UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For
the month of February, 2010
COMMISSION
FILE NUMBER 001-33373
CAPITAL
PRODUCT PARTNERS L.P.
(Translation
of registrant’s name into English)
3
IASSONOS STREET
PIRAEUS,
18537 GREECE
(address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.
Form
20-F x Form
40-F o
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1):
Yes o No x
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7):
Yes o No x
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule
12g3-2(b) under the Securities Exchange Act of 1934.
Yes o No x
If “yes”
is marked, indicate below this file number assigned to the registrant in
connection with Rule 12g3-2(b): N/A
Item
1 – Information Contained in this Form 6-K Report
Attached as Exhibit I is the Second Amended and Restated
Agreement of Limited Partnership of Capital Product Partners L.P., dated
February 22, 2010.
This
report on Form 6-K is hereby incorporated by reference into the registrant's
registration statement, registration number 333-153274, dated October 1,
2008.
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, thereunto duly
authorized.
|
CAPITAL
PRODUCT PARTNERS L.P.,
|
|
|
By
|
Capital
GP L.L.C., its general partner
|
| /s/ Ioannis E. Lazaridis | |
|
Name:
Ioannis E.
Lazaridis
|
|
|
of
Capital GP L.L.C.
|
|
Dated:
February 24, 2010
Exhibit
I
SECOND
AMENDED AND RESTATED
AGREEMENT
OF LIMITED PARTNERSHIP
OF
CAPITAL
PRODUCT PARTNERS L.P.
Page
|
DEFINITIONS
|
||
|
ORGANIZATION
|
||
|
RIGHTS
OF LIMITED PARTNERS
|
||
|
CERTIFICATES;
RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS
|
||
i
|
CAPITAL
CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
|
||
|
ALLOCATIONS
AND DISTRIBUTIONS
|
||
|
MANAGEMENT
AND OPERATION OF BUSINESS
|
||
ii
|
BOOKS,
RECORDS, ACCOUNTING AND REPORTS
|
||
|
TAX
MATTERS
|
||
|
ADMISSION
OF PARTNERS
|
||
|
WITHDRAWAL
OR REMOVAL OF PARTNERS
|
||
iii
|
DISSOLUTION
AND LIQUIDATION
|
||
|
AMENDMENT
OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
|
||
|
MERGER
|
||
|
RIGHT
TO ACQUIRE LIMITED PARTNER INTERESTS
|
||
iv
|
GENERAL
PROVISIONS
|
||
SECOND
AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP
OF CAPITAL PRODUCT PARTNERS L.P.
THIS SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF CAPITAL PRODUCT PARTNERS L.P., dated as of
February 22, 2010, is entered into by and between Capital GP L.L.C., a
Marshall Islands limited liability company, as the General Partner, and Capital
Maritime & Trading Corp., a Marshall Islands corporation, as the
Organizational Limited Partner, together with any other Persons who become
Partners in the Partnership or parties hereto as provided herein and amends and
restates in its entirety the First Amended and Restated Agreement of Limited
Partnership of Capital Product Partners L.P., dated as of April 3,
2007. In consideration of the covenants, conditions and agreements
contained herein, the parties agree as follows:
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 asset base of the Partnership
Group from the operating capacity or asset base of the Partnership Group
existing immediately prior to such transaction; provided, however, that any acquisition of
properties or assets of another Person that is made solely for investment
purposes shall not constitute an Acquisition under this Agreement.
“Adjusted Operating
Surplus” means, with respect to any period, Operating Surplus generated
with respect to such period (a) less (i) any net increase in Working
Capital Borrowings with respect to such period and (ii) any net decrease in
cash reserves for Operating Expenditures with respect to such period to the
extent such reduction does not relate to an Operating Expenditure made with
respect to 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 to the
extent such reserve is 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.
“Affiliate”
means, with respect to any Person, any other Person that directly or indirectly
through one or more intermediaries controls, is controlled by or is under common
control with, the Person in question. As used herein, the term “control” means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
“Agreed Value”
means the fair market value of the applicable property or other consideration at
the time of contribution or distribution, as the case may be, as determined by
the Board of Directors.
“Agreement”
means this Second Amended and Restated Agreement of Limited Partnership of
Capital Product Partners L.P., as it may be amended, supplemented or restated
from time to time.
“Annual
Meeting” means the meeting of Limited Partners to be held every year
commencing in 2008 to elect the Elected Directors as provided in Section 13.4
and to vote on any other matters brought before the meeting in accordance with
this Agreement.
“Appointed
Directors” means the members of the Board of Directors appointed by the
General Partner in accordance with the provisions of Article VII.
“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.
“Audit
Committee” means a committee of the Board of Directors of the Partnership
composed of a minimum of three members of the Board of Directors then serving
who meet the independence standards required of directors who serve on an audit
committee of a board of directors established by the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder and
by the National Securities Exchange on which the Common Units are listed or
admitted to trading.
“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 established by the Board of Directors
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 6.2 or 6.3 in
respect of any one or more of the next four Quarters; provided, however, that the
Board of Directors 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 Board of Directors so
determines.
Notwithstanding the foregoing, “Available Cash” with respect to the Quarter in
which the Liquidation Date occurs and any subsequent Quarter shall equal
zero.
“Board of
Directors” means the seven-member board of directors of the Partnership,
composed of Appointed Directors and Elected Directors appointed or elected, as
the case may be, in accordance with the provisions of Article VII and a majority
of whom are not United States citizens or residents, which, pursuant to Section
7.1, and subject to Section 7.10, oversees and directs the operations,
management and policies of the Partnership. The Board of Directors shall
constitute a committee within the meaning of Section 30(2)(g) of the Marshall
Islands Act.
“Business Day”
means Monday through Friday of each week, except that a legal holiday recognized
as such by the government of the United States of America or the State of New
York shall not be regarded as a Business Day.
“Capital
Contribution” means any cash, cash equivalents or the Net Agreed Value of
Contributed Property that a Partner contributes to the Partnership.
“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, in each case if such addition, improvement,
acquisition or construction is made to increase the operating capacity or asset
base of the Partnership Group from the operating capacity or asset base 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 6.1(a).
“Cause” means a
court of competent jurisdiction has entered a final, non-appealable judgment
finding a Person liable for actual fraud or willful misconduct in its capacity
as a general partner of the Partnership or as a member of the Board of
Directors, as the case may be.
“Certificate”
means a certificate (i) substantially in the form of Exhibit A to this
Agreement, (ii) issued in global or book entry form in accordance with the
rules and regulations of the Depositary or (iii) in such other form as may
be adopted by the Board of Directors, issued by the Partnership evidencing
ownership of one or more Common Units or a certificate, in such form as may be
adopted by the Board of Directors, issued by the Partnership evidencing
ownership of one or more other Partnership Securities.
“Certificate of
Limited Partnership” means the Certificate of Limited Partnership of the
Partnership filed with the Registrar of Corporations of The Marshall Islands as
referenced in Section 7.9 as such Certificate of Limited Partnership may be
amended, supplemented or restated from time to time.
“claim” (as
used in Section 7.19(c)) has the meaning assigned to such term in
Section 7.19(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 Purchase Agreement.
“Closing Price”
means, in respect of any class of Limited Partner Interests, as of the date of
determination, the last sale price on such day, regular way, or in case no such
sale takes place on such day, the average of the closing bid and asked prices on
such day, regular way, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal National
Securities Exchange on which the respective Limited Partner Interests are listed
or admitted to trading or, if such Limited Partner Interests are not listed or
admitted to trading on any National Securities Exchange, 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 any quotation
system then in use with respect to such Limited Partner Interests, or, if on any
such day such Limited Partner Interests of such class are not quoted by any such
system, 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 Board of Directors, 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 by
the Board of Directors.
“Code” means
the United States Internal Revenue Code of 1986, as amended and in effect from
time to time. Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of any
successor law.
“Combined
Interest” has the meaning assigned to such term in
Section 11.3(a).
“Commences Commercial
Service” and “Commenced Commercial
Service” shall mean the date a Capital Improvement is first put into
service by a Group Member following, if applicable, completion of construction
and testing.
“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 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 6.2(a)(i).
“Conflicts
Committee” means a committee of the Board of Directors composed entirely
of three or more directors who are not (a) security holders, officers or
employees of the General Partner, (b) officers, directors or employees of
any Affiliate of the General Partner or (c) holders of any ownership
interest in the Partnership Group other than Common Units and who also meet the
independence standards required of directors who serve on an audit committee of
a board of directors established by the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder and by the
National Securities Exchange on which the Common Units are listed or admitted to
trading.
“Contributed
Property” means each property or other asset, in such form as may be
permitted by the Marshall Islands Act, but excluding cash, contributed to the
Partnership.
“Contribution
Agreement” means that certain Contribution and Conveyance Agreement,
dated as of the Closing Date, among the General Partner, the Partnership, the
Operating Company and Capital Maritime & Trading Corp., together with the
additional conveyance documents and instruments contemplated or referenced
thereunder.
“Cumulative Common
Unit Arrearage” means, with respect to any Common Unit, whenever issued,
and as of the end of any Quarter, the excess, if any, of (a) the sum
resulting from adding together the Common Unit Arrearage as to 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 6.2(a)(ii) and the second sentence of
Section 6.3 with respect to an Initial Common Unit (including any
distributions to be made in respect of the last of such Quarters).
“Current Market
Price” means, in respect of any class of Limited Partner Interests, as of
the date of determination, the average of the daily Closing Prices per Limited
Partner Interest of such class for the 20 consecutive Trading Days
immediately prior to such date.
“Departing General
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.
“Elected
Directors” means the members of the Board of Directors who are elected or
appointed as such in accordance with the provisions of Article VII and at least
three of whom are not (a) security holders, officers or employees of the
General Partner, (b) officers, directors or employees of any Affiliate of
the General Partner or (c) holders of any ownership interest in the
Partnership Group other than Common Units and who also meet the independence
standards required of directors who serve on an audit committee of a board of
directors established by the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder
and by the National Securities Exchange on which the Common Units are listed or
admitted to trading.
“Estimated Incremental Quarterly Tax
Amount” has the meaning assigned to such term in Section
6.7.
“Estimated Maintenance
Capital Expenditures” means an estimate made in good faith by the Board
of Directors (with the concurrence of the Conflicts Committee) of the average
quarterly Maintenance Capital Expenditures that the Partnership will need to
incur to maintain the operating capacity or asset base of the Partnership Group,
existing at the time the estimate is made. The Board of Directors (with the
concurrence of the Conflicts Committee) will be permitted to make such estimate
in any manner it determines reasonable. The estimate will be made at least
annually and whenever an event occurs that is likely to result in a material
adjustment to the amount of Maintenance Capital Expenditures on a long-term
basis. The Partnership shall disclose to its Partners any change in the amount
of Estimated Maintenance Capital Expenditures in its reports made in accordance
with Section 8.3 to the extent not previously disclosed. Except as provided
in the definition of Subordination Period, any adjustments to Estimated
Maintenance Capital Expenditures shall be prospective only.
“Event of
Withdrawal” has the meaning assigned to such term in
Section 11.1(a).
“Expansion Capital
Expenditures” means cash expenditures for Acquisitions or Capital
Improvements. Expansion Capital Expenditures shall not include Maintenance
Capital Expenditures. Expansion Capital Expenditures shall include interest (and
related fees) on debt incurred and distributions on equity incurred, in each
case, to finance the construction of a Capital Improvement and paid during the
period beginning on the date that the Partnership enters into a binding
obligation to commence construction of the Capital Improvement and ending on the
earlier to occur of the date that such Capital Improvement Commences Commercial
Service or the date that such Capital Improvement is abandoned or disposed of.
Debt incurred or equity issued to fund any such construction period interest
payments, or such construction period distributions on equity paid during such
period shall also be deemed to be debt or equity, as the case may be, incurred
to finance the construction of a Capital Improvement.
“First Target
Distribution” means $0.4313 per Unit per Quarter (or, with respect
to the period commencing on the Closing Date and ending on June 30, 2007,
it means the product of $0.4313 multiplied by a fraction of which the numerator
is the number of days in such period, and of which the denominator is the total
number of days in the Quarter in which the Closing Date occurs), subject to
adjustment in accordance with Section 6.4.
“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 immediately following the end of 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) that were not converted into or exercised or exchanged
for such Units during the period for which the calculation is being made; provided, however, 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 5.7,
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; and, 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 that such consideration would purchase at the
Current Market Price.
“General
Partner” means Capital GP L.L.C., a Marshall Islands limited liability
company, and its successors and permitted assigns that are admitted to the
Partnership as general partner of the Partnership, in its capacity as general
partner of the Partnership (except as the context otherwise
requires).
“General Partner
Interest” means the ownership interest of the General Partner in the
Partnership (in its capacity as a general partner and without reference to any
Limited Partner Interest held by it), which is evidenced by General Partner
Units 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.
“General Partner
Unit” means a fractional part of the General Partner Interest having the
rights and obligations specified with respect to the General Partner Interest. A
General Partner Unit is not a Unit except as provided in Section
11.2.
“Group” means a
Person that with or through any of its Affiliates or Associates has any
agreement, arrangement, understanding or relationship for the purpose of
acquiring, holding, voting (except voting pursuant to a revocable proxy or
consent given to such Person in response to a proxy or consent solicitation made
to 10 or more Persons) or disposing of any Partnership Securities with any other
Person that beneficially owns, or whose Affiliates or Associates beneficially
own, directly or indirectly, Partnership Securities.
“Group Member”
means a member of the Partnership Group.
“Group Member
Agreement” means the partnership agreement of any Group Member, other
than the Partnership, that is a limited or general partnership, the limited
liability company agreement of any Group Member that is a limited liability
company, the certificate of incorporation and bylaws (or similar organizational
documents) of any Group Member that is a corporation, the joint venture
agreement or similar governing document of any Group Member that is a joint
venture and the governing or organizational or similar documents of any other
Group Member that is a Person other than a limited or general partnership,
limited liability company,
corporation or joint venture, in each case as such may be amended, supplemented
or restated from time to time.
“Holder” as
used in Section 7.19, has the meaning assigned to such term in
Section 7.19(a).
“Incentive
Distribution Right” means a non-voting Limited Partner Interest issued to
Capital Maritime & Trading Corp. and thereafter transferred to the General
Partner, 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 6.2(a)(v), (vi) and
(vii) and 6.2(b)(iii), (iv) and (v).
“Indemnified
Persons” has the meaning assigned to such term in
Section 7.19(c).
“Indemnitee”
means (a) the General Partner, (b) any Departing General Partner,
(c) any Person who is or was an Affiliate of the General Partner or any
Departing General Partner, (d) any Person who is or was a member, partner,
director, officer, fiduciary or trustee of any Person which any of the preceding
clauses of this definition describes, (e) any Person who is or was serving
at the request of the General Partner or any Departing General Partner or any
Affiliate of the General Partner or any Departing General Partner as an officer,
director, member, partner, fiduciary or trustee of another Person (provided, however, that a
Person shall not be an Indemnitee by reason of providing, on a fee-for-services
basis, trustee, fiduciary or custodial services), (f) the members of the Board
of Directors, and (g) any other Person the Board of Directors designates as
an “Indemnitee” for purposes of this Agreement.
“Initial Common
Units” means the Common Units sold in the Initial Offering.
“Initial General
Partner Interest” has the meaning set forth in Section 5.1.
“Initial Limited
Partner Interest” has the meaning set forth in Section 5.1.
“Initial Limited
Partners” means Capital Maritime & Trading Corp. and the General
Partner (with respect to the Incentive Distribution Rights received by it
pursuant to Section 5.2(a)), 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 Board of Directors, in each case adjusted as the Board of
Directors 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 (other than Working Capital Borrowings and other than for items
purchased on open account in the ordinary course of business) by any Group
Member and sales of debt securities of any Group Member; (b) sales of
equity interests of any Group Member (including the Common Units sold to the
Underwriters pursuant to the exercise of the Over-Allotment Option);
(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; (d) the termination of interest rate swap agreements;
(e) capital contributions received; and (f) corporate reorganizations
or restructurings.
“Investment Capital
Expenditures” means capital expenditures other than Maintenance Capital
Expenditures or Expansion Capital Expenditures.
“Limited
Partner” means, unless the context otherwise requires, the Organizational
Limited Partner prior to its withdrawal from the Partnership, each Initial
Limited Partner, each additional Person that becomes a Limited Partner pursuant
to the terms of this Agreement and any Departing General Partner upon the change
of its status from General Partner to Limited Partner pursuant to
Section 11.3, in each case, in such Person’s capacity as a limited partner
of the Partnership; provided, however, that when
the term “Limited Partner” is used herein in the context of any vote or other
approval, including Articles XIII and XIV, such term shall not, solely for
such purpose, include any holder of an Incentive Distribution Right (solely with
respect to its Incentive Distribution Rights and not with respect to any other
Limited Partner Interest held by such Person) except as may otherwise be
required by law. Limited Partners may include custodians, nominees or any other
individual or entity in its own or any representative capacity.
“Limited Partner
Interest” means the ownership interest of a Limited Partner in the
Partnership, which may be evidenced by Common Units, 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 is entitled as provided in this Agreement, together with all
obligations of such Limited Partner to comply with the terms and provisions of
this Agreement; provided, however, that when
the term “Limited Partner Interest” is used herein in the context of any vote or
other approval, including Articles XIII and XIV, such term shall not,
solely for such purpose, include any 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 continue the business of the
Partnership has expired without such an election being made, and (b) in the
case of any other event giving rise to the dissolution of the Partnership, the
date on which such event occurs.
“Liquidator”
means one or more Persons selected by the Board of Directors to perform the
functions described in Section 12.4.
“Maintenance Capital
Expenditures” means cash expenditures (including expenditures for the
addition or improvement to the capital assets owned by any Group Member or for
the acquisition of existing, or the construction of new, capital assets) if such
expenditure is made to maintain the operating capacity or asset base of the
Partnership Group. Maintenance Capital Expenditures shall not include
(a) Expansion Capital Expenditures or (b) expenditures made solely for
investment purposes (as opposed to maintenance purposes). Maintenance Capital
Expenditures shall include interest (and related fees) on debt incurred and
distributions on equity incurred, in each case, to finance the construction of a
replacement asset and paid during the period beginning on the date that the
Group Member enters into a binding obligation to commence constructing a
replacement asset and ending on the earlier to occur of the date that such
replacement asset Commences Commercial Service or the date that such replacement
asset is abandoned or disposed of. Debt incurred to pay or equity issued to fund
the construction period interest payments, or such construction period
distributions on equity shall also be deemed to be debt or equity, as the case
may be, incurred to finance the construction of a replacement
asset.
“Marshall Islands
Act” means the Limited Partnership Act of The Republic of the Marshall
Islands, as amended, supplemented or restated from time to time, and any
successor to such statute.
“Merger
Agreement” has the meaning assigned to such term in
Section 14.1.
“Minimum Quarterly
Distribution” means $0.3750 per Unit per Quarter (or with respect to
the period commencing on the Closing Date and ending on June 30, 2007, it
means the product of $0.3750 multiplied by a fraction of which the numerator is
the number of days in such period and of which the denominator is the total
number of days in the Quarter in which the Closing Date occurs), subject to
adjustment in accordance with Section 6.4.
“National Securities
Exchange” means an exchange registered with the Commission under
Section 6(a) of the Securities Exchange Act of 1934, as amended,
supplemented or restated from time to time, and any successor to such
statute.
“Net Agreed Value”
means, (a) in the case of any Contributed Property, the Agreed Value of
such property reduced by any liabilities either assumed by the Partnership upon
such contribution or to which such property is subject when contributed, and
(b) in the case of any property distributed to a Partner by the
Partnership, the Agreed Value of such property, reduced by any indebtedness
either assumed by such Partner upon such distribution or to which such property
is subject at the time of distribution.
“Notice of Election to
Purchase” has the meaning assigned to such term in
Section 15.1(b).
“Officers”
means the officers of the General Partner.
“Omnibus
Agreement” means that Omnibus Agreement, dated as of the Closing Date,
among Capital Maritime & Trading Corp., the Partnership, the General Partner
and the Operating Company.
“Operating
Company” means Capital Product Operating L.L.C., a Marshall Islands
limited liability company, and any successors thereto.
“Operating Company
Agreement” means the First Amended and Restated Limited Liability Company
Agreement of the Operating Company, as it may be amended, supplemented or
restated from time to time.
“Operating
Expenditures” means all Partnership Group expenditures, including taxes,
reimbursements of the General Partner, repayment of Working Capital Borrowings,
debt service payments and capital expenditures, subject to the
following:
(a) repayment of Working Capital Borrowings deducted from Operating Surplus
pursuant to clause (b)(iii) of the definition of Operating Surplus shall
not constitute Operating Expenditures when actually repaid;
(b) payments (including prepayments and prepayment penalties) of principal
of and premium on indebtedness other than Working Capital Borrowings shall not
constitute Operating Expenditures; and
(c) Operating Expenditures shall not include (i) Expansion Capital
Expenditures, Investment Capital Expenditures or actual Maintenance Capital
Expenditures, but shall include Estimated Maintenance Capital Expenditures,
(ii) payment of transaction expenses (including taxes) relating to Interim
Capital Transactions or (iii) distributions to Partners.
Where capital expenditures consist of both (x) Maintenance Capital
Expenditures and (y) Expansion Capital Expenditures and/or Investment
Capital Expenditures, the General Partner, with the concurrence of the Conflicts
Committee, shall determine the allocation between the amounts paid for
each.
“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) an amount equal to two times the amount needed for
any one Quarter to pay a distribution on all of the Units, the General Partner
Units and the Incentive Distribution Rights at the same amount as was
distributed immediately preceding the date of determination (or with respect to
the period commencing on the Closing Date and ending on March 31, 2007, it means
the product of (x) $0.3750 multiplied by (y) a fraction of which the numerator
is the number of days in such period and the
denominator is 90 multiplied by (z) the number of Units and General Partner
Units Outstanding on the Record Date with respect to such period), (ii) all
cash receipts of the Partnership Group for the period beginning on the Closing
Date and ending on the last day of such period, other than cash receipts from
Interim Capital Transactions, (iii) all cash receipts of the Partnership
Group after the end of such period but on or before the date of determination of
Operating Surplus with respect to such period resulting from Working Capital
Borrowings and (iv) the amount of distributions paid on equity issued in
connection with the construction of a Capital Improvement or replacement asset
and paid during the period beginning on the date that the Group Member enters
into a binding obligation to commence construction of such Capital Improvement
or replacement asset and ending on the earlier to occur of the date that such
Capital Improvement or replacement asset Commences Commercial Service or the
date that it is abandoned or disposed of (equity issued to fund the construction
period interest payments on debt incurred, or construction period distributions
on equity issued, to finance the construction of a Capital Improvement or
replacement asset shall also be deemed to be equity issued to finance the
construction of a Capital Improvement or replacement asset for purposes of this
clause (iv)), less
(b) the sum of (i) Operating Expenditures for the period beginning on
the Closing Date and ending on the last day of such period, (ii) the amount
of cash reserves established by the Board of Directors to provide funds for
future Operating Expenditures and (iii) all Working Capital Borrowings not
repaid within twelve months after having been incurred; 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 Board of Directors 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 Board of Directors.
“Option Closing
Date” means the date or dates on which any Common Units are sold by
Capital Maritime & Trading Corp. to the Underwriters upon exercise of the
Over-Allotment Option.
“Organizational
Limited Partner” means Capital Maritime & Trading Corp. 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 5% or more of the
Outstanding Partnership Securities of any class then Outstanding, all
Partnership Securities owned by such Person or Group in excess of 4.9% of the
Outstanding Partnership Securities shall not be voted on any matter and shall
not be considered to be Outstanding in the hands of such Person or
Group (except for purposes of Section 11.1(b)(iv))when sending notices of a
meeting of Limited Partners to vote on any matter (unless otherwise required by
law), calculating required votes, except for purposes of nominating a Person for
election to the Board of Directors pursuant to Section 7.3, determining the
presence of a quorum or for other similar purposes under this
Agreement, and the voting rights of any such Person or Group in excess of
4.9% shall be redistributed pro rata among the other owners of Partnership
Securities of the same class holding less than 4.9% of the voting
power (such Partnership Securities 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 to (i) any Person or Group who
acquired 5% or more of the Outstanding Partnership Securities of any class then
Outstanding directly from the General Partner or its Affiliates, (ii) any
Person or Group who acquired 5% 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) any Person or Group who acquired 5% or more of any Partnership
Securities issued by the Partnership with the prior approval of the Board of
Directors.
“Over-Allotment
Option” means the over-allotment option granted to the Underwriters
pursuant to the Purchase Agreement.
“Partners”
means the General Partner and the Limited Partners.
“Partnership”
means Capital Product Partners L.P., a Marshall Islands limited partnership, and
any successors thereto.
“Partnership
Group” means the Partnership and its Subsidiaries, including the
Operating Company, treated as a single entity.
“Partnership Interest”
means an interest in the Partnership, which shall include the General Partner
Interest and Limited Partner Interests.
“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 Common Units, Subordinated
Units and Incentive Distribution Rights.
“Percentage
Interest” means as of any date of determination (a) as to the
General Partner with respect to General Partner Units and as to any Unitholder
with respect to Units, the product obtained by multiplying (i) 100% less
the percentage applicable to clause (b) below by (ii) the quotient
obtained by dividing (A) the number of Units held by such Unitholder or the
number of General Partner Units held by the General Partner, as the case may be,
by (B) the total number of all Outstanding Units and General Partner Units,
and (b) as to the holders of other Partnership Securities issued by the
Partnership in accordance with Section 5.5, 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, firm, limited liability company, partnership,
joint venture, trust, unincorporated organization, association, governmental
agency or political subdivision thereof or other entity.
“Pro Rata”
means (a) when used with respect to Units or any class thereof, apportioned
equally among all designated Units in accordance with their relative Percentage
Interests, (b) when used with respect to Partners or Record Holders,
apportioned among all Partners or Record Holders in accordance with their
relative Percentage Interests and (c) when used with respect to holders of
Incentive Distribution Rights, apportioned equally among all holders of
Incentive Distribution Rights in accordance with the relative number or
percentage of Incentive Distribution Rights held by each such
holder.
“Purchase
Agreement” means the Purchase Agreement dated April 3, 2007 among the
Underwriters, the Partnership, the General Partner, the Operating Company, and
Capital Maritime & Trading Corp., providing for the purchase of Common Units
by such Underwriters.
“Purchase Date”
means the date determined by the General Partner as the date for purchase of all
Outstanding Limited Partner Interests of a certain class (other than Limited
Partner Interests owned by the General Partner and its Affiliates) pursuant to
Article XV.
“Quarter”
means, unless the context requires otherwise, a fiscal quarter, or, with respect
to the first fiscal quarter including the Closing Date, the portion of such
fiscal quarter after the Closing Date, of the Partnership.
“Record Date”
means the date established by the Board of Directors or otherwise in accordance
with this Agreement for determining (a) the identity of the Record Holders
entitled to notice of, or to vote at, any meeting of Limited Partners or
entitled to vote by ballot or give approval of Partnership action in writing
without a meeting or entitled to exercise rights in respect of any lawful action
of Limited Partners or (b) the identity of Record Holders entitled to
receive any report or distribution or to participate in any offer.
“Record Holder”
means (a) the Person in whose name a Common Unit is registered on the books
of the Transfer Agent as of the opening of business on a particular Business
Day, or (b) with respect to other Partnership Interests, the Person in
whose name any such other Partnership Interest is registered on the books
that the Board of Directors has caused to be kept by the General Partner as of
the opening of business on such Business Day.
“Registration
Statement” means the Registration Statement on Form F-1
(Registration No. 333-141422) 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.
“Second Target
Distribution” means $0.4688 per Unit per Quarter (or, with respect to the
period commencing on the Closing Date and ending on June 30, 2007, it means the
product of $0.4688 multiplied by a fraction of which the numerator is equal to
the number of days in such period and of which the denominator is the total
number of days in the Quarter in which the Closing Date occurs), subject to
adjustment in accordance with Section 6.4.
“Securities
Act” means the Securities Act of 1933, as amended, supplemented or
restated from time to time and any successor to such statute.
“Special
Approval” means approval by a majority of the members of the Conflicts
Committee.
“Subordinated
Unit” means a Unit representing a fractional part of the
Partnership Interests of all Limited Partners and having the rights and
obligations specified with respect to Subordinated Units in this Agreement. The
term “Subordinated Unit” does not include a Common Unit. A Subordinated Unit
that is convertible into a Common Unit shall not constitute a Common 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 June 30, 2011, in respect
of which (i)(A) distributions of Available Cash from Operating Surplus on each
of the Outstanding Common Units, Subordinated Units, General Partner Units and
any other Outstanding Units that are senior or equal in right of distribution to
the Subordinated Units equaled or exceeded the Minimum Quarterly Distribution
during each of the three consecutive, non-overlapping four-Quarter periods
immediately preceding such date and (B) the Adjusted Operating Surplus for 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, General Partner
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 with respect to each such period 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 and the
Board of Directors under circumstances where Cause does not exist and no Units
held by the General Partner and its Affiliates are voted in favor of such
removal.
For purposes of determining whether the test in subclause (a)(i)(B) above
has been satisfied, Adjusted Operating Surplus will be adjusted upwards or
downwards if the Conflicts Committee determines in good faith that the amount of
Estimated Maintenance Capital Expenditures used in the determination of Adjusted
Operating Surplus in
subclause (a)(i)(B) was materially incorrect, based on circumstances prevailing at the time of original determination of Estimated Maintenance Capital Expenditures, for any one or more of the preceding three four-Quarter periods.
subclause (a)(i)(B) was materially incorrect, based on circumstances prevailing at the time of original determination of Estimated Maintenance Capital Expenditures, for any one or more of the preceding three four-Quarter periods.
“Subsidiary”
means, with respect to any Person, (a) a corporation of which more than 50%
of the voting power of shares entitled (without regard to the occurrence of any
contingency) to vote in the election of directors or other governing body of
such corporation is owned, directly or indirectly, at the date of determination,
by such Person, by one or more Subsidiaries (as defined, but excluding
subsection (d) of this definition) of such Person or a combination
thereof, (b) a partnership (whether general or limited) in which such
Person or a Subsidiary (as defined, but excluding subsection (d) of
this definition) of such Person is, at the date of determination, a general or
limited partner of such partnership, but only if more than 50% of the
partnership interests of such partnership (considering all of the partnership
interests of the partnership as a single class) is owned, directly or
indirectly, at the date of determination, by such Person, by one or more
Subsidiaries (as defined, but excluding subsection (d) of this
definition) of such Person, or a combination thereof, (c) any other Person
(other than a corporation or a partnership) in which such Person, one or more
Subsidiaries (as defined, but excluding subsection (d) of this
definition) 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, or (d) any other Person
in which such Person, one or more Subsidiaries (as defined, but excluding
subsection (d) of this definition) of such Person, or a combination
thereof, directly or indirectly, at the date of determination, has (i) less
than a majority ownership interest or (ii) less than the power to elect or
direct the election of a majority of the directors or other governing body of
such Person, provided that (A) such Person, one or more Subsidiaries (as
defined, but excluding this subsection (d) of this definition) of such
Person, or a combination thereof, directly or indirectly, at the date of the
determination, has at least a 20% ownership interest in such other Person,
(B) such Person accounts for such other Person (under U.S. GAAP, as in
effect on the later of the date of investment in such other Person or material
expansion of the operations of such other Person) on a consolidated or equity
accounting basis, (C) such Person has directly or indirectly material
negative control rights regarding such other Person including over such other
Person’s ability to materially expand its operations beyond that contemplated at
the date of investment in such other Person, and (D) such other Person is
(i) other than with respect to the Operating Company, formed and maintained
for the sole purpose of owning or leasing, operating and chartering no more than
10 vessels for a period of no more than 40 years, and
(ii) obligated under its constituent documents, or as a result of a
unanimous agreement of its owners, to distribute to its owners all of its income
on at least an annual basis (less any cash reserves that are approved by such
Person).
“Surviving Business
Entity” has the meaning assigned to such term in
Section 14.2(b).
“Third Target
Distribution” means $0.5625 per unit per Quarter (or, with respect
to the period commencing on the Closing Date and ending on June 30, 2007, it
means the product of $0.5625 multiplied by a fraction of which the numerator is
equal to the number of days in such period and of which the denominator is the
total number of days in the Quarter in which the Closing Date occurs), subject
to adjustment in accordance with Section 6.4.
“Trading Day”
means, for the purpose of determining the Current Market Price of any class of
Limited Partner Interests, a day on which the principal National Securities
Exchange on which such class of Limited Partner Interests is listed is open for
the transaction of business or, if Limited Partner Interests of a class are not
listed on any National Securities Exchange, a day on which banking institutions
in New York City generally are open.
“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, however, that if no
Transfer Agent is specifically designated for any other Partnership Securities,
the General Partner shall, at the direction of the Board of Directors, act in
such capacity.
“Underwriter”
means each Person named as an underwriter in Schedule I to the Purchase
Agreement who purchases Common Units pursuant thereto.
“Unit” means a
Partnership Security that is designated as a “Unit” and shall include Common
Units and Subordinated Units but shall not include (i) General Partner
Units (or the General Partner Interest represented thereby) or (ii) the
Incentive Distribution Rights.
“Unitholders”
means the holders of Units.
“Unit Majority”
means, 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 after the end of the Subordination
Period, at least a majority of the Outstanding Common Units.
“Unit Register”
means the register of the Partnership for the registration and transfer of
Limited Partnership Interests as provided in Section 4.5.
“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 Board of Directors 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.
“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, commercial
paper facility or similar financing arrangement available to a Group Member,
provided that when such borrowing is incurred it is the intent of the borrower
to repay such borrowing within 12 months from other than additional Working
Capital Borrowings.
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; (c) the
term “include” or “includes” means includes, without limitation, and “including”
means including, without limitation; and (d) the terms “hereof”, “herein”
and “hereunder” refer to this Agreement as a whole and not to any particular
provision of this Agreement. The table of contents and headings contained in
this Agreement are for reference purposes only, and shall not affect in any way
the meaning or interpretation of this Agreement.
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
Marshall Islands Act and hereby amend and restate the original Agreement of
Limited Partnership of Capital Product 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 Marshall Islands Act. All Partnership Interests shall
constitute personal property of the owner thereof for all purposes and a Partner
has no interest in specific Partnership property.
SECTION 2.2. Name. The
name of the Partnership shall be “Capital Product Partners L.P.” The
Partnership’s business may be conducted under any other name or names as
determined by the Board of Directors. The words “Limited Partnership” or the
letters “L.P.” or similar words or letters shall be included in the
Partnership’s name where necessary for the purpose of complying with the laws of
any jurisdiction that so requires. The Board of Directors may change the name of
the Partnership at any time and from time to time in compliance with the
requirements of the Marshall Islands Act and shall notify the General Partner
and 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 Board of Directors, the registered office of the
Partnership in The Marshall Islands shall be located at Trust Company Complex,
Ajeltake Island, Ajeltake Road, Majuro, Marshall Islands MH 96960, and the
registered agent for service of process on the Partnership in The Marshall
Islands at such registered office shall be The Trust Company of The Marshall
Islands, Inc. The principal office of the Partnership shall be located at 3
Iassonos Street, Piraeus, 185 37 Greece, or such other place as the Board of
Directors may from time to time designate by notice to the General Partner and
the Limited Partners. The Partnership may maintain offices at such other place
or places within or outside The Marshall Islands as the Board of Directors
determines to be necessary or appropriate. The address of the General Partner
shall be at 3 Iassonos Street, Piraeus, 185 37 Greece, or such other place as
the General Partner may from time to time designate by notice to the Limited
Partners.
SECTION 2.4. Purpose and
Business. The purpose and nature of the business to be
conducted by the Partnership shall be to (a) engage directly in, or enter
into or form any corporation, partnership, joint venture, limited liability
company or other arrangement to engage indirectly
in, any business activity that lawfully may be conducted by a limited
partnership organized pursuant to the Marshall Islands Act and, in connection
therewith, to exercise all of the rights and powers conferred upon the
Partnership pursuant to the agreements relating to such business activity, and
(b) do anything necessary or appropriate to the foregoing, including the
making of capital contributions or loans to a Group Member. The Board of
Directors shall have no duty or obligation to propose or approve, and may
decline to propose or approve, the conduct by the Partnership of any business
free of any fiduciary duty or obligation whatsoever to the Partnership, the
General Partner and any Limited Partner and, in declining to so propose or
approve, shall not be required to act in good faith or pursuant to any other
standard imposed by this Agreement, any Group Member Agreement, any other
agreement contemplated hereby or under the Marshall Islands Act or any other
law, rule or regulation.
SECTION 2.5. Powers. The
Partnership shall be empowered to do any and all acts and things necessary and
appropriate for the furtherance and accomplishment of the purposes and business
described in Section 2.4 and for the protection and benefit of the
Partnership.
SECTION 2.6. Power of
Attorney. (a) Each Limited Partner hereby
constitutes and appoints the General Partner, under the supervision of the Board
of Directors, 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, under the supervision of the Board of Directors, or the
Liquidator determines to be necessary or appropriate to form, qualify or
continue the existence or qualification of the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) in the Marshall Islands and in all other jurisdictions in which
the Partnership may conduct business or own property; (B) all
certificates, documents and other instruments that the General Partner,
under the supervision of the Board of Directors, or the Liquidator
determines to be necessary or appropriate to reflect, in accordance with
its terms, any amendment, change, modification or restatement of this
Agreement; (C) all certificates, documents and other instruments
(including conveyances and a certificate of cancellation) that the General
Partner, under the supervision of the Board of Directors, or the
Liquidator determines to be necessary or appropriate to reflect the
dissolution and liquidation of the Partnership pursuant to the terms of
this Agreement; (D) all certificates, documents and other instruments
relating to the admission,
withdrawal, removal or substitution of any Partner pursuant to, or other
events described in, Articles IV, X, XI or XII; (E) all
certificates, documents and other instruments relating to the
determination of the rights, preferences and privileges of any class or
series of Partnership Securities issued pursuant to Section 5.5; and
(F) all certificates, documents and other instruments (including
agreements and a certificate of merger) relating to a merger,
consolidation or conversion of the Partnership pursuant to
Article XIV; and
|
|
|
(ii)
|
execute,
swear to, acknowledge, deliver, file and record all ballots, consents,
approvals, waivers, certificates, documents and other instruments that the
General Partner or the Liquidator determines to be necessary or
appropriate to (A) make, evidence, give, confirm or ratify any vote,
consent, approval, agreement or other action that is made or given by the
Partners hereunder or is consistent with the terms of this Agreement or
(B) effectuate the terms or intent of this Agreement; provided, however, that
when required by Section 13.3 or any other provision of this
Agreement that requires the consent of the Board of Directors or
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 consent of the Board of
Directors or 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 make an amendment to this Agreement.
(b) The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, and it shall survive and, to
the maximum extent permitted by law, not be affected by the subsequent death,
incompetency, disability, incapacity, dissolution, bankruptcy or termination of
any Limited Partner and the transfer of all or any portion of such Limited
Partner’s Partnership Interest and shall extend to such Limited Partner’s
heirs, successors, assigns and personal representatives. Each such Limited
Partner hereby agrees to be bound by any representation made by the General
Partner or the Liquidator acting in good faith pursuant to such power of
attorney; and each such Limited Partner, to the maximum extent permitted by law,
hereby waives any and all defenses that may be available to contest, negate or
disaffirm the action of the General Partner or the Liquidator taken in good
faith under such power of attorney. Each Limited Partner shall execute and
deliver to the General Partner or the Liquidator, within 15 days after
receipt of the request therefor, such further designation, powers of attorney
and other instruments as the General Partner or the Liquidator determines to be
necessary or appropriate to effectuate this Agreement and the purposes of the
Partnership.
SECTION 2.7. Term. The
term of the Partnership commenced upon the filing of the Certificate of Limited
Partnership in accordance with the Marshall Islands Act and shall
continue
in existence until the dissolution of the Partnership in accordance with the
provisions of Article XII. The existence of the Partnership as a separate
legal entity shall continue until the cancellation of the Certificate of Limited
Partnership as provided in the Marshall Islands Act.
SECTION 2.8. Title to Partnership
Assets. Title to Partnership assets, whether real, personal or
mixed and whether tangible or intangible, shall be deemed to be owned by the
Partnership as an entity, and no Partner, 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 Board of Directors 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 commercially reasonable efforts to cause record title to such
assets (other than those assets in respect of which the Board of Directors
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; and, 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 Board of
Directors. 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.
RIGHTS OF
LIMITED PARTNERS
SECTION 3.1. Limitation of
Liability. The Limited Partners shall have no liability under
this Agreement except as expressly provided in this Agreement or the Marshall
Islands Act.
SECTION 3.2. Management of
Business. No Limited Partner, in its capacity as such, shall
participate in the operation, management or control (within the meaning of the
Marshall Islands Act) of the Partnership’s business, transact any business in
the Partnership’s name or have the power to sign documents for or otherwise bind
the Partnership. Any action taken by any Affiliate of the General Partner or any
officer, director, employee, manager, member, general partner, agent or trustee
of the General Partner or any of its Affiliates, or any officer, director,
employee, 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 30 of the Marshall Islands Act) and shall
not affect, impair or eliminate the limitations on the liability of the Limited
Partners under this Agreement.
SECTION 3.3. Outside Activities of the
Limited Partners. Subject to the provisions of
Section 7.12 and the Omnibus Agreement, which shall continue to be
applicable to the Persons referred to therein, regardless of whether such
Persons shall also be Limited Partners, any Limited Partner shall be entitled to
and may have business interests and engage in business activities in addition to
those relating to the Partnership, including business interests and activities
in direct competition with the Partnership Group. Neither the Partnership nor
any of the other Partners shall have any rights by virtue of this Agreement in
any business ventures of any Limited Partner.
SECTION 3.4. Rights of Limited
Partners. (a) In addition to other rights provided
by this Agreement or by applicable law, and except as limited by
Section 3.4(b), each Limited Partner shall have the right, for a purpose
reasonably related to such Limited Partner’s interest as a Limited Partner in
the Partnership, upon reasonable written demand and at such Limited Partner’s
own expense, to:
|
|
(i)
|
have
furnished to him a current list of the name and last known business,
residence or mailing address of each
Partner;
|
|
|
(ii)
|
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 or
the Agreed Value of any services contributed to the Partnership by each
Partner and which each Partner has agreed to contribute in the future, and
the date on which each became a
Partner;
|
|
|
(iii)
|
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)
|
obtain
true and full information regarding the status of the business and
financial condition of the Partnership Group;
and
|
|
|
(v)
|
obtain
such other information regarding the affairs of the Partnership as is just
and reasonable.
|
(b) The Board of Directors may keep confidential from the Limited
Partners, for such period of time as the Board of Directors deems reasonable,
(i) any information that the Board of Directors reasonably believes to be
in the nature of trade secrets or (ii) other information the disclosure of
which the Board of Directors 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).
CERTIFICATES;
RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS
SECTION 4.1. Certificates. Upon
the Partnership’s issuance of Common Units or Subordinated Units to any Person,
the Partnership shall issue, upon the request of such Person, one or more
Certificates in the name of such Person evidencing the number of such Units
being so issued. In addition, (a) upon the General Partner’s request, the
Partnership shall issue to it one or more Certificates in the name of the
General Partner evidencing its General Partner Units 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 Chief Financial Officer or 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
Board of Directors elects to issue Common Units in global form, the Common Unit
Certificates shall be valid upon receipt of a certificate from the Transfer
Agent certifying that the Common Units have been duly registered in accordance
with the directions of the Partnership. Subject to the requirements of
Section 6.5(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 5.7.
SECTION 4.2. Mutilated, Destroyed, Lost
or Stolen Certificates. (a) If any mutilated
Certificate is surrendered to the Transfer Agent, the appropriate Officers 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 on behalf of the Partnership shall
execute and deliver, and the Transfer Agent shall countersign, a new Certificate
in place of any Certificate previously issued if the Record Holder of the
Certificate:
|
|
(i)
|
makes
proof by affidavit, in form and substance satisfactory to the Partnership,
that a previously issued Certificate has been lost, destroyed or
stolen;
|
|
|
(ii)
|
requests
the issuance of a new Certificate before the Partnership has notice that
the Certificate has been acquired by a purchaser for value in good faith
and without notice of an adverse
claim;
|
|
|
(iii)
|
if
requested by the Partnership, delivers to the Partnership a bond, in form
and substance satisfactory to the Partnership, with surety or sureties and
with fixed or open penalty as the Board of Directors may direct to
indemnify the Partnership, the Partners, the General Partner
and the Transfer Agent against any claim that may be made on account of
the alleged loss, destruction or theft of the
Certificate; and
|
|
|
(iv)
|
satisfies
any other reasonable requirements imposed by the Board of
Directors.
|
If
a Limited Partner fails to notify the Partnership within a reasonable period of
time after he has notice of the loss, destruction or theft of a Certificate, and
a transfer of the Limited Partner Interests represented by the Certificate is
registered before the Partnership, the General Partner or the Transfer Agent
receives such notification, the Limited Partner shall be precluded from making
any claim against the Partnership, the General Partner or the Transfer Agent for
such transfer or for a new Certificate.
(c) As a condition to the issuance of any new Certificate under this
Section 4.2, the Partnership may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Transfer
Agent) reasonably connected therewith.
SECTION 4.3. Record
Holders. The Partnership shall be entitled to recognize the
Record Holder as the Partner 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 or admitted to 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 shall be
the Record Holder of such Partnership Interest.
SECTION 4.4. Transfer
Generally. (a) The term “transfer,” when used in
this Agreement with respect to a Partnership Interest, shall be deemed to
refer to a transaction (i) by which the General Partner assigns its General
Partner Interest to another Person or by which a holder of Incentive
Distribution Rights assigns its Incentive Distribution Rights to another Person,
and includes a sale, assignment, gift, pledge, encumbrance, hypothecation,
mortgage, exchange or any other disposition by law or otherwise or (ii) by
which the holder of a Limited Partner Interest (other than an Incentive
Distribution Right) assigns such Limited Partner Interest to another Person who
is or becomes a Limited Partner, and includes a sale, assignment, gift, exchange
or any other disposition by law or otherwise, including any transfer upon
foreclosure of any pledge, encumbrance, hypothecation or mortgage.
(b) No Partnership Interest shall be transferred, in whole or in
part, except in accordance with the terms and conditions set forth in this
Article IV. Any transfer or purported transfer of a
Partnership Interest not made in accordance with this Article IV shall
be null and void.
(c) Nothing contained in this Agreement shall be construed to prevent
a disposition by any stockholder, member, partner or other owner of the General
Partner of any or all of the shares of stock, membership interests, partnership
interests or other ownership interests in the General Partner.
SECTION 4.5. Registration and Transfer of
Limited Partner Interests. (a) The General Partner
shall keep or cause to be kept on behalf of the Partnership a register in which,
subject to such reasonable regulations as it may prescribe and subject to the
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 on
behalf of the Partnership shall execute and deliver, and in the case of Common
Units, the Transfer Agent shall countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the
holder’s instructions, one or more new Certificates evidencing the same
aggregate number and type of Limited Partner Interests as was evidenced by the
Certificate so surrendered.
(b) The Partnership shall not recognize any transfer of Limited
Partner Interests until the Certificates evidencing such Limited Partner
Interests are surrendered for registration of transfer. No charge shall be
imposed by the Partnership for such transfer; provided, however, 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) 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 March 31, 2017, the General Partner shall
not transfer all or any part of its General Partner Interest (represented by
General Partner Units) 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 (1) the merger or consolidation of the
General Partner with or into such other Person or (2) the transfer by the
General Partner of all or substantially all of its assets to such other
Person.
(b) Subject to Section 4.6(c) below, on or after March 31, 2017,
the General Partner may transfer all or any of its General Partner Interest
without Unitholder approval.
(c) Notwithstanding anything herein to the contrary, no transfer by
the General Partner of all or any part of its General Partner Interest to
another Person shall be permitted unless (i) the transferee agrees to
assume the rights and duties of the General Partner under this Agreement and to
be bound by the provisions of this Agreement, (ii) the Partnership receives
an Opinion of Counsel that such transfer would not result in the loss of limited
liability of any Limited Partner or of any limited partner or member of any
other Group Member and (iii) such transferee also agrees to purchase all
(or the appropriate portion thereof, if applicable) of the partnership or
membership interest of the General Partner as the general partner or managing
member, if any, of each other Group Member. In the case of a transfer pursuant
to and in compliance with this Section 4.6, the transferee or successor (as
the case may be) shall, subject to compliance with the terms of
Section 10.3, be admitted to the Partnership as the General Partner
immediately prior to the transfer of the General Partner Interest, and the
business of the Partnership shall continue without dissolution.
SECTION 4.7. Transfer of Incentive
Distribution Rights. Prior to March 31, 2017, 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
to (a) an Affiliate of such holder (other than an individual) or
(b) 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. Any other
transfer of the Incentive Distribution Rights prior to March 31, 2017, 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 March 31, 2017, the General Partner or any other holder
of Incentive Distribution Rights may transfer any or all of its Incentive
Distribution Rights without Unitholder approval. Notwithstanding anything herein
to the contrary, no transfer of Incentive Distribution Rights to another Person
shall be permitted unless the transferee agrees to be bound by the provisions of
this Agreement. The General Partner and any transferee or transferees of the
Incentive Distribution Rights may agree in a separate instrument as to the
General Partner’s exercise of its rights with respect to the Incentive
Distribution Rights under Section 11.3 hereof.
SECTION 4.8. Restrictions on
Transfers. (a) Except as provided in
Section 4.8(c) below, but notwithstanding the other provisions of this
Article IV, no transfer of any Partnership Interests shall be made if
such transfer would (i) violate the then applicable U.S. 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 or (ii) terminate the existence or qualification of the
Partnership or any Group Member under the laws of the jurisdiction of its
formation.
(b) The transfer of a Subordinated Unit that has converted into a
Common Unit shall be subject to the restrictions imposed by
Section 6.5(b).
(c) Nothing contained in this Article IV, or elsewhere in this
Agreement, shall preclude the settlement of any transactions involving
Partnership Interests entered into through the facilities of any National
Securities Exchange on which such Partnership Interests are listed or
admitted to trading.
CAPITAL
CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
SECTION 5.1. Organizational
Contributions. In connection with the formation of the
Partnership under the Marshall Islands Act, the General Partner made an initial
Capital Contribution to the Partnership in the amount of $20, for a 2% General
Partner Interest in the Partnership (the “Initial General Partner Interest”) and
has been admitted as the General Partner of the Partnership, and the
Organizational Limited Partner made an initial Capital Contribution to the
Partnership in the amount of $980 for a 98% limited partner interest in the
Partnership (the “Initial Limited Partner Interest”) and has been admitted as a
Limited Partner of the Partnership.
SECTION 5.2. Initial Unit
Issuances. (a) On or prior to the Closing Date and
pursuant to the Contribution Agreement, (i) Capital Maritime & Trading Corp.
shall sell all of the outstanding shares of eight vessel-owning subsidiaries of
Capital Maritime & Trading Corp. to the Partnership, (ii) as consideration
therefor, the Partnership shall issue to Capital Maritime & Trading
Corp. (A) 11,750,000 Common Units, representing a 56.0% limited partner
interest in the Partnership, (B) 8,805,521 Subordinated Units, representing
a 42.0% limited partner interest in the Partnership, (C) the Incentive
Distribution Rights, (D) $25 million in cash representing a cash dividend and
(E) the right to receive an additional dividend in the amount of $30 million,
payable in cash or a number of Common Units necessary to satisfy the
Over-Allotment Option or a combination thereof, as described in Section 5.3.,
(iii) Capital Maritime & Trading Corp.’s Initial Limited Partner Interest
will be converted into one Subordinated Unit, (iv) the Initial General Partner
Interest will be converted into 419,500 General Partner Units and (v) Capital
Maritime & Trading Corp. will transfer the Incentive Distribution Rights to
the General Partner.
(b) Upon the issuance of any additional Limited Partner Interests by
the Partnership (other than Common Units issued pursuant to subparagraph (a)
hereof), the General Partner may, in exchange for a proportionate number of
General Partner Units, make additional Capital Contributions in an amount equal
to the product obtained by multiplying (i) the quotient determined by
dividing (A) the General Partner’s Percentage Interest immediately prior to
such issuance by (B) 100 less the General Partner’s Percentage Interest
immediately prior to such issuance by (ii) the amount contributed to the
Partnership by the Limited Partners in exchange for such additional Limited
Partner Interests. The General Partner shall not be obligated to make additional
Capital Contributions to the Partnership.
SECTION 5.3. Exercise of the
Over-Allotment Option. (a) Pursuant to the
Contribution Agreement, upon any exercise of the Over-Allotment Option, the
Partnership shall issue Common Units to Capital Maritime & Trading Corp. in
an amount equal to the number of Common Units to be purchased by all
Underwriters at the Option Closing Date. Upon the earlier of (i) the
exercise in full of the Over-Allotment Option and (ii) 30 days after the date of
the Purchase Agreement, the Partnership shall pay to Capital Maritime &
Trading Corp. an additional cash dividend in an amount of $30 million or a
number of Common Units necessary to satisfy the Over-Allotment Option or a
combination thereof as described in the Contribution Agreement.
(b) No Limited Partner Interests will be issued or issuable as of or
at the Closing Date other than (i) the 11,750,000 Common Units issuable
pursuant to Section 5.2 hereof, (ii) the 8,805,521 Subordinated Units
issuable pursuant to Section 5.2 hereof, (iii) the “Option Units” as
such term is used in the Purchase Agreement in an aggregate number up to
1,762,500 issuable upon exercise of the Over-Allotment Option pursuant to
subparagraph (a) 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 shall be entitled to the withdrawal or return
of its Capital Contribution, except to the extent, if any, that distributions
made pursuant to this Agreement or upon termination of the Partnership may be
considered and permitted as such by law and then only to the extent provided for
in this Agreement. Except to the extent expressly provided in this Agreement, no
Partner shall have priority over any other Partner either as to the return of
Capital Contributions or as to profits, losses or distributions.
SECTION 5.5. 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 the Board of Directors shall determine, all
without the approval of any Limited Partners, but subject to the approval of the
General Partner in the case where issuances of equity are not reasonably
expected to be accretive to equity within twelve months of issuance or which
would otherwise have a material adverse impact on the General Partner or the
General Partner Interest.
(b) Each additional Partnership Security authorized to be issued by
the Partnership pursuant to Section 5.5(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 Board of
Directors, including (i) the right to share in Partnership distributions;
(ii) the rights upon dissolution and liquidation of the Partnership;
(iii) whether, and the terms and conditions upon which, the Partnership may
or shall be required to redeem the Partnership Security (including sinking fund
provisions); (iv) 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; (v) the terms and conditions upon which each
Partnership Security will be issued, evidenced by certificates and assigned or
transferred; (vi) the method for determining the Percentage Interest as to
such Partnership Security; 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 Board of Directors shall take all actions that it determines
to be necessary or appropriate in connection with (i) each issuance of
Partnership Securities and options, rights, warrants and appreciation rights
relating to Partnership Securities pursuant to this Section 5.5,
(ii) the conversion of the General Partner Interest (represented by General
Partner Units) 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 Board of
Directors shall determine the relative rights, powers and duties of the holders
of the Units or other Partnership Securities being so issued. The Board of
Directors shall do all
things necessary to comply with the Marshall Islands Act and is authorized and
directed to do all things that it determines to be necessary or appropriate in
connection with any future issuance of Partnership Securities or in connection
with the conversion of the General Partner Interest 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 or admitted to
trading.
SECTION 5.6. Limitations on Issuance of
Additional Partnership Securities. The Partnership may issue
an unlimited number of Partnership Securities (or options, rights, warrants or
appreciation rights related thereto) pursuant to Section 5.5 without the
approval of the Limited Partners; provided, however, that no
fractional units shall be issued by the Partnership.
SECTION 5.7. Conversion of Subordinated
Units. (a) All of the Outstanding Subordinated
Units will convert into Common Units on a one-for-one basis on the first day
following the distribution of Available Cash to Partners pursuant to
Section 6.1(a) in respect of any Quarter ending on or after June 30, 2007,
in respect of which:
|
|
(i)
|
distributions
of Available Cash from Operating Surplus under Section 6.2(a) on each
of the Outstanding Common Units, Subordinated Units, General Partner Units
and any other Outstanding Units that are senior or equal in right of
distribution to the Subordinated Units equaled or exceeded $2.25 during
the four-Quarter period immediately preceding such
date;
|
|
|
(ii)
|
the
Adjusted Operating Surplus for the four-Quarter period immediately
preceding such date equaled or exceeded the sum of $2.25 on all of the
Common Units, Subordinated Units, General Partner Units and any other
Units that are senior or equal in right of distribution to the
Subordinated Units that were Outstanding during such period on a Fully
Diluted Basis with respect to such
period; and
|
|
|
(iii)
|
there
are no Cumulative Common Unit
Arrearages.
|
(b) If the Subordinated Units are not converted into Common Units
pursuant to Section 5.7(a), the Subordinated Units shall convert into
Common Units on a one-for-one basis upon the expiration of the Subordination
Period.
(c) Notwithstanding any other provision of this Agreement, the
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.
(d) A Subordinated Unit that has converted into a Common Unit shall
be subject to the provisions of Section 6.5(b).
SECTION 5.8. Limited Preemptive
Right. Except as provided in this Section 5.8 and in
Section 5.2(b), 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 5.9. Splits and
Combinations. (a) Subject to Sections 5.9(d)
and 6.4 (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 are proportionately adjusted.
(b) Whenever such a distribution, subdivision or combination of
Partnership Securities is declared, the Board of Directors 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 Board of Directors 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 Board of Directors 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 Board of
Directors may adopt such other procedures that it determines to be necessary or
appropriate to reflect such changes. If any such combination results in a
smaller total number of Partnership Securities Outstanding, the Partnership
shall require, as a condition to the delivery to a Record Holder of such new
Certificate, the surrender of any Certificate held by such Record Holder
immediately prior to such Record Date.
(d) The Partnership shall not issue fractional Units upon any
distribution, subdivision or combination of Units. If a distribution,
subdivision or combination of Units would result in the issuance of fractional
Units but for the provisions of this Section 5.9(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 5.10. Fully Paid and
Non-Assessable Nature of Limited Partner Interests. All
Limited Partner Interests issued pursuant to, and in accordance with the
requirements of, this Article V shall be fully paid and non-assessable
Limited Partner Interests in the Partnership, except as such non-assessability
may be affected by the Marshall Islands Act.
ALLOCATIONS
AND DISTRIBUTIONS
SECTION 6.1. 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 June 30, 2007, an amount
equal to 100% of Available Cash with respect to such Quarter shall, subject to
Section 51 of the Marshall Islands Act, be distributed in accordance with
this Article VI by the Partnership to the Partners as of the Record Date
selected by the Board of Directors. 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 6.2 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 6.3, be deemed to be “Capital Surplus.”
(b) Notwithstanding Section 6.1(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) 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 6.2. Distributions of Available
Cash from Operating Surplus. (a) During Subordination
Period. Available Cash with respect to any Quarter or portion
thereof within the Subordination Period that is deemed to be Operating Surplus
pursuant to the provisions of Sections 6.1 or 6.3 shall, subject to
Section 51 of the Marshall Islands Act, be distributed as follows, except
as otherwise contemplated by Section 5.5 in respect of other Partnership
Securities issued pursuant thereto:
|
|
(i)
|
First,
(x) to the General Partner in accordance with its Percentage Interest
and (y) to all the Unitholders holding Common Units, Pro Rata, a
percentage equal to 100% less the General Partner’s Percentage Interest,
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,
(x) to the General Partner in accordance with its Percentage Interest
and (y) to all Unitholders holding Common Units, Pro Rata, a
percentage equal to 100% less the General Partner’s
Percentage Interest, 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,
(x) to the General Partner in accordance with its Percentage Interest
and (y) to all Unitholders holding Subordinated Units, Pro Rata, a
percentage equal to 100% less the General Partner’s Percentage Interest,
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,
to the General Partner and all Unitholders, in accordance with their
respective Percentage Interests, 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,
(A) to the General Partner in accordance with its Percentage
Interest; (B) 13% to the holders of the Incentive Distribution
Rights, Pro Rata; and (C) to all Unitholders, Pro Rata, a percentage
equal to 100% less the sum of the percentages applicable to
subclauses (A) and (B) of this clause (v) 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,
(A) to the General Partner in accordance with its Percentage
Interest, (B) 23% to the holders of the Incentive Distribution
Rights, Pro Rata; and (C) to all Unitholders, Pro Rata, a percentage
equal to 100% less the sum of the percentages applicable to
subclauses (A) and (B) of this subclause (vi), 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,
(A) to the General Partner in accordance with its Percentage
Interest; (B) 48% to the holders of the Incentive Distribution
Rights, Pro Rata; and (C) to all Unitholders, Pro Rata, a percentage
equal to 100% less the sum of the percentages applicable to
subclauses (A) and (B) of this
clause (vii);
|
provided, however, that 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 6.4(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 6.2(a)(vii).
(b) After
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 Sections 6.1 or 6.3, shall subject to
Section 51 of the Marshall Islands Act, be distributed as follows, except
as otherwise required by Section 5.5(b) in respect of additional
Partnership Securities issued pursuant thereto:
|
|
(i)
|
First,
100% to the General Partner and the Unitholders in accordance with their
respective Percentage Interests, 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,
100% to the General Partner and the Unitholders in accordance with their
respective Percentage Interests, 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,
(A) to the General Partner in accordance with its Percentage
Interest; (B) 13% to the holders of the Incentive Distribution
Rights, Pro Rata; and (C) to all Unitholders, Pro Rata, a percentage
equal to 100% less the sum of the percentages applicable to
subclauses (A) and (B) of this clause (iii), 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,
(A) to the General Partner in accordance with its Percentage
Interest; (B) 23% to the holders of the Incentive Distribution
Rights, Pro Rata; and (C) to all Unitholders, Pro Rata, a percentage
equal to 100% less the sum of the percentages applicable to
subclause (A) and (B) of this clause (iv), 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,
(A) to the General Partner in accordance with its Percentage
Interest; (B) 48% to the holders of the Incentive Distribution
Rights, Pro Rata; and (C) to all Unitholders, Pro Rata, a percentage
equal to 100% less the sum of the percentages applicable to
subclauses (A) and (B) of this
clause (v);
|
provided, however, that 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 6.4(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 6.2(b)(v).
SECTION 6.3. Distributions of Available
Cash from Capital Surplus. Available Cash that is deemed to be
Capital Surplus pursuant to the provisions of Section 6.1(a) shall, subject
to Section 51 of the Marshall Islands Act, be distributed, unless the
provisions of Section 6.1 require otherwise, 100% to the General Partner
and the Unitholders in accordance with their respective Percentage Interests,
until a hypothetical holder of a Common Unit acquired on the Closing Date 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
(a) to the General Partner in accordance with its Percentage Interest and
(b) to all Unitholders holding Common Units their Pro Rata share of a
percentage equal to 100% less the General Partner’s Percentage Interest, 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 6.2.
SECTION 6.4. 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 5.9. 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
reduced in the same proportion that the distribution had to the fair market
value of the Common Units prior to the announcement of the distribution. If the
Common Units are publicly traded on a National Securities Exchange, the fair
market value will be the Current Market Price before the ex-dividend date. If
the Common Units are not publicly traded, the fair market value will be
determined by the Board of Directors.
(b) The Minimum Quarterly Distribution, First Target Distribution,
Second Target Distribution and Third Target Distribution shall also be subject
to adjustment pursuant to Section 6.7.
SECTION 6.5. 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 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 5.7, 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 distributions made with respect to Common Units.
(b) A Unitholder holding a Subordinated Unit that has converted into
a Common Unit pursuant to Section 5.7 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 that is
not an Affiliate of the holder until such time as the Board of Directors
determines, based on advice of counsel, that a converted Subordinated Unit
should have, as a substantive matter, like intrinsic economic and
U.S. federal income tax characteristics, in all material respects, to the
intrinsic economic and U.S. federal income tax characteristics of an
Initial Common Unit.
SECTION 6.6. 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
possess the rights and obligations provided in this Agreement with respect to a
Limited Partner pursuant to Articles III and VII and (b) shall not
(i) be entitled to vote on any matters requiring the approval or vote of
the holders of Outstanding Units, except as provided by law, or (ii) be
entitled to any distributions other than as provided in Sections 6.2(a)(v),
(vi) and (vii), 6.2(b)(iii), (iv) and (v), and 12.4.
SECTION 6.7. Entity-Level
Taxation. If legislation is enacted or the official
interpretation of any existing legislation is modified by a governmental taxing
authority, and as a result, a Subsidiary of the Partnership is subject to
an entity-level income tax for U.S. federal, state, local or non-U.S. tax
purposes, then the Board of Directors shall estimate for each Quarter the
Partnership Group’s direct or indirect aggregate liability (the “Estimated
Incremental Quarterly Tax Amount”) for all such income taxes that are payable by
reason of any such new legislation or interpretation; provided that any
difference between such estimate and the actual tax liability for such Quarter
that is owed by reason of any such new legislation or interpretation shall be
taken into account in determining the Estimated Incremental Quarterly Tax Amount
with respect to each Quarter in which any such difference can be determined. For
each such Quarter, the Minimum Quarterly Distribution, First Target
Distribution, Second Target Distribution and Third Target Distribution, shall be
the product obtained by multiplying (a) the amounts therefore that are set out
herein prior to the application of this Section 6.7 times (b) the quotient
obtained by dividing (i) Available Cash with respect to such Quarter by (ii) the
sum of Available Cash with respect to such Quarter and the Estimated Incremental
Quarterly Tax Amount for such Quarter, as determined by the Board of Directors.
For purposes of the foregoing, Available Cash with respect to a Quarter will be
deemed reduced by the Estimated Incremental Quarterly Tax Amount for that
Quarter.
MANAGEMENT
AND OPERATION OF BUSINESS
SECTION 7.1. Management. (a) The
Board of Directors shall have the power to oversee and direct the operations,
management and policies of the Partnership on an exclusive basis. No Limited
Partner shall have any management power or control over the business and affairs
of the Partnership. Except as otherwise expressly provided in this Agreement,
the business and affairs of the Partnership shall be managed by the General
Partner under the direction of the Board of Directors, and the day-to-day
activities of the Partnership initially shall be conducted on the Partnership’s
behalf by the Officers, who shall be agents of the Partnership. The General
Partner, except as otherwise expressly provided in this Agreement, hereby
irrevocably delegates to the Board of Directors the authority to oversee and
direct the operations, management and policies of the Partnership on an
exclusive basis that it may now or hereafter possess
under applicable law. The General Partner further agrees to take any and all
action necessary and appropriate, in the sole discretion of the Board of
Directors, to effect any duly authorized actions by the Board of Directors,
including executing or filing any agreements, instruments or certificates,
delivering all documents, providing all information and taking or refraining
from taking action as may be necessary or appropriate to achieve the effective
delegation of power described in this Section 7.1(a). Each of the Partners and
each Person who may acquire an interest in a Partnership Interest hereby
approves, consents to, ratifies and confirms such delegation. The delegation by
the General Partner to the Board of Directors of management powers over the
business and affairs of the Partnership pursuant to the provisions of this
Agreement shall not cause the General Partner to cease to be a general partner
of the Partnership nor shall it cause the Board of Directors or any member
thereof to be a general partner of the Partnership or to have or be subject to
the liabilities of a general partner of the Partnership.
(b) Notwithstanding any other provision of this Agreement, any Group
Member Agreement, the Marshall Islands Act or any applicable law, rule or
regulation, each of the Partners and each other Person who may acquire an
interest in Partnership Securities hereby (i) approves, consents to,
ratifies and confirms the General Partner’s delegation of management powers to
the Board of Directors pursuant to paragraph (a) of this Section 7.1;
(ii) approves, ratifies and confirms the execution, delivery and
performance by the parties thereto of this Agreement, the Purchase Agreement,
the Omnibus Agreement, the Contribution Agreement, any Group Member Agreement of
any other Group Member and the other agreements described in or filed as
exhibits to the Registration Statement that are related to the transactions
contemplated by the Registration Statement; (iii) agrees that the General
Partner (on behalf of the Partnership) is authorized to execute, deliver and
perform the agreements referred to in clause (i) of this sentence and the
other agreements, acts, transactions and matters described in or contemplated by
the Registration Statement on behalf of the Partnership without any further act,
approval or vote of the Partners or the other Persons who may acquire an
interest in Partnership Securities; and (iv) agrees that the execution,
delivery or performance by the Board of Directors, 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 Board of
Directors or the General Partner of any duty that the Board of Directors or 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. The Board of Directors;
Election and Appointment; Term; Manner of
Acting. (a) Except as described below with respect
to the Board of Directors upon Closing, the Board of Directors shall consist of
seven individuals, three of whom shall be Appointed Directors and four of whom
shall be Elected Directors. The Elected Directors shall be divided into three
classes: Class I, comprising one Elected Director, Class II, comprising one
Elected Director, and Class III, comprising two Elected Directors. The Board of
Directors upon Closing may consist of six individuals, provided that a seventh
director is appointed within twelve months after the date of the Purchase
Agreement. The Board of Director upon Closing shall consist of the
following individuals, each of whom shall hold office until his successor is
duly elected or appointed, as the case may be, and qualified, in accordance with
subclauses (a)(i) and
(a)(ii) below, or until his earlier death, resignation or removal: Appointed
Directors: Ioannis E. Lazaridis and Evangelos M. Marinakis; Elected
Directors: Class I: Nikolaos Syntychakis, Class II: Abel Rasterhoff, Class III:
Evangelos Bairactaris and Keith Forman. The vacancy among the
Appointed Directors shall be filled as if an Appointed Director had resigned, in
accordance with Section 7.6. The successors of the initial members of
the Board of Directors shall be appointed or elected, as the case may be, as
follows:
|
|
(i)
|
The
Appointed Directors shall be appointed by the General Partner on the date
of the 2010 Annual Meeting and every third succeeding Annual Meeting
thereafter; and
|
|
|
(ii)
|
The
Class I Elected Director shall be elected at the 2008 Annual Meeting,
the Class II Elected Director shall be elected at the 2009 Annual
Meeting and the Class III Elected Directors shall be elected at the
2010 Annual Meeting, in each case by a plurality of the votes of the
Outstanding Common Units (excluding Common Units owned by Capital Maritime
& Trading Corp. and its Affiliates) present in person or represented
by proxy at the Annual Meeting with each Outstanding Common Unit having
one vote and for a three-year term expiring on the date of the third
succeeding Annual Meeting. At each Annual Meeting after the 2010 Annual
Meeting, Elected Directors so classified who are elected to replace those
whose terms expire at such Annual Meeting shall be elected to hold office
until the third succeeding Annual
Meeting.
|
(b) Each member of the Board of Directors appointed or elected, as
the case may be, at an Annual Meeting shall hold office until the third
succeeding Annual Meeting and until his successor is duly elected or appointed,
as the case may be, and qualified, or until his earlier death, resignation or
removal.
(c) Each member of the Board of Directors shall have one vote. The
vote of the majority of the members of the Board of Directors present at a
meeting at which a quorum is present shall be the act of the Board of Directors.
A majority of the number of members of the Board of Directors then in office
shall constitute a quorum for the transaction of business at any meeting of the
Board of Directors, but if less than a quorum is present at a meeting, a
majority of the members of the Board of Directors present at such meeting may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
SECTION 7.3. Nominations of Elected
Directors. The Board of Directors shall be entitled to
nominate individuals to stand for election as Elected Directors at an Annual
Meeting. In addition, any Limited Partner or Group of Limited Partners that
beneficially owns 10% or more of the Outstanding Common Units shall be entitled
to nominate one or more individuals to stand for election as Elected Directors
at an Annual Meeting by providing written notice thereof to the Board of
Directors not more than 120 days and not less than 90 days prior to the date of
such Annual Meeting; provided, however, that in the event that the date of the
Annual Meeting was not publicly announced by the Partnership by mail, press
release or otherwise more than 100
days prior to the date of such meeting, such notice, to be timely, must be
delivered to the Board of Directors not later than the close of business on the
tenth day following the date on which the date of the Annual Meeting was
announced. Such notice shall set forth (i) the name and address of the Limited
Partner or Limited Partners making the nomination or nominations, (ii) the
number of Common Units beneficially owned by such Limited Partner or Limited
Partners, (iii) such information regarding the nominee(s) proposed by the
Limited Partner or Limited Partners as would be required to be included in a
proxy statement relating to the solicitation of proxies for the election of
directors filed pursuant to the proxy rules of the Commission had the nominee(s)
been nominated or intended to be nominated to the Board of Directors, (iv) the
written consent of each nominee to serve as a member of the Board of Directors
if so elected and (v) a certification that such nominee(s) qualify as Elected
Directors.
SECTION 7.4. Removal of Members of Board
of Directors. Members of the Board of Directors may only be
removed as follows:
(a) Any Appointed Director may be removed at any time, (i) without
Cause, only by the General Partner and, (ii) with Cause, by the General Partner
or by the affirmative vote of the holders of a majority of the Outstanding Units
at a properly called meeting of the Limited Partners.
(b) Any and all of the Elected Directors may be removed at any time,
with Cause, only by the affirmative vote of a majority of the other Elected
Directors or at a properly called meeting of the Limited Partners only by the
affirmative vote of the holders of a majority of the Outstanding
Units.
SECTION 7.5. Resignations of Members of
the Board of Directors. Any member of the Board of Directors
may resign at any time by giving written notice to the Board of Directors. Such
resignation shall take effect at the time specified therein.
SECTION 7.6. Vacancies on the Board of
Directors. Vacancies on the Board of Directors may be filled
only as follows:
(a) If any Appointed Director is removed, resigns or is otherwise
unable to serve as a member of the Board of Directors, the General Partner
shall, in its sole discretion, appoint an individual to fill the
vacancy.
(b) If any Elected Director is removed, resigns or is unable to serve
as a member of the Board of Directors, the vacancy shall be filled by a majority
of the Elected Directors then serving.
(c) A director appointed or elected pursuant to this Section 7.6 to
fill a vacancy shall be appointed or elected, as the case may be, for the
unexpired term of his predecessor in office.
SECTION 7.7. Meetings; Committees;
Chairman. (a) Regular meetings of the Board of
Directors shall be held at such times and places as shall be designated from
time to time by resolution of the Board of Directors. Notice of such regular
meetings shall not be required. Special meetings of the Board of Directors may
be called by the Chairman of the Board of Directors
and shall be called by the Secretary upon the written request of two members of
the Board of Directors, on at least 48 hours prior written notice to the other
members. Any such notice, or waiver thereof, need not state the purpose of such
meeting except as may otherwise be required by law. Attendance of a member of
the Board of Directors at a meeting (including pursuant to the penultimate
sentence of this Section 7.7(a)) shall constitute a waiver of notice of such
meeting, except where such member attends the meeting for the express purpose of
objecting to the transaction of any business on the ground that the meeting is
not lawfully called or convened. Any action required or permitted to be taken at
a meeting of the Board of Directors may be taken without a meeting, without
prior notice and without a vote if a consent or consents in writing, setting
forth the action so taken, is signed by all the members of the Board of
Directors. Members of the Board of Directors may participate in and hold
meetings by means of conference telephone, videoconference or similar
communications equipment by means of which all Persons participating in the
meeting can hear each other, and participation in such meetings shall constitute
presence in person at the meeting. The Board of Directors may establish any
additional rules governing the conduct of its meetings that are not inconsistent
with the provisions of this Agreement.
(b) The Board of Directors shall appoint the Audit Committee and the
Conflicts Committee to consist, in each case, solely of a minimum of three of
the Elected Directors then in office. The Audit Committee and the Conflicts
Committee shall, in each case, perform the functions delegated to it pursuant to
the terms of this Agreement and such other matters as may be delegated to it
from time to time by resolution of the Board of Directors. The Board of
Directors, by a majority of the whole Board of Directors, may appoint one or
more additional committees of the Board of Directors to consist of one or more
members of the Board of Directors, which committee(s) shall have and may
exercise such of the powers and authority of the Board of Directors (including
in respect of Section 7.1) with respect to the management of the business and
affairs of the Partnership as may be provided in a resolution of the Board of
Directors. Any committee designated pursuant to this Section 7.7(b) shall choose
its own chairman, shall keep regular minutes of its proceedings and report the
same to the Board of Directors when requested, shall fix its own rules or
procedures and shall meet at such times and at such place or places as may be
provided by such rules or by resolution of such committee or resolution of the
Board of Directors. At every meeting of any such committee, the presence of a
majority of all the members thereof shall constitute a quorum and the
affirmative vote of a majority of the members present shall be necessary for the
taking of any action. Subject to the first sentence of this Section 7.7(b), the
Board of Directors may designate one or more members of the Board of Directors
as alternate members of any committee who may replace any absent or disqualified
member at any meeting of such committee. Subject to the first sentence of this
Section 7.7(b), in the absence or disqualification of a member of a committee,
the member or members present at any meeting and not disqualified from voting,
whether or not constituting a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of the absent or
disqualified member.
(c) The Appointed Directors may designate one of the members of the
Board of Directors as Chairman of the Board of Directors. The Chairman of the
Board of Directors, if any, and if present and acting, shall preside at all
meetings of the Board of Directors. In the absence of the Chairman of the Board
of Directors, another member of the Board of Directors chosen by the Appointed
Directors shall preside. If, at any time, in accordance with Section 7.2(b), the
Board of
Directors consists solely of Elected Directors, the Board of Directors may elect
one of its members as Chairman of the Board of Directors and shall, in the
absence of the Chairman of the Board of Directors at a meeting of the Board of
Directors, choose another member of the Board of Directors to preside at the
meeting.
SECTION 7.8. Compensation of
Directors. The members of the Board of Directors who are not
employees of the Partnership, the General Partner or its Affiliates shall
receive such compensation for their services as members of the Board of
Directors or members of a committee of the Board of Directors shall determine.
In addition, the members of the Board of Directors shall be entitled to be
reimbursed for out-of-pocket costs and expenses incurred in the course of their
service hereunder.
SECTION 7.9. Certificate of Limited
Partnership. The General Partner has caused the Certificate of
Limited Partnership to be filed with the Registrar of Corporations of The
Marshall Islands as required by the Marshall Islands Act. The General Partner
shall use all commercially reasonable efforts to cause to be filed such other
certificates or documents that the Board of Directors determines to be necessary
or appropriate for the formation, continuation, qualification and operation of a
limited partnership (or a partnership or other entity in which the limited
partners have limited liability) in The Marshall Islands or any other
jurisdiction in which the Partnership may elect to do business or own property.
To the extent the Board of Directors determines such action to be necessary or
appropriate, the General Partner shall file amendments to and restatements of
the Certificate of Limited Partnership and do all things to maintain the
Partnership as a limited partnership (or a partnership or other entity in which
the limited partners have limited liability) under the laws of The Marshall
Islands or of any other jurisdiction in which the Partnership may elect to do
business or own property. Subject to the terms of Section 3.4(a), the
General Partner shall not be required, before or after filing, to deliver or
mail a copy of the Certificate of Limited Partnership, any qualification
document or any amendment thereto to any Limited Partner.
SECTION 7.10. Restrictions on the
Authority of the Board of Directors and the General
Partner. (a) Except as otherwise provided in this
Agreement, neither the Board of Directors nor the General Partner may, 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.
(b) Except as provided in Articles XII and XIV, the Board of
Directors may not sell, exchange or otherwise dispose of all or substantially
all of the assets of the Partnership Group, taken as a whole, in a single
transaction or a series of related transactions (including by way of merger,
consolidation, other combination or sale of ownership interests in the
Partnership’s Subsidiaries) or dissolve the Partnership without the approval of
holders of a Unit Majority and the General Partner; provided, however, that this
provision shall not preclude or limit the ability of the Board of Directors,
subject to the approval of the General Partner as provided in subparagraph (c)
below, to mortgage, pledge, hypothecate or grant a security interest in all or
substantially all of the assets of the Partnership Group and shall not apply to
any forced sale of any or all of the assets of the Partnership Group pursuant to
the foreclosure of, or other realization upon, any such encumbrance. The
transfer of the General Partner Interest to and the election
of a successor general partner of the Partnership shall be made in accordance
with Sections 4.6, 11.1 and 11.2.
(c) Without the approval of the General Partner, the Board of
Directors may not:
|
|
(i)
|
merge
or consolidate the Partnership;
|
|
|
(ii)
|
dissolve
the Partnership;
|
|
|
(iii)
|
make
a sale of assets representing 10% or more of the fair market value of the
Partnership’s assets prior to the
sale;
|
|
|
(iv)
|
make
a purchase of assets representing 10% or more of the fair market value of
the Partnership’s assets prior to the
purchase;
|
|
|
(v)
|
incur
debt if such incurrence would result in the Partnership’s over leverage,
taking into account customary industry leverage levels, the Partnership’s
structure and its other assets and
liabilities;
|
|
|
(vi)
|
mortgage,
pledge, hypothecate, or grant a security interest in all or substantially
all of the Partnership’s assets for purposes other than securing
indebtedness that does not result in the Partnership’s over leverage,
taking into account customary industry leverage levels, the Partnership’s
structure and its other assets and liabilities;
and
|
|
|
(vii)
|
make
issuances of equity that are not reasonably expected to be accretive to
equity within twelve months of issuance or which would otherwise have a
material adverse impact on the General Partner or the General Partner
Interest.
|
SECTION 7.11. Reimbursement of the General
Partner. (a) Except as provided in this
Section 7.11 and elsewhere in this Agreement, the General Partner shall not
be compensated for its services as a general partner or managing member of any
Group Member.
(b) The General Partner shall be reimbursed on a monthly basis, or
such other basis as the Board of Directors may determine, for (i) all
direct and indirect expenses it incurs or payments it makes on behalf of the
Partnership Group (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 Group, which amounts shall also include
reimbursement for any Common Units purchased to satisfy obligations of the
Partnership under any of its equity compensation plans), and (ii) all other
direct and indirect expenses allocable to the Partnership or otherwise incurred
by the General Partner in connection with operating the Partnership Group’s
business (including expenses allocated to the General Partner by its
Affiliates). The Board of Directors and the General Partner shall determine in
good faith the expenses that are allocable to the Partnership Group.
Reimbursements pursuant to this Section 7.11 shall be in addition to any
reimbursement to the General Partner as a result of indemnification pursuant to
Section 7.14.
(c) The General Partner, without the approval of the Limited Partners
(who shall have no right to vote in respect thereof) but subject to the approval
of the Board of Directors, 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 or rights, warrants or appreciation rights relating to
Partnership Securities), or cause the Partnership to issue Partnership
Securities in connection with, or pursuant to, any employee benefit plan,
employee program or employee practice maintained or sponsored by the General
Partner or any of its Affiliates, in each case for the benefit of employees of
the General Partner, any Group Member or any Affiliate thereof, 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 or in the open market to fulfill options or
awards under such plans, programs and practices) shall be reimbursed in
accordance with Section 7.11(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 7.11(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 7.12. Outside
Activities. (a) After the Closing Date, the General
Partner, for so long as it is the General Partner of the Partnership
(i) agrees that its sole business will be to act as a general partner or
managing member, as the case may be, of the Partnership and any other
partnership or limited liability company of which the Partnership is, directly
or indirectly, a partner or member and to undertake activities that are
ancillary or related thereto (including being a limited partner in the
Partnership), (ii) shall not engage in any business or activity or incur
any debts or liabilities except in connection with or incidental to (A) its
performance as general partner or managing member, if any, of one or more Group
Members or as described in or contemplated by the Registration Statement or
(B) the acquiring, owning or disposing of debt or equity securities in any
Group Member and (iii) except to the extent permitted in the Omnibus
Agreement, shall not, and shall cause its controlled Affiliates not to, acquire,
own or operate Medium Range Tankers under Qualifying Contracts (as such terms
are defined in the Omnibus Agreement).
(b) Capital Maritime & Trading Corp., the Partnership, the
General Partner and the Operating Company have entered into the Omnibus
Agreement, which agreement sets forth certain restrictions on the ability of
Capital Maritime & Trading Corp. and certain of its Affiliates to acquire,
own or operate Medium Range Tankers under Qualifying Contracts (as defined in
the Omnibus Agreement).
(c) Except as specifically restricted by Section 7.12(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 expressed or implied by law to any Group Member or any Partner.
Notwithstanding anything to the contrary in this Agreement, (i) the
possessing of competitive interests and engaging in competitive activities by
any Indemnitees (other than the General Partner) in accordance with the
provisions of this Section 7.12 is hereby approved by the Partnership and
all Partners and (ii) it shall be deemed not to be a breach of any
fiduciary duty or any other obligation of any type whatsoever of the General
Partner or of any Indemnitee for the Indemnitees (other than the General
Partner) to engage in such business interests and activities in preference to or
to the exclusion of the Partnership.
(d) Notwithstanding anything to the contrary in this Agreement, the
doctrine of corporate opportunity, or any analogous doctrine, shall not apply to
an Indemnitee (including the General Partner) and, subject to the terms of
Section 7.12(a), Section 7.12(b), Section 7.12(c) and the Omnibus
Agreement, no Indemnitee (including the General Partner) who acquires knowledge
of a potential transaction, agreement, arrangement or other matter that may be
an opportunity for the Partnership shall have any duty to communicate or offer
such opportunity to the Partnership, and, subject to the terms of
Section 7.12(a), Section 7.12(b), Section 7.12(c) and the Omnibus
Agreement, such Indemnitee (including the General Partner) shall not be liable
to the Partnership, to any Limited Partner or any other Person for breach of any
fiduciary or other duty by reason of the fact that such Indemnitee (including
the General Partner) pursues or acquires such opportunity for itself, directs
such opportunity to another Person or does not communicate such opportunity or
information to the Partnership.
(e) The General Partner and each of its Affiliates may acquire Units
or other Partnership Securities in addition to those acquired on the Closing
Date and, except as otherwise provided in this Agreement, shall be entitled to
exercise, at their option, all rights relating to all Units or other Partnership
Securities acquired by them. The term “Affiliates” as used in this
Section 7.12(e) with respect to the General Partner shall not include any
Group Member.
SECTION 7.13. Loans from the General
Partner; Loans or Contributions from the Partnership or Group
Members. (a) The General Partner or any of its
Affiliates may lend to any Group Member, and any Group Member may borrow from
the General Partner or any of its Affiliates, funds needed or desired by the
Group Member for such periods of time and in such amounts as the General Partner
and the Board of Directors 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
arms’-length basis (without reference to the lending party’s financial abilities
or guarantees), all as determined by the General Partner and the Board of
Directors. 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 7.13(a) and Section 7.13(b), the term “Group Member” shall
include any Affiliate of a Group Member that is controlled by the Group
Member.
(b) The Partnership may lend or contribute to any Group Member, and
any Group Member may borrow from the Partnership, funds on terms and conditions
determined by the Board of Directors. No Group Member may lend funds to the
General Partner or any of its Affiliates (other than another Group
Member).
(c) No borrowing by any Group Member or the approval thereof by the
General Partner or the Board of Directors shall be deemed to constitute a breach
of any duty, expressed or implied, of the General Partner or its Affiliates or
the Board of Directors 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 (i) enable distributions to the General Partner or its Affiliates
(including in their capacities as Limited Partners) to exceed the General
Partner’s Percentage Interest of the total amount distributed to all partners or
(ii) hasten the expiration of the Subordination Period or the conversion of
any Subordinated Units into Common Units.
SECTION 7.14. 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, however, that the Indemnitee
shall not be indemnified and held harmless if there has been a final and
non-appealable judgment entered by a court of competent jurisdiction determining
that, in respect of the matter for which the Indemnitee is seeking
indemnification pursuant to this Section 7.14, the Indemnitee acted in bad
faith or engaged in fraud or willful misconduct or, in the case of a criminal
matter, acted with knowledge that the Indemnitee’s conduct was unlawful; and,
provided further, that no
indemnification pursuant to this Section 7.14 shall be available to the
General Partner or its Affiliates (other than a Group Member) with respect to
its or their obligations incurred pursuant to the Purchase Agreement, the
Omnibus Agreement or the Contribution Agreement (other than obligations incurred
by the General Partner on behalf of the Partnership). Any indemnification
pursuant to this Section 7.14 shall be made 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 7.14(a) in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by the Partnership prior to a
determination that the Indemnitee is not entitled to be indemnified upon receipt
by the Partnership of any undertaking by or on behalf of the Indemnitee to repay
such amount if it shall be determined that the Indemnitee is not entitled to be
indemnified as authorized in this Section 7.14.
(c) The indemnification provided by this Section 7.14 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, and shall continue as to an Indemnitee who has ceased to serve
in such capacity and shall inure to the benefit of the heirs, successors,
assigns and administrators of the Indemnitee.
(d) The Partnership may purchase and maintain (or reimburse the
members of the Board of Directors and the General Partner or its Affiliates for
the cost of) insurance, on behalf of the Board of Directors and the General
Partner, its Affiliates and such other Persons as the Board of Directors 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 7.14, the Partnership shall be
deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by the Indemnitee 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 7.14(a); and action
taken or omitted by the Indemnitee with respect to any employee benefit plan in
the performance of its duties for a purpose reasonably believed by it to be in
the best interest of the participants and beneficiaries of the plan shall be
deemed to be for a purpose that is in the best interests of the
Partnership.
(f) In no event may an Indemnitee subject the Limited Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.14 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 7.14 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 7.14 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 7.14 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
SECTION 7.15. 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 or any other Persons who have
acquired interests in the Partnership Securities, for losses sustained or
liabilities incurred as a result of any act or
omission
of an Indemnitee unless there has been a final and non-appealable judgment
entered by a court of competent jurisdiction determining that, in respect of the
matter in question, the Indemnitee acted in bad faith or engaged in fraud or
willful misconduct or, in the case of a criminal matter, acted with knowledge
that the Indemnitee’s conduct was criminal.
(b) Subject to their obligations and duties as members of the Board
of Directors or the General Partner, respectively, set forth in
Section 7.1(a), members of the Board of Directors and the General Partner
may exercise any of the powers granted to them and perform any of the duties
imposed upon them hereunder either directly or by or through its agents, and the
members of the Board of Directors and the General Partner shall not be
responsible for any misconduct or negligence on the part of any such agent
appointed by the Board of Directors or the General Partner in good
faith.
(c) To the extent that, at law or in equity, an Indemnitee has duties
(including fiduciary duties) and liabilities relating thereto to the Partnership
or to the Partners, the General Partner and any other Indemnitee acting in
connection with the Partnership’s business or affairs shall not be liable to the
Partnership or to any Partner for its good faith reliance on the provisions of
this Agreement.
(d) Any amendment, modification or repeal of this Section 7.15
or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the liability of the Indemnitees under this
Section 7.15 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 7.16. Resolution of Conflicts of
Interest; Standards of Conduct and Modification of
Duties. (a) Unless otherwise expressly provided in
this Agreement or any Group Member Agreement, whenever a potential conflict of
interest exists or arises between the General Partner or any of its Affiliates,
or any member of the Board of Directors, on the one hand, and the Partnership,
any Group Member or any Partner, on the other, any resolution or course of
action in respect of such conflict of interest shall be permitted and deemed
approved by all Partners, and shall not constitute a breach of this Agreement,
of any Group Member Agreement, of any agreement contemplated herein or therein,
or of any duty stated or implied by law or equity, if the resolution or course
of action in respect of such conflict of interest is (i) approved by
Special Approval, (ii) approved by the vote of a majority of the Common
Units (excluding Common Units owned by the General Partner and its Affiliates),
(iii) on terms no less favorable to the Partnership than those generally
being provided to or available from unrelated third parties or (iv) fair
and reasonable to the Partnership, taking into account the totality of the
relationships between the parties involved (including other transactions that
may be particularly favorable or advantageous to the Partnership). The General
Partner and the Board of Directors may but shall not be required in connection
with the resolution of such conflict of interest to seek Special Approval of
such resolution, and the General Partner or the Board of Directors, as the case
may be, may also adopt a resolution or course of action that has not received
Special Approval. If Special Approval is not sought and the Board of Directors
determines that the resolution or course of action taken with respect to a
conflict of interest satisfies either of the standards set forth in
clauses (iii) or (iv) above, then it shall be presumed that, in making
its decision
the Board of Directors, acted in good faith, and in any proceeding brought by
any Limited Partner or by or on behalf of such Limited Partner or any other
Limited Partner or the Partnership challenging such approval, the Person
bringing or prosecuting such proceeding shall have the burden of overcoming such
presumption. Notwithstanding anything to the contrary in this Agreement, the
existence of the conflicts of interest described in the Registration Statement
are hereby approved by all Partners.
(b) Whenever the General Partner makes a determination or takes or
declines to take any other action, or any of its Affiliates causes it to do so,
in its capacity as the general partner of the Partnership as opposed to in its
individual capacity, whether under this Agreement, any Group Member Agreement or
any other agreement contemplated hereby or otherwise, then, unless another
express standard is provided for in this Agreement, the General Partner, or such
Affiliates causing it to do so, shall make such determination or take or decline
to take such other action in good faith and shall not be subject to any other or
different standards imposed by this Agreement, any Group Member Agreement, any
other agreement contemplated hereby or under the Marshall Islands Act or any
other law, rule or regulation or at equity. In order for a determination or
other action to be in “good faith” for purposes of this Agreement, the Person or
Persons making such determination or taking or declining to take such other
action must reasonably believe that the determination or other action is in the
best interests of the Partnership, unless the context otherwise
requires.
(c) Whenever the General Partner makes a determination or takes or
declines to take any other action, or any of its Affiliates causes it to do so,
in its individual capacity as opposed to in its capacity as the general partner
of the Partnership, whether under this Agreement, any Group Member Agreement or
any other agreement contemplated hereby or otherwise, then the General Partner,
or such Affiliates causing it to do so, are entitled to make such determination
or to take or decline to take such other action free of any fiduciary duty or
obligation whatsoever to the Partnership or any Limited Partner, and the General
Partner, or such Affiliates causing it to do so, shall not be required to act in
good faith or pursuant to any other standard imposed by this Agreement, any
Group Member Agreement, any other agreement contemplated hereby or under the
Marshall Islands Act or any other law, rule or regulation or at equity. By way
of illustration and not of limitation, whenever the phrase, “at the option of
the General Partner,” or some variation of that phrase, is used in this
Agreement, it indicates that the General Partner is acting in its individual
capacity. For the avoidance of doubt, whenever the General Partner votes or
transfers its Units, General Partner Interest or Incentive Distribution Rights,
to the extent permitted under this Agreement, or refrains from voting or
transferring its Units, General Partner Units or Incentive Distribution Rights,
as appropriate, it shall be acting in its individual capacity. The General
Partner’s organizational documents may provide that determinations to take or
decline to take any action in its individual, rather than representative,
capacity may or shall be determined by its members, if the General Partner is a
limited liability company, stockholders, if the General Partner is a
corporation, or the members or stockholders of the General Partner’s general
partner, if the General Partner is a limited partnership.
(d) Whenever the Board of Directors makes a determination or takes or
declines to take any other action, whether under this Agreement, any Group
Member Agreement or any other agreement contemplated hereby or otherwise, then,
unless another express standard is provided for in this Agreement, the Board of
Directors, shall make such determination or take or decline
to take such other action in good faith and shall not be subject to any other or
different standards imposed by this Agreement, any Group Member Agreement, any
other agreement contemplated hereby or under the Marshall Islands Act or any
other law, rule or regulation or at equity. In order for a determination or
other action to be in “good faith” for purposes of this Agreement, the Person or
Persons making such determination or taking or declining to take such other
action must reasonably believe that the determination or other action is in the
best interests of the Partnership, unless the context otherwise
requires.
(e) Notwithstanding anything to the contrary in this Agreement,
neither the Board of Directors nor the General Partner and its Affiliates shall
have a duty or obligation, express or implied, to (i) sell or otherwise
dispose of any asset of the Partnership Group other than in the ordinary course
of business or (ii) permit any Group Member to use any facilities or assets
of the General Partner and its Affiliates, except as may be provided in
contracts entered into from time to time specifically dealing with such use. Any
determination by the Board of Directors or the General Partner or any of its
Affiliates to enter into such contracts shall, in each case, be at their
option.
(f) Except as expressly set forth in this Agreement, neither the
General Partner nor the Board of Directors or any other Indemnitee shall have
any duties or liabilities, including fiduciary duties, to the Partnership or any
Limited Partner and the provisions of this Agreement, to the extent that they
restrict, eliminate or otherwise modify the duties and liabilities, including
fiduciary duties, of the Board of Directors or the General Partner or any other
Indemnitee otherwise existing at law or in equity, are agreed by the Partners to
replace such other duties and liabilities of the Board of Directors or the
General Partner or such other Indemnitee.
(g) The Unitholders hereby authorize the Board of Directors, 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 Board of Directors
pursuant to this Section 7.16.
SECTION 7.17. Other Matters Concerning the
General Partner and the Board of Directors. (a) The
General Partner and the Board of Directors may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
(b) The General Partner and the Board of Directors may consult with
legal counsel, accountants, appraisers, management consultants, investment
bankers and other consultants and advisers selected by either of them, and any
act taken or omitted to be taken in reliance upon the advice or opinion
(including an Opinion of Counsel) of such Persons as to matters that the General
Partner or the Board of Directors 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 advice or
opinion.
(c) The General Partner shall have the right, in respect of any of
its powers or obligations hereunder, to act through any of its duly authorized
officers, a duly appointed attorney or attorneys-in-fact or the duly authorized
officers of the Partnership.
SECTION 7.18. Purchase or Sale of
Partnership Securities. The Board of Directors may cause the
Partnership to purchase or otherwise acquire Partnership Securities; provided, however, that the
Board of Directors 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 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 7.19. 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 7.19, any Person that is an Affiliate of the
General Partner at the date hereof notwithstanding that it may later cease to be
an Affiliate of the General Partner) holds Partnership Securities that it
desires to sell and (ii) Rule 144 of the Securities Act (or any
successor rule or regulation to Rule 144) or another exemption from
registration is not available to enable such holder of Partnership Securities
(the “Holder”) to dispose of the number of Partnership Securities it desires to
sell at the time it desires to do so without registration under the Securities
Act, then at the option and upon the request of the Holder, the Partnership
shall file with the Commission as promptly as practicable after receiving such
request, and use its reasonable best 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 five registrations
pursuant to this Section 7.19(a); and, provided further,
that if the Conflicts Committee determines in good faith that the requested
registration would be materially detrimental to the Partnership and its Partners
because such registration would (x) materially interfere in a way
materially adverse to the Partnership with a significant acquisition, merger,
disposition, corporate reorganization or other similar transaction involving the
Partnership, (y) require premature disclosure of material information that
the Partnership has a bona fide business purpose
for preserving as confidential or (z) render the Partnership unable to
comply with requirements under applicable securities laws, then the Partnership
shall have the right to postpone such requested registration for a period of not
more than 90 days after receipt of the Holder’s request, such right pursuant to
this Section 7.19(a) not to be utilized more than once in any 12-month
period. The Partnership shall use its reasonable best efforts to resolve any
deferral with respect to any such registration and/or filing. Except as provided
in the first sentence of this Section 7.19(a), the Partnership shall be deemed
not to have used all its reasonable best efforts to keep the registration
statement effective during the applicable period if it voluntarily takes any
action that would result in Holders of Partnership Securities covered thereby
not being able to offer and sell such Partnership Securities at any time during
such period, unless such action is required by applicable law. In connection
with any registration pursuant to this Section 7.19(a), the Partnership shall
(i) promptly prepare and file (A) such documents as may be necessary
to register or qualify the securities subject to such registration under the
securities laws of such states as the Holder shall reasonably request (provided, however, that no such
qualification shall be required in any jurisdiction where, as a result thereof,
the Partnership would become subject to general service of process or to
taxation or qualification to do business as a foreign corporation or partnership
doing business in such jurisdiction
solely as a result of such registration), and (B) such documents as may be
necessary to apply for listing or to list the Partnership Securities subject to
such registration on such National Securities Exchange as the Holder shall
reasonably request, and (ii) do any and all other acts and things that may
be necessary or appropriate to enable the Holder to consummate a public sale of
such Partnership Securities in such states. Except as set forth in
Section 7.19(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 Partnership
Securities for cash (other than an offering relating solely to an employee
benefit plan), the Partnership shall use all its reasonable best efforts to
include such number or amount of Partnership Securities held by any Holder in
such registration statement as the Holder shall request; provided, however, that the
Partnership is not required to make any effort or take any action to so include
the Partnership Securities of the Holder once the registration statement becomes
or is declared effective by the Commission, including any registration statement
providing for the offering from time to time of Partnership Securities pursuant
to Rule 415 of the Securities Act. If the proposed offering pursuant to
this Section 7.19(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 Partnership Securities held
by the Holder that, in the opinion of the managing underwriter or managing
underwriters, will not so adversely and materially affect the offering. Except
as set forth in Section 7.19(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 7.19, 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 7.14, 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”) from and against any and
all 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 7.19(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 or issuer free
writing prospectus as defined in Rule 433 of the Securities Act (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 7.19(a) and Section 7.19(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 general partner of the
Partnership, during a period of two years subsequent to the effective date of
such cessation and for so long thereafter as is required for the Holder to sell
all of the Partnership Securities with respect to which it has requested during
such two-year period inclusion in a registration statement otherwise filed or
that a registration statement be filed; provided, however, that the
Partnership shall not be required to file successive registration statements
covering the same Partnership Securities for which registration was demanded
during such two-year period. The provisions of Section 7.19(c) shall
continue in effect thereafter.
(e) The rights to cause the Partnership to register Partnership
Securities pursuant to this Section 7.19 may be assigned (but only with all
related obligations) by a Holder to a transferee or assignee of such Partnership
Securities, provided (i) the Partnership is, within a reasonable time after
such transfer, furnished with written notice of the name and address of such
transferee or assignee and the Partnership Securities with respect to which such
registration rights are being assigned, and (ii) such transferee or
assignee agrees in writing to be bound by and subject to the terms set forth in
this Section 7.19.
(f) Any request to register Partnership Securities pursuant to this
Section 7.19 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 7.20. Reliance by Third
Parties. Notwithstanding anything to the contrary in this
Agreement, any Person dealing with the Partnership shall be entitled to assume
that the Board of Directors, the General Partner and any Officer authorized by
the General Partner or the Board of Directors 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 Board of Directors, 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 Board of Directors, the General Partner or
any such Officer in connection with any such dealing. In no event shall any
Person dealing with the Board of Directors, the General Partner or any such
Officer or its representatives be obligated to ascertain that the terms of this
Agreement have been complied with or
to inquire into the necessity or expedience of any act or action of the Board of
Directors, 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 Board of Directors, the General Partner, the Officers or
representatives of the General Partner authorized by the General Partner or the
Board of Directors 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.
BOOKS,
RECORDS, ACCOUNTING AND REPORTS
SECTION 8.1. Records and
Accounting. The Partnership shall keep or cause to be kept at
the principal office of the Partnership appropriate books and records with
respect to the Partnership’s business, including all books and records necessary
to provide to the Limited Partners any information required to be provided
pursuant to Section 3.4(a). Any books and records maintained by or on
behalf of the Partnership in the regular course of its business, including the
record of the Record Holders of Units or other Partnership Securities, books of
account and records of Partnership proceedings, may be kept on, or be in the
form of, computer disks, hard drives, punch cards, magnetic tape, photographs,
micrographics or any other information storage device; provided, however, 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 Partnership shall cause to be mailed or
made available, by any reasonable means (including posting on the Partnership’s
website), to each Record Holder of a Unit as of a date selected by the Board of
Directors, 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 Board of Directors.
(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
Partnership shall cause to be mailed or made available, by any reasonable means
(including posting on the Partnership’s website), to each Record Holder of a
Unit, as of a date selected by the Board of Directors, a report containing
unaudited financial statements of the Partnership and such other information as
may be required by
applicable law, regulation or rule of any National Securities Exchange on which
the Units are listed or admitted to trading, or as the Board of Directors
determines to be necessary or appropriate.
TAX
MATTERS
SECTION 9.1. Tax Elections and
Information. (a) The Partnership has elected to be
treated as an association taxable as a corporation for United States federal
income tax purposes. Except as otherwise provided herein, the Board of Directors
shall determine whether the Partnership should make any other elections
permitted by the Code.
(b) The tax information reasonably required by Record Holders
generally for United States federal and state income tax reporting purposes with
respect to a taxable year shall be furnished to them within 90 days of the
close of the calendar year in which the Partnership’s taxable year
ends.
SECTION 9.2. Withholding. Notwithstanding
any other provision of this Agreement, the Board of Directors is authorized to
take any action that may be required to cause the Partnership and other Group
Members to comply with any withholding requirements established under the Code
or any other U.S. federal, state or local or any non-U.S. law including
pursuant to Sections 1441, 1442 and 1445 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 distribution of income to any Partner,
the Board of Directors may treat the amount withheld as a distribution of cash
pursuant to Section 6.1 in the amount of such withholding from such
Partner.
SECTION 9.3. Conduct of
Operations. The Board of Directors and the General Partner
shall use commercially reasonable efforts to conduct the business of the
Partnership and its Affiliates in a manner that does not require a holder of
Common Units to file a tax return in any jurisdiction with which the holder has
no contact other than through ownership of Common Units.
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 General
Partner and Capital Maritime & Trading Corp. as described in Sections 5.2
and 5.3, the Board of Directors 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 Additional
Limited Partners. (a) By acceptance of the transfer
of any Limited Partner Interests in accordance with Article IV or the
acceptance of any Limited Partner Interests issued pursuant to Article V or
pursuant to a merger or consolidation pursuant to Article XIV, each
transferee of, or other such Person acquiring, a Limited Partner Interest
(including any nominee holder or an agent or representative acquiring such
Limited Partner Interests for the account of another Person) (i) shall be
admitted to the Partnership as a Limited Partner with respect to the Limited
Partner Interests so transferred or issued to such Person when any such
transfer, issuance or admission is reflected in the books and records of the
Partnership and such Limited Partner becomes the Record Holder of the Limited
Partner Interests so transferred, (ii) shall become bound by the terms of
this Agreement, (iii) represents that the transferee has the capacity,
power and authority to enter into this Agreement, (iv) grants the powers of
attorney set forth in this Agreement and (v) makes the consents and waivers
contained in this Agreement, all with or without execution of this Agreement by
such Person. The transfer of any Limited Partner Interests and the admission of
any new Limited Partner shall not constitute an amendment to this Agreement. A
Person may become a Limited Partner or Record Holder of a Limited Partner
Interest without the consent or approval of any of the Partners. A Person may
not become a Limited Partner until such Person acquires a Limited Partner
Interest and such Person is reflected in the books and records of the
Partnership as the Record Holder of such Limited Partner Interest.
(b) The name and mailing address of each Limited Partner shall be
listed on the books and records of the Partnership maintained for such purpose
by the Partnership or the Transfer Agent. The General Partner shall update the
books and records of the Partnership from time to time as necessary to reflect
accurately the information therein (or shall cause the Transfer Agent to do so,
as applicable). A Limited Partner Interest may be represented by a Certificate,
as provided in Section 4.1 hereof.
(c) Any transfer of a Limited Partner Interest shall not entitle the
transferee to receive distributions or to any other rights to which the
transferor was entitled until the transferee becomes a Limited Partner pursuant
to Section 10.2(a).
SECTION 10.3. Admission of Successor
General Partner. A successor General Partner approved pursuant
to Section 11.1 or 11.2 or the transferee of or successor to all of the
General Partner Interest (represented by General Partner Units) 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 (represented by General Partner Units)
pursuant to Section 4.6; provided, however, that no such
successor shall be admitted to the Partnership until compliance with the terms
of Section 4.6 has occurred and such successor has executed and delivered
such other documents or instruments as may be required to effect such admission.
Any such successor shall, subject to the terms hereof, carry on the business of
the members of the Partnership Group without dissolution.
SECTION 10.4. Amendment of Agreement and
Certificate of Limited Partnership. To effect the admission to
the Partnership of any Partner, the General Partner shall take all steps
necessary or appropriate under the Marshall Islands Act to amend the records of
the Partnership
to reflect such admission and, if necessary, to prepare as soon as practicable
an amendment to this Agreement and, if required by law, the General Partner
shall prepare and file an amendment to the Certificate of Limited Partnership
and the General Partner may for this purpose, among others, exercise the power
of attorney granted to it subject to the direction of the Board of Directors
pursuant to Section 2.6.
WITHDRAWAL
OR REMOVAL OF PARTNERS
SECTION 11.1. Withdrawal of the General
Partner. (a) The General Partner shall be deemed to
have withdrawn from the Partnership upon the occurrence of any one of the
following events (each such event herein referred to as an “Event of
Withdrawal”):
|
|
(i)
|
The
General Partner voluntarily withdraws from the Partnership by giving
written notice to the other
Partners;
|
|
|
(ii)
|
The
General Partner transfers all of its rights as General Partner pursuant to
Section 4.6;
|
|
|
(iii)
|
The
General Partner is removed pursuant to
Section 11.2;
|
|
|
(iv)
|
The
General Partner (A) makes a general assignment for the benefit of
creditors; (B) files a voluntary petition in bankruptcy;
(C) files a petition or answer seeking for itself a liquidation,
dissolution or similar relief (but not a reorganization) under any law;
(D) files an answer or other pleading admitting or failing to contest
the material allegations of a petition filed against the General Partner
in a proceeding of the type described in clauses (A), (B) or
(C) of this Section 11.1(a)(iv); or (E) seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator of the
General Partner or of all or any substantial part of its
properties;
|
|
|
(v)
|
The
General Partner is adjudged bankrupt or insolvent, or has entered against
it an order for relief in any bankruptcy or insolvency
proceeding;
|
|
|
(vi)
|
(A) in
the event the General Partner is a corporation, the filing of a
certificate of dissolution, or its equivalent, for the corporation or the
revocation of its charter and the expiration of ninety (90) days
after the date of notice to the corporation of revocation without a
reinstatement of its charter; (B) in the event the General Partner is
a partnership or a limited liability company, the dissolution and
commencement of winding up of the General Partner; (C) in the event
the General Partner is acting in such capacity by virtue of being
a trustee of a trust, the termination of the trust; (D) in the event
the General Partner is a natural person, his death or adjudication of
incompetency; and (E) otherwise in the event of the termination of
the General Partner.
|
If an
Event of Withdrawal specified in Section 11.1(a)(iv), (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,
prevailing Eastern Time, on March 31, 2017, the General Partner voluntarily
withdraws by giving at least 90 days’ advance notice of its intention to
withdraw to the Limited Partners; provided, however, that prior
to the effective date of such withdrawal, the withdrawal is approved by the
Board of Directors and 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; (ii) at any
time after 12:00 midnight, prevailing Eastern Time, on March 31, 2017, 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, if any, to the extent applicable, of the other Group Members.
If the General Partner gives a notice of withdrawal pursuant to
Section 11.1(a)(i), the holders of a Unit Majority, may, prior to the
effective date of such withdrawal, elect a successor General Partner. The Person
so elected as successor General Partner shall automatically become the successor
general partner or managing member, to the extent applicable, of the other Group
Members of which the General Partner is a general partner or a managing member.
If, prior to the effective date of the General Partner’s withdrawal, a successor
is not selected by the Unitholders as provided herein or, if applicable, 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 voting as a
single
class) and a majority vote of the Board of Directors. Any such action by such
holders or the Board of Directors for removal of the General Partner must also
provide for the election of a successor General Partner by the majority vote of
the outstanding Common Units and Subordinated Units (including Units held by the
General Partner and its Affiliates) and General Partner Units (which for
purposes of the election of a successor General Partner pursuant to this Section
11.2 only, shall be considered Units), voting together as a single class. Such
removal shall be effective immediately following the admission of a successor
General Partner pursuant to Section 10.3. The removal of the General
Partner shall also automatically constitute the removal of the General Partner
as general partner or managing member, to the extent applicable, of the other
Group Members of which the General Partner is a general partner or a managing
member. If a Person is elected as a successor General Partner in accordance with
the terms of this Section 11.2, such Person shall, upon admission pursuant
to Section 10.3, automatically become a successor general partner or
managing member, to the extent applicable, of the other Group Members of which
the General Partner is a general partner or a managing member. The right of the
holders of Outstanding Units to remove the General Partner shall not exist or be
exercised unless the Partnership has received an Opinion of Counsel 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.
SECTION 11.3. Interest of Departing
General 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 General Partner shall have the option,
exercisable prior to the effective date of the departure of such Departing
General Partner, to require its successor to purchase its General Partner
Interest (represented by General Partner Units) and its general partner interest
(or equivalent interest), if any, in the other Group Members and all of the
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 (or if the business of the Partnership is continued pursuant to
Section 12.2 and the successor General Partner is not the former General
Partner), such successor shall have the option, exercisable prior to the
effective date of the departure of such Departing General Partner (or, in the
event the business of the Partnership is continued, prior to the date the
business of the Partnership is continued), to purchase the Combined Interest for
such fair market value of such Combined Interest of the Departing General
Partner. In either event, the Departing General Partner shall be entitled to
receive all reimbursements due such Departing General Partner pursuant to
Section 7.11, including any employee-related liabilities (including
severance liabilities), incurred in connection with the termination of any
employees employed by the Departing General 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 General Partner’s Combined Interest shall be determined by agreement
between the Departing General Partner and its successor or, failing agreement
within 30 days after the effective date of such
Departing General Partner’s departure, by an independent investment banking firm
or other independent expert selected by the Departing General 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
General Partner shall designate an independent investment banking firm or other
independent expert, the Departing General 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 General 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 or admitted to trading, the value of the
Partnership’s assets, the rights and obligations of the Departing General
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 General 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 General Partner (or its transferee) as to all debts and liabilities of the Partnership arising on or after the date on which the Departing General Partner (or its transferee) becomes a Limited Partner. For purposes of this Agreement, conversion of the Combined Interest of the Departing General Partner to Common Units will be characterized as if the Departing General Partner (or its transferee) contributed its Combined Interest to the Partnership in exchange for the newly issued Common Units.
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 General Partner (or its transferee) as to all debts and liabilities of the Partnership arising on or after the date on which the Departing General Partner (or its transferee) becomes a Limited Partner. For purposes of this Agreement, conversion of the Combined Interest of the Departing General Partner to Common Units will be characterized as if the Departing General Partner (or its transferee) contributed its Combined Interest to the Partnership in exchange for the newly issued Common Units.
(c) If a successor General Partner is elected in accordance with the
terms of Section 11.1 or 11.2 (or if the Partnership is continued pursuant
to Section 12.2 and the successor General Partner is not the former General
Partner) and the option described in Section 11.3(a) is not exercised by
the party entitled to do so, the successor General Partner shall, at the
effective date of its admission to the Partnership, contribute to the
Partnership cash in the amount equal to the product of the Percentage Interest
of the Departing General Partner and the Net Agreed Value of the Partnership’s
assets on such date. In such event, such successor General Partner shall,
subject to the following sentence, be entitled to its Percentage Interest of all
Partnership allocations and distributions to which the Departing General 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 its Percentage
Interest.
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 no Units held by
the General Partner and its Affiliates are 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, (ii) all
Cumulative Common Unit Arrearages on the Common Units will be extinguished and
(iii) the General Partner will have the right to convert its General
Partner Interest (represented by General Partner Units) and its Incentive
Distribution Rights into Common Units or to receive cash in exchange therefor,
as provided in Section 11.3.
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.
DISSOLUTION
AND LIQUIDATION
SECTION 12.1. Dissolution. The
Partnership shall not be dissolved by the admission of additional Limited
Partners or by the admission of a successor General Partner in accordance with
the terms of this Agreement. Upon the removal or withdrawal of the General
Partner, if a successor General Partner is elected pursuant to
Sections 11.1 or 11.2, the Partnership shall not be dissolved and such
successor General Partner shall continue the business of the Partnership under
the supervision of the Board of Directors. The Partnership shall dissolve, and
(subject to Section 12.2) its affairs shall be wound up, upon:
(a) an election to dissolve the Partnership by the General Partner
and our Board of Directors that is approved by the holders of a Unit
Majority;
(b) at any time there are no Limited Partners, unless the Partnership
is continued without dissolution in accordance with the Marshall Islands
Act;
(c) the entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Marshall Islands Act;
(d) an Event of Withdrawal of the General Partner as provided in
Section 11.1(a) (other than Section 11.1(a)(ii)), unless a successor
is elected and an Opinion of Counsel is received as provided in
Sections 11.1(b) or 11.2 and such successor is admitted to the Partnership
pursuant to Section 10.3; or
(e) the sale, exchange, or other disposition of all or substantially
all of the Partnership’s assets and properties and its
Subsidiaries.
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
Sections 11.1(a)(i) or (iii) and the failure of the Partners to select
a successor to such Departing General Partner pursuant
to Sections 11.1 or 11.2, then within 90 days thereafter, or
(b) dissolution of the Partnership upon an event constituting an Event of
Withdrawal as defined in Sections 11.1(a)(iv), (v) or (vi), then, to
the maximum extent permitted by law, within 180 days thereafter, the
holders of a Unit Majority may elect to continue the business of the Partnership
on the same terms and conditions set forth in this Agreement by appointing as a
successor General Partner a Person approved by the holders of a Unit Majority.
Unless such an election is made within the applicable time period as set forth
above, the Partnership shall conduct only activities necessary to wind up its
affairs. If such an election is so made, then:
|
|
(i)
|
the
Partnership shall continue without dissolution unless earlier dissolved in
accordance with this
Article XII;
|
|
|
(ii)
|
if
the successor General Partner is not the former General Partner, then the
interest of the former General Partner shall be treated in the manner
provided in
Section 11.3; and
|
|
|
(iii)
|
the
successor General Partner shall be admitted to the Partnership as General
Partner, effective as of the Event of Withdrawal, by agreeing in writing
to be bound by this Agreement; provided, however, that
the right of the holders of a Unit Majority to approve a successor General
Partner and to reconstitute and to continue the business of the
Partnership shall not exist and may not be exercised unless the
Partnership has received an Opinion of Counsel that the exercise of the
right would not result in the loss of limited liability of any Limited
Partner.
|
SECTION 12.3. Liquidator. Upon
dissolution of the Partnership, unless the business of the Partnership is
continued pursuant to Section 12.2, the Board of Directors shall select one
or more Persons to act as Liquidator. The Liquidator (if other than the General
Partner) shall be entitled to receive such compensation for its services as may
be approved by holders of 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 the 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 the 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 Board of Directors and 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 7.10(b)) necessary or appropriate to carry out
the duties and functions of the Liquidator hereunder for and during the
period of
time required to complete the winding up and liquidation of the Partnership as
provided for herein.
SECTION 12.4. Liquidation. The
Liquidator shall proceed to dispose of the assets of the Partnership, discharge
its liabilities, and otherwise wind up its affairs in such manner and over such
period as determined by the Liquidator, subject to Section 60 of the
Marshall Islands Act and the following:
(a) The assets may be disposed of by public or private sale or by
distribution in kind to one or more Partners on such terms as the Liquidator and
such Partner or Partners may agree. If any property is distributed in kind, the
Partner receiving the property shall be deemed for purposes of
Section 12.4(c) to have received cash equal to its fair market value, and
contemporaneously therewith, appropriate cash distributions must be made to the
other Partners. The Liquidator may defer liquidation or distribution of the
Partnership’s assets for a reasonable time if it determines that an immediate
sale or distribution of all or some of the Partnership’s assets would be
impractical or would cause undue loss to the Partners. The Liquidator may
distribute the Partnership’s assets, in whole or in part, in kind if it
determines that a sale would be impractical or would cause undue loss to the
Partners.
(b) Liabilities
of the Partnership include amounts owed to the Liquidator as compensation for
serving in such capacity (subject to the terms of Section 12.3) and amounts
to Partners otherwise than in respect of their distribution rights under
Article VI. 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 as follows:
(i) If
the Current Market Price of the Common Units as of the date three trading days
prior to the announcement of the proposed liquidation exceeds the Unrecovered
Capital for a Common Unit plus the Cumulative Common Unit
Arrearage:
(A) First,
(x) to the General Partner in accordance with its Percentage Interest and
(y) to all the Unitholders holding Common Units, Pro Rata, a percentage
equal to 100% less the General Partner’s Percentage Interest, until there has
been distributed in respect of each Common Unit then Outstanding an amount equal
to such Current Market Price of a Common Unit;
(B) Second
(x) to the General Partner in accordance with its Percentage Interest and
(y) to all Unitholders holding Subordinated Units, Pro Rata, a percentage
equal to 100% less the General Partner’s Percentage
Interest, until there has been distributed in respect of each Subordinated Unit
then Outstanding an amount equal to such Current Market Price of a Common
Unit; and
(C) Thereafter
(x) to the General Partner in accordance with its Percentage Interest;
(y) 48% to the holders of the Incentive Distribution Rights, Pro Rata; and
(z) to all Unitholders, Pro Rata, a percentage equal to 100% less the sum
of the percentages applicable to subclauses (x) and (y) of this
clause (i)(C);
(ii) If
the Current Market Price of the Common Units as of the date three trading days
prior to the announcement of the proposed liquidation is equal to or less than
the Unrecovered Capital for a Common Unit plus the Cumulative Common Unit
Arrearage:
(A) First,
(x) to the General Partner in accordance with its Percentage Interest and
(y) to all the Unitholders holding Common Units, Pro Rata, a percentage
equal to 100% less the General Partner’s Percentage Interest, until there has
been distributed in respect of each Common Unit then Outstanding an amount equal
to the Unrecovered Capital for a Common Unit;
(B) Second,
(x) to the General Partner in accordance with its Percentage Interest and
(y) to all Unitholders holding Common Units, Pro Rata, a percentage equal
to 100% less the General Partner’s Percentage Interest, until there has been
distributed in respect of each Common Unit then Outstanding an amount equal to
the Cumulative Common Unit Arrearage;
(C) Third,
(x) to the General Partner in accordance with its Percentage Interest and
(y) to all Unitholders holding Subordinated Units, Pro Rata, a percentage
equal to 100% less the General Partner’s Percentage Interest, until there has
been distributed in respect of each Subordinated Unit then Outstanding an amount
equal to the Unrecovered Capital for a Common Unit (as calculated prior to the
distribution specified in clause (ii)(A) above); and
(D) Thereafter,
(x) to the General Partner in accordance with its Percentage Interest;
(y) 48% to the holders of the Incentive Distribution Rights, Pro Rata; and
(z) to all Unitholders, Pro Rata, a percentage equal to 100% less the sum
of the percentages applicable to subclauses (x) and (y) of this
clause (ii)(D).
SECTION 12.5. Cancellation of Certificate
of Limited Partnership. Upon the completion of the
distribution of Partnership cash and property as provided in Section 12.4
in connection with the liquidation of the Partnership, the Certificate of
Limited Partnership and all qualifications of the Partnership as a foreign
limited partnership in jurisdictions other than the Marshall
Islands shall be canceled and such other actions as may be necessary to
terminate the Partnership shall be taken.
SECTION 12.6. Return of
Contributions. The General Partner shall not be personally
liable for, and shall have no obligation to contribute or loan any monies or
property to the Partnership to enable it to effectuate, the return of the
Capital Contributions of the Limited Partners or Unitholders, or any portion
thereof, it being expressly understood that any such return shall be made solely
from Partnership assets.
SECTION 12.7. Waiver of
Partition. To the maximum extent permitted by law, each
Partner hereby waives any right to partition of the Partnership
property.
AMENDMENT
OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
SECTION 13.1. Amendments to be Adopted
without Limited Partner Approval. Each Limited Partner agrees
that the Board of Directors, without the approval of any Limited Partner, but
with the approval of the General Partner required for any such amendment, may
amend any provision of this Agreement and execute, swear to, acknowledge,
deliver, file and record whatever documents may be required in connection
therewith, to reflect:
(a) a change in the name of the Partnership, the location of the
principal place of business of the Partnership, the registered agent of the
Partnership or the registered office of the Partnership;
(b) admission, substitution, withdrawal or removal of Partners in
accordance with this Agreement;
(c) a change that the Board of Directors determines to be necessary
or appropriate to qualify or continue the qualification of the Partnership as a
limited partnership or a partnership in which the Limited Partners have limited
liability under the laws of The Marshall Islands or any other jurisdiction, or
to ensure that the Group Members will not be treated as associations taxable as
corporations or otherwise taxed as entities for Marshall Islands income tax
purposes;
(d) a change that the Board of Directors determines (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) to be necessary
or appropriate to (A) satisfy any requirements, conditions or guidelines
contained in any opinion, directive, order, ruling or regulation of any Marshall
Islands or other authority (including the Marshall Islands Act) or contained in
any statute, 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, (iii) to be
necessary or appropriate
in connection with action taken by the Board of Directors pursuant to
Section 5.09 or (iv) is required to effect the intent expressed in the
Registration Statement or the intent of the provisions of this Agreement or is
otherwise contemplated by this Agreement;
(e) a change in the fiscal year or taxable year of the Partnership
and any other changes that the Board of Directors determines to be necessary or
appropriate as a result of a change in the fiscal year or taxable year of the
Partnership including, if the Board of Directors 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, the members of the Board of Directors, or the General
Partner or its directors, officers, trustees or agents from in any manner being
subjected to the provisions of the U.S. Investment Company Act of 1940, as
amended, the U.S. Investment Advisers Act of 1940, as amended, or “plan
asset” regulations adopted under the U.S. Employee Retirement Income
Security Act of 1974, as amended, regardless of whether such regulations are
substantially similar to plan asset regulations currently applied or proposed by
the United States Department of Labor;
(g) an amendment that the Board of Directors, and if required by
Section 5.5, the General Partner, determines to be necessary or appropriate in
connection with the authorization of issuance of any class or series of
Partnership Securities pursuant to Section 5.5;
(h) any amendment expressly permitted in this Agreement to be made by
the Board of Directors acting alone;
(i) an amendment effected, necessitated or contemplated by a Merger
Agreement approved in accordance with Section 14.3;
(j) an amendment that the Board of Directors determines to be
necessary or appropriate to reflect and account for the formation by the
Partnership of, or investment by the Partnership in, any corporation,
partnership, joint venture, limited liability company or other Person, in
connection with the conduct by the Partnership of activities permitted by the
terms of Section 2.4;
(k) a conversion, merger or conveyance pursuant to
Section 14.3(d); or
(l) any other amendments substantially similar to the
foregoing.
SECTION 13.2. Amendment
Procedures. (a) Except as provided in
Sections 13.1 and 13.3, all amendments to this Agreement shall be made in
accordance with the following requirements. Amendments to this Agreement may be
proposed only by the General Partner or the Board of Directors; provided, however, that neither
the General Partner nor the Board of Directors shall have a duty or obligation
to propose any amendment to this Agreement and may decline to do so free of any
fiduciary duty or obligation whatsoever to the Partnership or any Limited
Partner and, in declining to propose an amendment, to the fullest extent
permitted by
applicable law shall not be required to act in good faith or pursuant to any
other standard imposed by this Agreement, any Group Member Agreement, any other
agreement contemplated hereby or under the Marshall Islands Act or any other
law, rule or regulation. A proposed amendment shall be effective upon its
approval by the General Partner, the Board of Directors and the holders of a
Unit Majority, unless a greater or different percentage is required under this
Agreement or by the Marshall Islands Act. Each proposed amendment that requires
the approval of the holders of a specified percentage of Outstanding Units shall
be set forth in a writing that contains the text of the proposed amendment. If
such an amendment is proposed, the Board of Directors 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 Board of
Directors shall notify all Record Holders upon final adoption of any such
proposed amendments.
(b) Any amendment to the Operating Company Agreement that would
adversely affect the Limited Partners in any material respect shall be made in
accordance with the requirements set forth in Section 13.2(a).
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 enlargement shall be deemed to have
occurred as a result of an amendment approved pursuant to Section 13.3(c),
(ii) enlarge the obligations of, restrict in any way any action by or
rights of, or reduce in any way the amounts distributable, reimbursable or
otherwise payable to, the General Partner or any of its Affiliates without its
consent, which consent may be given or withheld at the General Partner’s option,
(iii) change Section 12.1(a), or (iv) change the term of the
Partnership or, except as set forth in Section 12.1(a), give any Person the
right to dissolve the Partnership.
(c) Except as provided in Section 14.3, and without limitation
of the Board of Directors’ authority to adopt amendments to this Agreement
without the approval of any Limited Partners 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,
the Board of Directors 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 Board of
Directors 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, it being understood that
the purposes of such special meeting may only be to vote on matters that require
the vote of the Unitholders pursuant to this Agreement. 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 Board of Directors 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 Board of Directors on a date
not less than 10 days nor more than 60 days after the mailing of
notice of the meeting. Limited Partners shall not vote on matters that would
cause the Limited Partners to be deemed to be taking part in the management and
control of the business and affairs of the Partnership so as to jeopardize the
Limited Partners’ limited liability under the Marshall Islands Act or the law of
any other jurisdiction in which the Partnership is qualified to do
business.
SECTION 13.5. Notice of a
Meeting. Notice of a meeting called pursuant to
Section 13.4 shall be given to the Record Holders of the class 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 Board of
Directors 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 or admitted to trading, in
which case the rule, regulation, guideline or requirement of such National
Securities 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 Board of Directors to give such approvals. If the Board of
Directors does not set a Record Date, then (a) the Record Date for
determining the Limited Partners entitled to notice of or to vote at a meeting
of the Limited Partners shall be the close of business on the day next preceding
the day on which notice is given, and (b) the Record Date for determining
the Limited Partners entitled to give approvals without a meeting shall be the
date the first written approval is deposited with the Partnership in care of the
Board of Directors in accordance with Section 13.11.
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. Attendance
of a Limited Partner at a meeting shall constitute a waiver of notice of the
meeting, except when the Limited Partner attends the meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened; and except that
attendance at a meeting is not a waiver of any right to disapprove the
consideration of matters required to be included in the notice of the meeting,
but not so included, if the disapproval is expressly made at the
meeting.
SECTION 13.9. Quorum and
Voting. The holders of a majority of the 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; provided, however, that if any
meeting has been adjourned for a second time due to absence of a quorum, the
holders of 25% of all Outstanding Units and which are represented in person or
by proxy shall constitute a quorum for the purposes of such meeting. 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; provided, however, that if any
meeting has been adjourned for a second time due to absence of a quorum, the act
of the Limited Partners holding at least 25% of all Outstanding Units and which
are represented 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 Board of Directors 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
Chairman of the Board of Directors shall 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 Board of
Directors. The Board of Directors 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 Board of Directors, 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 or admitted to trading, in which case the rule,
regulation, guideline or requirement of such National Securities Exchange shall
govern). Prompt notice of the taking of action without a meeting shall be given
to the Limited Partners who have not approved the action in writing. The Board
of Directors 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 Board of Directors. 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 Board of Directors,
the written approvals shall have no force and effect unless and until
(a) they are deposited with the Partnership in care of the Board of
Directors, (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 Board of Directors to the effect that the exercise of such
right and the action proposed to be taken with respect to any particular matter
(i) will not cause the Limited Partners to be deemed to be taking part in
the management and control of the business and affairs of the Partnership so as
to jeopardize the Limited Partners’ limited liability, and (ii) is
otherwise permissible under the applicable statutes then governing the rights,
duties and liabilities of the Partnership and the Partners.
SECTION 13.12. Right to Vote and Related
Matters. (a) Only those Record Holders of the Units
on the Record Date set pursuant to Section 13.6 (and also subject to the
limitations contained in the definition of “Outstanding”) shall be entitled to
notice of, and to vote at, a meeting of Limited Partners or to act with respect
to matters as to which the holders of the Outstanding Units have the right to
vote or to act. All references in this Agreement to votes of, or other
acts that may be taken by, the Outstanding Units shall be deemed to be
references to the votes or acts of the Record Holders of such Outstanding
Units.
(b) With respect to Units that are held for a Person’s account by
another Person (such as a broker, dealer, bank, trust company or clearing
corporation, or an agent of any of the forego ing), 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.
MERGER
SECTION 14.1. Authority. The
Partnership may merge or consolidate with or into one or more corporations,
limited liability companies, statutory trusts or associations, real estate
investment trusts, common law trusts or unincorporated businesses, including a
partnership (whether general or limited (including a limited liability
partnership)), formed under the laws of The Marshall Islands or the state of
Delaware or any other state of the United States, 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 approval of the Board of
Directors and the prior consent of the General Partner; provided, however, that, to the
fullest extent permitted by law, the General Partner shall not have a duty or
obligation to consent to any merger or consolidation of the Partnership and may
decline to do so free of any fiduciary duty or obligation whatsoever to the
Partnership or any Limited Partner and, in declining to consent to a merger or
consolidation, shall not be required to act in good faith or pursuant to any
other standard imposed by this Agreement, any Group Member Agreement, any other
agreement contemplated hereby or under the Marshall Islands Act or any other
law, rule or regulation or at equity. If the Board of Directors and the General
Partner shall determine to consent to the merger or consolidation, the Board of
Directors and the General Partner shall approve the Merger Agreement, which
shall set forth:
(a) the names and jurisdictions of formation or organization of each
of the business entities proposing to merge or consolidate;
(b) the name and jurisdiction of formation or organization of the
business entity that is to survive the proposed merger or consolidation (the
“Surviving Business Entity”);
(c) the terms and conditions of the proposed merger or
consolidation;
(d) the manner and basis of exchanging or converting the equity
securities of each constituent business entity for, or into, cash, property or
interests, rights, securities or obligations of the Surviving Business Entity;
and (i) if any general or limited partner interests, securities or rights
of any constituent business entity are not to be exchanged or converted solely
for, or into, cash, property or interests, rights, securities or obligations of
the Surviving Business Entity, the cash, property or general or limited partner
interests, rights, securities or obligations of any general or limited
partnership, corporation, trust, limited liability company, unincorporated
business or other Person (other than the Surviving Business Entity) which the
holders of such interests, securities or rights are to receive in exchange for,
or upon conversion of their interests, securities or rights, and (ii) in
the case of securities represented by certificates, upon the surrender of such
certificates, which cash, property or interests, rights, securities or
obligations of the Surviving Business Entity or any general or limited
partnership, corporation, trust, limited liability company, unincorporated
business or other Person (other than the Surviving Business Entity), or
evidences thereof, are to be delivered;
(e) a statement of any changes in the constituent documents or the
adoption of new constituent documents (the articles or certificate of
incorporation, articles of trust, declaration of trust, certificate or agreement
of limited partnership or other similar charter or governing document) of the
Surviving Business Entity to be effected by such merger or
consolidation;
(f) the effective time of the merger, which may be the date of the
filing of the certificate of merger pursuant to Section 14.4 or a later
date specified in or determinable in accordance with the Merger Agreement
(provided, that if the effective time of the merger is to be later than the date
of the filing of such certificate of merger, the effective time shall be fixed
at a date or time certain at or prior to the time of the filing of such
certificate of merger and stated therein); and
(g) such other provisions with respect to the proposed merger or
consolidation that the Board of Directors and the General Partner determine to
be necessary or appropriate.
SECTION 14.3. Approval by Limited Partners
of Merger or Consolidation. (a) Except
as provided in Sections 14.3(d) and 14.3(e), the Board of Directors, upon
its and the General Partner’s approval of the Merger Agreement, shall direct
that the Merger Agreement be submitted to a vote of Limited Partners, whether at
a special meeting or by written consent, in either case in accordance with the
requirements of Article XIII. A copy or a summary of the Merger Agreement
shall be included in or enclosed with the notice of a special meeting or the
written consent.
(b) Except as provided in Sections 14.3(d) and 14.3(e), the
Merger Agreement shall be approved upon receiving the affirmative vote or
consent of the holders of a Unit Majority.
(c) Except as provided in Sections 14.3(d) and 14.3(e), after
such approval by vote or consent of the Limited Partners, and at any time prior
to the filing of the certificate of merger
pursuant to Section 14.4, the merger or consolidation may be abandoned
pursuant to provisions therefor, if any, set forth in the Merger
Agreement.
(d) Notwithstanding anything else contained in this Article XIV
or in this Agreement, the Board of Directors is permitted, without Limited
Partner approval, to convert the Partnership or any Group Member into a new
limited liability entity, to merge the Partnership or any Group Member into, or
convey all of the Partnership’s assets to, another limited liability entity
which shall be newly formed and shall have no assets, liabilities or operations
at the time of such conversion, merger or conveyance other than those it
receives from the Partnership or other Group Member if (i) the Board of
Directors has received an Opinion of Counsel that the conversion, merger or
conveyance, as the case may be, would not result in the loss of the limited
liability of any Limited Partner, (ii) the sole purpose of such conversion,
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, the General Partner
and the Board of Directors with the same rights and obligations as are herein
contained.
(e) Additionally, notwithstanding anything else contained in this
Article XIV or in this Agreement, the Board of Directors, with the prior
consent of the General Partner, is permitted, without Limited Partner approval,
to merge or consolidate the Partnership with or into another entity if
(i) the Board of Directors has received an Opinion of Counsel that the
merger or consolidation, as the case may be, would not result in the loss of the
limited liability of any Limited Partner, (ii) the merger or consolidation
would not result in an amendment to this Agreement, other than any amendments
that could be adopted pursuant to Section 13.1, (iii) the Partnership
is the Surviving Business Entity in such merger or consolidation, (iv) each
Unit outstanding immediately prior to the effective date of the merger or
consolidation is to be an identical Unit of the Partnership after the effective
date of the merger or consolidation, and (v) the number of Partnership
Securities to be issued by the Partnership in such merger or consolidation does
not exceed 20% of the Partnership Securities Outstanding immediately prior to
the effective date of such merger or consolidation.
SECTION 14.4. Certificate of
Merger. Upon the required approval by the Board of Directors,
the General Partner and the Unitholders of a Merger Agreement, a certificate of
merger shall be executed and filed in conformity with the requirements of the
Marshall Islands Act.
SECTION 14.5. Amendment of Partnership
Agreement. Pursuant to Section 20(2) of the Marshall
Islands Act, an agreement of merger or consolidation approved in accordance with
Section 20(2) of the Marshall Islands Act may (a) effect any amendment
to this Agreement or (b) effect the adoption of a new partnership agreement
for a limited partnership if it is the Surviving Business Entity. Any such
amendment or adoption made pursuant to this Section 14.5 shall be effective
at the effective time or date of the merger or consolidation.
SECTION 14.6. Effect of
Merger. (a) At the effective time of the
certificate of merger:
|
|
(i)
|
all
of the rights, privileges and powers of each of the business entities that
has merged or consolidated, and all property, real, personal
and mixed, and all debts due to any of those business entities and all
other things and causes of action belonging to each of those business
entities, shall be vested in the Surviving Business Entity and after the
merger or consolidation shall be the property of the Surviving Business
Entity to the extent they were of each constituent business
entity;
|
|
|
(ii)
|
the
title to any real property vested by deed or otherwise in any of those
constituent business entities shall not revert and is not in any way
impaired because of the merger or
consolidation;
|
|
|
(iii)
|
all
rights of creditors and all liens on or security interests in property of
any of those constituent business entities shall be preserved
unimpaired; and
|
|
|
(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.
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 at its option, 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.
(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, at such
office or offices of the Transfer Agent as the Transfer Agent may specify, or as
may be required by any National Securities Exchange on which such Limited
Partner Interests are listed. Any such Notice of Election to Purchase mailed to
a Record Holder of Limited Partner Interests at his address as reflected in the
records of the Transfer Agent shall be conclusively presumed to have been given
regardless of whether the owner receives such notice. On or prior to the
Purchase Date, the General Partner, its Affiliate or the Partnership, as the
case may be, shall deposit with the Transfer Agent cash in an amount sufficient
to pay the aggregate purchase price of all of such Limited Partner Interests to
be purchased in accordance with this Section 15.1. If the Notice of
Election to Purchase shall have been duly given as aforesaid at least
10 days prior to the Purchase Date, and if on or prior to the Purchase Date
the deposit described in the preceding sentence has been made for the benefit of
the holders of Limited Partner Interests subject to purchase as provided herein,
then from and after the Purchase Date, notwithstanding that any Certificate
shall not have been surrendered for purchase, all rights of the holders of such
Limited Partner Interests (including any rights pursuant to
Articles IV, V, VI and XII) shall thereupon cease, except the right to
receive the applicable purchase price (determined in accordance with
Section 15.1(a)) for Limited Partner Interests therefor, without interest,
upon surrender to the Transfer Agent of the Certificates representing such
Limited Partner Interests, and such Limited Partner Interests shall thereupon be
deemed to be transferred to the General Partner, its Affiliate or the
Partnership, as the case may be, on the record books of the Transfer Agent and
the Partnership, and the General Partner or any Affiliate of the General
Partner, or the Partnership, as the case may be, shall be deemed to be the owner
of all such Limited Partner Interests from and after the Purchase Date and shall
have all rights as the owner of such Limited Partner Interests (including all
rights as owner of such Limited Partner Interests pursuant to
Articles IV, V, VI and XII).
(c) At any time from and after the Purchase Date, a holder of an
Outstanding Limited Partner Interest subject to purchase as provided in this
Section 15.1 may surrender his Certificate evidencing such Limited Partner
Interest to the Transfer Agent in exchange for payment of the amount described
in Section 15.1(a), without interest thereon.
GENERAL
PROVISIONS
SECTION 16.1. Addresses and
Notices. (a) Any notice, demand, request, report or
proxy materials required or permitted to be given or made to a Partner under
this Agreement shall be in writing and shall be deemed given or made when
delivered in person or when sent by first class United States mail or by
other means of written communication to the Partner at the address described
below. Any notice, payment or report to be given or made to a Partner hereunder
shall be deemed conclusively to have been given or made, and the obligation to
give such
notice or report or to make such payment shall be deemed conclusively to have
been fully satisfied, upon sending of such notice, payment or report to the
Record Holder of such Partnership Securities at his address as shown on the
records of the Transfer Agent or as otherwise shown on the records of the
Partnership, regardless of any claim of any Person who may have an interest in
such Partnership Securities by reason of any assignment or otherwise. An
affidavit or certificate of making of any notice, payment or report in
accordance with the provisions of this Section 16.1 executed by a member of
the Board of Directors, the General Partner, the Transfer Agent or the mailing
organization shall be prima facie evidence of the
giving or making of such notice, payment or report. If any notice, payment or
report addressed to a Record Holder at the address of such Record Holder
appearing on the books and records of the Transfer Agent or the Partnership is
returned by the United States Postal Service marked to indicate that the United
States Postal Service is unable to deliver it, such notice, payment or report
and any subsequent notices, payments and reports shall be deemed to have been
duly given or made without further mailing (until such time as such Record
Holder or another Person notifies the Transfer Agent or the Partnership of a
change in his address) if they are available for the Partner at the principal
office of the Partnership for a period of one year from the date of the giving
or making of such notice, payment or report to the other Partners. Any notice to
the Partnership shall be deemed given if received by the General Partner or the
Board of Directors at the principal office of the Partnership designated
pursuant to Section 2.3. The General Partner and the Board of Directors may
rely and shall be protected in relying on any notice or other document from a
Partner or other Person if believed by it to be genuine.
SECTION 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 respective 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 Limited Partner Interest, pursuant to
Section 10.2(a) without execution hereof.
SECTION 16.8. Applicable
Law. This Agreement shall be construed in accordance with and
governed by the laws of The Republic of the Marshall Islands, 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.
SECTION 16.11. Facsimile
Signatures. The use of facsimile signatures affixed in the
name and on behalf of the transfer agent and registrar of the Partnership on
certificates representing Common Units is expressly permitted by this
Agreement.
SECTION 16.12. Third-Party
Beneficiaries. Each Partner agrees that any Indemnitee shall
be entitled to assert rights and remedies hereunder as a third-party beneficiary
hereto with respect to those provisions of this Agreement affording a right,
benefit or privilege to such Indemnitee.
[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]
75
IN
WITNESS WHEREOF, the parties hereto have executed this Second Amended and
Restated Agreement of Limited Partnership as a Deed as of the date first written
above.
| GENERAL PARTNER: | |||
|
Capital
GP L.L.C.,
|
|||
| by | |||
|
|
|
/s/ Ioannis E. Lazaridis | |
|
Name: Ioannis
E. Lazaridis
|
|||
|
Title:
Chief Executive Officer and Chief
Financial Officer of Capital GP L.L.C.
|
|||
| ORGANIZATIONAL LIMITED PARTNER: | |||
|
Capital
Maritime & Trading Corp.,
|
|||
| by | |||
|
|
|
/s/ Ioannis E. Lazaridis | |
|
Name: Ioannis
E. Lazaridis
|
|||
|
Title:
Chief Executive Officer
|
|||
| 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.
|
|||
|
Capital
GP L.L.C.,
|
|||
| by | |||
|
|
|
/s/ Ioannis E. Lazaridis | |
|
Name: Ioannis
E. Lazaridis
|
|||
|
Title:
Chief Executive Officer and Chief
Financial Officer of Capital GP L.L.C.
|
|||
76
EXHIBIT
A
to
the Second Amended and Restated
Agreement
of Limited Partnership of
Capital
Product Partners L.P.
Certificate
Evidency Common Units
Representing
Limited Partner Interests in
Capital
Product Partners L.P.
| No. | ______ Common Units |
In accordance with Section 4.1 of
the Second Amended and Restated Agreement of Limited Partnership of Capital
Product Partners L.P., as amended, supplemented or restated from time to time
(the “Partnership
Agreement”), Capital Product Partners L.P., a Marshall Islands limited
partnership (the “Partnership”), hereby
certifies that
(the
“Holder”) is
the registered owner of Common Units representing limited partner interests in
the Partnership (the “Common Units”)
transferable on the books of the Partnership, in person or by duly authorized
attorney, upon surrender of this Certificate properly endorsed. The rights,
preferences and limitations of the Common Units are set forth in, and this
Certificate and the Common Units represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Partnership Agreement.
Copies of the Partnership Agreement are on file at, and will be furnished
without charge on delivery of written request to the Partnership at, the
principal office of the Partnership located c/o Capital Ship Management Corp., 3
Iassonos Street, Piraeus, 185 37 Greece. 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:
|
Capital
Product Partners L.P.
|
|||
|
Countersigned
and Registered by:
|
By: |
Capital
GP L.L.C.,
its
General Partner
|
||
|
By:
|
|
|||
|
as
Transfer Agent and Registrar
|
Title:
|
|||
| 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
|
|
|
__________________________
Custodian ________________________
|
||||
| (Cust) |
(Minor)
|
|||
|
TEN
ENT
|
—
|
as
tenants by the entireties
|
||
|
JT
TEN
|
—
|
as
joint tenants with right of survivorship and not as tenants in
common
|
under
Uniform Gifts /Transfers to CD Minors Act
(State)
|
|
Additional
abbreviations, though not in the above list, may also be used.
ASSIGNMENT
OF COMMON UNITS
in
CAPITAL
PRODUCT PARTNERS L.P.
FOR VALUE
RECEIVED, hereby
assigns, conveys, sells and transfers unto
|
(Please
print or typewrite name and address of Assignee)
|
(Please
insert Social Security or 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 Capital Product Partners L.P.
|
Date: ________________________________
|
NOTE:
|
The
signature to any endorsement hereon must correspond with the name as
written upon the face of this Certificate in every particular, without
alteration, enlargement or change.
|
|
THE
SIGNATURE(S) MUST BE
GUARANTEED
BY AN ELIGIBLE
|
___________________________________________
|
|
|
GUARANTOR
INSTITUTION (BANKS,
|
(Signature)
|
|
|
STOCKBROKERS,
SAVINGS AND LOAN
ASSOCIATIONS
AND CREDIT UNIONS
WITH
MEMBERSHIP IN AN APPROVED
|
___________________________________________
|
|
|
SIGNATURE
GUARANTEE MEDALLION
|
(Signature)
|
|
|
PROGRAM),
PURSUANT TO
S.E.C.
RULE 17Ad-15
|
No transfer of the Common Units
evidenced hereby will be registered on the books of the Partnership, unless the
Certificate evidencing the Common Units to be transferred is surrendered for
registration or transfer.
2