shall be no later than the date of the Assignment of the Lease. In addition, Lessee covenants that in the event of cancellation or non-renewal of any such policy, or if any such policy is replaced with a new policy that does not have an effective commencement date which is the same as the date of the Assignment, then Lessee shall obtain such coverage as shall be necessary for the discovery period for insurance claims (Tail Coverage) under such non-renewal or cancelled policy to be not less than the applicable Statutes of Limitations.
All of the required insurance coverages shall be issued as required and policies shall be endorsed, where necessary, to comply with the minimum requirements contained herein. Renewal Certificates of Insurance on the Lessor's form must be provided the Lessor ten (10) days prior to expiration of current coverages so that there shall be no interruption in Lessee's occupancy due to lack of proof of the insurance coverages required of Lessee in this Lease. Should at any time Lessee not provide or maintain the insurance coverages required in this Lease, the lessor may terminate or suspend this Lease.
The amounts and types of insurance shall conform to the following minimum requirements with the use of Insurance Service Office (ISO) policies, forms, and endorsements or broader where applicable. Notwithstanding the foregoing, the wording of all policies, forms and endorsements must be acceptable to the Lessor.
(b) Insurance Coverages and Limits.
(1) Commercial General Liability Insurance shall be maintained by Lessee. Coverage shall include but not be limited to Premises and Operations, Personal Injury, Contractual, Independent Contractors, Broad Form Property Damage including Completed Operations and Products & Completed Operations Coverages and shall not exclude coverage for the "X" (explosion), "C" (collapse) and "U" (underground) Property Damage Liability exposures.
Completed Operations Liability Coverage shall be maintained for a period of not less than two (2) years following termination of this Lease Agreement.
Limits of Coverage shall not be less than:
Bodily Injury & Property Damage Liability $l,000,000.00 Combined Single Limit Each Occurrence and Aggregate. The General Aggregate limit shall be separately applicable to this specific Lease. |
Should Lessee's General Liability Insurance be written or renewed on the Comprehensive General Liability form, the limits of coverage required shall not be less than:
Bodily Injury Liability $1,000,000.00 Limit Each Occurrence Damage Liability $1,000,000.00 Limit Each Occurrence or Bodily Injury & Property Damage Liability $1,000,000.00 Combined Single Limit Each Occurrence |
(2) Automobile Liability Insurance shall be maintained by Lessee as to the ownership, maintenance, and use of all owned, non-owned, leased or hired vehicles to be used on the Premises with limits of not less than:
Bodily Injury Liability $1,000,000.00 Limit Each Person $1,000,000.00 Limit Each Accident Property Damage Liability $1,000,000.00 Limit Each Accident or Bodily Injury & Property Damage Liability $1,000,000.00 Combined Single Limit Each Accident |
(3) Umbrella Liability Insurance shall be maintained by Lessee with a limit of not less than $3,000,000.00 each occurrence and aggregate. The limits of Primary Liability Insurance for the General Liability, Automobile Liability and Employers' Liability Insurance Coverages required in this section shall be not less than:
Bodily Injury, Personal Insurance and Property Damage Liability $1,000,000.00 Combined Single Limit and Aggregate Limit, where applicable |
(B) Lessee and not BCI expressly assumes, and agrees to be responsible to Lessor for, the covenants of, and the indemnifications of Lessor by, Lessee under the provisions of the "Environmental Addendum to Lease" attached hereto and made a part hereof as Exhibit "B". The environmental provisions starting at line 4, page 4 of Amendment No. 4 to Agreement of Lease and continuing through line 28, page 5 of Amendment No. 4 to Lease are hereby stricken and replaced with the provisions set forth in Exhibit "B".
4. The undersigned Lessee and BCI, respectively, covenant and agree to be bound by the terms of this Consent.
5. Lessee hereby attorns to Lessor and agrees to keep and perform all the covenants and obligations of Lessee under the Lease, and the "Environmental Addendum to Lease" attached hereto, as so assigned effective as of the date hereof.
6. Lessee represents and covenants that it will only conduct business on the Premises under the name of Martin Gas Sales, Inc., a Texas corporation, and will not conduct business on the Premises under any other name or permit any other person or entity to conduct business from or on the Premises without the prior written consent of the Lessor, provided that duly authorized customers of Lessee shall be entitled to conduct business on the Premises to the extent as part of an operator/customer relationship established in the ordinary course of business. Lessee agrees that with respect to entities other than Lessee which are controlled by Lessee, or which are under common control with the Lessee, it shall be responsible for and pay to the Lessor any charges, commissions, assessments, wharfage or dockage fees resulting from any transactions by such person or entity which arise from the use or occupation of the Premises and which would be assessable if the entity was a Lessee.
7. This Consent shall be effective only after the execution of the Acknowledgement, below, by all of the designated parties, and the delivery of an original (or original counterparts) hereof executed by Martin Gas Sales, Inc. and Boliden Chemicals, Inc. to the Lessor.
8. Notwithstanding any provision of this instrument or the Lease to the contrary, from the effective date of the assignment of the Lease by Boliden Chemicals, Inc. to Martin
Gas Sales, Inc. (the "Effective Date of the Assignment") and through the remaining term of the Lease:
(a) The Leased Premises may be used for the storage, handling, terminalling and related functions of petroleum products, sulphuric acid, molten sulphur, asphalt and derivatives thereof.
(b) Upon the occurrence of any breach and/or default by Lessee under the Lease, the Lessor shall promptly notify AmSouth Bank of Florida ("AmSouth") in writing at 469 23rd Street, Panama City, Florida 32405, Attention: Robert S. Vanlandingham, telephone: (904) 747-4501, fax: (904) 747-4675. Following receipt of such notice, AmSouth shall have thirty (30) days to cure any such breach or default, and the Lessor hereby agrees that it shall not exercise any available remedies, under the Lease or otherwise, until the expiration of such thirty (30) days period.
(c) Martin Gas Sales, Inc. shall have no liability or obligation to the Lessor under the Lease or otherwise with respect to the failure by any such prior lessee to make any payments to the Lessor under the Lease or otherwise.
TAMPA PORT AUTHORITY
By: /s/ JOSEPH L. VALENTI ----------------------------------------- Name: Joseph L. Valenti Title: Port Director Date: March 30, 1995 -------------------------------------- |
Acknowledgement
The foregoing Consent to Assignment and Attornment Agreement by TAMPA PORT AUTHORITY is hereby accepted and approved, and the undersigned hereby acknowledge that complete copies of the instruments comprising the Lease, as defined above, have been delivered to Martin Gas Sales, Inc.
MARTIN GAS SALES, INC.,
a Texas corporation
By: /s/ RUBEN S. MARTIN III ----------------------------------------- Name: Ruben S. Martin III Title: President Date: 3/30/95 --------------------------------------- |
BOLIDEN CHEMICALS, INC.,
a Delaware corporation
By: /s/ WILLIAM F. MASON ----------------------------------------- Name: William F. Mason --------------------------------------- Title: President -------------------------------------- Date: March 30, 1995 --------------------------------------- |
EXHIBIT "A"
Assignment and Assumption Agreement between Boliden Chemicals, Inc. and Martin Gas Sales, Inc., dated March 28, 1995.
EXHIBIT "B"
ENVIRONMENTAL ADDENDUM TO LEASE
This Addendum is effective from and after March 28, 1995 and applies exclusively to Martin Gas Sales, Inc. and not to Boliden Chemicals, Inc.
(a) Definitions for Environmental Provisions. The following terms, as used in the environmental provisions of this Lease Agreement, shall have the meanings indicated:
"CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 USC Sections 9601, et seq.), as amended from time to time, including without limitation, the Superfund Amendments and Reauthorization Act of 1986 ("SARA").
"CERCLIS" means the Comprehensive Environmental Response, Compensation and Liability Information System, or any other information system, established pursuant to CERCLA.
"Environmental Law" means any applicable federal, state or local law, statute, code, ordinance, or common law, whether now in existence or established, enacted or amended during the term of this Lease Agreement, relating to pollution, protection of the environment, health, industrial hygiene, Hazardous Substances (including, without limitation, the manufacture, generation, distribution, use, treatment, storage, disposal, transport or handling thereof), including but not limited to CERCLA, SARA, RCRA, the Florida Resource Recovery and Management Act (Florida Statutes Sections 403.701, et seq.), and the Pollutant Spill Prevention and Control Act (Florida Statutes Sections 376.011 through 376.17 and 376.19 through 376.21)
"Environmental Regulation" means any applicable regulation or rule promulgated by any Environmental Regulator.
"Environmental Regulator" means any federal, state or local governmental or quasi-governmental unit, body or agency which is charged with regulating the environment or Hazardous Substances, or which is charged with enforcing
any Environmental Law or Environmental Regulation, including, without limitation, the U.S. Environmental Protection Agency ("EPA"), or the Florida Department of Environmental Protection ("FDEP").
"Hazardous Substance" means asbestos, polychlorinated biphenyls, petroleum products and distillates, and any other substances, materials and wastes which are or become regulated or controlled by any Environmental Law or Environmental Regulation applicable at any time to the use by Lessee, its agents or invitees of the Leased Premises during the term of this Lease Agreement, including, without limitation, those within the definition of "hazardous substances," "hazardous materials," "hazardous wastes," "toxic substances," "solid waste," "pollutants," "contaminants," or "nuclear or byproduct material" in any such Environmental Law or Environmental Regulation.
"National Priorities List" means the National Priorities List established pursuant to CERCLA or any other list identifying hazardous or toxic waste sites maintained or controlled by any Environmental Regulator.
"RCRA" means the Resource Conservation and Recovery Act of 1976 (42 USC Sections 6901, et seq.), as amended from time to time.
(b) Environmental Covenants of Lessee. Lessee covenants and warrants, as applicable, that at all times during the term of this Lease Agreement:
(1) The Leased Premises shall not be used by Lessee, its agents or invitees for the storage or generation of any Hazardous Substance in violation of any Environmental Law, Environmental Regulation, order of an Environmental Regulator.
(2) No Hazardous Substance will be released or disposed of on the Leased Premises by Lessee, its agents or invitees in violation of any Environmental Law, Environmental Regulation, order of an Environmental Regulator.
(3) Lessee and its agents and invitees shall comply with all permits and/or licenses issued by Environmental Regulators with respect to the conduct by Lessee, its agents or invitees of operations governed by this Lease Agreement.
(4) If Lessee shall receive any notice regarding the Leased Premises from any Environmental Regulator of any violation or suspected violation of any Environmental Law or Environmental Regulation, or relating to any clean-up, remediation or other response action or threat thereof, then Lessee shall notify the Lessor within 24 hours thereof, and of all subsequent developments related thereto.
(5) To the best of Lessee's knowledge, no properties owned, operated or controlled by Lessee are listed on the National Priorities List or with CERCLIS, and, except for certain properties of Lessee not related to the Premises, no Environmental Regulator or any third party has demanded any right of recovery, nor brought or threatened to bring any action, cause of action, suit or proceeding against Lessee seeking recovery for payment or reimbursement for clean-up costs, damages or other costs incurred under or pursuant to any Environmental Law or Environmental Regulation.
(c) Covenant Not To Store Hazardous Substances In Violation of Law. Lessee, for itself, its agents and invitees, covenants and agrees not to use the Leased Premises, at any time, for:
(1) the storage, generation, release or disposal of any Hazardous Substance in violation of any Environmental Law or Environmental Regulation, any order of an Environmental Regulator, or any permit issued by an Environmental Regulator;
(2) any purpose that would give rise to a clean-up, remediation or other response action; to the imposition of any fine, penalty, assessment, cost, forfeiture or imposition for violation of an Environmental Law or Environmental Regulation; or to a claim, claim of lien or lien (whether against the Leased Premises, the Lessor or the Lessor's properties) for response costs,
damages or other costs pursuant to any Environmental Law or Environmental Regulation; or,
(3) any purpose that would cause the Leased Premises to be listed on the National Priorities List or with CERCLIS.
In furtherance of the foregoing, Lessee also agrees that it will not use, operate or maintain any other properties it owns, operates or controls in a manner which would give rise to a claim, claim of lien or lien against the Lessor, the Leased Premises, or Lessee's interests under this Lease Agreement under any Environmental Law or Environmental Regulation.
The Lessor may, upon reasonable grounds for insecurity, request in writing, assurances, in reasonable form and content, concerning the environmental covenants and warranties made by Lessee in this Lease Agreement. The Lessor shall state in its request for assurances the specific grounds for insecurity with respect to the environmental covenants and warranties of this Lease Agreement. The Lessor may obtain such assurances, at the Lessor's option, from a duly authorized agent of Lessee.
(d) Release of Hazardous Materials; Claim. Lessee agrees to notify the Lessor within 24 hours of an occurrence or any release or disposal of any Hazardous Substance of any kind in, on, about or under the Leased Premises regardless of the source or other circumstances thereof to the extent any such release or disposal is required to be reported under Environmental Law or Environmental Regulation.
Further, Lessee shall, within 24 hours, notify the Lessor in writing of the receipt of any notice, order, correspondence or communication that:
(1) a permit is required from any Environmental Regulator for the use or operation by Lessee, its agents or invitees upon the Leased Premises;
(2) a summons, citation; order directing compliance or inquiry has been or is being issued or made by any Environmental Regulator with respect to the Leased Premises;
(3) any Environmental Regulator or third party has demanded or asserted any right of recovery for payment or reimbursement, or any claim, claim of lien or lien against the Leased Premises for clean-up costs, damages, or other costs incurred, under or pursuant to any Environmental Law, Environmental Regulation, or the common law;
(4) the Leased Premises are or will be listed on the National Priorities List or with CERCLIS;
(5) any fine, penalty, assessment, cost, forfeiture or imposition has been, or will be or is sought to be imposed against Lessee, its agents or invitees, or the Lessor, for violation or asserted violation by Lessee, its agents or invitees of any Environmental Law, Environmental Regulation, any order of an Environmental Regulator or any permit issued by an Environmental Regulator with respect to the Leased Premises; or,
(6) any clean-up, remediation or other response action pursuant to any Environmental Law or Environmental Regulation has been, is being, or will be, commenced by any Environmental Regulator or third party with regard to (1) the Leased Premises or (2) any other properties owned, operated or controlled by Lessee which would give rise to a claim, claim of lien or lien against the Leased Premises.
(e) Clean-up Plan. In the event of any determination that, through actions by or attributable in any manner to Lessee, its agents or invitees, any Hazardous Substance has been stored, generated, located, released or disposed of in, on, about or under the Leased Premises in violation of any Environmental Law, Environmental Regulation, order of an Environmental Regulator, or any permit issued by an Environmental Regulator with respect to the Leased Premises, Lessee shall so notify the Lessor within 24 hours.
Further, in each such instance, Lessee shall, at Lessee's sole cost and expense, within 24 hours notify and keep the Lessor fully informed of response actions proposed or necessary for clean-up or remediation, the details of plans and specifications therefor, and all developments related thereto with respect to the Leased Premises. As soon as reasonably
possible, after obtaining all necessary approvals, permits and/or licenses of all appropriate governmental or quasi-governmental units, bodies or agencies, including without limitation Environmental Regulators, Lessee shall diligently prosecute the accomplishment of the response actions contemplated herein with respect to the Leased Premises, at Lessee's sole cost and expense.
(f) Continuing Nature. The environmental provisions of this Lease Agreement shall survive the termination of the Lease Agreement, such provisions to continue in full force and effect so long as the possibility of any environmental liability, claim, obligations, or leases of the Lessor with respect to the Leased Premises, attributable to Lessee, its agents or invitees, shall exist. However, Lessee may limit its liability and obligations under the environmental provisions of this Lease by obtaining environmental audits of the Leased Premises before the effective date of the Assignment and after the Termination of the Lease Term, at Lessee's sole expense, prepared by environmental consultants acceptable to the Lessor (which acceptable consultants shall include Ash Environmental Engineering, Inc., St. Petersburg, Florida), to determine if Lessee has caused any Hazardous Substances to be released or disposed of in, on, about, or under the Leased Premises in violation of any Environmental Law, Environmental Regulation, order of an Environmental Regulator, or any permit issued by an Environmental Regulator. Lessee shall provide copies of all such environmental audits to the Lessor. In the event that the environmental audits substantiate that Lessee has not caused any Hazardous Substances to be released or disposed of in, on, about, or under the Leased Premises in violation of any Environmental Law, Environmental Regulation, order of an Environmental Regulator, or any permit issued by an Environmental Regulator, then Lessee's obligations under the environmental provisions of this Lease shall cease.
(g) Radon Gas. Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed Federal and State guidelines have been found in buildings in Florida. Additional information regarding radon and radon testing may be obtained from your County Public Health Unit. Each party hereto disclaims any liability for any health risks incurred by the other, its employees, and/or its invitees as a result of, or claimed to be a result of, radon at the Leased Premises.
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Agreement made this 28th day of March, 1995, by and between Boliden Chemicals, Inc. ("BCI") and Martin Gas Sales, Inc. ("Martin").
WITNESSETH:
WHEREAS, Port Sutton, Inc. and Eastern Seaboard Petroleum Company previously entered into an Agreement of Lease dated December 16, 1976 (the "Lease", including all amendments to date) which Lease was amended by the parties on May 21, 1980, and October 10, 1980; and
WHEREAS, Eastern Seaboard Petroleum Company assigned the Lease to Steuart Petroleum Company on August 14, 1984 which Lease was amended by the parties on August 15, 1984; and
WHEREAS, Port Sutton assigned the said Lease on September 21, 1984 to Tampa Port Authority ("TPA"); and
WHEREAS, the TPA and Steuart Petroleum Company amended said Lease on July 13, 1987, and December 5, 1988, and
WHEREAS, Steuart Petroleum assigned the Lease to BCI on February 16, 1989; and
WHEREAS, TPA and BCI amended said Lease on February 16, 1989; and
WHEREAS, TPA and BCI amended said Lease on May 13, 1992; and
WHEREAS, BCI and Martin, contemporaneously with the execution of this Agreement, have executed an Asset Purchase and Sale Agreement whereunder BCI conveys to Martin BCI's Tampa Terminal assets and a commitment to assign the Lease to Martin; and
WHEREAS, this document evidences BCI's willingness to assign its rights in the Lease to Martin and Martin's willingness to agree to and accept such assignment.
NOW, THEREFORE, the parties hereto, in consideration of the covenants, terms and conditions contained herein, and the sum of One Dollar ($1.00), receipt of which is herewith acknowledged by each party, hereby covenant and agree as follows:
1. BCI herewith assigns and transfers to Martin all of its right, title and interest in the Lease and Martin accepts such assignment and transfer.
2. BCI and Martin acknowledge that the consent of the Lessor under the Lease to this Assignment and Assumption Agreement is a pre-condition to the effectiveness of this Agreement and each agrees to timely execute a consent with said Lessor in form reasonably acceptable to each party and its respective counsel.
3. Martin agrees to assume all responsibilities as Lessee under the Lease and to hold harmless and indemnify BCI, its directors, officers and stockholders, from and against any liability arising under the Lease except any such liability expressly retained by BCI under the terms of the Asset Purchase and Sale Agreement above referenced and except any such liability expressly undertaken or retained by BCI under the terms of the Consent to Assignment and Attornment Agreement, dated ____________, 1995, by and between BCI, Martin and the Tampa Port Authority.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives the day and year first above written.
BOLIDEN CHEMICALS, INC. MARTIN GAS SALES, INC. /s/ WILLIAM F. MASON /s/ RUBEN S. MARTIN, III ---------------------------------- ---------------------------------- By: William F. Mason By: Ruben S. Martin, III Its: President Its: President |
AMENDMENT NO. 7 TO AGREEMENT OF LEASE
This Amendment No. 7 to Agreement of Lease made and entered into this 13th day of May, 1992, by and between the TAMPA PORT AUTHORITY, a body politic and corporate organized and existing under the laws of the State of Florida, hereinafter referred to as "Lessor", and BOLIDEN CHEMICALS INC., hereinafter referred to as "Lessee".
WITNESSETH:
WHEREAS, Port Sutton, Inc. and Eastern Seaboard Petroleum Company previously entered into an Agreement of Lease dated December 16, 1976 which was amended by the parties on May 21, 1980, and October 10, 1980; and
WHEREAS, Eastern Seaboard Petroleum Company assigned its Lease to Steuart Petroleum Company on August 14, 1984 which Lease was amended by the parties on August 15, 1984; and
WHEREAS, Port Sutton assigned the said Lease on September 21, 1984 to Lessor; and
WHEREAS, the Lessor and Steuart Petroleum Company amended said Agreement of Lease on July 13, 1987, and December 5, 1988, and
WHEREAS, Steuart Petroleum Company assigned its Lease to Lessee on February 16, 1989; and
WHEREAS, the Lessor and the Lessee amended said Lease on 16 February 1989; and
WHEREAS, the parties desire to further amend such Agreement of Lease.
NOW, THEREFORE, the parties hereto, in consideration of the covenants contained herein and the sum of One Dollar ($1.00) each to the other in hand paid, hereby covenant and agree as follows:
1. Term of this Lease shall be extended for seven (7) years, commencing December 16, 1989 and ending December 15, 1996.
2. This Lease, Article 3, Paragraph 1 (a)(i) of the First Amendment and Article 2 of the Fifth Amendment to Agreement of Lease, is amended to provide that the bare land rental rate shall be increased to $66,948.00 annually, to be paid monthly in advance at a rate of $5,579.00.
3. This Lease, Article 3, Paragraph 1 (a)(ii) subparagraphs A and B of the First Amendment to Agreement of Lease and Article 2 of the Second Amendment to Agreement of Lease, and Article 3 of the Fifth Amendment to Agreement of Lease, and Article 2 of the Sixth Amendment to the Agreement of Lease, is amended to provide that the wharfage guarantee on inbound movements of petroleum and sulphuric acid products shall be increased to $66,948.00 annually, and the wharfage guarantee on outbound movements of petroleum and sulphuric acid products shall be increased to $14,784.00 annually.
The wharfage rate for petroleum and sulphur acid products shall be at the rates established by Tampa Port Authority Tariff No. 11 and any revisions thereto, and shall apply toward the minimum wharfage guarantee.
During any lease year, once Lessee has reached its outbound wharfage
guarantee limit the applicable outbound wharfage rate shall be reduced to fifty
(50) percent of the tariff rate for the remaining portion of the lease year.
4. This Lease, Article 3, Paragraph 2 (b) of the First Amendment of Lease and Article 3 of the Second Amendment to Agreement and Article 4 of the Fifth Amendment to Agreement, is amended as follows:
a. the minimum charge (in lieu of dockage charge) relative to the Vessel Mooring System (VMS) shall be increased to $26,088.00 annually, to be paid monthly in advance at a rate of $2,174.00.
b. In lieu of dockage charge shall be suspended, effective 1 June 1990, and shall be reinstated at the above rate on the first day of the month after Lessor places VMS is service and as more particularly provided for in Article 6 of this Amendment.
5. Paragraph 23 of the Agreement of Lease as deleted and replaced by Article 5 of the First Amendment to Agreement of Lease and Article 5 of the Fifth Amendment to the Agreement, is hereby amended in its entirety to read as follows:
23. Lessee shall have one successive option to renew and extend this Lease, as amended. The renewal shall be for a period of ten (10) years beginning December 16, 1996. Each such option shall be exercised by Lessee by giving written notice to the Lessor no less than ninety (90) days prior to the expiration of the term then in effect. If Lessee does exercise the ten (10) year option period, the rental rate, the inbound and outbound wharfage
guarantees and the minimum charge relative to the Vessel Mooring System shall be increased effective upon commencement of said ten (10) year option period to an amount calculated by multiplying the base amount of the charge (as stated in this Amendment) for which the adjustment is being calculated by a fraction whose numerator is The Consumer Price Index, U.S. City Average All Items (Base Year 1967) published by the Bureau of Labor Statistics, U.S. Department of Labor, for the third month prior to the expiration of the term then in effect, and whose denominator shall be said Consumer Price Index, U.S. City Average All Items for the third month prior to the commencement of this Amendment.
Should the Bureau of Labor Statistics change the manner of computing the Consumer Price Index, the Bureau shall be requested to furnish a conversion factor designated to adjust the new index to the one previously in use, and adjustment to the new index will be made on the basis of such conversion factor. Should the publication of the Consumer Price Index be discontinued by the Bureau of Labor Statistics, then such other index as may be published by said Bureau most nearly approaching said discontinued index shall be used in making the adjustment herein provided. No additional option fee shall be payable by Lessee with respect to the successive ten (10) year option period.
6. The Lessor will relocate the existing VMS now sited immediately west of Berth 24 to an area east of Berth 24, and it is herein agreed that:
a. The Lessor will relocate the VMS at its sole expense, excepting that Lessee shall be responsible for the relocation of any pipelines at its own expense.
b. The "in lieu of dockage charge" shall be suspended
until the relocation of the VMS has been completed
and will be reinstated as provided for in Article 4
(b) of this Lease Amendment.
c. The Lessor, at its sole discretion, will determine the date the VMS will be considered operational and when charges to the Lessee for the use of the VMS will be reinstated, and will be independent of the Lessee's relocation of its pipelines.
d. When the VMS is operational at the site east of Berth 24, the Lessee's berthing limits shall be the western boundary limit of Berth 24, which is the western boundary of the Lessee's lease area, and the eastern boundary of the Lessee's lease area, with both boundaries extended into the Port Sutton Terminal Channel.
e. During that period of time pending the completion of the relocation of the VMS, Lessee shall have the right to use Berth 24, for its tugs and bunkering barges, free of charges. Such use is on an as-available basis, subject to operational activities by revenue-producing vessels of said Lessee or other tenants of the Lessor.
f. During the relocation of the VMS to a site east of Berth 24, Lessor agrees, in order to provide clearance for vessels using Berth 24 and to the extent that public berths are not available and there is no expense to the Lessor, Lessee may tie its bunkering barges to other Lessor facilities without charge.
7. The Lessor and Lessee have agreed to cooperate on a project to extend the existing rail service along the right-of-way north of Pendola Point Road and along the southern boundary of the leased premises with a spur track onto the leased premises (Exhibit A). The project shall be completed under the following terms and conditions:
a. All construction plans will be coordinated with the Authority's Engineering Department.
b. Lessee shall be the contracting party with the railroad (CSX) for all proposed improvement.
c. Lessee will assume responsibility for all costs associated with the construction of approximately 1,300 lineal feet of lead track, spur track, switches, crossings and other common track facilities.
d. Lessor's participation in cost sharing shall be limited to a maximum of $50,000.00 or 50% of the cost of the lead track facilities, whichever is the lesser. Payment to be made after all track and associated facilities are in place and certified by the railroad (CSX) and upon receipt of appropriate invoices.
e. Responsibility for maintenance of the spur track and associated equipment and facilities shall be stated in a separate agreement between the Lessor and Lessee.
f. The extended lead track shall become the property of the Lessor with the Lessor responsible for the maintenance of the track.
8. Except as herein expressly amended, all other terms and conditions of the Agreement of Lease, as previously amended, shall remain the same.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized officers the day and year first above written.
Signed, sealed and delivered TAMPA PORT AUTHORITY in the presence of: /s/ MYRNA M. GARNER /s/ JOSEPH L. VALENTI (Seal) ---------------------------------- ---------------------------------- /s/ SUSAN PERDONO By: Joseph L. Valenti ---------------------------------- Its: Port Director |
Signed, sealed and delivered BOLIDEN CHEMICALS INC. in the presence of: /s/ [ILLEGIBLE] /s/ MICHAEL J. AMATO (Seal) ---------------------------------- ---------------------------------- /s/ [ILLEGIBLE] By: Michael J. Amato ---------------------------------- Its: Secretary |
EXHIBIT A
AMENDMENT NO. 6 TO AGREEMENT OF LEASE
This Amendment No. 6 to Agreement of Lease made and entered into this 16th day of this 16th day of February, 1989, by and between the TAMPA PORT AUTHORITY; a body politic and corporate organized and existing under the laws of the State of Florida, hereinafter referred to as "Lessor", and BOLIDEN CHEMICALS INC., hereinafter referred to as "Lessee".
WITNESSETH:
WHEREAS, Port Sutton, Inc. and Eastern Seaboard Petroleum Company previously entered into an Agreement of Lease dated December 16, 1976 which was amended by the parties on May 21, 1980, and October 10, 1980; and
WHEREAS, Eastern Seaboard Petroleum Company assigned its Lease to Steuart Petroleum Company an August 14, 1984 which Lease was amended by the parties on August 15, 1984; and
WHEREAS, Port Sutton assigned the said Lease on September 21, 1984 to Lessor; and
WHEREAS, the Lessor and Steuart Petroleum Company amended said agreement of Lease on July 13, 1987, and December 5, 1988, and
WHEREAS, Steuart Petroleum Company assigned its Lease to Lessee on February 16, 1989; and
WHEREAS, the parties desire to further amend such Agreement of Lease.
NOW, THEREFORE, the parties hereto, in consideration of the covenants contained herein and the sum of One Dollar ($1.00) each to the other in hand paid, hereby covenant and agree as follows:
1. This Lease, Article 3, is amended to provide that sulfuric acid products shall be a permitted commodity to be stored and handled on the leased premises; provided, however, the Lessee shall use its best efforts to insure the continuation of throughput/storage of bunker fuels on the lease premises in order to continue that service as a function of the marine terminal located on the lease premises.
2. This Lease, Article 3, Paragraph 1 (a)(ii) subparagraphs A and B of the First Amendment to Agreement of Lease, Article 2 of the Second Amendment to Agreement of Lease, and Article 3 of the Fifth Amendment to Agreement of Lease, is amended to provide that the wharfage rate for sulfuric acid products either inbound or outbound shall be at rates established by Tampa Port Authority Tariff No. 10 and any revisions thereto, and movement of sulfuric acid products shall apply toward the minimum wharfage guarantee for movement of petroleum products.
3. Except as herein expressly amended, all other terms and conditions of the Agreement of Lease, as previously amended, shall remain the same.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized officers the day and year first above written.
WITNESSES: TAMPA PORT AUTHORITY /s/ KELLY M JACKSON /s/ EMMETT C. LEE, JR. ---------------------------------- ------------------------------------ /s/ SUSAN PERDOMO By: Emmett C. Lee, Jr. ---------------------------------- Its: Port Director WITNESSES: BOLIDEN CHEMICALS INC. /s/ [ILLEGIBLE] /s/ MICHAEL J. AMATO ---------------------------------- ------------------------------------ /s/ [ILLEGIBLE] By: Michael J. Amato ---------------------------------- Its: Secretary |
AMENDMENT NO. 5 TO AGREEMENT OF LEASE
This Amendment No. 5 to Agreement of Lease made and entered into this 5th day of December, 1988, by and between the TAMPA PORT AUTHORITY, a body politic and corporate organized and existing under the laws of the State of Florida, hereinafter referred to as "Lessor", and STEUART PETROLEUM COMPANY, hereinafter referred to as "Lessee".
WITNESSETH:
WHEREAS, Port Sutton, Inc. and Eastern Seaboard Petroleum Company previously entered into an Agreement of Lease dated December 16, 1976 which was amended by the parties on May 21, 1980, and October 10, 1980; and
WHEREAS, Eastern Seaboard Petroleum Company assigned its Lease to Lessee on August 14, 1984 which Lease was amended by the parties on August 15, 1984; and
WHEREAS, Port Sutton assigned the said Lease on September 21, 1984 to Lessor; and
WHEREAS, the parties amended said Agreement of Lease on July 13, 1987; and
WHEREAS, the parties desire to further amend such Agreement of Lease.
NOW, THEREFORE, the parties hereto, in consideration of the covenants contained herein and the sum of One Dollar ($1.00) each to the other in hand paid, hereby covenant and agree as follows:
1. Term of this Lease shall be extended for one (1) year commencing December 16, 1988 and ending December 15, 1989.
2. This Lease, Article 3, Paragraph 1 (a)(i) of the First Amendment to Agreement of Lease, is amended to provide that the bare land rental rate shall be increased to $64,140.00 annually, to be paid monthly in advance at a rate of $5,345.00.
3. This Lease, Article 3, Paragraph 1 (a)(ii) subparagraphs A and B of the First Amendment to Agreement of Lease and Article 2 of the Second Amendment to Agreement of Lease, is amended to provide that the wharfage guarantee on inbound movements of petroleum products shall be increased to $64,140.00 annually, and the wharfage guarantee on outbound movements of petroleum products shall be increased to $14,153.00 annually.
APPROVED AS TO FORM AND LEGALITY,
/s/ CAROLE A TAYLOR ------------------- LEGAL DEPARTMENT |
4. This Lease, Article 3, Paragraph 2 (b) of the First Amendment of Lease and Article 3 of the Second Amendment to Agreement, is amended to provide that the minimum charge relative to the Vessel Mooring System shall be increased to $24,984.00 annually, to be paid monthly in advance at a rate of $2,982.00.
5. Paragraph 23 of the Agreement of Lease as deleted and replaced by Article 5 of the First Amendment to Agreement of Lease is hereby amended in its entirety to read as follows:
23. Lessee shall have two successive options to renew and extend this Lease, as amended. The first renewal shall be for a period of seven (7) years beginning December 16, 1989, and the second renewal shall be for a period of ten (10) years beginning December 16, 1996. Each such option shall be exercised by Lessee by giving written notice to the Lessor no less than ninety (90) days prior to the expiration of the term then in effect. If Lessee does not exercise the seven (7) year option to renew, Lessee shall pay to the Lessor an amount of $167,417.00 as an option fee within 30 days of expiration of the term as herein extended. If Lessee does exercise the seven (7) year option period, the rental rate, the inbound and outbound wharfage guarantees and the minimum charge relative to the Vessel Mooring System shall be increased effective upon commencement of said seven (7) year option period (and, if exercised, increased again effective at the commencement of the successive ten (10) year option period) to an amount calculated by multiplying the base amount of the charge (as stated in this Amendment) for which the adjustment is being calculated by a fraction whose numerator is The Consumer Price Index, U.S. City Average All Items (Base Year 1967) published by the Bureau of Labor Statistics, U.S. Department of Labor, for the third month prior to the expiration of the term then in effect, and whose denominator shall be said Consumer Price Index, U.S. City Average All Items for the third month prior to the commencement of this Amendment.
Should the Bureau of Labor Statistics change the manner of computing the Consumer Price Index, the Bureau shall be requested to furnish a conversion factor designated to adjust the new index to the one previously in use, and adjustment to the new index will be made on the basis of such conversion factor. Should the publication of the Consumer Price Index be discontinued by the Bureau of Labor Statistics, then such other index as may be published by said Bureau most nearly approaching said discontinued index shall be used in making the adjustment herein provided. No additional option fee shall be payable by Lessee with respect to the successive ten (10) year option period.
6. Except as herein expressly amended, all other terms and conditions of the Agreement of Lease, as previously amended, shall remain the same.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized officers the day and year first above written.
Signed, sealed and delivered TAMPA PORT AUTHORITY in the presence of: /s/ KELLY M. JACKSON /s/ EMMETT C. LEE, JR. [Seal] ---------------------------------- ---------------------------- /s/ SUSAN PERDOMO By: Emmett C. Lee, Jr. ---------------------------------- Its: Port Director Signed, sealed and delivered STEUART PETROLEUM COMPANY in the presence of: /s/ CAROLYN GIVENS /s/ JOHN W. CONNOLLY, JR. [Seal] ---------------------------------- ---------------------------- /s/ KEVIN R. PURCELL By: John W. Connolly, Jr. ---------------------------------- Its: Senior Vice President |
AMENDMENT NO. 5 TO AGREEMENT OF LEASE
This Amendment No. 5 to Agreement of Lease made and entered into this 5th day of December, 1988, by and between the TAMPA PORT AUTHORITY, a body politic and corporate organized and existing under the laws of the State of Florida, hereinafter referred to as "Lessor", and STEUART PETROLEUM COMPANY, hereinafter referred to as "Lessee".
WITNESSETH:
WHEREAS, Port Sutton, Inc. and Eastern Seaboard Petroleum Company previously entered into an Agreement of Lease dated December 16, 1976 which was amended by the parties on May 21, 1980, and October 10, 1980; and
WHEREAS, Eastern Seaboard Petroleum Company assigned its Lease to Lessee on August 14, 1984 which Lease was amended by the parties on August 15, 1984; and
WHEREAS, Port Sutton assigned the said Lease on September 21, 1984 to Lessor; and
WHEREAS, the parties amended said Agreement of Lease on July 13, 1987; and
WHEREAS, the parties desire to further amend such Agreement of Lease.
NOW, THEREFORE, the parties hereto, in consideration of the covenants contained herein and the sum of One Dollar ($1.00) each to the other in hand paid, hereby covenant and agree as follows:
1. Term of this Lease shall be extended for one (1) year commencing December 16, 1988 and ending December 15, 1989.
2. This Lease, Article 3, Paragraph 1 (a)(1) of the First Amendment to Agreement of Lease, is amended to provide that the bare land rental rate shall be increased to $64,140.00 annually, to be paid monthly in advance at a rate of $5,345.00.
3. This Lease, Article 3, Paragraph 1 (a)(ii) subparagraphs A and B of the First Amendment to Agreement of Lease and Article 2 of the Second Amendment to Agreement of Lease, is amended to provide that the wharfage guarantee on inbound movements of petroleum products shall be increased to $64,140.00 annually, and the wharfage guarantee on outbound movements of petroleum products shall be increased to $14,153.00 annually.
APPROVED AS TO FORM AND LEGALITY.
/s/ CAROLE A. TAYLOR -------------------- LEGAL DEPARTMENT |
4. This Lease, Article 3, Paragraph 2 (b) of the First Amendment of Lease and Article 3 of the Second Amendment to Agreement, is amended to provide that the minimum charge relative to the Vessel Mooring System shall be increased to $24,984.00 annually, to be paid monthly in advance at a rate of $2,982.00.
5. Paragraph 23 of the Agreement of Lease as deleted and replaced by Article 5 of the First Amendment to Agreement of Lease is hereby amended in its entirety to read as follows:
23. Lessee shall have two successive options to renew and extend this Lease, as amended. The first renewal shall be for a period of seven (7) years beginning December 16, 1989, and the second renewal shall be for a period of ten (10) years beginning December 16, 1996. Each such option shall be exercised by Lessee by giving written notice to the Lessor no less than ninety (90) days prior to the expiration of the term then in effect. If Lessee does not exercise the seven (7) year option to renew, Lessee shall pay to the Lessor an amount of $167,417.00 as an option fee within 30 days of expiration of the term as herein extended. If Lessee does exercise the seven (7) year option period, the rental rate, the inbound and outbound wharfage guarantees and the minimum charge relative to the Vessel Mooring System shall be increased effective upon commencement of said seven (7) year option period (and, if exercised, increased again effective at the commencement of the successive ten (10) year option period) to an amount calculated by multiplying the base amount of the charge (as stated in this Amendment) for which the adjustment is being calculated by a fraction whose numerator is The Consumer Price Index, U.S. City Average All Items (Base Year 1967) published by the Bureau of Labor Statistics, U.S. Department of Labor, for the third month prior to the expiration of the term then in effect, and whose denominator shall be said Consumer Price Index, U.S. City Average All Items for the third month prior to the commencement of this Amendment.
Should the Bureau of Labor Statistics change the manner of computing the Consumer Price Index, the Bureau shall be requested to furnish a conversion factor designated to adjust the new index to the one previously in use, and adjustment to the new index will be made on the basis of such conversion factor. Should the publication of the Consumer Price Index be discontinued by the Bureau of Labor Statistics, then such other index as may be published by said Bureau most nearly approaching said discontinued index shall be used in making the adjustment herein provided. No additional option fee shall be payable by Lessee with respect to the successive ten (10) year option period.
6. Except as herein expressly amended, all other terms and conditions of the Agreement of Lease, as previously amended, shall remain the same.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized officers the day and year first above written.
Signed, sealed and delivered TAMPA PORT AUTHORITY in the presence of: /s/ KELLY M. JACKSON /s/ EMMETT C. LEE, JR. [Seal] ---------------------------------- ------------------------------ /s/ SUSAN PERDOMO By: Emmett C. Lee, Jr. ---------------------------------- Its: Port Director Signed, sealed and delivered STEUART PETROLEUM COMPANY in the presence of: /s/ CAROLYN GIVENS /s/ JOHN W. CONNOLLY, JR. [Seal] ---------------------------------- ------------------------------ /s/ KEVIN R. PURCELL By: John W. Connolly, Jr. ---------------------------------- Its: Senior Vice President |
SETTLEMENT AGREEMENT
This Settlement Agreement dated this 31st day of August, 1988 by and between the Tampa Port Authority, a body corporate and politic organized and existing under the laws of the State of Florida (hereinafter "Authority"), party of the first part, and Steuart Petroleum Company, a Delaware Corporation (hereinafter "Steuart"), party of the second part (hereinafter "Tenant").
WITNESSES
WHEREAS, on December 16, 1976, Port Sutton, Inc. and Eastern Seaboard Petroleum Company (hereinafter "Eastern") entered into a lease of certain property in Hillsborough County, Florida, located on that peninsula commonly known as "Pendola Point";
WHEREAS, by agreement dated August 14, 1984, Eastern assigned its interest in the lease to Steuart Petroleum Company (hereinafter "Steuart")
WHEREAS, on November 14, 1985 Port Sutton, Inc. conveyed the lease premises to and assigned its interest in said lease to the Authority;
WHEREAS, the lease premises are currently operated by Steuart through its Western Fuels Division;
WHEREAS, on March 7, 1987 the bulkhead adjacent to the lease premises partially collapsed causing damage to some of Tenant's equipment on the lease premises;
WHEREAS, a dispute arose between Authority and Tenant regarding each parties responsibilities for repair and payment of rent under the lease agreement;
WHEREAS, the parties now desire to settle the dispute between them;
NOW, THEREFORE, the parties hereto agree as follows:
1. That Authority on June 18, 1987 completed repairs to the structure supporting the pipeline and stabilizing the bulkhead at the lease premises to the reasonable satisfaction of Tenant.
2. That the pipeline itself is now in working order and operational.
3. That Authority agrees to reduce its invoiced amount for the period March 7, 1987 through June 19, 1987 ($5,790.96) by one-half, thereby making the amount due and payable to Authority for that period two thousand eight-hundred ninety five and 48/100 dollars ($2,895.48).
4. That Tenant shall pay to the Authority the sums described in paragraph 3, within ten (10) days after full execution hereof by certified check payable to the Authority.
5. Within ten (10) days after full execution hereof and simultaneously with the delivery of the certified check described in paragraph 4, the parties hereto shall exchange fully executed releases in the forms attached hereto as Exhibits A and B.
6. That any charges accruing thereafter are not governed by this settlement agreement but shall be invoiced and paid in accordance with the lease agreement, as amended, between the parties.
IN WITNESS WHEREOF the parties hereto have set their hands and seals on the dates stated below.
WITNESSES: TAMPA PORT AUTHORITY /s/ KELLY JACKSON By: /s/ EMMETT C. LEE, JR. ---------------------------------- -------------------------------------- /s/ SUSAN PERDOMO Its: Emmett C. Lee, Jr., Port Director ---------------------------------- Date: 31 August 1988 STEUART PETROLEUM COMPANY /s/ [ILLEGIBLE] By: /s/ JOHN W. CONNOLLY, JR. ---------------------------------- -------------------------------------- /s/ [ILLEGIBLE] Its: Senior Vice President ---------------------------------- Date: August 26, 1988 |
Exhibit A - Full and Complete Release (Steuart)
Exhibit B - Full and Complete Release (Authority)
FULL AND COMPLETE RELEASE
KNOW ALL MEN BY THESE PRESENTS, That STEUART PETROLEUM COMPANY, in consideration of the sum of Ten Dollars, acknowledged by all parties as paid and other good and valuable consideration, the receipt of all of which is hereby acknowledged by the undersigned, which is acknowledged to be in full and final payment of all sums, obligations or claims due or made by it against TAMPA PORT AUTHORITY, and its successors, assigns, officers, directors, attorneys, agents, servants, trustees and employees, does by these presents forever release, acquit and discharge the said TAMPA PORT AUTHORITY, its successors, assigns, officers, directors, agents, servants, employees, attorneys and trustees, of and from any and all, known and unknown, claims, debts, demands, causes of action and liabilities of every kind, character and nature whatsoever arising out of the failure on March 7, 1987 of the bulkhead at Tampa Port Authority Berth 25, located on Port Sutton Channel, Hillsborough County, Florida whether they be for negligence or based on the lease agreement between the parties, from the beginning of time to date.
IN WITNESS WHEREOF, the undersigned has set its hand and seal this 26th day of August, 1988.
Signed, sealed and delivered STEUART PETROLEUM, COMPANY in the presence of: /s/ THEO V. VILLINGHUNT By: /s/ JOHN W. CONNOLLY JR. ----------------------------- -------------------------- Its: Senior Vice President by Carolyn Givens (CORPORATE SEAL) ----------------------------- THIS IS A LEGAL RELEASE OF LIABILITY -- READ IT CAREFULLY BEFORE SIGNING. |
FULL AND COMPLETE RELEASE
KNOW ALL MEN BY THESE PRESENTS, That TAMPA PORT AUTHORITY (hereinafter "AUTHORITY"), in consideration of the sum of Ten Dollars, acknowledged by AUTHORITY as paid, and other good and valuable consideration, the receipt of all of which is hereby acknowledged by the undersigned, which is acknowledged to be in full and final payment of all sums, obligations or claims due or made by it against STEUART PETROLEUM COMPANY ("STEUART"), and its successors, assigns, officers, directors, attorneys agents, servants, trustees and employees, does by these presents forever release, acquit and discharge the said STEUART, its successors, assigns, officers, directors, agents, servants, employees, attorneys and trustees of and from any and all, known and unknown, claims, debts, demands, causes of actions and liabilities, of every kind, character and nature whatsoever arising out of the failure on March 7, 1987 of the bulkhead at Tampa Port Authority Berth 25 located on Port Sutton Channel, Hillsborough County, Florida, whether they be for negligence or based on the lease agreement between the parties, from the beginning of time to date.
IN WITNESS WHEREOF, the undersigned has set its hand and seal this 31st day of August, 1988.
Signed, sealed and delivered TAMPA PORT AUTHORITY in the presence of: /s/ KELLY M. JACKSON /s/ EMMETT C. LEE, JR. -------------------------------- -------------------------------------- /s/ SUSAN PERDOMO Its: Emmett C. Lee, Jr., Port Director -------------------------------- (CORPORATE SEAL) THIS IS A LEGAL RELEASE OF LIABILITY -- READ IT CAREFULLY BEFORE SIGNING |
AMENDMENT NO. 4 TO AGREEMENT OF LEASE
This Amendment No. 4 to Agreement of Lease made and entered into this 13th day of July, 1987, by and between the TAMPA PORT AUTHORITY, a body politic and corporate organized and existing under the laws of the State of Florida, hereinafter to as "Lessor" and Steuart Petroleum Company, hereinafter referred to as "Lessee".
WITNESSETH:
WHEREAS, Port Sutton, Inc. and Eastern Seaboard Petroleum Company previously entered into an Agreement of Lease dated December 16, 1976 which was amended by the parties on May 21, 1980, and October 10, 1980 and;
WHEREAS, Eastern Seaboard Petroleum Company assigned its Lease to Lessee on August 14, 1984 which Lease was amended by the parties on August 15. 1984; and
WHEREAS, Port Sutton assigned the said Lease on September 21, 1984 to Lessor; and
WHEREAS, the parties desire to amend such Agreement of Lease.
NOW, THEREFORE, the parties hereto, in consideration of the covenants contained herein and the sum of One Dollar ($1.00) each to the other in hand paid, hereby covenant and agree as follows:
1. Term of this Lease shall be extended for Two (2) years commencing December 16, 1986 and ending December 15, 1988.
2. This Lease, Article 3, Paragraph 1 (a)(i) of the first Amendment to Agreement of Lease, is amended to provide that the bare land rental rate shall be increased to $59,676.00 annually, to be paid monthly in advance at a rate of $4,973.00.
3. This Lease, Article 3, Paragraph 1 (a)(ii) subparagraphs A and B of the First Amendment to Agreement of Lease and Article 2 of the Second Amendment to Agreement of Lease, is amended to the extent that wharfage rate for petroleum products either inbound or outbound shall be per the rates established in the Tampa Port Authority Tariff No. 9 and any revisions thereto. Wharfage guarantee on inbound movements of petroleum products shall be increased to $59,676.00 annually, and the wharfage guarantee on outbound movements of petroleum products shall be increased to $13,168.40 annually.
Page two
4. Paragraph 23 of the Agreement of Lease as deleted and replaced by Article 5 of the First Amendment to Agreement of Lease is hereby amended in its entirety to read as follows:
23. Lessee shall have two successive options of renewing and extending this Lease, as amended. One such renewal and extension being a period of eight (8) years beginning December 16, 1988 and one further renewal extending this Lease for a period of ten (10) years beginning December 16, 1996. Each such option shall be exercised by giving written notice to the Lessor no less than ninety (90) days prior to the expiration of the term then in effect. If Lessee does not exercise the eight (8) year option to renew, Lessee shall pay to the Lessor an amount of $155,770.40 as an option fee within 30 days of expiration of the term as herein extended. If Lessee does exercise the eight (8) year option period, the rental rate, the inbound and outbound wharfage guarantees and the minimum charge relative to the Vessel Mooring System set forth in Article 3, paragraph 2(b) of the Fist Amendment of Lease and as amended by Article 3 of the Second Amendment to Agreement shall be increased effective upon commencement of said eight (8) year option period (and, if exercised, increased again effective at the commencement of the successive ten (10) year option period) to an amount calculated by multiplying the base amount of the charge (as stated in this amendment) for which the adjustment is being calculated by a fraction whose numerator is The Consumer Price Index, U.S. City Average All Items (Base Year 1967) published by the Bureau of Labor Statistics, U.S. Department of Labor, for the third month prior to expiration of the term then in effect, and whose denominator shall be said Consumer Price Index U.S. City Average All Items for the third month prior to the commencement of this Amendment. Should the Bureau of Labor Statistics change the manner of computing the Consumer Price Index, the Bureau shall be requested to
Page three
furnish a conversion factor designated to adjust the new index to the one previously in use, and adjustment to the new index will be made on the basis of such conversion factor. Should the publication of the Consumer Price Index be discontinued by the Bureau of Labor Statistics, then such other index as may be published by said Bureau most nearly approaching said discontinued index shall be used in making the adjustment herein provided. No additional option fee shall be payable by Lessee with respect to the successive ten (10) year option period.
5. Paragraph 10 of the Agreement of Lease is hereby amended in its entirety to read as follows: It is covenanted and agreed that Lessor by and through its duly authorized officers, agents and representatives shall have the right at any and all times to go upon and inspect the demised premises. If at any time during the term of this Lease, Lessor has reasonable grounds to suspect that there has been - unauthorized or prohibited disposal of "hazardous waste" as defined below, Lessor shall also have the right to perform appropriate tests on the demised premises at its own cost and expense.
6. Paragraph 11 of the Agreement of Lease is hereby amended in its
entirety to read as follows:
Lessee covenants and agrees that Lessee will comply with all the valid
requirements of law and duly constituted public authority and
environmental protection laws so far as they concern Lessee's occupancy
of demised premises, and it will not use the demised premises or any
part hereof in such manner as to create a nuisance, undue noise,
noxious odors or unwarranted interference with the enjoyment of
adjoining premises by the Owners and tenants thereof other than what is
normal for an operating petroleum storage terminal nor use the same for
any unlawful purposes or in violation of any State Statute, City
Ordinance or Rule or Regulation promulgated by or under such authority;
and that at all times Lessee will keep said demised premises in a clean
and sanitary condition and not allow waste or refuse to accumulate or
be stored
Page four
on the demised premises and shall not dump or place any waste or refuse
in any water, either navigable or non-navigable in or adjacent to the
terminal area.
Any "disposal" of a "hazardous substance" as defined in and prohibited
by 42USC9601, the "Comprehensive Environmental Response, Compensation
and Liability Act of 1980", of a "hazardous waste" as defined in and
prohibited by 42USC6901, the "Resource Conservation and Recovery Act of
1976" or of a "hazardous waste" as defined in and prohibited by Section
403.703, Florida Statutes (1985), as same may be modified or revised,
on any property of the Tampa Port Authority or in any manner
deleteriously affecting property of the Tampa Port Authority is
expressly prohibited. Any unauthorized discharge prohibited on the
Lease Premises under Lessee's exclusive possession and control by
anyone or any unauthorized or prohibited discharge upon any
non-exclusive easements which are a part of the lease premises by
Lessee of such "hazardous substance" or "hazardous waste" shall be
promptly cleaned up and environmentally restored by Lessee in
accordance with proper procedures and applicable governmental
regulations. Any violation of this provision which is not remedied by
Lessee or with respect to which curative actions are not commenced by
Lessee as required by the governmental entity requesting same (after
Lessee has exercised or invoked all available review and /or appeals of
such requirements) shall be considered a default hereunder, and Lessor,
at its option, may declare this lease terminated upon expiration of the
longer of any curative period permitted by the governmental entity or
by Lessor. In addition, Lessee agrees that within forty-five (45) days
of termination of this Lease for any reason, Lessee shall have
performed a site investigation
Page five
by an independent environmental consultant, who has been approved in advance by Lessor, such approval shall not be unreasonably withheld. The scope of such site investigation shall be as recommended by the consultant and approved by the parties hereto. The results of such site investigation shall be in writing and shall be delivered to Lessor within five (5) days of receipt from the independent environmental consultant. If the results of this site investigation do not reveal the presence of prohibited disposal of "hazardous waste" on the Premises, Lessee shall bear the cost of such site investigation not to exceed $7,500.00 and Lessor shall bear any cost of the same in excess of $7,500.00; said $7,500.00 is stated in 1986 dollars and shall be adjusted by the CPI Index in the manner provided in paragraph 4 hereof at the time any such sums become due. In addition, any further site investigation may be conducted by the Lessor at its cost and expense. If any site investigation reveals the presence of "hazardous waste" which has been disposed of on the premises without proper authorization or Lessee otherwise violates this provision, Lessee shall bear the entire cost of such site investigation and Lessor may bring an action for injunctive relief against Lessee and/or bring any action against Lessee to recover any damages, including but not limited to costs of investigation, removal, recovery and clean-up costs and fines incurred by Lessor due to Lessee's violation of this provision.
7. Except as herein expressly amended, all other terms and conditions of the Agreement of Lease, as previously amended, shall remain the same.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized officers the day and year first
Page six
above written.
Signed, sealed and delivered TAMPA PORT AUTHORITY in the presence of. /s/ KELLY M. JACKSON By: /s/ EMMETT C. LEE, JR. ------------------------------- ---------------------------- /s/ [ILLEGIBLE] Emmett C. Lee, Jr. ------------------------------- Its: Port Director |
Signed sealed and delivered
in the presence of:
/s/ [ILLEGIBLE] By: /s/ JOHN W. CONNOLLY, JR. ------------------------------- --------------------------- /s/ KEVIN R. PURCELL Its: Sr. Vice President ------------------------------- |
THIRD AMENDMENT TO BE ATTACHED TO AGREEMENT OF LEASE DATED
DECEMBER 16, 1976, BETWEEN PORT SUTTON, INC. AND EASTERN
SEABOARD PETROLEUM COMPANY, INC. FOR PREMISES LOCATED IN
PORT SUTTON. HILLSBOROUGH COUNTY, FLORIDA
This Third Amendment to Lease of December 16, 1976, by and between PORT SUTTON, INC., a Florida corporation, (hereinafter called "Lessor") and STEUART PETROLEUM COMPANY, a Delaware corporation, (hereinafter called "Lessee").
WITNESSETH:
WHEREAS, Lessor and EASTERN SEABOARD PETROLEUM COMPANY previously entered into an Agreement of Lease (the "Agreement of Lease") dated December 16, 1976 covering certain real property situated at Port Sutton, southeast of the city of Tampa, in Hillsborough County, Florida, together with nonexclusive easements, as described in said Agreement of Lease; and
WHEREAS, Lessor and EASTERN SEABOARD PETROLEUM COMPANY amended the Agreement of Lease by First Amendment to Agreement of Lease dated May 21, 1980, and further amended the Agreement of Lease by a Second Amendment to Lease dated October 10, 1980; and
WHEREAS, EASTERN SEABOARD PETROLEUM COMPANY, entered into Lease Assignment and Agreement effective August 14, 1984 in which it assigned all of its interest in the Agreement of Lease to Lessee; and
WHEREAS, Lessor and Lessee desire to add additional acres to the leased real property;
NOW, THEREFORE, for and in consideration of the sum of One Dollar ($1.00) each to the other in hand paid, receipt of which is hereby acknowledged, and other valuable consideration, Lessor and Lessee stipulate and bind themselves and agree as follows:
1. The Lessor does hereby lease unto the Lessee an additional 0.334 acres which is more particularly described in Exhibit A attached hereto and incorporated herein by reference.
2. The monthly land rent and wharfage for this increased area described in Exhibit A shall be at the same rate as the rate stated in the Agreement of Lease.
3. In all other respects, the Agreement of Lease, as amended by the First Amendment to Agreement of Lease dated May 21, 1980, and further amended by the Second Amendment to Lease dated October 10, 1980, between Lessor and Lessee is hereby confirmed and ratified.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective the 15th day of August, 1984.
Witnesses: "LESSOR" /s/ JO SHAPIRO PORT SUTTON, INC. ---------------------------- By: /s/ ROBERT THOMAS /s/ TULULAH G. THOMAS ---------------------------- ---------------------------- Its President ------------------------ ATTEST: By: /s/ DOROTHY BUGLY ------------------------ Its Assistant Secretary Witnesses: "LESSEE" /s/ [ILLEGIBLE] STEUART PETROLEUM COMPANY ---------------------------- /s/ BEVERLY K. MINNI By: /s/ [ILLEGIBLE] ---------------------------- ---------------------------- Its President ATTEST: By: /s/ GEORGE C. [ILLEGIBLE] ---------------------------- Its Secretary ------------------------ STATE OF Florida COUNTY OF Hillsborough |
The foregoing instrument was acknowledged before me this 28th day of August, 1984, by 1984, by Robert Thomas, President of PORT SUTTON, INC., a Florida corporation,
on behalf of the corporation.
/s/ [ILLEGIBLE] --------------------- NOTARY PUBLIC |
My Commission Expires:
The foregoing instrument was acknowledged before me this 5th day of Sept., 1984, by Leonard C. Stuart II;, George C. Sinclair, of STEUART PETROLEUM COMPANY, a Delaware corporation, on behalf of the corporation
/s/ WILDA [ILLEGIBLE] --------------------- NOTARY PUBLIC |
My Commission Expires:
/s/ August 31, 1985 |
Exhibit A to Third Amendment to Lease Agreement dated August 15, 1984 between Port Sutton, Inc. and Eastern Seaboard Petroleum Company, Inc.
Beginning at the NE corner of Section 4, Township 30 South, Range 19 East, Hillsborough County, Florida, run South 2,020.00 feet parallel to the East Boundary of said Section 4; thence run West 4,810.00 feet parallel to the North Boundary of said Section 4 to the Point of Beginning of the tract hereinbelow described: Thence continue West parallel to the North Boundary of said Section 4 a distance of 20.00 feet; thence run South parallel to the East Boundary of said Section 4 a distance of 729.81 feet; thence run N. 76 degrees 12' 10" E a distance of 20.59 feet; thence run North parallel to the East Boundary of said Section 4 a distance of 724.90 feet to the Point of Beginning. An area containing 0.334 +/- acres.
[PROPERTY BOUNDARIES]
LEASE ASSIGNMENT AND AGREEMENT
AGREEMENT, made as of August 14, 1984, by and between EASTERN SEABOARD PETROLEUM COMPANY, INC., a Florida corporation, with a mailing address of 2000 Ashland Drive, Ashland, Kentucky 41114, Attention: Vice President ("Assignor"), and STEUART PETROLEUM COMPANY, a Delaware corporation, with a mailing address of 4646 40th Street, N.W., Washington, D.C. 20016, Attention: President ("Assignee").
WITNESSETH:
WHEREAS, pursuant to a lease dated December 16, 1976, a true copy of which is attached hereto as Exhibit A and made a part hereof, Amendment Number 1 to said Lease dated May 21, 1980, a true copy of which is attached hereto as Exhibit B and made a part hereof and Amendment Number 2 to said Lease dated October 10, 1980, a true copy of which is attached hereto as Exhibit C and made a part hereof (all hereinafter referred to as the "Lease"), Port Sutton, Inc., with a mailing address of P.O. Box E, Tampa, Florida 33675 ("Lessor"), leased to Eastern Seaboard Petroleum Company, Inc., a Florida corporation, certain property located at Port Sutton, Hillsborough County, Florida and more particularly described in the Lease (the "Leased Premises").
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other valuable consideration, the receipt and adequacy of which is hereby acknowledged, Assignor hereby grants, bargains, sells, assigns and confirms to Assignee, its successors and assigns, all right, title and interest of Assignor in and to the Lease, on the terms and conditions set forth below.
1. Representations of Assignor. Assignor hereby represents and warrants to Assignee that; (i) the Lease documents at Exhibits A, B and C constitute the entire Agreement between Lessor and Assignor and there have
been no modifications to the said documents; (ii) that as of the date hereof, the Lease is in full force and effect, has not been materially breached by Assignor (or, if materially breached, that such breach has been effectively cured), is enforceable in accordance with its terms and conditions, and Assignor is not aware of any condition which upon mere delivery of notice and or passage of time would result in a default thereunder; (iii) Assignor has full and lawful authority to assign the Lease subject to the consent of Lessor; and (iv) Assignor will save harmless and indemnify Assignee, its officers and directors, from any and all claims resulting from Assignor's conduct of business in connection therewith.
2. Covenants of Assignee. From and after the date hereof, Assignee hereby assumes all right, title and interest of Assignor in and to the Lease, agrees to be bound by all terms and conditions thereof, and agrees to protect, defend and indemnify and save harmless Assignor and its subsidiaries and related companies and the directors, officers, employees, workmen and agents of Assignor and its subsidiaries and related companies, from and against any loss, cost, damage, demand, claim or other liability, including attorneys fees and other expenses of litigation, which directly or indirectly results from or arises out of Assignee's performance or nonperformance under the Lease, or which directly or indirectly results from or arises out of Assignee's ownership, use or possession of the Leased Premises or the improvements thereon. Not more than fifteen (15) days after the date hereof, Assignee shall obtain and furnish to the Lessor (with a copy furnished to Assignee) a certificate evidencing that Assignee has obtained the insurance coverages requested by the Lease.
3. Taxes and Recording Costs. Assignee shall be fully liable for and pay: (i) any sales or excise tax which is due with respect to the transfer of
the Lease; and (ii) the cost for the recording of this Assignment or any other instrument relating to the Lease.
4. Rentals/Real Estate Taxes/Assessments/Utilities. The monthly rental; and any real estate taxes or assessments on the Leased Premises due and payable by Assignor during the year of the Closing shall be prorated between Assignor and Assignee as of the Closing Date on the basis of the most recently available bills with a post-Closing adjustment within seven (7) days after receipt of the actual current tax bills. From and after the Closing Date, Assignee shall be fully liable for and pay all rentals, taxes, utility charges and other expenses relating to the Leased Premises, in accordance with the provisions of the Lease.
5. Miscellaneous Provisions.
(a) This Agreement shall be construed, governed and administered in accordance with the laws of the State of Florida.
(b) This Agreement is the final and entire expression of the agreement between Assignor and Assignee with respect to its subject matter.
(c) Nothing in this Agreement, express or implied, is intended to confer on any person other than Assignor and Assignee, and their respective successors and assigns, any right or remedy under or by reason of this Agreement.
(d) This Agreement is binding upon and shall inure to the benefit of Assignor and Assignee and their respective heirs, successors and assigns. In no event shall assignment of this Agreement by Assignee relieve such party of its liabilities and obligations as primary obligor under this Agreement without the prior written consent of the Assignor.
(e) This Agreement will not be binding upon Assignor or Assignee until it is fully executed by and delivered to both parties. This Agreement
may not be amended, modified or supplemented, except by written agreement of Assignor and Assignee, executed by their duly authorized representatives.
(f) Any notice or other communication required or permitted by this Agreement shall not be valid unless in writing and personally delivered or sent by postage prepaid registered or certified United States Mail, with return receipt requested, addressed to the party for whom such notice is intended at the address given for such party in the heading of this Agreement. Notice shall be deemed given upon actual physical receipt by the party to whom the notice is addressed. Either ASSIGNOR or ASSIGNEE may change the address provided for it by notice given to the other party in accordance with this Section 5(f).
(g) No waiver of any breach of this Agreement may be construed as a waiver of any continuing or subsequent breach of the same or any other provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written, by order of their respective Boards of Directors.
Signed, Sealed and Delivered
In The Presence Of:
WITNESSES: EASTERN SEABOARD PETROLEUM COMPANY, INC. /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE] ----------------------- -------------------------------- /s/ SHERRY ADAMS Its: Vice President ----------------------- ATTEST: By: /s/ MICHAEL F. JORDAN -------------------------------- Assistant Secretary [SEAL] |
Signed, Sealed and Delivered
In The Presence Of:
WITNESSES: STEUART PETROLEUM COMPANY /s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE] ----------------------------- ---------------------------- /s/ [ILLEGIBLE] Its: President ----------------------------- ATTEST: By: /s/ GEORGE C. [ILLEGIBLE] ------------------------- Secretary [SEAL] Signed, Sealed and Delivered In The Presence of: WITNESSES: Agreed and accepted this 20th day of July, 1984. /s/ [ILLEGIBLE] PORT SUTTON, INC. ---------------------------------- /s/ TULULAH G. THOMAS By: /s/ [ILLEGIBLE] ---------------------------------- ---------------------------- Its: President --------------------------- ATTEST: /s/ DOROTHY C. BERGER ------------------------ Asst Secretary [SEAL] |
STATE OF Kentucky )
) SS:
COUNTY OF [ILLEGIBLE] )
On the 10th day of July, 1984, before me personally came James E. Stout and Michael F. Jordan to me known, who, being by me duly sworn, did depose and say that they are the Vice President and Asst Secretary, respectively, of EASTERN SEABOARD PETROLEUM COMPANY, INC., the corporation described in and which executed the above instrument; that they know the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation; and that they signed their names thereto by like order.
/s/ DEBRA J. DOHERTY -------------------------- Notary Public |
My commission expires May 12, 1986
STATE OF WASHINGTON, D.C.)
) SS.
COUNTY OF D.C. )
On the 5th day of July, 1984, before me personally came George C. Sinclair and Leonard C. Steuart, II to me known, who, being by me duly sworn, did depose and say that they are the President and Secretary, respectively, of STEUART PETROLEUM COMPANY, the corporation described in and which executed the above instrument; that they know the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation; and that they signed their names thereto by like order.
/s/ [ILLEGIBLE] ----------------------- Notary Public (SEAL) |
My commission expires of ____________________.
STATE OF FLORIDA ) ) SS. COUNTY OF HILLSBOROUGH ) |
I, Lynne Mayberry, a Notary Public in and for the said county in said state, hereby certify that Robert Thomas whose name as President of Port Sutton, Inc., a corporation, is signed to the foregoing conveyance, and who is known to me, acknowledged before me on this day that, being informed of the contents of the conveyance, he, as such officer and with full authority, executed the same voluntarily for and as the act of said corporation.
Given under my hand and seal of office this 2Oth day of July, 1984.
/s/ LYNNE MAYBERRY -------------------------- Notary Public (SEAL) |
This Instrument Prepared By:
AGREEMENT OF LEASE
THIS AGREEMENT OF LEASE, made as of the 16th day of December 1976, by and between PORT SUTTON INC.; A Florida corporation, herein called "LESSOR", and EASTERN SEABOARD PETROLEUM COMPANY, INC., a Florida corporation, herein called "LESSEE",
WITNESSETH;
That in consideration of the mutual covenants and agreements herein contained, the Lessor does hereby lease unto the Lessee the real property situate at Port Sutton, southeast of the City of Tampa, in Hillsborough County, Florida, described on Exhibit "A" attached hereto and made a part hereof.
TOGETHER with an easement or easements for the non-exclusive use of:
(a) The East-West dock known as Berth 24 located on the south side of Port Sutton channel as indicated on the sketch marked Exhibit "B" and attached hereto, together with the bollards and other appurtenances to such dock and the private channel of Lessor connecting the same with the main ship channel of Hillsborough Bay.
(b) The wharf area adjacent to the aforesaid dock outlined on Exhibit "B" in red.
(c) Easements for utilities and for ingress and egress to and from the aforesaid dock and wharf area over roads, railroads and other rights-of-way from time to time designated by the Lessor necessary or convenient for the leased premises to be operated by the Lessee as a petroleum products terminal.
The real property and easements hereinbefore described are hereinafter called "the leased premises."
TO HAVE AND TO HOLD the above-described premises, together with the tenements, hereditaments, appurtenances and easements thereunto belonging upon the terms and conditions hereinafter stated for a term of ten (10) years, commencing on the 16th
day of December, 1976, and extending to and including the 15th day of December, 1986.
1. Lessee agrees to pay Lessor as rental for leased premises and use of wharfage facilities and the easements hereinabove described the following.
A. Monthly land rent at the rate of Two Hundred Fifty Dollars ($250.00) per acre in the leased premises; plus
B. Wharfage for products brought into the leased premises from vessel, truck, railcar or pipeline as follows:
$0.02 per barrel for the first 2,000,000 barrels
$0.015 per barrel for the second 2,000,000 barrels
$0.01 per barrel over 4,000,000 barrels.
C. Lessee agrees that minimum wharfage will aggregate a minimum of Three Thousand Dollars ($3,000.00) per acre in any contract year. If at the end of any contract year, Lessee has unloaded insufficient volume of product to bring the minimum wharfage to a sum equal to Three Thousand Dollars ($3,000.00 times the number of acres in the leased premises (and remitted therefor), it will within the following fifteen days remit an additional amount sufficient to bring the annual payment for such contract year up to a total equal to Three Thousand Dollars ($3,000.00) times the number of acres in the leased premises.
D. In the event the docking facility on Port Sutton Channel becomes unusable for more than 96 hours through no fault of the Lessee, its agents or employees, or by vessels serving the Lessee, the annual minimum wharfage shall be reduced by the ratio of hours the docking facility is unusable to the total hours in the contract year. This reduction in minimum wharfage shall not alter the demurrage provisions of other paragraphs in this contract.
2. In addition to the amounts hereinabove specified, the Lessor will charge dockage to or against the various vessels employed in the movement of materials to and from the leased premises at a rate not greater than the then current rates estab-
lished by the applicable tariff of the Tampa Port Authority. In the event the Tampa Port Authority ceases to publish its tariffs, then the dockage charge will be established by mutual agreement of the parties for the balance of any lease term or extensions thereof.
3. The leased premises shall be used solely and only for the storage and handling of petroleum products. The premises shall not be used for other purposes except upon the prior written consent of Lessor. Lessee shall have the right to place or install for its exclusive use, on the leased premises unloading facilities, tanks, scales, boilers, pipelines, and other fixtures and equipment, including office buildings and appurtenant structures for the conduct of its business thereon. Any facilities placed within the wharf area shall be so placed and maintained as to facilitate the joint use of said wharf area by the Lessee and the Lessor or its licensees or other tenants. -- All buildings and appurtenances erected or installed on the leased premises shall be properly designed and built to meet all applicable building codes and shall be maintained in good order and condition.
Lessee shall not engage in general stevedoring but may charge other tenants, present and future, of Port Sutton, Inc. an appropriate fee for the use of any facilities, pipelines, or appurtenances which Lessee has placed on the leased premises and easements for its exclusive use; the written consent of the Lessor shall be obtained prior to enacting any such agreement.
4. Lessor covenants and agrees to maintain the dock, constructed in accord with the plans marked Exhibit C and attached hereto, as well as a berth and channel to the main ship channel of Hillsborough Bay having a depth of thirty-four (34) feet at mean low water; provided, however, the Lessee shall be responsible for any damage to any such facilities by its agents or employees or by vessels serving the Lessee.
5. In the event any vessel owned by or under the control or direction of the Lessee sinks or becomes disabled for
reasons other than those caused by Lessor at any dock, channel, slip, turning basin, or fairway located at Port Sutton, the Lessee will promptly and with all reasonable speed refloat and remove said vessel and all debris so as not to interfere with the use of any such mooring facility or channel, or otherwise impede safe navigation to and from Port Sutton facilities; provided, however, that nothing herein contained shall prevent Lessee from recovering its costs and damages from the party causing, or contributing to the cause, of such sinking or disablement.
6. This lease is made upon the express condition that the Lessor shall be free from all liabilities and claims for damages and suits for or by reason of any injury or injuries to any person or persons or property of any kind whatsoever, whether the person or property of Lessee, its agents, or employees, or third persons, from any cause or causes whatsoever while in or upon the leased premises or any part thereof during the term of this agreement or occasioned by any occupancy or use of the leased premises or any activity carried on by Lessee in connection therewith; provided, however, Lessee shall not be liable for the negligence of the Lessor or any of its agents, guests, servants or employees. Each party covenants and agrees to indemnify and save harmless the other party from all liabilities, charges, expenses (including attorneys' fees) and costs on account of or by reason of any such injuries, liabilities, claims, suits or losses however occurring or damages growing out of same, for which the parties are liable hereunder.
7. The Lessee agrees to procure and to constantly maintain in force, at its expense, comprehensive general liability and property damage insurance, in companies satisfactory to the Lessor, the policies thereof to name the Lessor as an additional assured and to have limits of not less than $500,000.00 for death or injury of any one person and $1,000,000.00 for death or injury to persons from any one accident, and property damage
of not less than One Million Dollars ($1,000,000.00).
8. Except as provided in paragraph 4 above, the Lessee shall keep the leased premises and all improvements erected thereon at all times in good condition and repair, shall pay all water, gas, electric, and other utility expenses incident to the occupation and use of the leased premises, and shall pay all taxes and assessments levied upon or assessed against the land described on Exhibit "A" hereof and any improvements thereon during the primary term hereunder, or any extension or renewal thereof.
9. The Lessee shall not permit the leased premises or any improvements thereon or the estate of the Lessee in the same to become subject to any lien, charge, or encumbrance whatsoever and shall indemnify and keep indemnified the Lessor against all such liens, charges, and encumbrances; it being expressly stipulated that the Lessee shall have no authority, express or implied, to create any lien, charge or encumbrance upon the leased premises or the improvements now or hereafter located thereon or upon the estate of the Lessee in the same. Nothing herein contained shall restrict Lessee from selling the facilities constructed by it on the leased premises; and in the event of such a sale, the purchaser thereof shall be relieved of any obligations hereunder, but Lessee shall continue to be bound by the terms and conditions hereof.
10. The Lessee shall permit the Lessor and its agents at all reasonable times to enter upon the leased premises to view the condition of the premises and any improvements thereon.
11. The Lessee shall not make or suffer any use or occupancy of the leased premises contrary to any law or ordinance now or hereafter in force, and shall strictly comply with all laws, ordinances, and rules of any governmental authorities, bodies, or commissions having jurisdiction. The Lessee shall conduct its business and operations on the leased premises in such a manner so as not to create a nuisance, or interfere with
or cause any damages or inconvenience to other tenants of the Lessor, their agents or employees.
12. The Lessee agrees that if by reason of its failure to perform any of the covenants or provisions of this lease, the Lessor shall be compelled to do so or shall do any act which requires the payment of money, then the sum or sums so paid or required to be paid, together with the legal interest and any penalties and costs and attorney's fees shall be considered as so much additional rental and if not paid by Lessee to Lessor upon ten (10) days written demand then the Lessor shall have the same rights and remedies as in the case of the failure of the Lessee to pay the rental.
13. The Lessee shall indemnify the Lessor against all costs and expenses, including counsel fees, lawfully and reasonably incurred in enforcing the terms and conditions of this lease, or in the defense of any action or proceeding involving this lease, or in discharging the premises from any charge, lien or encumbrance, or in obtaining possession after default of the Lessee or the determination of this lease.
14. Upon the expiration of this lease or any extension or renewal hereof, or upon any earlier termination of this lease, Lessee shall yield up and surrender the leased premises in the same condition as they were at the time it originally took possession thereof, reasonable fair wear and tear excepted. The Lessee is specifically given the right at termination of this lease if not in default, to remove from said premises all improvements, machinery, equipment and other personal property placed thereon by Lessee, but, if Lessee removes any part of a permanent improvement or structure, the Lessee must remove the whole of such improvement or structure and restore the site upon which structure or improvement was located to its original condition. Any property remaining on the leased premises ninety (90) days after the termination of this lease shall become the property of the Lessor without process of law, but this provision
shall not limit the Lessor's right under the preceding sentence to require the Lessee to complete the removal of any improvement or structure theretofore partially removed by the Lessee, and should the Lessee fail to so restore the premises, the Lessor may do so at the expense of the Lessee.
15. The Lessor covenants that the Lessee, on paying the rental herein reserved and performing the covenants on its part to be performed, shall and may peaceably and quietly have, hold and enjoy the leased premises during the term hereof; provided, however, should the Lessee fail to make the rental payments hereby required and the same shall remain unpaid after thirty (30) days' written notice to pay the same, or if the Lessee shall neglect or fail to perform or observe any of the covenants contained in this instrument which are on its part to be performed and after thirty (30) days' written notice the same have not been performed or observed, or if the leasehold interest shall be taken on execution or other process of law and such proceedings are not dismissed and the premises returned to the Lessee within sixty (60) days, or if the Lessee shall petition to be or shall be declared a bankrupt or insolvent according to law, or if any assignment shall be made of its property for the benefit of creditors, then and in any of the said cases the Lessor lawfully may, immediately or at any time thereafter, and without further notice or demand, enter into and upon the said premises or any part thereof in the name of the whole, and repossess the same as its own fee simple estate, and expel the Lessee and those claiming under it, and remove their effects (forcibly, if necessary) without being taken or deemed guilty of any manner of trespass, and without prejudice to any remedies which might otherwise be used for arrears of rental or preceding breach of covenant, and that upon entry as aforesaid this lease shall be terminated; and the Lessee covenants and agrees that, notwithstanding the termination of this lease and possession regained by the Lessor, it will be and remain liable to the Lessor, after
such possession regained, for any loss sustained by the Lessor on account of the premises being let for the remainder of the original term or any extension thereof for a less sum than before, or at the election of the Lessor, the Lessee will, on and after such termination and so long as the demised premises have not been relet, pay to the Lessor, at the times and in the proportions herein named for the payment of rental, a sum equal to the rental and other payments herein named as liquidated damages for so much of the unexpired term as expires with each such payment, or at the election of the Lessor made upon the termination as aforesaid, or after such payment of liquidated damages as hereinbefore provided, the Lessee will pay to the Lessor as damages such a sum as at the time of such termination represents the difference between the rental value of the leased premises for the remainder of the said term and the rental and other payments herein named. No waiver by the Lessor of any covenant contained in this lease shall be a waiver of any succeeding breach of the same covenant.
16. Neither the Lessor nor the Lessee shall be deemed to be in default on account of any failure or delay of performance of any obligation hereunder when such failure or delay shall be due to any cause or causes beyond its reasonable control; provided that the party so failing or delaying shall exercise due diligence to try to remove promptly such cause or causes, excepting only disputes involving the settlement of strikes or other labor disputes; provided further, however, that this paragraph 16 shall not relieve Lessee of the obligation to remit the sums provided in paragraph 1 of the agreement. In the event Lessee's inability to use the leased premises is due to Lessor's labor disputes, strikes or other labor difficulty, then Lessee's obligations under paragraph 1(b) and 1(c) shall be reduced pro rata for the period of non-utilization caused by Lessor.
17. All notices to the Lessee shall be sent by registered or certified mail addressed to Post Office Box 3233, Jacksonville, Florida, 32206, or at such other address as the Lessee shall designate in writing.
18. All notices to the Lessor shall be sent by registered mail to the Lessor at Post Office Box "E", Tampa, Florida, 33675, or at such other address as the Lessor shall designate in writing. Notwithstanding any provisions in this lease to the contrary concerning modifications, a change in address may be effected by a registered or certified letter sent by either party to the other.
19. All payments to the Lessor under the terms of this lease shall be made at the address designated for notice to the Lessor.
20. Lessor has good right and authority to enter into this lease and shall warrant and defend its right to do so. Lessor further warrants that there are no liens, charges, or encumbrances upon the leased premises, except current taxes, and that it will indemnify and keep indemnified the Lessee against any and all future liens, charges, and encumbrances, other than taxes to be paid by Lessee as hereinbefore provided.
21. This Lease may not be assigned by the Lessee without prior written permission of the Lessor, which permission shall not be unreasonably withheld.
22. The Lessor owns vacant land west of the leased premises which are
[illegible] for future terminals of liquid products. Lessee [illegible]
hereinbefore mentioned are for the non-exclusive use on a berth-in-turn basis;
except that Lessee shall not have a permit for the unloading of more than one
vessel of any other tenant. In order to facilitate availability of the berth,
Lessee will furnish Lessor a schedule of expected vessel movements affecting its
terminal, and, in any case, will notify Lessor at least seventy-two (72) hours
prior to each arrival or at the time of Lessee's vessel sails from its last port
of call, whichever is later.
Lessor will permit no use of the berth by vessels requiring more than thirty-six (36) hours to load or unload and will require that each vessel unloading or loading at the berth to expeditiously discharge at the maximum capacity of the vessel
compatible with the terminal facilities and to vacate the berth as soon as possible after discharge.
In the event Lessee's vessel is delayed as a result of a previous vessel occupying the berth for more than thirty-six (36) hours, or, in the event Lessor fails to make available the berth as hereinabove provided, Lessor will pay the full demurrage charges incurred by the Lessee as a result of the delay.
Lessee further agrees that it will expeditiously start and complete its unloading at the maximum pumping capacity of the vessel compatible with the terminal facilities and vacate the berth as soon as possible after discharge upon the request of the Lessor. If Lessee fails to vacate the berth after thirty-six (36) hours as provided above, Lessee will pay to Lessor any demurrage Lessor is obligated to pay other tenants using the berth due to Lessee's failure to vacate.
23. Lessee shall have two successive options of renewing and extending this lease, each such renewal and extension to be for a period of ten years beginning with the date of termination of the preceding ten year lease. Each such option shall be exercised by giving written notice to the lessor no less than ninety (90) days prior to the expiration of the lease then in effect. Each such lease or extension entered into pursuant to an exercise of such option shall be on the same terms and conditions as those expressed herein, except that the rental rate, wharfage and minimum wharfage, shall be increased or decreased for the next ensuing ten years by an amount calculated by multiplying the base rental set forth in paragraph 1 above by a fraction whose numerator is The Consumer Price Index, U. S. City Average, All Items (Base Year 1967) published by the Bureau of Labor Statistics, U.S. Department of Labor, for the third month prior to expiration of such 10-year period whose denominator shall be said consumer price index (U. S. City Average, All Items) for the first month of the original term of this lease. Should the Bureau of Labor Statistics change the manner of computing The Consumer Price Index, the Bureau shall be requested to furnish a conversion factor designated to adjust the new Index to the one previously
in use, and adjustment to the new Index shall be made on the basis of such conversion factor. Should the publication of the Consumer Price Index be discontinued by the Bureau of Labor Statistics, then such other Index as may be published by such Bureau most nearly approaching said discontinued Index shall be used in making the adjustments herein provided. Should the Bureau discontinue the publication of an Index approximating the Index herein contemplated, then such Index as may be published by another United States Government agency as most nearly approximates the Index herein first above mentioned shall govern and be substituted as the Index to be used, subject to the application of an appropriate conversion factor to be furnished by the governmental agency publishing the adopted Index. In the event of any valid delay caused by seeking the proper adjustment for rental payments, as herein provided, Lessee shall continue paying the rental under the last preceding rental adjustment as herein provided, until such time as said proper adjustment has been made, at which time an adjustment shall be made retroactive to the beginning of the year in which the adjustment should have been made.
In any event, the land rent, wharfage, and annual minimum payment shall be no less than specified in Paragraph 1 above.
24. The Lessor agrees to provide and maintain a road for Lessee's non-exclusive use from the southeast corner of the leased property described in Exhibit "A" to Highway U.S. 41. Such road shall be suitable for the two-way traffic of the largest trucks allowed on State of Florida highways. Should lessor dedicate said road to public usage, and a governmental entity accept the road for maintenance providing lessee with ingress and egress, then lessor shall be relieved of its responsibility.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be properly executed by their proper officers
in due form of law, the day and year first above written.
LESSOR: LESSEE: PORT SUTTON, INC. EASTERN SEABOARD PETROLEUM COMPANY, INC. BY /s/ ROBERT THOMAS BY /s/ JOHN W. CONNOLLY JR. ------------------------------- ------------------------------- President President |
ATTEST:
BY DOROTHY C. BERGER BY W. ALVIN WATSON ------------------------------- ------------------------------- Assistant Secretary Assistant Secretary |
STATE OF FLORIDA )
COUNTY OF HILLSBOROUGH ) ss
I HEREBY CERTIFY, That on this 15th day of December, 1976, before me, the undersigned authority, personally appeared Robert Thomas and Dorothy C. Berger to me known to be the persons described in and who executed the foregoing instrument as President and Secretary, respectively, of PORT SUTTON, INC., a Florida corporation, and who severally and duly acknowledged the execution of such instrument as such officers aforesaid, for and on behalf of and as the act and deed of said corporation for the uses and purposes therein expressed, pursuant to authority lawfully conferred upon them by said corporation and that the seal affixed thereto is the true and genuine corporate seal of said corporation and was affixed thereunto by the said Secretary, under like authority, he being the proper custodian thereof.
WITNESS my hand and official seal the date aforesaid,
/s/ GLORIA J. ALLEN --------------------------------------- Notary Public for State of Florida at Large |
My commission expires:
Notary Public State of Florida at Large My Commission Expires Nov. 5, 1977
STATE OF FLORIDA )
COUNTY OF DUVAL ) ss
I HEREBY CERTIFY, That on this 16th day of December, 1976, before me the undersigned authority personally appeared John W. Connolly Jr. and W. Alvin Watson to me known to be the persons described in and who executed the foregoing instrument as President and Secretary, respectively, of EASTERN SEABOARD PETROLEUM COMPANY, INC., a Florida corporation, and who severally and duly acknowledged the execution of such instrument as such officers aforesaid, for and on behalf of and as the act and deed of said corporation, for the uses and purposes therein expressed, pursuant to authority lawfully conferred upon them by said corporation; and that the seal affixed thereto is the true and genuine corporate seal of said corporation and was affixed thereunto by the said Assistant Secretary under like authority, he being the proper custodian thereof.
WITNESS my hand and official seal the date aforesaid.
/s/ JOHN A. BLAIR ------------------------------------ Notary Public |
My commission expires:
Notary Public, State of Florida at Large My commission expires July 27, 1980
[PROPERTY BOUNDARIES]
Exhibit A to Lease
Agreement between Port
Sutton, Inc. and Eastern
Seaboard Petroleum Company
Inc. dated December 16,
1976
Beginning at the NE corner of Section 4, Township 30 South, Range 19 East,
Hillsborough County, Florida, run South 2,020 feet parallel to the East boundary
of said Section 4; Thence run West 4,160 feet parallel to the North boundary of
said Section 4 to the Point of Beginning of the tract hereinbelow described:
Thence continue West parallel to the North boundary of said Section 4 a distance
of 650 feet; Thence run South parallel to the East boundary of said Section 4 a
distance of 724.9 feet more or less; Thence run northeasterly a distance of
720.8 feet more or less to a point 4,110 feet West and 2,573 feet South of said
Section 4; Thence run North parallel to the East boundary of said Section 4 a
distance of 503 feet; Thence run northwesterly a distance of 70.71 feet more or
less to the Point of Beginning. An area containing 9.94 +/- acres.
FIRST AMENDMENT TO AGREEMENT OF LEASE
This First Amendment to Agreement of Lease made and entered into this 21st day of May, 1980, by and between Port Sutton, Inc., a Florida corporation ("Lessor") and Eastern Seaboard Petroleum Company, Inc., a Florida corporation, ("Lessee").
WITNESSETH:
WHEREAS, Lessor and Lessee previously entered into an Agreement of Lease (the "Agreement of Lease") dated December 16, 1976 covering certain real property situated at Port Sutton, southeast of the City of Tampa, in Hillborough County, Florida together with nonexclusive easements, as described in said Agreement of Lease, and
WHEREAS, Lessee has requested that the Lessor construct for the Lessee's exclusive use a vessel mooring system described in Subparagraph 2(a) below (the "Vessel Mooring System") adjacent to and west of the area covered by the above referenced Agreement of Lease and grant to Lessee certain easement or easements for the exclusive use of Lessee; and
WHEREAS, Lessor has agreed to construct the Vessel Mooring System to be identified as Berth 25 and to grant the requested easements all to be located as indicated on the sketch attached hereto and made a part hereof as Exhibit "C",
NOW THEREFORE, for and in consideration of the sum of One Dollar ($1.00) each to the other hand paid, receipt of which is hereby acknowledged, and other valuable consideration, Lessor and Lessee stipulate and bind themselves and agree as follows:
1. The definition of the Leased Premises in the Agreement of Lease is modified to add the following after item (c):
"Together with: (i) The exclusive right to Lessee to use the rectangular area outlined in red as shown on Exhibit C and being an area starting where the new sea wall joins the existing sea wall at a point on the westerly side of Berth 24 and whose easterly/westerly running parallel sides are four hundred feet in length and whose northerly/southerly running parallel sides are seventy-five feet in length and the southerly most easterly/westerly line of which runs along the northern edge of the new sea wall, and such exclusive right to be subject only to the right of Lessor in accordance with the terms of the Agreement of Lease to permit the mooring of ships at Berth 24 and to run mooring lines from such moored ship to a mooring bollard located immediately south of this described area as such bollard is shown on Exhibit C.
Exhibit B
(ii) The exclusive use of the Vessel Mooring System to be constructed in accordance with the terms of this amendment.
(iii) An exclusive easement, to be located as marked in yellow on attached Exhibit C running from real property leased to Lessee by Lessor as described in the Agreement of Lease and as shown In Exhibit A to the Agreement of Lease to the new sea wall as described in this amendment to be constructed by Lessor and along that sea wall to and among the various facilities constituting the Vessel Mooring System which easement shall be for the purpose of installation of below ground and above ground petroleum products lines; water lines; electrical lines; communication lines and other utilities or services reasonably required by Lessee in connection with its use of the Vessel Mooring System (such services being collectively referred to as "Lessee Support Services"),
This easement includes the right exercisable by Lessee from time to time, to install, replace, repair, maintain and operate the Lessee Support Services, and
(iv) A non exclusive easement for ingress and egress to and from the Lessee Support Services and the Vessel Mooring System and the area described in Subparagraph (i) above, over roads, railroads and other rights-of-way from time to time designated by the Lessor as necessary or convenient for the Leased Premises."
2(a) Lessor shall construct and maintain in good repair for Lessee's exclusive use and in accordance with the drawing and specifications attached hereto and made a part hereof as Exhibit C the Vessel Mooring System adjacent to and west of the portion of Leased Premises described in the Agreement of Lease, which Vessel Mooring System shall consist of
(i) a 400 foot extension of the sea wall in a westerly direction which shall be constructed in the same fashion and of the same quality, materials and workmanship as the existing sea wall in the Berth 24 area;
(ii) five mooring dolphins connected to the sea wall by walkways; and
(iii) one loading platform.
(b) Lessee shall have the right from time to time to install on the constituents of the Vessel Mooring System such equipment, pipe lines, machinery and other facilities which Lessee finds desirable in accordance with its use of the Vessel Mooring System (such facilities being collectively referred to as "Lessee Support Facilities"), and Lessor shall not be responsible for the maintenance or repair of the Lessee Support Services or the Lessee Support Facilities except where damage is caused to such facilities or services as a result of Lessor's fault or negligence. At any time during the continuance of the effectiveness of this Amendment or within ninety (90) days after the termination or nonrenewal hereof, however arising, Lessee will sever and remove from the Leased Premises any Lessee Support Facilities or Lessee Support
2.
Services. If Lessee removes any part of such Lessee Support Facilities or Lessee Support Services, Lessee, except as otherwise provided at Paragraph 8 hereof, shall be obligated to restore to its original condition, fair wear and tear excluded, Lessor's property upon which the Lessee Support Services or Lessee Support Facilities were located.
In the event that Lessee decides to install or attach any equipment (i.e., pipelines, machinery or other facilities) on or to the Vessel Mooring System, all permits, fees and construction costs shall be paid by Lessee.
Lessee agrees to hold harmless and indemnify Lessor against all claims brought against Lessor which arise out of the fault or negligence of the Lessee in connection with the installation or use of the equipment attached by Lessee to the vessel mooring system and Lessor agrees to hold harmless and indemnify Lessee against all claims brought against Lessee arising out of the fault or negligence of the Lessor in the construction and maintenance of the vessel mooring system. The foregoing indemnifications include reasonable legal fees and costs incurred in defense of such claims.
(c) Lessor shall maintain a depth of at least ten (10) feet at mean low water beginning immediately on the northerly side of the loading platform and the breasting dolphins shown in Exhibit C attached hereto and continuing northerly to the main ship channel of Port Sutton channel.
3. Paragraphs 1 and 2 of the Agreement of Lease are deleted, effective as of the first day of the first month after the date on which the Vessel Mooring System has been completed in accordance with the provisions of this Amendment and turned over to Lessee for Lessee's use, and replaced with the following:
"l.(a) Lessee agrees to pay Lessor for performance of Lessor's obligations under this Agreement and as rental for the Leased Premises, including without limitation the rental of the premises described in Exhibit A of the Agreement of Lease and Exhibit C of this Amendment and the wharfage facilities and the easements described in the Lease Agreement and this Amendment, the following amounts plus the amounts prescribed in Paragraph 2 below:
(i) monthly land rent at the rate of Two Hundred and Fifty Dollars ($250.00) per acre in the portion of the Leased Premises described in Exhibit A to the Agreement of Lease which contains 10.24 acres for purposes hereof; plus
(ii) Wharfage for petroleum products brought into and taken from Lessee's terminal located on the portion of the Leased Premises described in Exhibit A to the Agreement of Lease and such wharfage to be calculated as follows:
(A) for petroleum products brought into said portion of the Leased Premises whether brought in by vessel, truck, rail car or pipe line,
3.
$0.02 per barrel for the first 2,000,000 barrels per lease year,
$0.015 per barrel for the second 2,000,000 barrels per lease year, and
$0.01 per barrel for all amounts over 4,000,000 barrels per lease year
The wharfage to be charged pursuant of this Part (A) will aggregate a minimum of Three Thousand Dollars ($3,000.00) per acre in the portion of the Leased Premises described in Exhibit A to the Agreement of Lease (which constitutes 10.24 acres for purposes hereof) in any Lease Year. For purposes of this calculation a Lease Year shall be deemed to begin on the 16 day of December and continue through the 15 day of the following December during the term of this lease.
(B) for petroleum products taken out of said portion of the Leased
Premises by vessel: the rate shall be one-half the rate in effect in paragraph 1
(a) (ii) (A) above.
The wharfage to be charged pursuant to this Part (B) will aggregate a minimum of Six Thousand Five Hundred Dollars ($6,500.00) per Amendment Year. For purposes hereof an Amendment year shall start with the first day of the first month after the date on which the Vessel Mooring System has been completed in accordance with the provisions of this Amendment and turned over to Lessee for Lessee's use and shall end with the last day of the twelfth calendar month thereafter, said Amendment Year to consist of a total of twelve consecutive calendar months.
(C) If at the end of any Lease Year or Amendment Year, whichever is applicable, there has been insufficient volume of petroleum products either brought into said portion of the Leased Premises or taken out of said portion of the Leased Premises, as shall be applicable to the particular calculation, to bring the wharfage to a sum equal to the minimum set forth in Part (ii) (A) or (B), as applicable, Lessee will within the following fifteen (15) days remit an additional amount sufficient to bring the annual payment for such Lease Year or Amendment Year, whichever is applicable, up to said minimum.
(b)(i) In the event the docking facility on Port Sutton Channel as described in the Agreement of Lease becomes unuseable for more than ninety-six hours through no fault of the Lessee, its agents or employees, or by vessel serving the Lessee, the annual minimum wharfage set forth at Subparagraph l(a)(ii)(A) above shall be reduced by the ratio of hours the docking facilities is unuseable to the total hours in the Lease Year.
4.
(ii) In the event the Vessel Mooring System becomes unuseable for more then ninety-six hours through fault of the Lessor, its agents or employees, the annual minimum wharfage set forth at Subparagraph l(a)(ii)(B) and the dockage set forth below in Subparagraph 2(b) shall each be reduced by the ratio of hours the Vessel Mooring System is unuseable to the total hours in the Amendment Year.
In the event the Vessel Mooring System becomes unuseable through the fault of Lessee; its agents or employees, the annual wharfage set forth at subparagraph l(a)(ii)(B) and the dockage set forth below in subparagraph 2(b) shall continue in full force and effect.
In the event that Lessor terminates this Amendment pursuant to Paragraph 7 hereof, the annual minimum wharfage set forth at Subparagraph l(a)(ii)(B) and the dockage set forth at Subparagraph 2(b) below shall be prorated to the portion of the Amendment Year prior to the effective date of the termination.
(iii) These reductions in minimum wharfages shall not alter the dumurrage provisions of other sections in the Agreement of Lease.
2(a) In addition to the amounts specified in Paragraph 1 and in Part (b) of this Paragraph 2, the Lessor will charge dockage to or against the various vessels employed in the movement of petroleum products to and from the docking facilities described on the sketch marked Exhibit B to the Agreement of Lease at a rate not greater than the then current rates established by the applicable tariff of the Tampa Port Authority. In the event the Tampa Port Authority ceases to publish its tariffs, then the dockage charge will be established by mutual agreement of the parties for the balance of any lease term or extensions thereof.
(b) In addition to the amounts specified in Paragraph 1 and in Part (a) of this Paragraph 2, Lessor will charge, in lieu of dockage relative to the Vessel Mooring System, Twenty-two Thousand Dollars ($22,000.00) per Amendment Year ($1,833.33 per month, payable monthly in advance.)
(c) Any wharfage amounts due pursuant to Subsection l(a)(ii) shall be payable on a monthly basis within fifteen (15) days after the end of the month to which the amounts apply.
(d) All wharfage calculations shall be based on Lessee's loading and unloading records as maintained by Lessee, or such other mutually agreeable method. Lessor shall have a right during normal business hours to have access to, inspect and make copies of Lessee's loading records as are relevant to wharfage amounts due pursuant to Subparagraph l(a)(ii)."
5.
4. The first seven words of Paragraph B of the Agreement of Lease reading "except as provided in Paragraph 4 above," are deleted and replaced with the following: "Except as provided in Subparagraph 2.(a) of this Amendment and in Paragraph 4 of the Agreement of Lease,".
5. Paragraph 23 of the Agreement Lease is deleted and replaced with the following:
"23 Lessee shall have two successive options of renewing and
extending this Lease, including this Amendment, each such renewal and
extension to be for a period of ten (10) years beginning with the date
of termination of the preceding ten (10) year lease. Each such option
shall be exercised by giving written notice to the Lessor no less than
ninety (90) days prior to the expiration of the term then in effect.
Alternatively, Lessee may elect to exercise this option as to the
Leased Premises described in the Agreement of Lease prior to change by
this Amendment and in such case the extension shall not apply to the
Leased Premises described above at Paragraph 1 of this Amendment and in
such case or in case of cancellation by Lessor in accordance with
Paragraph 7 of this Amendment, Lessee's obligation to make any further
payments as described at Subparagraphs l(a)(ii)(B) and 2(b) of the
Agreement of Lease as amended hereby shall terminate at the end of the
Lease Term then in effect or at the time of cancellation as applicable.
Except to the extent otherwise provided immediately above in this
section, each such lease or extension entered into pursuant to an
exercise of such option shall be on the same terms and conditions as
those expressed herein, except that the rental rate, wharfages and
minimum wharfages, described in Paragraph 1 of the Agreement of Lease
as amended hereby shall be increased or decreased for the next ensuing
ten years by an amount calculated by multiplying the base amount for
which the adjustment is being calculated as set forth at Paragraph 1 of
the Agreement of Lease as amended hereby by a fraction whose numerator
is The Consumer Price Index, U.S. City Average All Items (Base Year
1967) published by the Bureau of Labor Statistics, U.S. Department of
Labor, for the third month prior to expiration of the ten year lease
period then in effect, and (a) whose denominator shall be said Consumer
Price Index (U.S. City Average All Items) for the first month of the
original term of this lease insofar as calculation of the increase or
decrease of the amounts set forth at Subparagraphs (a)(i), (ii)(A) and
(ii)(B) of Paragraph 1 of the Agreement of Lease as amended hereby.
Should the Bureau of Labor Statistics change the manner of computing
the Consumer Price Index, the Bureau shall be requested to furnish a
conversion factor designated to adjust the new index to the one
previously in use, and adjustment to the new index will be made on the
basis of such conversion factor. Should the publication of the Consumer
Price Index be discontinued by the Bureau of Labor Statistics, then
such other index as may be published by said Bureau most nearly
approaching said discontinued index shall be used in making the
adjustments herein provided.
6.
Should the Bureau discontinue the publication of an index approximating the index herein contemplated, then such index as may be published by another United States Government Agency as most nearly approximates the index herein first above mentioned shall govern and be substituted as the index to be used, subject to the application of an appropriate conversion factor to be furnished by the governmental agency publishing the adopted index.
In the event of any valid delay caused by seeking the proper adjustment for rental payments as herein provided, Lessee shall continue paying the rental under the last preceding rental adjustment as herein provided, until such time as said proper adjustment has been made, at which time adjustment shall be made retroactive to the beginning of the year in which the adjustment should have been made.
In any event, the land rent, wharfage and annual minimum wharfage payment shall be no less than specified in Paragraph 1 of the Agreement of Lease as amended hereby.
6. The lease term of the portion of the Leased Premises described in this Amendment shall commence as of the first day of the first month after the date the Vessel Mooring System has been completed in accordance with the provisions of this Amendment and turned over to Lessee for Lessee's use and shall run, subject to the termination provisions and opt[on rights of this Amendment, with the term of the Agreement of Lease.
If the Lease Term of the portion of the Leased Premises described in this Amendment has not begun, for any reason whatsoever except the default of the Lessee in performance of its obligations under this Amendment, within one year after the date hereof, Lessee shall have the right, on thirty (30) days written notice to Lessor, to cancel this Amendment.
7. Lessor specifically reserves the right to terminate this Amendment for the portion of the Leased Premises described in this Amendment by giving Lessee six months prior written notice of such termination where Lessor must build a deepwater dock for a prospective lessee or purchaser in order to lease or sell the land immediately to the south of the Vessel Mooring System.
8. The fourth sentence of paragraph 3 of the Agreement of Lease which sentence reads 'Any facilities placed within the wharf area shall be so placed and maintained to facilitate the joint use of said wharf area by the Lessee and the lessor or its licensees or other tenants' as applied to the Vessel Mooring System shall mean that the facilities placed on the Vessel Mooring System by Lessee shall not unreasonably hinder or prevent the use of the wharf area adjacent to the east west dock known as Berth 24 by both Lessee and Lessor or Lessor's licensees or other tenants as such use is contemplated by this Agreement of Lease.
7.
9. In the event of termination of this Amendment pursuant to Paragraph 7 of this Amendment or in the event of expiration of the term of this Amendment without termination of, or expiration of the term of the Agreement of Lease, Lessee and Lessor shall be relieved of all obligations under this Amendment, and the Agreement of Lease, unamended by this Amendment, shall remain in full force and effect.
10. All the terms, provisions and conditions of the Agreement of Lease, not amended or modified herein, shall apply to the Leased Premises described in this Amendment as fully and completely as if such terms, provisions and conditions were set forth in this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written.
LESSOR: Port Sutton, Inc. LESSEE: Eastern Seaboard Petroleum Company, Inc. BY: /s/ ROBERT THOMAS BY: /s/ BEN W. MATHEWS ------------------------------- ------------------------------- Its: President Its: Vice President ------------------------------ ------------------------------ Attest: /s/ [ILLEGIBLE] Attest: /s/ JOHN A. BLAIR --------------------------- --------------------------- Secretary-Treasurer Secretary-Treasurer |
8.
STATE OF FLORIDA ) ) ss. COUNTY OF DUVAL ) |
I hereby certify that on this day before me, an officer duly authorized in the state aforesaid and in the county aforesaid to take acknowledgements, personally appeared Ben W. Mathews and John A. Blair, to me known and know to be the persons described in and who executed the foregoing instrument as Vice President and Secretary-Treasurer, respectively, of the corporation named therein, and severally acknowledged before me that they executed the same as such officers in the name and on behalf of said corporation.
Witness my hand and official seal in the county and state aforesaid this 20th day of May, A.D. 1980.
/s/ DURWOOD H. BOZZELL --------------------------------------- Notary Public |
NOTARY PUBLIC STATE OF FLORIDA AT LARGE MY COMMISSION EXPIRES OCT 20, 1983 [SEAL] BONDED THRU GENERAL INS. UNDERWRITERS STATE OF FLORIDA ) ) ss. COUNTY OF HILLSBOROGH ) |
I hereby certify that on this day before me, an officer duly authorized in the state aforesaid and in the county aforesaid to take acknowledgments, personally appeared Robert Thomas and Henry Toland, to me known and known to be the persons described in and who executed the foregoing instrument as President and Secretary-Treasurer, respectively, of the corporation named therein, and severally acknowledged before me that they executed the same as such officers in the name and on behalf of said corporation.
Witness my hand and official seal in the county and state aforesaid this 29th day of May, A.D. 1980.
/s/ BETTY FOSTER --------------------------------------- Notary Public |
Notary Public, Florida, State at Large
My Commission Expires Sept. 9, 1983
[SEAL]
9.
SECOND AMENDMENT TO BE ATTACHED
TO AGREEMENT OF LEASE DATED
DECEMBER 16, 1976, BETWEEN
PORT SUTTON, INC. AND
EASTERN SEABOARD PETROLEUM COMPANY, INC. FOR
PREMISES LOCATED IN
PORT SUTTON, HILLSBOROUGH COUNTY, FLORIDA
THIS SECOND AMENDMENT TO LEASE of December 16, 1976, by and between PORT SUTTON, INC., a Florida corporation, hereinafter called LESSOR, and EASTERN SEABOARD PETROLEUM COMPANY, INC., a Florida corporation, hereinafter referred to as LESSEE,
WITNESSETH: That for and in consideration of the terms and conditions contained in the original Lease of December 16, 1976, which was amended by First Amendment To Agreement Of Lease dated May 21 1980, and for the purpose of further amending said Lease it is now agreed as follows:
1. Article 2(a)(ii) on page two of the First Amendment To Agreement Of Lease is amended to the extent that the Vessel Mooring System shall consist of six mooring dolphins connected to the sea wall by walkways.
2. Article 3, paragraph l(a)(ii)(B) on page four of the First Amendment To Agreement Of Lease is amended to the extent that the wharfage to be charged pursuant to this Part (B) will aggregate a minimum of Seven Thousand Dollars ($7,000.00) per Amendment Year.
3. Article 3, paragraph 2(b) on page five of the First Amendment To
Agreement Of Lease is amended to the extent that in addition to the amounts
specified in Paragraph 1 and in Part (a) of Paragraph 2 of said Amendment,
Lessor will charge in lieu of dockage relative to the Vessel Mooring System,
Twenty-three Thousand Two Hundred Fifty Dollars ($23,250.00) per Amendment Year
($1,937.50 per month, payable monthly in advance.)
4. Exhibit "C" attached to the First Amendment To Agreement Of Lease, is revised, showing the addition of one (1) breasting dolphin, to be located on the same east-west line as the original five (5) breasting dolphins and seventy
EXHIBIT C
feet (70') east of the easternmost original breasting dolphin. A copy of the "revised" Exhibit C is attached hereto and made a part hereof.
5. In all other respects the original Agreement Of Lease of December 16, 1976, as amended by the First Amendment To Agreement Of Lease of May 21, 1980, between the parties is hereby confirmed and ratified.
Executed in multiple copies this the 10th day of October, 1980.
WITNESSES: LESSOR: PORT SUTTON, INC. /s/ DOROTHY C. BERGER By: /s/ ROBERT THOMAS ----------------------------- ---------------------------- /s/ EMILY I. FRANK Its: President ----------------------------- --------------------------- ATTEST: By: /s/ SHERRY TOLAND ---------------------------- Its: Secretary-Treasurer --------------------------- WITNESSES: LESSEE: EASTERN SEABOARD PETROLEUM COMPANY INC. /s/ THEO V. TILLENHART By: /s/ BEN W. MATTHEWS ----------------------------- ---------------------------- /s/ [ILLEGIBLE] Its: Vice President ----------------------------- --------------------------- ATTEST: By: /s/ JOHN A. BLAIR ---------------------------- Its: Secretary-Treasurer --------------------------- |
STATE OF FLORIDA ) ) ss. COUNTY OF DUVAL ) |
I hereby certify that on this day before me, an officer duly authorized in the state aforesaid and in the county aforesaid to take acknowledgements, personally appeared Ben W. Mathews and John A. Blair, to me known and known to be the persons described in and who executed the foregoing instrument as Vice President and Secretary-Treasurer respectively, of the corporation named therein, and severally acknowledged before me that they executed the same as such officers in the name and on behalf of said corporation.
Witness my hand and official seal in the county and state aforesaid this 6th day of October, A.D. 1980.
/s/ DURWOOD H. BOZZELL --------------------------------------- Notary Public |
NOTARY PUBLIC STATE OF FLORIDA AT LARGE
MY COMMISSION EXPIRES OCT 20, 1983
BONDED THRU GENERAL INS. UNDERWRITERS
EXHIBIT B
THE SUBLEASE
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT (this "Sublease") is entered into as of the 22nd day of November, 2000, by and between MARTIN GAS SALES, INC., a Texas corporation ("Sublessor"), and CF MARTIN SULPHUR, LP, a Delaware limited partnership ("Sublessee").
WITNESSETH:
WHEREAS, Sublessor currently leases from the Tampa Port Authority, a body politic and corporate organized and existing under the laws of the State of Florida ("Master Lessor"), approximately 10.274 acres of land ("Leased Premises") situated in Port Sutton, southeast of the City of Tampa, in Hillsborough County, Florida, and more particularly described in the Master Lease (defined below), pursuant to that certain Agreement of Lease (assigned and amended as described below) dated December 16, 1976 (the "Original Master Lease"), by and between Port Sutton, Inc., a Florida corporation ("Original Master Lessor"), as lessor, and Eastern Seaboard Petroleum Company, Inc., a Florida corporation (the "Original Master Lessee"), as lessee;
WHEREAS, the Original Master Lease has been: (i) amended by
that certain First Amendment to Agreement of Lease ("First Amendment") dated May
21, 1980; (ii) amended by that certain Second Amendment to Lease dated October
10, 1980; (iii) assigned by Original Master Lessee to Steuart Petroleum Company,
a Delaware corporation ("Second Master Lessee"), pursuant to that certain Lease
Assignment and Agreement effective August 14, 1984; (iv) amended by that certain
Third Amendment to Lease dated effective August 15, 1984; (v) assigned by
Original Master Lessor to Master Lessor by instrument effective September 21,
1984; (vi) amended by that certain Amendment No. 4 to Agreement of Lease
("Fourth Amendment") dated July 13, 1987; (vii) amended by that certain
Amendment No. 5 to Agreement of Lease ("Fifth Amendment") dated December 5,
1988; (viii) assigned by Second Master Lessee to Boliden Chemicals, Inc., a
Delaware corporation ("Third Master Lessee"), by instrument effective February
16, 1989; (ix) amended by that certain Amendment No. 6 to Agreement of Lease
("Sixth Amendment") dated February 16, 1989; (x) amended by that certain
Amendment No. 7 to Agreement of Lease ("Seventh Amendment") dated May 13, 1992;
(xi) assigned by Third Lessee to Sublessor pursuant to that certain Assignment
and Assumption Agreement dated March 28, 1995; and (xii) amended by Amendment
No. 8 to Agreement of Lease (the "Eighth Amendment") dated December 16, 1996
(the Original Master Lease, as so amended and assigned, the "Master Lease");
WHEREAS, a copy of said Master Lease is attached hereto as Exhibit A; and
WHEREAS, Sublessor desires to sublet to Sublessee, subject to and upon the terms and conditions contained herein, (i) for the exclusive use of Sublessee, that certain portion of the Leased Premises described on the Legal Description attached hereto as Exhibit B, and identified (by horizontal hatching) on the Site Plan attached hereto as Exhibit C (each of which exhibits is incorporated herein and made a part hereof for all purposes), which portion contains
approximately 1.69 acres of land (hereinafter, the "Controlled Premises"), and
(ii) for the non-exclusive use of Sublessee, all easements and areas, and rights
of use and access necessary or pertaining to the Controlled Premises (except for
the Vessel Mooring System, defined and described in the First Amendment) which
are appurtenant to the Leased Premises under the Master Lease, as the same are
in part identified (by vertical hatching) on Exhibit C (hereinafter, the "Common
Areas"), to the extent to which the same are held by Sublessor pursuant to the
Master Lease (the Controlled Premises and the Common Areas are collectively
referred to hereinafter as the "Subleased Premises").
NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Sublessor and Sublessee hereby covenant and agree as follows:
1. DEFINED TERMS. All capitalized terms used herein and not defined herein shall have the meanings ascribed thereto in the Master Lease.
2. SUBLEASE; USE. Sublessor hereby subleases and grants to Sublessee, and Sublessee hereby subleases and accepts from Sublessor, the Subleased Premises, on and subject to the terms and conditions contained in this Sublease. Sublessee shall use the Subleased Premises only for the uses permitted under the terms and provisions of the Master Lease (including, without limitation, Paragraph 3 of the Original Master Lease, as modified by Paragraph 1 of the Sixth Amendment and Paragraph 3 of the Eighth Amendment).
3. TERM. The term of this Sublease shall commence on October 31, 2000 ("Sublease Commencement Date"), and shall terminate on December 14, 2006 ("Sublease Term"); provided, however, the Sublease Term shall in no event extend beyond the term of the Master Lease, and provided further, that this Sublease may terminate or be terminated earlier pursuant to the terms of the Master Lease or this Sublease.
4. CONDITION OF SUBLEASED PREMISES. The Subleased Premises shall be delivered to Sublessee by Sublessor in its present condition existing on the Sublease Commencement Date. Sublessor and Sublessee agree that none of the terms contained in the Master Lease with respect to the construction or completion of improvements (including, without limitation, the construction and maintenance of the Vessel Mooring System) are applicable to the Subleased Premises or this Sublease, except as expressly set forth in this Sublease below. From and after the Sublease Commencement Date, Sublessee hereby assumes all risks associated with the Controlled Premises and all improvements, equipment, fixtures or facilities constructed or located therein or thereon (including the physical condition of any of the foregoing), and Sublessee shall indemnify and hold harmless Sublessor from and against any claim, loss, damage, expense (including without limitation reasonable attorneys' fees and costs) or liability arising out of or based upon any injury or damage to person or property occurring on the Controlled Premises during the Sublessee's occupancy of the Controlled Premises under this Sublease, unless caused by the negligence or intentional torts of Sublessor, or its agents, servants or employees.
Furthermore, except as otherwise expressly provided in this Sublease to the contrary, Sublessor shall not be liable to Sublessee, or to Sublessee's agents, servants or employees for any claim, loss, damage, expense or liability arising out of or based upon any injury or damage to person or property occurring on the Common Areas which is caused by the negligence or intentional torts of Sublessee, or its agents, servants or employees, and Sublessee shall indemnify and hold Sublessor harmless from and against all liability and claims (including, without limitation, reasonable attorneys' fees and costs) for or related to the same. Except as otherwise expressly provided in this Sublease to the contrary, Sublessee shall not be liable to Sublessor, or to Sublessor's agents, servants or employees for any claim, loss, damage, expense or liability arising out of or based upon any injury or damage to person or property occurring on the Common Areas which is caused by the negligence or intentional torts of Sublessor, or its agents, servants or employees, and Sublessor agrees to indemnify and hold Sublessee harmless from and against all liability and claims (including, without limitation, reasonable attorneys' fees and costs) for or related to the same.
5. MASTER LEASE. This Sublease is subject and subordinate to the Master Lease. Except as may be inconsistent with the terms and provisions hereof and of any consent to this Sublease executed by Sublessor, Sublessee and the Master Lessor, the terms and provisions of the Master Lease (including, without limitation, any and all terms or provisions concerning hazardous waste and/or environmental condition, compliance, inspection, liability and/or indemnity, and/or rights of removal concerning improvements, machinery, equipment and other personal property on the Subleased Premises; specifically including, without limitation, Paragraphs 5 and 6 of the Fourth Amendment, and Paragraph 14 of the Original Master Lease, respectively) shall be applicable to this Sublease as and to the extent that such provisions relate to the Subleased Premises, and shall be incorporated into this Sublease (i) as if Sublessor were Lessor under the Master Lease and Sublessee were Lessee under the Master Lease, and (ii) as if the Subleased Premises were the Leased Premises under the Master Lease, except to the extent inconsistent with the agreements and understandings expressed in this Sublease or to the extent prior to the Sublease Commencement Date or after the expiration of the Sublease term. Notwithstanding the foregoing, the following provisions of the Master Lease are expressly not incorporated herein and such provisions shall have no application to Sublessee or the Subleased Premises:
A. Paragraphs 17, 18 and 20, the first sentence of Paragraph 22, Paragraph 23 and any provision creating construction or maintenance obligations contained in Paragraph 24 (it being understood that Sublessor shall have no such obligations and that Sublessee shall have access to the road described therein) of the Original Master Lease;
B. Any provision creating construction or maintenance obligations, and/or any provision passing an "exclusive" use, contained in Paragraphs 1 and/or 2 (it being understood that Sublessor shall have no such obligations and that Sublessor and Sublessee shall share the rights to access, ingress and egress and any other rights of use or easements created or described therein), Paragraph 5 and the second paragraph of Paragraph 6 of the First Amendment;
C. Paragraph 4 of the Fourth Amendment;
D. Paragraph 5 of the Fifth Amendment; and
E. Paragraphs 5, 6 and 7 the Seventh Amendment.
Where reasonably necessary, the terms of the Master Lease, as incorporated into this Sublease as aforesaid, shall be construed in light of the fact that Sublessor (unlike Master Lessor) does not own a fee interest in the Subleased Premises but only a leasehold interest under the Master Lease. Sublessor and Sublessee anticipate that Master Lessor's performance in accordance with the Master Lease shall fulfill the equivalent obligation of Sublessor hereunder, and in the event of Master Lessor's default under the Master Lease, Sublessee's rights shall be limited as provided in the following subparagraph of this Section 5. As between Sublessor and Sublessee, if the terms of this Sublease conflict with the terms of the Master Lease, then the terms of this Sublease shall control. Sublessee shall perform and observe all the obligations, covenants and conditions contained in the Master Lease on Sublessor's part that are incorporated hereinabove by reference and to the extent that the obligations, covenants and conditions apply and accrue from and after the Sublease Commencement Date. Each of Sublessor and Sublessee will not cause or allow to be caused any default under the Master Lease as to its respective portion thereof. Sublessee hereby indemnifies and holds Sublessor harmless from and against any claim, loss, damage, expense (including without limitation reasonable attorneys' fees and costs) or liability arising under the Master Lease with respect to the Subleased Premises, from and after the Sublease Commencement Date, from or related to Sublessee's failure to perform Sublessee's obligations under this Sublease, including, without limitation, those obligations of Sublessor pursuant to the Master Lease which are incorporated herein by reference. Sublessee acknowledges that it has received and reviewed the Master Lease, in the form attached hereto as Exhibit A. Except as may be expressly set forth in Section 4 above, Sublessee is not relying on, and Sublessor has made no representations, warranties or statements regarding, the interpretation or application of the terms of the Master Lease.
At Sublessee's written request, Sublessor will exercise the rights and remedies Sublessor has under the Master Lease with respect to the Subleased Premises, and at law or in equity, so designated by Sublessee in its request. Such rights and remedies shall be pursued diligently by Sublessor; however, Sublessee shall be obligated to reimburse Sublessor for Sublessor's reasonable out-of-pocket costs of exercising such rights or remedies. Notwithstanding anything to the contrary contained in this Sublease, Sublessor shall not be deemed in default under this Sublease if Master Lessor fails to perform its obligations under the Master Lease. Sublessee shall indemnify, hold harmless and defend (with counsel reasonably satisfactory to Sublessor) Sublessor from and against any claim, loss, damage, expense or liability arising from or in connection with Sublessor's assertion of rights or pursuit of remedies under the Master Lease either (a) at the request of Sublessee or (b) following Sublessee's assertion of the same right or pursuit of the same remedy against Sublessor under this Sublease upon grounds which, if proven, would justify the pursuit of the same right or remedy under the Master Lease (e.g., termination in the event of condemnation). The foregoing notwithstanding, Sublessor shall not be required to do or perform any act which would constitute a default by Sublessor under the Master Lease.
In the event that Sublessor receives notice of default from Master Lessor under the Master Lease, Sublessor shall immediately notify Sublessee of the same, and Sublessee shall have the right, but not the obligation, to attempt to cure such default, in which event Sublessor
shall reimburse Sublessee for all reasonable costs related to such cure expended by Sublessee. If Sublessee cures such default, and Sublessor fails to reimburse Sublessee for the cost of such cure within thirty (30) days of Sublessee's demand therefor, Sublessee shall be entitled to demand and receive an assignment by Sublessor of all of Sublessor's right, title and interest under the Master Lease, and Sublessor agrees to execute and deliver such assignment to Sublessee within thirty (30) days following Sublessor's receipt of Sublessee's demand for such assignment, pursuant to the terms of this paragraph.
Notwithstanding any provision to the contrary of this Sublease or of
any consent to this Sublease executed by Sublessor, Sublessee and the Master
Lessor, in no event shall Sublessee be entitled to receive assignment of the
Master Lease pursuant the terms of this Section 5 (or of any such consent) if
(i) the default under the Master Lease giving rise to such right of assignment
shall occur as a result of any act or omission of the Sublessee (including,
without limitation, any act or omission constituting a default by Sublessee
under Section 14 of this Sublease), or (ii) this Sublease has been terminated
(in accordance with the terms of this Sublease) prior to the date of such
default.
6. SECURITY DEPOSIT. Sublessee shall not be required to deposit a security deposit as a condition to this Sublease.
7. RENT. Sublessee hereby accepts this Sublease and agrees that
Sublessee shall be obligated to pay to Sublessor all amounts due under the
Master Lease respecting the use and/or possession of the Subleased Premises,
including, without limitation, (i) monthly bare land rent (which rent Sublessee
shall be obligated to pay pro rata, based on the proportion of the amount of
area constituting the Controlled Premises compared to the amount of area
constituting the Leased Premises, which proportion is hereby deemed to be
15.7680%), (ii) any and all wharfage for products brought onto or shipped out of
the Controlled Premises, including any and all minimum wharfage guarantees (as
the same may be adjusted), (iii) any and all dockage charges charged and/or
owing with respect to vessels employed in the movement of materials to and from
the Controlled Premises, (iv) any and all Vessel Mooring Charges (if any)
applicable to Sublessee, and (v) any and all real and personal property taxes,
sales taxes and other taxes payable by Sublessor with respect to the Controlled
Premises or activities related thereto pursuant to the terms of the Master
Lease. All of the foregoing sums shall be paid by Sublessee to Sublessor in
accordance with the terms and provisions of the Master Lease, as if Sublessor
were Lessor under the Master Lease and Sublessee were Lessee under the Master
Lease; subject, however, to shortening of time limits as provided in Paragraph
14(b) below, and provided, that the sums owing under subclauses (ii), (iii),
(iv) and (v) above shall not be due and payable by Sublessee to Sublessor until
five (5) days after delivery by Sublessor to Sublessee of an invoice therefor.
8. NOTICES. Notices required by this Sublease shall be in writing. All such notices shall be served personally or sent by United States certified mail, return receipt requested, or private air courier, postage or charge prepaid, addressed to Sublessor or Sublessee, as the case may be, at its address set forth below, or at such other place as Sublessee or Sublessor may from time to time designate in a written notice to the other. Notices may also be sent by facsimile transmission, provided a duplicate copy is sent to the addressee by certified mail. Such
notices shall be deemed sufficiently served or given when faxed, two (2) days after deposit in any U.S. Post Office, or by overnight air courier service on actual receipt by the recipient.
If to Sublessor: Martin Gas Sales, Inc. PO Box 191 4200 Stone Road Kilgore, Texas 75663 Fax: 903.983.6262 Attn: Ruben S. Martin, III If to Sublessee: CF Martin Sulphur, LP PO Box 191 4200 Stone Road Kilgore, Texas 75663 Fax: (903) 983-6262 -------------------------------------- Attn: Ruben S. Martin, III -------------------------------------- With a copy to: CF Industries, Inc. One Salem Lake Drive Long Grove, Illinois 60047 Fax: 847-438-0211 Attn: Stephen R. Wilson And: CF Industries, Inc. One Salem Lake Drive Long Grove, Illinois 60047 Fax: 847-438-0211 Attn: John H. Sultenfuss |
9. SERVICES. Without limiting the provisions of Section 5 above, Sublessor shall have no liability or responsibility for the provision of any services to the Subleased Premises. Rather, Master Lessor will provide such services in accordance with, and only to the extent required by, the terms of the Master Lease. No failure of Master Lessor to provide services to the Subleased Premises, and no interruption in the provision of such services, shall cause Sublessor to be in default under this Sublease; nor shall Sublessee have a right to an abatement of rent or a right to terminate this Sublease with respect to the same, except to the extent such rights are held by Sublessor under the Master Lease.
10. SUBLESSOR RESTORATION AND REPAIRS. Without limiting the provisions of Section 5 above, as between Sublessor and Sublessee, Sublessor shall have no liability or responsibility for maintenance, repairs, rebuilding or restoration of the Subleased Premises, except to the extent that any such maintenance, repairs, rebuilding or restoration are made necessary by the negligent act or omission of Sublessor or its agents, employees, or contractors. Rather, Master Lessor will provide and conduct such maintenance, repairs, rebuilding and/or restoration in accordance with, and only to the extent required by, the terms of
the Master Lease. No failure of Master Lessor to provide such maintenance, repairs, rebuilding or restoration shall cause Sublessor to be in default under this Sublease nor shall Sublessee be entitled to an abatement of rent or to terminate this Sublease unless and to the extent that Sublessor is entitled to an abatement of rent under the Master Lease or to terminate the Master Lease.
11. ASSIGNMENT AND SUBLETTING. Subject to the provisions of this Section 11 set forth below, Sublessee shall not, without Sublessor's prior written consent (which may be withheld in Sublessor's absolute discretion), and the consent of Master Landlord (i) assign, convey, mortgage, pledge, encumber, or otherwise transfer this Sublease or any interest hereunder; (ii) allow any lien to be placed upon Sublessee's interest hereunder; (iii) sublet the Subleased Premises or any part thereof; or (iv) permit the use or occupancy of the Subleased Premises or any part thereof by any one other than Sublessee (all of the foregoing, an "Assignment"). Any attempt to consummate an Assignment without Sublessor's consent shall be of no force or effect and shall be an event of default under this Sublease. Notwithstanding the foregoing, Sublessee may, without Sublessor's prior written consent, assign any or all of its rights, interests and obligations hereunder if such Assignment (x) is made to a wholly-owned subsidiary of Sublessee, provided that any such subsidiary agrees in writing to be bound by all of the terms, conditions and provisions contained herein, or (y) occurs by operation of law. Notwithstanding any provision to the contrary contained herein, no Assignment shall relieve Sublessee of its obligations hereunder.
12. SUBORDINATION. Sublessee accepts this Sublease subject and subordinate to any mortgages and/or deeds of trust now or at any time hereafter constituting a lien or charge on the Subleased Premises or the improvements situated thereon; provided, however, Sublessee's subordination of this Sublease to any such mortgage hereafter placed by Sublessor is expressly conditioned upon the delivery to Sublessee, simultaneously with the closing of such mortgage, a written agreement of the applicable mortgagee (in a form reasonably acceptable to Sublessee and to such mortgagee) that so long as Sublessee is not in default under the provisions of this Sublease (including all applicable grace periods), Sublessee's rights under this Sublease and possession of the Subleased Premises shall not be disturbed by such mortgagee or by any persons or parties claiming by, through or under such mortgagee (whether or not such persons or parties acquired its or their rights as a result of foreclosure); and, provided further, that any mortgagee, trustee, or holder of any mortgage or deed of trust may elect at any time to cause its interest to be subordinate and junior to Sublessee's interest under this Sublease by filing an instrument in the real property records of the county in the state where the Subleased Premises is located, effecting such election and providing Sublessee with notice of such election. Sublessee, at any time hereafter on demand, shall execute any instruments, releases or other documents that may be required by any present or future mortgagee, trustee, or holder of any mortgage or deed of trust for the purpose of subjecting and subordinating this Sublease to the lien of any mortgage or deed of trust.
13. ASSIGNMENTS BY SUBLESSOR. Sublessor shall have the right to transfer and/or assign, in whole or in part, all its rights and obligations hereunder, subject to this Sublease and Sublessee's rights hereunder. Upon request by Sublessee, Sublessor shall provide Sublessee with prompt written notice of any such transfer or assignment by Sublessor. Sublessee
agrees to execute a certificate certifying such facts (if true) as Sublessor may reasonably require in connection with any such transfer and/or assignment by Sublessor.
14. SUBLESSEE DEFAULTS.
(a) In the event that Sublessee shall (i) default in
the performance of any of the terms, covenants and conditions of this Sublease
(including those portions of the Master Lease incorporated herein by reference)
beyond any applicable notice and grace period provided for in the Master Lease
and incorporated herein by reference (as shortened by subparagraph (b) below),
and/or (ii) Sublessee performs or permits the performance of any other act or
event which would constitute or cause an event of default by Sublessor, as
Lessee, under the Master Lease, Sublessor shall be entitled to exercise any and
all of the rights and remedies to which it is entitled by law, including,
without limitation, the remedy of summary proceeding, and also any and all of
the rights and remedies specifically provided for in the Master Lease and
incorporated herein by reference.
(b) The time limits contained in the Master Lease for the giving of notices, making of demands or performing any act, condition or covenant on the part of Lessee thereunder, or for the exercise by Lessee thereunder of any right, remedy or option, are changed for the purposes of incorporation herein by reference by shortening the same in each instance by three (3) days so that in each instance Sublessee shall have three (3) days less time to observe or perform hereunder than Sublessor has as Lessee under the Master Lease; this provision shall not be applicable to any time limit contained in the Master Lease which is equal to or less than five (5) days, but in such event such time limit shall be shortened by two (2) days so that in such instances Sublessee shall have two (2) days less time to observe or perform hereunder than Sublessor has as the Lessee under the Master Lease.
15. PEACEFUL ENJOYMENT. So long as Sublessee is not in default hereunder (including applicable grace periods), Sublessor covenants that Sublessee shall have, subject to the terms and provisions of this Sublease and the Master Lease, quiet and peaceful possession of the Subleased Premises and enjoy all of the rights herein granted without interference from Sublessor or anyone acting by, through or under Sublessor.
16. SURRENDER OF SUBLEASED PREMISES. Sublessee shall surrender the Subleased Premises on the expiration or earlier termination of this Sublease in the same or better condition as existed on the Sublease Commencement Date, reasonable, ordinary wear and tear and damage by casualty and condemnation excepted.
17. SUCCESSORS. This Sublease shall be binding upon and inure to the benefit of Sublessor, its successors and assigns, and shall be binding upon and inure to the benefit of Sublessee, its successors and, to the extent assignment is permitted hereunder, Sublessee's assigns.
18. EXCLUDED RIGHTS. Sublessor shall have no right to modify the Master Lease, terminate the Master Lease, or expand or otherwise alter, modify or make any improvements to the Subleased Premises without first obtaining Sublessee's consent thereto. If
Sublessor acquires any rights to extend the term of, or to renew, the Master Lease, then, upon Sublessee's request therefor, Sublessor shall exercise such rights and shall grant to Sublessee the right to extend the term of, or to renew, this Sublease (as the case may be), but only to the extent to which Sublessor has the right to do so under the terms of the Master Lease (as modified), and subject to the prior consent of the Master Lessor.
19. LIMITATION OF SUBLESSOR'S LIABILITY. Notwithstanding anything in this Sublease or the Master Lease to the contrary, Sublessee specifically agrees to look to solely to Sublessor's interest in the Subleased Premises for the recovery of any judgment from Sublessor, it being agreed by Sublessee that neither Sublessor (or its successors) nor Sublessor's (or its successors') partners, shareholders, officers, directors, managers, agents and employees shall ever be personally liable for any such judgment.
20. ENTIRETY. This instrument and, to the extent incorporated herein by reference, the Master Lease constitute the entire agreement between Sublessor and Sublessee and may not be modified orally or in any manner other than by an agreement in writing signed by Sublessor and Sublessee or their respective permitted successors in interest. No prior or contemporaneous promises, inducements, representations or agreements, oral or otherwise, between Sublessor and Sublessee not embodied herein shall be binding or have any force or effect.
21. MISCELLANEOUS.
(a) If Sublessee is a corporation, partnership or other entity, Sublessee warrants that all consents or approvals required of third parties (including but not limited to its Board of Directors or partners, to the extent applicable) for the execution, delivery and performance of this Sublease have been obtained and that Sublessee has the right and authority to enter into and perform its covenants contained in this Sublease. Likewise, if Sublessor is a corporation, partnership or other entity, Sublessor warrants that all consents or approvals required of third parties (including but not limited to its Board of Directors or partners) for the execution, delivery and performance of this Sublease have been obtained and that Sublessor has the right and authority to enter into and perform its covenants contained in this Sublease.
(b) Time is of the essence in this Sublease.
(c) The terms and provisions of the Exhibit(s) attached hereto are hereby made a part hereof for all purposes.
(d) This Sublease shall not be deemed or construed to create or establish any relationship (other than that of landlord and tenant) or partnership or joint venture or similar relationship or agreement between Sublessor and Sublessee hereunder.
[The signature page follows immediately hereafter.]
EXECUTED effective as of the day and year first above written.
SUBLESSOR: Executed in the presence of: MARTIN GAS SALES, INC., a Texas corporation /s/ Robert D. Bondurant By: /s/ Ruben S. Martin, III ------------------------------------ --------------------------------------- Name: Robert D. Bondurant Name: Ruben S. Martin, III ------------------------------- Title: President /s/ D. R. Neumeyer ------------------------------------ Name: D. R. Neumeyer ------------------------------- SUBLESSEE: Executed in the presence of: CF MARTIN SULPHUR, LP, a Delaware limited partnership /s/ Robert D. Bondurant ------------------------------------ Name: Robert D. Bondurant By: CF MARTIN SULPHUR, LLC, a Delaware limited ------------------------------- liability company, its general partner /s/ D. R. Neumeyer ------------------------------------ Name: D. R. Neumeyer By: /s/ Ruben S. Martin, III ------------------------------- ---------------------------------------- Name: Ruben S. Martin, III ------------------------------------- Title: President ------------------------------------- |
THE STATE OF TEXAS ) ) COUNTY OF DALLAS ) |
This instrument was acknowledged before me on the 17th day of November, 2000, by Ruben S. Martin, III as President of CF MARTIN SULPHUR, LLC, a Delaware limited liability company, general partner of CF MARTIN SULPHUR, L.P., a Delaware limited partnership, on behalf of said company and partnership.
/s/ F. Gayle McClendon ------------------------------------------ Notary Public in and for the State of Texas |
THE STATE OF TEXAS ) ) COUNTY OF DALLAS ) |
This instrument was acknowledged before me on the 17th day of November, 2000, by Ruben S. Martin, III , as President of MARTIN GAS SALES, INC., a Texas corporation, on behalf of said corporation.
/s/ F. Gayle McClendon -------------------------------------------- Notary Public in and for the State of Texas |
EXHIBIT A
MASTER LEASE
[SEE ATTACHED]
A
EXHIBIT B
LEGAL DESCRIPTION OF SUBLEASED PREMISES
BEGINNING AT THE NE CORNER OF SECTION 4, TOWNSHIP 30 SOUTH, RANGE 19 EAST,
HILLSBOROUGH COUNTY, FLORIDA, THENCE RUN SOUTH 2,020 FEET PARALLEL TO THE EAST
BOUNDARY OF SAID SECTION 4; THENCE RUN WEST 4,160 FEET PARALLEL TO THE NORTH
BOUNDARY OF SAID SECTION 4; THENCE RUN SOUTH PARALLEL TO THE EAST BOUNDARY OF
SAID SECTION 4, A DISTANCE OF 552.74 FEET RUN THENCE S.76 degrees11'33"W., A
DISTANCE OF 681.41 FEET; TO THE POINT OF BEGINNING OF THE HEREIN DESCRIBED
PARCEL; RUN THENCE N.02 degrees38'35"W., A DISTANCE OF 21.11 FEET; RUN THENCE
N.76 degrees01'28"E., A DISTANCE OF 396.08 FEET; RUN THENCE N.33
degrees24'18"W., A DISTANCE OF 81.26 FEET; RUN THENCE N.00 degrees00'00"W.,
PARALLEL TO THE EAST BOUNDARY OF SAID SECTION 4, A DISTANCE OF 163.68 FEET; RUN
THENCE N.90 degrees00'00"W., A DISTANCE OF 171.94 FEET; RUN THENCE S.00
degrees00'00"W., PARALLEL TO THE EAST BOUNDARY OF SAID SECTION 4, A DISTANCE OF
200.66 FEET; RUN THENCE S.89 degrees58'25"W., A DISTANCE OF 224.95 FEET; RUN
THENCE S.00 degrees00'00"W., PARALLEL TO THE EAST BOUNDARY OF SAID SECTION 4, A
DISTANCE OF 161.83 FEET; RUN THENCE N.76 degrees11'33"E., A DISTANCE OF 59.98
FEET TO THE POINT OF BEGINNING, CONTAINING 1.69 ACRES MORE OR LESS.
B
EXHIBIT C
SITE PLAN OF SUBLEASED PREMISES
[SEE ATTACHED]
C
EXHIBIT 10.13
When Recorded, Return to:
Martin Operating Partnership, L.P.
P.O. Box 191
4200 Stone Road
Kilgore, Texas 75663
Attn: Bob Bondurant
PURCHASER USE EASEMENT, INGRESS-EGRESS EASEMENT,
AND UTILITY FACILITIES EASEMENT
THIS PURCHASER USE EASEMENT, INGRESS-EGRESS EASEMENT, AND
UTILITY FACILITIES EASEMENT (this "Agreement") is made as of the 1st day of
November, 2002, by and between Martin Gas Sales LLC, a Texas limited liability
company ("Grantor"), and Martin Operating Partnership L.P., a Delaware limited
partnership ("Grantee").
WITNESSETH:
WHEREAS, Grantor is the owner of that certain land located in or near the City of Beaumont, County of Jefferson, State of Texas more particularly described on Exhibit A attached hereto and made a part hereof (the "Terminal Tract") and the holder of a non-exclusive easement upon, over, under and across a certain fifty foot (50') strip of land for the maintenance of underground utility lines and for vehicular and pedestrian ingress and egress between Texas State Highway 347 and the Terminal Tract (the "Access Easement Tract") pursuant to that certain Utility and Access Easement Agreement dated April 22, 1998, recorded under County Clerk's File No. 9814113, Official Public Records of Real Property Records of Jefferson County, Texas, as amended by instrument dated October 27, 1999, recorded July 21, 2000 under County Clerk's File No. 2000027626, Official Public Records of Real Property Records of Jefferson County, Texas (as amended, the "Access Easement") (the Terminal Tract and the Access Easement Tract are collectively referred to herein as the "Grantor's Property") upon which or adjacent to which are located (a) the areas and easements identified by hatching on Exhibit B attached hereto and made a part hereof (the "Common Use Areas") and (b) additional areas and easements within Grantor's Property which have not been identified on Exhibit B attached hereto, but which are reasonably necessary or convenient for Grantee to have (i) access between the Benefited Parcel (defined below) and the Common Use Areas, and (ii) access, ingress and egress, to and from, the Common Use Areas and any and all existing streets, roadways, rights-of-way, and highways adjacent to the Grantor's Property (such additional areas and easements set forth in this subsection (b) are collectively referred to hereinafter as the "Access Routes"; the Access Routes, the Common Areas and the Grantor's Property are collectively referred to hereinafter as the "Easement Area"); and
WHEREAS, by conveyance of even date herewith, Grantor has conveyed to Grantee that certain land and improvements located in or near the City of Beaumont, County of Jefferson, State of Texas, which is more particularly described on Exhibit C attached hereto and made a part hereof (the "Benefited Parcel"; the Easement Area and the Benefited Parcel are collectively referred to herein as the "Parcels" and individually as a "Parcel"); and
WHEREAS, as part of the consideration for the conveyance of the Benefited Parcel by Grantor to Grantee, Grantor has agreed to grant to Grantee (a) a non-exclusive easement upon, under, over, across and along the Common Use Areas for purposes of using the Common Use Areas and of gaining access to the Benefited Parcel therefrom, (b) a non-exclusive easement upon, under, over, across and along the Access Routes for purposes of gaining access, ingress and egress, to and from, the Common Use Areas and any and all existing streets, roadways, rights-of-way, and highways adjacent to the Grantor's Property, and (c) a non-exclusive easement in, to, under and through Grantor's Property for purposes of using, accessing, constructing, installing, and operating certain utility facilities thereat, all upon the terms, provisions and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of Ten and No/100 Dollars ($10.00), the mutual covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby expressly acknowledged, Grantor and Grantee hereby agree as follows:
1. Grantor does hereby give, grant and convey to Grantee and
Grantee's agents, contractors, tenants, licensees, guests, invitees, grantees,
employees, representatives, successors (including, without limitation, any and
all successors to Grantee in title to all or any portion of the Benefited
Parcel) and assigns (collectively, the "Grantee Parties") a non-exclusive,
perpetual right and easement (which easement shall be appurtenant to the
Benefited Parcel) upon, under, over, across and along (a) the Common Use Areas
for purposes of using the Common Use Areas and gaining access to the Benefited
Parcel therefrom and transporting products, steam, water and other substances
through the piping and conduits within the Common Use Areas to and from the
storage tanks located on the Benefited Parcel, (b) the Access Routes for
purposes of gaining pedestrian, vehicular and all other reasonable modes of (i)
access between the Benefited Parcel and the other Common Use Areas and (ii)
access, ingress and egress, to and from, the Common Use Areas and any and all
existing streets, roadways, paths, driveways, rights-of-way and highways
adjacent to the Grantor's Property, from time to time and at any and all times,
(c) such other portions of Grantor's Property as are necessary to gain access to
and from the Benefited Parcel, the Common Use Areas and the Access Roads, and
(d) subject to the terms of Paragraph 3 below, the Easement Area for purposes of
using, accessing, constructing, placing, installing, maintaining, repairing,
replacing, inspecting, patrolling, renewing, and operating, from time to time
(and for the purposes of causing or permitting any third party to take any or
all of the foregoing actions from time to time) on, under and through the
Easement Area, gas, telephone, telecommunications, water, sanitary sewer and
other utility lines, switchboxes, cables, wires and other associated fixtures,
equipment and facilities (collectively, the "Grantee Utility Facilities"), in
order to provide the Benefited Parcel and the Common Use Areas with utility
services, and in connection with the Grantee Parties' exercise of the rights set
forth in this clause (d), the right to enter upon the Easement Area for such
purposes. Except as specifically set forth herein, each and all of the rights,
privileges and easements conferred upon the Grantee Parties pursuant to this
Agreement may be exercised by the Grantee Parties from time to time and at any
time without any notice (prior or subsequent) to Grantor.
2. In the event that an emergency, hazardous condition or other event beyond the reasonable control of Grantee shall from time to time occur (including, without limitation, strikes, acts of god and actions of law enforcement authorities) which results in the full or partial closure of (a) the Access Routes (or any portion thereof) or (b) the roadways, paths, driveways, rights-of-way or other areas (or any portion thereof) located in the Common Use Area or other portions of Grantor's Property used by the Grantee Parties for access between, among, to, and from the Common Use Areas and the Benefited Parcel, then (in addition to, and not in lieu of, the Grantee Parties' rights and easements described in Paragraph 1 above), the Grantee Parties shall have the right, during the continuance of any such closure, to gain emergency pedestrian, vehicular and all other reasonable modes of access, ingress and egress, over any portion of the Grantor's Property as required by Grantee to gain access to and use of the Benefited Parcel and the Common Use Areas. Such right to access, ingress and egress, may be exercised by
Grantee without prior notice to Grantor, but shall be exercised in a manner that creates and allows only minimal interference with Grantor's operations conducted on the Grantor's Property.
3. In connection with the exercise by the Grantee Parties of their rights and easements under clause (d) of the first sentence of Paragraph 1 of this Agreement, Grantee shall provide Grantor with at least fifteen (15) days advance notice of any proposed construction, placement and installation of Grantee Utility Facilities, and the construction, placement and installation of the Grantee Utility Facilities shall not unreasonably interfere with Grantor's use, occupancy and operation of the Grantor's Property. Grantor acknowledges and agrees that any Grantee Utility Facilities may be owned and/or operated by third parties (and not by Grantee), and that (in addition to, and not in lieu of, the other rights conferred upon Grantee pursuant to this Agreement), Grantee shall have the right to confer upon any such third parties any or all of the rights to which Grantee is entitled under clause (c) of the first sentence of Paragraph 1 of this Agreement, which rights shall be exercised in accordance with and subject to the terms of this Agreement as if such third party were Grantee hereunder. Grantee shall be responsible for maintaining any Grantee Utility Facilities, at its sole cost and expense, subject to the terms set forth in Paragraph 4 below.
4. Grantor and its successors and assigns shall be obligated to maintain and repair the Common Use Areas and keep the Common Use Areas in good repair and condition, reasonable wear and tear excepted, including without limitation the maintenance, replacement and repair of all piping, pumps, valves, gauges, conduits, docks and other facilities located thereon; provided, however, Grantor shall have no obligation whatsoever to staff or provide employees to operate the improvements on the Benefited Parcel, except and only to the extent expressly agreed to in writing by and between Grantor or its successors or assigns and the owner of the Benefited Parcel. In the event that Grantor or its successors or assigns fail to conduct necessary items of maintenance, replacement or repair on the Common Use Areas within a reasonable time after its receipt of written notice thereof from Grantee (not to exceed ninety [90] days), then Grantee may undertake to have such items of maintenance, replacement or repair completed at Grantee's cost, and Grantor or its successor or assign shall reimburse Grantee for the reasonable cost thereof within thirty (30) days after its receipt of a detailed written invoice therefor. The foregoing maintenance, replacement, repair and reimbursement obligations of Grantor shall be covenants running with the land and shall bind the successors and assigns of Grantor. The maintenance and repair of the Access Easement Tract shall be governed by the terms and provisions of the Access Easement.
5. Grantor, at Grantor's sole cost and expense, shall have the right from time to time (but no more frequently than once within any three (3) year period) to relocate the Common Use Areas to an alternative location on the Grantor's Property which is acceptable to Grantee; provided, that (a) Grantor shall have delivered to Grantee at least thirty (30) days' advance notice of any such relocation (which notice shall designate with specificity the proposed alternative location of the Common Use Areas), (b) such relocation shall not materially impair (or make more expensive or more burdensome) any of the rights of use or access granted upon the Grantee Parties hereunder, (c) at all times during the period of time required in order to effect such relocation, the Grantee Parties shall have pedestrian, vehicular and other reasonable modes of access, ingress and egress, on and over the Easement Area or an alternative location reasonably designated by Grantor on and over the Grantor's Property between and among the Benefited Parcel and the Common Use Areas and to and from the Benefited Parcel and the Common Use Areas and all streets, roadways, paths, driveways, rights-of-way and highways adjacent to the Easement Area or such alternative location, (d) the physical condition and condition of title of the relocated Common Use Areas shall be reasonably acceptable to Grantee, and (e) promptly following any such relocation, Grantor shall, if Grantee so requests, execute and record with the County recorder's office an instrument reasonably acceptable to Grantee designating such new location.
6. The terms, conditions, rights and easements contained herein shall be covenants running with the land and shall be perpetual. This Agreement shall be recorded, and the terms and conditions contained herein shall bind, inure to the benefit of, and be enforceable by, the parties hereto and their respective successors and assigns (including, without limitation, the respective successors in title to Grantee and Grantor to the Benefited Parcel and Easement Area).
7. Whenever notice is required to be given pursuant to this Agreement, the same shall be either personally delivered, sent by a nationally recognized overnight delivery service, postage prepaid, or sent via United States certified mail, return receipt requested, postage prepaid, and addressed to the parties at their respective addressed as follows:
(a) If to Grantor: Martin Gas Sales LLC P.O. Box 191 4200 Stone Road Kilgore, Texas 75663 Fax: 903.983.6262 Attn: Ruben S. Martin, III
(b) If to Grantee: Martin Operating Partnership, L.P.
P.O. Box 191
4200 Stone Road
Kilgore, Texas 75663
Fax: 903.983.6262
Attn: Ruben S. Martin, III
or such other addresses as any party, by written notice in the manner specified above to the other party hereto, may designate from time to time. Unless otherwise specified to the contrary in this Agreement, notice shall be deemed to have been given on the date the notice is received, if personally delivered, on the business day after the date the notice is properly sent, if sent by nationally recognized overnight delivery service, or four (4) business days after the notice is properly sent, if sent by United States certified mail.
8. If any term, provision or condition in this Agreement shall, to any extent, be invalid or unenforceable, the remainder of this Agreement (or the application of such term, provision or condition to persons or circumstances other than in respect of which it is invalid or unenforceable) shall not be affected thereby, and each term, provision and condition of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
9. The terms and provisions of this Agreement shall be governed by and construed in accordance with the laws of the State of Texas applicable to a contract executed and performed in such State, without giving effect to the conflicts of laws principles thereof.
10. The rights granted pursuant to this Agreement shall not terminate or be in any way impaired by reason of a change of the present uses of any Parcel of the present improvements or fixtures thereon.
11. If either of the Parcels is hereafter divided into two or more parts by separation of ownership or lease, each portion of such Parcel shall enjoy the benefits and be subject to the burdens, as applicable, of the rights, easements and restrictions created hereby.
12. Either party hereto (or their respective representatives, successors and assigns) may enforce this instrument by appropriate action and the prevailing party in such action shall be entitled to recover as part of its costs reasonable attorneys' fees and expenses.
13. The rule of strict construction does not apply to the grant of easements contained herein. These grants shall be given a reasonable construction in order that the intention of the parties to confer a commercially useable right of enjoyment to Grantee with respect to such easements shall be effectuated.
14. This Agreement may be executed in several counterparts, each of which shall be deemed an original; further, the signature of the parties hereto on this Agreement may be executed and notarized on separate pages, and when attached to this Agreement shall constitute one complete document.
15. None of the terms and provisions of this Agreement shall be deemed to create a partnership between or among the parties hereto in their respective businesses or otherwise, nor shall any terms or provisions of this Agreement cause them to be considered joint venturers or members of any joint enterprise.
16. Each party agrees that it will execute and deliver such other documents and take such other action as may be reasonable requested by the other party to effectuate the intention of this Agreement.
17. The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto.
18. This Agreement cannot be changed orally or by course of conduct, and no executory agreement, oral agreement or course of conduct shall be effective to waive, change, modify or discharge it in whole or in part unless the same is in writing and is signed by the party against whom enforcement of any waiver, change, modification or discharge is sought.
19. Grantor and Grantee agree and acknowledge that, except as expressly set forth herein, there are no intended third party beneficiaries of this Agreement nor any of the rights and privileges conferred herein.
20. In the event of any assignment, transfer, conveyance or sale, once or successively, of all of the right, title and interest of a Grantor in and to the Easement Area, said Grantor making such assignment, transfer, conveyance or sale shall be entirely freed and relieved of all covenants and obligations of the Grantor hereunder accruing after the date of such assignment, transfer, conveyance or sale, and the Grantee shall look solely to the assignee, transferee or purchaser with respect thereof; provided, that upon such assignment, transfer, conveyance or sale, such assignee, transferee or purchaser shall automatically, and without the necessity of further action of any kind, be deemed to have assumed all of Grantor's covenants and obligations hereunder accruing after the date of such assignment, transfer, conveyance or sale. In the event of any assignment, transfer, conveyance or sale, once or successively, of all of the right, title and interest of a Grantee in and to the Benefited parcel, said Grantee making such assignment, transfer, conveyance or sale shall be entirely freed and relieved of all covenants and obligations of the Grantee hereunder accruing after the date of such assignment, transfer, conveyance or sale, and the Grantor shall look solely to the assignee, transferee or purchaser with respect thereto; provided, that upon such assignment, transfer, conveyance or sale, such assignee, transferee or purchaser
shall automatically, and without the necessity of further action of any kind, be deemed to have assumed all of Grantee's covenants and obligations hereunder accruing after the date of such assignment, transfer, conveyance or sale.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date and year first above written.
GRANTOR
MARTIN GAS SALES, LLC,
a Texas limited liability company
By: Martin Resource Management Corporation, a Texas corporation, its sole member
By: /s/ ROBERT D. BONDURANT -------------------------------------------------- Name: Robert D. Bondurant Title: Chief Financial Officer |
GRANTEE
MARTIN OPERATING PARTNERSHIP L.P.,
a Delaware limited partnership
By: Martin Operating GP LLC,
a Delaware limited liability company, its general
partner
By: Martin Midstream Partners L.P.,
a Delaware limited partnership, its sole member
By: Martin Midstream GP, LLC,
a Delaware limited liability company, its
general partner
By: /s/ RUBEN S. MARTIN, III --------------------------------- Name: Ruben S. Martin, III Title: President |
STATE OF TEXAS ) ) ss COUNTY OF DALLAS ) |
I, Adam C. Gallegos, a Notary Public in and for the County and State aforesaid, DO HEREBY CERTIFY that Robert D. Bondurant, personally known to me to be the Chief Financial Officer of Martin Resource Management Corporation, a Texas corporation and sole member of MARTIN GAS SALES LLC, a Texas limited liability company, and personally known to be to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that as such Chief Financial Officer, he signed and delivered such instrument pursuant to the authority given by such limited liability company, as his free and voluntary act and deed, and as the free and voluntary act and deed of such limited liability company, for the uses and purposes therein set forth.
Given under my hand and official seal this 1st day of November, 2002.
/s/ ADAM C. GALLEGOS ---------------------------------------- Notary Public |
Printed Name: Adam C. Gallegos
My Commission Expires: 10/17/2004
STATE OF TEXAS ) ) ss COUNTY OF DALLAS ) |
I, Adam C. Gallegos, a Notary Public in and for the County and State aforesaid, DO HEREBY CERTIFY that Ruben S. Martin, III, personally known to me to be the President of Martin Midstream GP, LLC, a Delaware limited liability company and general partner of Martin Midstream Partners L.P., a Delaware limited partnership and sole member of Martin Operating GP LLC, a Delaware limited liability company and general partner of MARTIN OPERATING PARTNERSHIP L.P., a Delaware limited partnership, and personally known to be to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that as such President, he signed and delivered such instrument pursuant to the authority given by such limited liability company, as his free and voluntary act and deed, and as the free and voluntary act and deed of such limited liability company, for the uses and purposes therein set forth.
Given under my hand and official seal this 1st day of November, 2002.
/s/ ADAM C. GALLEGOS ------------------------------------- Notary Public |
Printed Name: Adam C. Gallegos
My Commission Expires: 10/17/2004
EXHIBIT A
THE GRANTOR'S PROPERTY
BEING an approximately 7.8158 acre tract or parcel of land out of and a part of that certain 208.38 acre tract out of the P.H. Humphrey League, Abstract 32, Jefferson County, Texas; which said 208.38 acre tract of land was conveyed by Stanolind Oil Purchasing Company to Texas Gulf Sulphur Company by deed dated June 15, 1950 recorded in volume 1597, Page 324, Deed Records, Jefferson County, Texas and said 7.8158 acre tract of land being more particularly described as follows:
Note: All bearings are based on the Northeast line of a 6.615 acre tract described as Part 1 of Judgment No. 23421 in The State of Texas vs. Texas Gulf Sulphur Company dated April 27, 1966 recorded in Volume 1464, Page 486, Deed Records, Jefferson County, Texas as being North 38(0) 22'00" West.
COMMENCING at an axle found at an Ell corner of said Humphrey League and said 208.38 acre tract, same being the Northwest corner of the John A. Veatch League, Abstract 55, same being the most Southerly Southeast corner o the Jeff & James Chaison Survey, Abstract 435, Jefferson County, Texas and being the most Southerly Southeast corner of a 150 acre tract as conveyed by Perry McFaddin Duncan, Camelia B. McFaddin, Di Vernon McFaddin and husband, E.G. Cordts, Mamie McFaddin Ward and husband, Carroll E. Ward, W.P.H. McFaddin, Jr. and J.L.C. McFaddin to Texas Gulf Sulphur Company by deed dated November 12, 1954 recorded in Volume 960, Page 192, Deed Records, Jefferson County, Texas;
Thence South 57 degrees 43'02" East a distance of 820.77 feet to a 4/8" iron rod found at the PLACE OF BEGINNING of the tract or parcel of land herein described;
THENCE North 19 degrees 44'44" East a distance of 96.44 feet to a 5/8" iron rod found;
THENCE North 47 degrees 09'07" East a distance of 673.89 feet to a 1/2" iron rod found;
THENCE North 48 degrees 38'32" East a distance of 596.68 feet to a 1/2" iron rod found;
THENCE South 45 degrees 42'21" East a distance of 87.73 feet to a 1/2" iron rod found;
THENCE South 53 degrees 30'50" West a distance of 8.90 feet to a 1/2" iron rod found;
THENCE South 43 degrees 50'30" East a distance of 260.00 feet to a 1/2" iron rod found;
THENCE South 45 degrees 31'31" West a distance of 1217.60 feet to a 1/2" iron rod found;
THENCE North 52 degrees 39'42" West a distance of 348.52 feet to the PLACE OF BEGINNING, containing 10.6679 acres of land, more or less;
LESS AND EXCEPT THE FOLLOWING FOUR (4) PARCELS:
SAVE AND EXCEPT TRACT NO. 1:
BEING a 0.4122 acre tract or parcel of land situated in the P.H. Humphrey League, Abstract No. 32, Jefferson County, Texas and being out of and part of that certain called 10.6679 acre tract of land as
conveyed by Palmera Properties, Inc. to Martin Gas Sales, Inc., as recorded in Clerk's File No. 98-9814112, Official Public Records of Real Property, Jefferson County, Texas, said 0.4122 acre tract of land being more particularly described as follows:
Note: All bearings are based on the most Southerly portion of the Northwesterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract as NORTH 19 degrees44'40" EAST as recorded in the above referenced deed.
COMMENCING at a 5/8" iron rod found for the most Westerly corner of the said 10.6679 acre Martin Gas Sales, Inc. tract, said corner also being the POINT OF BEGINNING of the said 10.6679 acre tract as described in the above referenced deed;
THENCE SOUTH 52 degrees 39'42" EAST, along and with the Southwesterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract, for a distance of 348.52 feet to a point, said point being the most Southerly corner of the said 10.6679 acre Martin Gas Sales, Inc. tract;
THENCE NORTH 45 degrees 31'31" EAST, along and with the Southeasterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract, for a distance of 366.26 feet to a point;
THENCE NORTH 44 degrees 28'29" WEST, perpendicular to the Southeasterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract, for a distance of 39.68 feet to the POINT OF BEGINNING of the tract herein described;
THENCE NORTH 44 degrees 28'29" WEST, for a distance of 134.00 feet to a point for corner;
THENCE NORTH 45 degrees 31'31" EAST, for a distance of 134.00 feet to a point for corner;
THENCE SOUTH 44 degrees 28'29" EAST, for a distance of 134.00 feet to a point for corner;
THENCE SOUTH 45 degrees31'31" WEST, for a distance of 134.00 feet to the POINT OF BEGINNING and containing 0.4122 ACRES, more or less.
SAVE AND EXCEPT TRACT NO. 2:
BEING a 0.7638 acre tract or parcel of land situated in the P.H. Humphrey League, Abstract No. 32, Jefferson County, Texas and being out of and part of that certain called 10.6679 acre tract of land as conveyed by Palmera Properties, Inc. to Martin Gas Sales, Inc., as recorded in Clerk's File No. 98-9814112, Official Public Records of Real Property, Jefferson County, Texas, said 0.7638 acre tract of land being more particularly described as follows:
Note: All bearings are based on the most Southerly portion of the Northwesterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract as NORTH 19 degrees44'40" EAST as recorded in the above referenced deed.
COMMENCING at a 5/8" iron rod found for the most Westerly corner of the said 10.6679 acre Martin Gas Sales, Inc. tract, said corner also being the POINT OF BEGINNING of the said 10.6679 acre tract as described in the above referenced deed;
THENCE SOUTH 52 degrees 39'42" EAST, along and with the Southwesterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract, for a distance of 348.52 feet to a point, said point being the most Southerly corner of the said 10.6679 acre Martin Gas Sales, Inc. tract;
THENCE NORTH 45 degrees 31'31" EAST, along and with the Southeasterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract, for a distance of 273.62 feet to a point;
THENCE NORTH 44 degrees 28'28" WEST, perpendicular to the Southeasterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract, for a distance of 173.68 feet to a 5/8" iron rod set for corner and the POINT OF BEGINNING of the tract herein described;
THENCE NORTH 44 degrees 28'29" WEST, for a distance of 101.71 feet to a 5/8" iron rod set for corner;
THENCE NORTH 05 degrees 38'50" EAST, for a distance of 49.78 feet to a 5/8" iron rod set for corner;
THENCE NORTH 45 degrees 31'31" EAST, for a distance of 221.41 feet to a 5/8" iron rod set for corner;
THENCE SOUTH 44 degrees 28'29" EAST, for a distance of 86.45 feet to a 5/8" iron rod set for corner;
THENCE SOUTH 10 degrees 38'31" EAST, for a distance of 59.22 feet to a 5/8" iron rod set for corner;
THENCE SOUTH 45 degrees 31'31" WEST, for a distance of 226.64 feet to the POINT OF BEGINNING and containing 0.7638 ACRES, more or less.
SAVE AND EXCEPT TRACT NO. 3:
BEING a 0.0275 acre tract or parcel of land situated in the he P.H. Humphrey League, Abstract No. 32, Jefferson County, Texas and being out of and part of that certain called 10.6679 acre tract of land as conveyed by Palmera Properties, Inc. to Martin Gas Sales, Inc. as recorded in Clerk's File No. 98-9814112, Official Public Records of Real Property of Jefferson County, Texas, said 0.0275 acre tract of land being more particularly described as follows:
COMMENCING at a 5/8" iron rod found for the most Westerly corner of the said 10.6679 acre Martin Gas Sales, Inc. tract, said corner also being the POINT OF BEGINNING of the said 10.6679 acre tract as described in the above referenced deed;
THENCE South 52 degrees 39' 42" East, along and with the Southwesterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract, for a distance of 348.52 feet to a point, said point being the most Southerly corner of the said 10.6679 acre Martin Gas Sales, Inc. tract;
THENCE North 45 degrees 31' 31" East, along and with the Southeasterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract, for a distance of 636.95 feet to a point;
THENCE North 44 degrees 28' 29" West, perpendicular to the Southeasterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract, for a distance of 288.19 feet to a 5/8" iron rod set for the POINT OF BEGINNING of the tract herein described;
THENCE North 23 degrees 39' 14" West, for a distance of 44.00 feet to a 5/8" iron rod set for corner;
THENCE North 65 degrees 57' 58" East, for a distance of 27.13 feet to a 5/8" iron rod set for corner;
THENCE South 23 degrees 51' 08" East, for a distance of 44.19 feet to a "X" scribed in concrete set for corner;
THENCE South 66 degrees 22' 28" West, for a distance of 27.28 feet to the POINT OF BEGINNING and containing 0.0275 acres, more or less.
SAVE AND EXCEPT TRACT NO. 4:
BEING a 1.6486 acre tract or parcel of land situated in the P.H. Humphrey League, Abstract No. 32, Jefferson County, Texas and being out of and part of that certain called 10.6679 acre tract of land as conveyed by Palmera Properties, Inc. to Martin Gas Sales, Inc. as recorded in Clerk's File No. 98-9814112, Official Public Records of Real Property of Jefferson County, Texas, said 1.6486 acre tract of land being more particularly described as follows:
COMMENCING at a 5/8" iron rod found for the most Westerly corner of the said 10.6679 acre Martin Gas Sales, Inc. tract, said corner also being the POINT OF BEGINNING of the said 10.6679 acre tract as described in the above-referenced deed;
THENCE South 52 degrees 39' 42" East, along and with the Southwesterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract, for a distance of 348.52 feet to a point said point being the most Southerly corner of the said 10.6679 acre Martin Gas Sales, Inc. tract;
THENCE North 45 degrees 31' 31" East, along and with the Southeasterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract, for a distance of 832.40 feet to a point;
THENCE North 44 degrees 28' 29" West, perpendicular to the Southeasterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract, for a distance of 46.91 feet to a 5/8" iron rod set for the POINT OF BEGINNING of the tract herein described;
THENCE North 44 degrees 35' 42" West, for a distance of 224.99 feet to a 5/8" iron rod set for corner;
THENCE North 47 degrees 14' 25" East, for a distance of 251.54 feet to a 5/8" iron rod set for corner;
THENCE South 87 degrees 00' 50" East, for a distance of 83.91 feet to a 5/8" iron rod set for corner;
THENCE North 44 degrees 14' 22" East, for a distance of 42.38 feet to a "X" scribed in concrete set for corner;
THENCE South 43 degrees 16' 43" East, for a distance of 141.35 feet to a 5/8" iron rod set for corner;
THENCE South 45 degrees 48' 37" West, for a distance of 39.11 feet to a 5/8" iron rod set for corner;
THENCE South 44 degrees 34' 25" East, for a distance of 14.83 feet to a 5/8" iron rod set for corner;
THENCE South 45 degrees 24' 30" West, for a distance of 308.02 feet to the POINT OF BEGINNING and containing 1.6486 acres, more or less;
LEAVING A TOTAL GROSS ACREAGE OF 7.8158 ACRES, MORE OR LESS.
EXHIBIT B
COMMON USE AREAS
See attached.
EXHIBIT C
BENEFITED PARCEL
Legal Description: 0.7638 Acre Tract or Parcel of Land P.H. Humphrey League, Abstract No. 32 Jefferson County, Texas |
BEING a 0.7638 acre tract or parcel of land situated in the P.H. Humphrey League, Abstract No. 32, Jefferson County, Texas and being out of and part of that certain called 10.6679 acre tract of land as conveyed by Palmera Properties, Inc. to Martin Gas Sales, Inc., as recorded in Clerk's File No. 98-9814112, Official Public Records of Real Property, Jefferson County, Texas, said 0.4122 acre tract of land being more particularly described as follows:
Note: All bearings are based on the most Southerly portion of the Northwesterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract as NORTH 19 degrees44'40" EAST as recorded in the above referenced deed.
COMMENCING at a 5/8" iron rod found for the most Westerly corner of the said 10.6679 acre Martin Gas Sales, Inc. tract, said corner also being the POINT OF BEGINNING of the said 10.6679 acre tract as described in the above referenced deed;
THENCE SOUTH 52 degrees 39'42" EAST, along and with the Southwesterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract, for a distance of 348.52 feet to a point, said point being the most Southerly corner of the said 10.6679 acre Martin Gas Sales, Inc. tract;
THENCE NORTH 45 degrees 31'31" EAST, along and with the Southeasterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract, for a distance of 273.62 feet to a point;
THENCE NORTH 44 degrees 28'28" WEST, perpendicular to the Southeasterly line of the said 10.6679 acre Martin Gas Sales, Inc. tract, for a distance of 173.68 feet to a 5/8" iron rod set for corner and the POINT OF BEGINNING of the tract herein described;
THENCE NORTH 44 degrees 28'29" WEST, for a distance of 101.71 feet to a 5/8" iron rod set for corner;
THENCE NORTH 05 degrees 38'50" EAST, for a distance of 49.78 feet to a 5/8" iron rod set for corner;
THENCE NORTH 45 degrees 31'31" EAST, for a distance of 221.41 feet to a 5/8" iron rod set for corner;
THENCE SOUTH 44 degrees 28'29" EAST, for a distance of 86.45 feet to a 5/8" iron rod set for corner;
THENCE SOUTH 10 degrees 38'31" EAST, for a distance of 59.22 feet to a 5/8" iron rod set for corner;
THENCE SOUTH 45 degrees 31'31" WEST, for a distance of 226.64 feet to the POINT OF BEGINNING and containing 0.7638 ACRES, more or less.