Exhibit 10.1

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

ATLAS RESOURCE PARTNERS, L.P.

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TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS    1

SECTION 1.1. Definitions

   1

SECTION 1.2. Construction

   22 ARTICLE II ORGANIZATION    23

SECTION 2.1. Formation

   23

SECTION 2.2. Name

   23

SECTION 2.3. Registered Office; Registered Agent; Principal Office; Other
Offices

   23

SECTION 2.4. Purpose and Business

   24

SECTION 2.5. Powers

   24

SECTION 2.6. Term

   24

SECTION 2.7. Title to Partnership Assets

   24 ARTICLE III RIGHTS OF LIMITED PARTNERS    25

SECTION 3.1. Limitation of Liability

   25

SECTION 3.2. Management of Business

   25

SECTION 3.3. Outside Activities of Limited Partners

   25

SECTION 3.4. Rights of Limited Partners

   26

ARTICLE IV CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;
REDEMPTION OF PARTNERSHIP INTERESTS

   27

SECTION 4.1. Certificates

   27

SECTION 4.2. Mutilated, Destroyed, Lost or Stolen Certificates

   27

SECTION 4.3. Record Holders

   28

SECTION 4.4. Transfer Generally

   28

SECTION 4.5. Registration and Transfer of Limited Partner Interests

   29

SECTION 4.6. Transfer of the General Partner Interest

   30

SECTION 4.7. Transfer of Incentive Distribution Rights

   31

SECTION 4.8. Restrictions on Transfers

   31

SECTION 4.9. Eligibility Certificates; Ineligible Holders

   32

SECTION 4.10. Redemption of Partnership Interests of Ineligible Holders

   34 ARTICLE V CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS   
35

SECTION 5.1. Organizational Contributions

   35

SECTION 5.2. Additional Capital Contributions

   35

SECTION 5.3. Interest and Withdrawal

   35

SECTION 5.4. Capital Accounts

   36

SECTION 5.5. Issuances of Additional Partnership Interests

   39

SECTION 5.6. Limited Preemptive Rights

   40

SECTION 5.7. Splits and Combinations

   40

SECTION 5.8. Fully Paid and Non-Assessable Nature of Limited Partner Interests

   41

 

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SECTION 5.9. Issuance of Common Units in Connection with Reset of Incentive
Distribution Rights

   41

SECTION 5.10. No Additional Capital Contributions by the General Partner or
Dilution; Automatic Issuance of Class A Units Upon Issuance of Units

   43 ARTICLE VI ALLOCATIONS AND DISTRIBUTIONS    43

SECTION 6.1. Allocations for Capital Account Purposes

   43

SECTION 6.2. Allocations for Tax Purposes

   51

SECTION 6.3. Requirement and Characterization of Distributions; Distributions to
Record Holders

   54

SECTION 6.4. Distributions of Available Cash from Operating Surplus

   54

SECTION 6.5. Distributions of Available Cash from Capital Surplus

   55

SECTION 6.6. Adjustment of Minimum Quarterly Distribution and Target
Distribution Levels

   55

SECTION 6.7. Special Provisions Relating to the Holders of Incentive
Distribution Rights

   56

SECTION 6.8. Entity-Level Taxation

   56 ARTICLE VII MANAGEMENT AND OPERATION OF BUSINESS    57

SECTION 7.1. Management

   57

SECTION 7.2. Duties

   59

SECTION 7.3. Certificate of Limited Partnership

   59

SECTION 7.4. Restrictions on the General Partner’s Authority

   60

SECTION 7.5. Reimbursement of the General Partner

   60

SECTION 7.6. Outside Activities

   61

SECTION 7.7. Loans from the General Partner; Loans or Contributions from the
Partnership or Group Members

   62

SECTION 7.8. Indemnification

   63

SECTION 7.9. Liability of Indemnitees

   65

SECTION 7.10. Resolution of Conflicts of Interest; Standards of Conduct and
Modification of Duties

   65

SECTION 7.11. Other Matters Concerning the General Partner

   67

SECTION 7.12. Purchase or Sale of Partnership Interests

   68

SECTION 7.13. Registration Rights of the General Partner and its Affiliates

   68

SECTION 7.14. Reliance by Third Parties

   71 ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS    71

SECTION 8.1. Records and Accounting

   71

SECTION 8.2. Fiscal Year

   72

SECTION 8.3. Reports

   72 ARTICLE IX TAX MATTERS    72

SECTION 9.1. Tax Returns and Information

   72

SECTION 9.2. Tax Elections

   73

SECTION 9.3. Tax Controversies

   73

SECTION 9.4. Withholding

   73

 

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ARTICLE X ADMISSION OF PARTNERS    73

SECTION 10.1. Admission of Limited Partners

   73

SECTION 10.2. Admission of Successor General Partner

   74

SECTION 10.3. Amendment of Agreement and Certificate of Limited Partnership

   75 ARTICLE XI WITHDRAWAL OR REMOVAL OF PARTNERS    75

SECTION 11.1. Withdrawal of the General Partner

   75

SECTION 11.2. Removal of the General Partner

   77

SECTION 11.3. Interest of Departing General Partner and Successor General
Partner

   77

SECTION 11.4. Withdrawal of Limited Partners

   79 ARTICLE XII DISSOLUTION AND LIQUIDATION    79

SECTION 12.1. Dissolution

   79

SECTION 12.2. Continuation of the Business of the Partnership After Dissolution

   80

SECTION 12.3. Liquidator

   80

SECTION 12.4. Liquidation

   81

SECTION 12.5. Cancellation of Certificate of Limited Partnership

   82

SECTION 12.6. Return of Contributions

   82

SECTION 12.7. Waiver of Partition

   82

SECTION 12.8. Capital Account Restoration

   82 ARTICLE XIII AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE   
82

SECTION 13.1. Amendments to be Adopted Solely by the General Partner

   82

SECTION 13.2. Amendment Procedures

   84

SECTION 13.3. Amendment Requirements

   84

SECTION 13.4. Special Meetings

   85

SECTION 13.5. Notice of a Meeting

   86

SECTION 13.6. Record Date

   86

SECTION 13.7. Adjournment

   86

SECTION 13.8. Waiver of Notice; Approval of Meeting

   86

SECTION 13.9. Quorum and Voting

   87

SECTION 13.10. Conduct of a Meeting

   87

SECTION 13.11. Action Without a Meeting

   87

SECTION 13.12. Voting and Other Rights

   88 ARTICLE XIV MERGER, CONSOLIDATION OR CONVERSION    89

SECTION 14.1. Authority

   89

SECTION 14.2. Procedure for Merger, Consolidation or Conversion

   89

SECTION 14.3. Approval by Limited Partners

   90

SECTION 14.4. Certificate of Merger or Conversion

   91

SECTION 14.5. Effect of Merger, Consolidation or Conversion

   92

SECTION 14.6. Amendment of Partnership Agreement

   93 ARTICLE XV RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS    93

SECTION 15.1. Right to Acquire Limited Partner Interests

   93

 

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ARTICLE XVI GENERAL PROVISIONS    95

SECTION 16.1. Addresses and Notices; Written Communications

   95

SECTION 16.2. Further Action

   96

SECTION 16.3. Binding Effect

   96

SECTION 16.4. Integration

   96

SECTION 16.5. Creditors

   96

SECTION 16.6. Waiver

   96

SECTION 16.7. Third-Party Beneficiaries

   96

SECTION 16.8. Counterparts

   96

SECTION 16.9. Applicable Law; Forum; Venue and Jurisdiction

   97

SECTION 16.10. Invalidity of Provisions

   98

SECTION 16.11. Consent of Partners

   98

SECTION 16.12. Facsimile and PDF Signatures

   98

 

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AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

ATLAS RESOURCE PARTNERS, L.P.

This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF ATLAS RESOURCE
PARTNERS, L.P., dated as of March 13, 2012, is entered into by and between ATLAS
RESOURCE PARTNERS GP, LLC, a Delaware limited liability company, as the General
Partner, and ATLAS ENERGY, L.P., a Delaware limited partnership, as the
Organizational Limited Partner, together with any other Persons who become
Partners in the Partnership or parties hereto as provided herein. In
consideration of the covenants, conditions and agreements contained herein, the
parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1. Definitions.

The following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in this Agreement.

“Acquisition” means any transaction in which any Group Member acquires (through
an asset acquisition, merger, stock acquisition or other form of investment)
control over all or a portion of the assets, properties or business of another
Person for the purpose of increasing the asset base of the Partnership Group
from the asset base of the Partnership Group existing immediately prior to such
transaction.

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

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

(b) If Carrying Value that constitutes Additional Book Basis is reduced as a
result of a Book-Down Event and the Carrying Value of other property is
increased as a result of such Book-Down Event, an allocable portion of any such
increase in Carrying Value shall be treated as Additional Book Basis; provided
that the amount treated as Additional Book Basis as a result of such Book-Down
Event shall not exceed the amount by which the Aggregate Remaining Net Positive
Adjustments after such Book-Down Event exceeds the remaining Additional Book
Basis attributable to all of the Partnership’s Adjusted Property after such
Book-Down Event (determined without regard to the application of this clause
(b) to such Book-Down Event).

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“Additional Book Basis Derivative Items” means any Book Basis Derivative Items
that are computed with reference to Additional Book Basis. To the extent that
the Additional Book Basis attributable to all of the Partnership’s Adjusted
Property as of the beginning of any taxable period exceeds the Aggregate
Remaining Net Positive Adjustments as of the beginning of such period (the
“Excess Additional Book Basis”), the Additional Book Basis Derivative Items for
such period shall be reduced by the amount that bears the same ratio to the
amount of Additional Book Basis Derivative Items determined without regard to
this sentence as the Excess Additional Book Basis bears to the Additional Book
Basis as of the beginning of such period.

“Additional Limited Partner” means a Person admitted to the Partnership as a
Limited Partner pursuant to Section 4.5(d) and who is shown as such on the books
and records of the Partnership.

“Adjusted Capital Account” means the Capital Account maintained for each Partner
as of the end of each taxable year of the Partnership, (a) increased by any
amounts that such Partner is obligated to restore under the standards set by
Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to
restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and
(b) decreased by (i) the amount of all adjustments that, as of the end of such
taxable year, reasonably are expected to be made to such Partner’s Capital
Account under Treasury Regulation Section 1.704-1(b)(2)(iv)(k) for depletion
allowances with respect to oil and gas properties of the Partnership, (ii) the
amount of all losses and deductions that, as of the end of such taxable year,
reasonably are expected to be allocated to such Partner in subsequent years
pursuant to Sections 704(e)(2) and 706(d) of the Code and Treasury Regulation
Section 1.751-1(b)(2)(ii), and (iii) the amount of all distributions that, as of
the end of such taxable year, reasonably are expected to be made to such Partner
in subsequent years in accordance with the terms of this Agreement or otherwise
to the extent they exceed offsetting increases to such Partner’s Capital Account
that are reasonably expected to occur during (or prior to) the year in which
such distributions are reasonably expected to be made (other than increases as a
result of a minimum gain chargeback pursuant to Section 6.1(d)(i) or
6.1(d)(ii)). The foregoing definition of Adjusted Capital Account is intended to
comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d)
and shall be interpreted consistently therewith. The “Adjusted Capital Account”
of a Partner in respect of a Class A Unit, a Common Unit or an Incentive
Distribution Right or any other Partnership Interest shall be the amount that
such Adjusted Capital Account would be if such Class A Unit, Common Unit,
Incentive Distribution Right or other Partnership Interest were the only
interest in the Partnership held by such Partner from and after the date on
which such Class A Unit, Common Unit, Incentive Distribution Right or other
Partnership Interest was first issued.

“Adjusted Operating Surplus” means, with respect to any period, (a) Operating
Surplus generated with respect to such period (b) less (i) the amount of any net
increase in Working Capital Borrowings with respect to such period and (ii) the
amount of any net decrease in cash reserves for Operating Expenditures with
respect to such period not relating to an Operating Expenditure made with
respect to such period (it being understood that, in calculating the amount of
Adjusted Operating Surplus in respect of any Subsidiary of the Partnership that
is

 

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not directly or indirectly wholly owned by the Partnership, such cash reserves
for Operating Expenditures by such Subsidiary shall be multiplied by a fraction,
the numerator of which is the percentage of equity in such Subsidiary held
directly or indirectly by the Partnership and the denominator of which is 100),
and (c) plus (i) the amount of any net decrease in Working Capital Borrowings
with respect to such period, (ii) the amount of any net increase in cash
reserves for Operating Expenditures with respect to such period required by any
debt instrument for the repayment of principal, interest or premium (it being
understood that, in calculating the amount of Adjusted Operating Surplus in
respect of any Subsidiary of the Partnership that is not directly or indirectly
wholly owned by the Partnership, such cash reserves for Operating Expenditures
by such Subsidiary shall be multiplied by a fraction, the numerator of which is
the percentage of equity in such Subsidiary held directly or indirectly by the
Partnership and the denominator of which is 100) and (iii) the amount of any net
decrease made in subsequent periods in cash reserves for Operating Expenditures
initially established with respect to such period to the extent such decrease
results in a reduction in Adjusted Operating Surplus in subsequent periods
pursuant to clause (b)(ii) above. Adjusted Operating Surplus does not include
that portion of Operating Surplus included in clause (a)(i) of the definition of
Operating Surplus.

“Adjusted Property” means any property the Carrying Value of which has been
adjusted pursuant to Section 5.4(d)(i) or 5.4(d)(ii).

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by or is
under common control with, the Person in question. As used herein, the term
“control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise.

“Aggregate Quantity of IDR Reset Common Units” has the meaning assigned to such
term in Section 5.9(a).

“Aggregate Remaining Net Positive Adjustments” means, as of the end of any
taxable period, the sum of the Remaining Net Positive Adjustments of all the
Partners.

“Agreed Allocation” means any allocation, other than a Required Allocation, of
an item of income, gain, loss or deduction pursuant to the provisions of
Section 6.1, including a Curative Allocation (if appropriate to the context in
which the term “Agreed Allocation” is used).

“Agreed Value” of any Contributed Property means the fair market value of such
property or other consideration at the time of contribution and in the case of
an Adjusted Property, the fair market value of such Adjusted Property on the
date of the revaluation event as described in Section 5.4(d), in both cases as
determined by the General Partner. The General Partner shall use such method as
it determines to be appropriate to allocate the aggregate Agreed Value of
Contributed Properties contributed to the Partnership in a single or integrated
transaction among each separate property on a basis proportional to the fair
market value of each Contributed Property.

 

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

“Associate” means, when used to indicate a relationship with any Person, (a) any
corporation or organization of which such Person is a director, officer,
manager, member, general partner or managing member or is, directly or
indirectly, the owner of 20% or more of any class of voting stock or other
voting interest; (b) any trust or other estate in which such Person has at least
a 20% beneficial interest or as to which such Person serves as trustee or in a
similar fiduciary capacity; and (c) any relative or spouse of such Person, or
any relative of such spouse, who has the same principal residence as such
Person.

“Available Cash” means, with respect to any Quarter ending prior to the
Liquidation Date,

(a) the sum of:

(i) all cash and cash equivalents (including amounts available for working
capital purposes under a credit facility, commercial paper facility or other
similar financing arrangement) of the Partnership Group on hand at the end of
such Quarter (it being understood that, in calculating the amount of Available
Cash in respect of a Subsidiary of the Partnership that is not directly or
indirectly wholly owned by the Partnership, such cash and cash equivalents of
such Subsidiary shall be multiplied by a fraction, the numerator of which is the
percentage of equity in such Subsidiary held directly or indirectly by the
Partnership and the denominator of which is 100); and

(ii) if the General Partner so determines in its sole discretion, all or any
portion of additional cash and cash equivalents of the Partnership Group on hand
on the date of determination of Available Cash with respect to such Quarter
resulting from borrowings (including Working Capital Borrowings) made subsequent
to the end of such Quarter (it being understood that, in calculating the amount
of Available Cash in respect of a Subsidiary of the Partnership that is not
directly or indirectly wholly owned by the Partnership, such additional cash and
cash equivalents of such Subsidiary shall be multiplied by a fraction, the
numerator of which is the percentage of equity in such Subsidiary held directly
or indirectly by the Partnership and the denominator of which is 100);

(b) less the amount of any cash reserves established by the General Partner for
the Partnership Group (it being understood that, in calculating the amount of
Available Cash in respect of a Subsidiary of the Partnership that is not
directly or indirectly wholly owned by the Partnership, such cash reserves
established for such Subsidiary shall be multiplied by a fraction, the numerator
of which is the percentage of equity in such Subsidiary held directly or
indirectly by the Partnership and the denominator of which is 100) on the date
of determination of Available Cash with respect to such Quarter, to:

(i) provide for the proper conduct of the business of the Partnership Group
(including reserves for working capital, operating expenses, future capital
expenditures, potential acquisitions and for anticipated future credit needs of
the Partnership Group);

 

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(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 pursuant to Section 6.4 or 6.5 with
respect to any one or more of the next four Quarters; or

(iv) provide funds for distributions with respect to the Incentive Distribution
Rights;

provided, however, that the General Partner may not establish cash reserves
pursuant to subclause (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 and Class A Units with respect to such Quarter; and provided
further, that disbursements made by a Group Member or cash reserves established,
increased or reduced after the end of such Quarter but on or before the date of
determination of Available Cash with respect to such Quarter shall be deemed to
have been made, established, increased or reduced, for purposes of determining
Available Cash, within such Quarter if the General Partner so determines.

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

“Board of Directors” means (i) if the General Partner is a corporation or a
limited liability company, the General Partner’s board of directors or board of
managers, as applicable, and (ii) if the General Partner is a limited
partnership, the board of directors or board of managers, as applicable, of the
general partner of the General Partner.

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

“Book-Down Event” means an event that triggers a negative adjustment to the
Capital Accounts of the Partners pursuant to Section 5.4(d).

“Book-Tax Disparity” means with respect to any item of Contributed Property or
Adjusted Property, as of the date of any determination, the difference between
the Carrying Value of such Contributed Property or Adjusted Property and the
adjusted basis thereof for U.S. federal income tax purposes as of such date. A
Partner’s share of the Partnership’s Book-Tax Disparities in all of its
Contributed Property and Adjusted Property will be reflected by the difference
between such Partner’s Capital Account balance as maintained pursuant to
Section 5.4 and the hypothetical balance of such Partner’s Capital Account
computed as if it had been maintained strictly in accordance with U.S. federal
income tax accounting principles.

 

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“Book-Up Event” means an event that triggers a positive adjustment to the
Capital Accounts of the Partners pursuant to Section 5.4(d).

“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 Commonwealth of Pennsylvania shall not be regarded as a Business Day.

“Capital Account” means the capital account maintained for a Partner pursuant to
Section 5.4. The “Capital Account” of a Partner in respect of a Class A Unit, a
Common Unit, an Incentive Distribution Right or any other Partnership Interest
shall be the amount that such Capital Account would be if such Class A Unit,
Common Unit, Incentive Distribution Right or other Partnership Interest were the
only interest in the Partnership held by a Partner from and after the date on
which such Class A Unit, Common Unit, Incentive Distribution Right or other
Partnership Interest was first issued.

“Capital Contribution” means any cash, cash equivalents or the Net Agreed Value
of Contributed Property that a Partner contributes to the Partnership pursuant
to this Agreement or the Separation Agreement or that is contributed or deemed
contributed to the Partnership on behalf of a Partner (including, in the case of
an underwritten offering of Partnership Interests, the amount of any
underwriting discounts or commissions).

“Capital Improvement” means any (a) addition or improvement to the capital
assets owned by any Group Member, (b) acquisition (through an asset acquisition,
merger, stock acquisition or other form of investment) of existing, or
construction of new or improvement or replacement of existing, capital assets
(including undeveloped leasehold acreage, properties containing estimated proved
reserves (whether or not producing) and other similar assets) or (c) capital
contribution by a Group Member to a Person that is not a Subsidiary in which a
Group Member has an equity interest, or after such capital contribution will
have an equity interest, to fund such Group Member’s pro rata share of the cost
of the addition or improvement to, the acquisition of existing, the construction
of new or the improvement or replacement of existing capital assets by such
Person, in each case if such addition, improvement, replacement, acquisition or
construction is made to increase the asset base of the Partnership Group, in the
case of clauses (a) and (b), or such Person, in the case of clause (c), from the
asset base of the Partnership Group or such Person, as the case may be, existing
immediately prior to such addition, improvement, replacement, acquisition or
construction.

“Capital Surplus” has the meaning assigned to such term in Section 6.3(a).

“Carrying Value” means (a) with respect to a Contributed Property or Adjusted
Property, the Agreed Value of such property reduced (but not below zero) by all
depreciation, Simulated Depletion, amortization and cost recovery deductions
charged to the Partners’ Capital Accounts in respect of such property, and
(b) with respect to any other Partnership property, the adjusted basis of such
property for U.S. federal income tax purposes, all as of the time of
determination. The Carrying Value of any property shall be adjusted from time to
time in accordance with Sections 5.4(d)(i) and 5.4(d)(ii) and to reflect
changes, additions or other adjustments to the Carrying Value for dispositions
and acquisitions of Partnership properties, as deemed appropriate by the General
Partner.

 

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

“Certificate” means a certificate in such form (including in global form if
permitted by applicable rules and regulations) as may be adopted by the General
Partner, issued by the Partnership evidencing ownership of one or more Common
Units or a certificate, in such form as may be adopted by the General Partner,
issued by the Partnership evidencing ownership of one or more other Partnership
Interests.

“Certificate of Limited Partnership” means the Certificate of Limited
Partnership of the Partnership filed with the Secretary of State of the State of
Delaware as referenced in Section 2.1, as such Certificate of Limited
Partnership may be amended, supplemented or restated from time to time.

“Citizenship Eligibility Trigger” has the meaning assigned to such term in
Section 4.9(a)(ii).

“claim” has the meaning assigned to such term in Section 7.13(c).

“Class A Unit” means a fractional part of the General Partner Interest having
the rights and obligations specified with respect to the General Partner
Interest. A Class A Unit is not a Unit.

“Closing Date” means March 13, 2012.

“Closing Price” has the meaning assigned to such term in Section 15.1(a).

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

“Combined Interest” has the meaning assigned to such term in Section 11.3(a).

“Commences Commercial Service” and “Commencement of Commercial Service” shall
mean the date on which a Capital Improvement or replacement asset begins
producing in paying quantities or is first put into commercial service following
completion of construction, acquisition, development and testing, as applicable.

“Commission” means the U.S. Securities and Exchange Commission.

“Common Unit” means a Partnership Interest representing a fractional part of the
Partnership Interests held by all Limited Partners and by the General Partner
(exclusive of the General Partner’s interest as a holder of the General Partner
Interest, Class A Units and Incentive Distribution Rights) and having the rights
and obligations specified with respect to Common Units in this Agreement.

 

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“Conflicts Committee” means a committee of the Board of Directors composed of
one or more directors, each of whom (a) is not an officer or employee of the
General Partner, (b) is not an officer, director or employee of any Affiliate of
the General Partner, (c) is not a holder of any ownership interest in the
General Partner or the Partnership, other than Common Units or other awards
granted to such director under the Partnership’s equity compensation plans, and
(d) meets the independence standards required of directors who serve on an audit
committee of a board of directors established by the Securities Exchange Act and
the rules and regulations of the Commission thereunder and by the National
Securities Exchange on which the Common Units are listed or admitted for
trading.

“Contributed Property” means each property or other asset, in such form as may
be permitted by the Delaware Act, but excluding cash, contributed to the
Partnership (or deemed contributed to a new partnership on termination of the
Partnership pursuant to Section 708 of the Code). Once the Carrying Value of a
Contributed Property is adjusted pursuant to Section 5.4(d), such property shall
no longer constitute a Contributed Property but shall be deemed an Adjusted
Property.

“Curative Allocation” means any allocation of an item of income, gain,
deduction, loss or credit pursuant to the provisions of Section 6.1(d)(xi).

“Current Market Price” has the meaning assigned to such term in Section 15.1(a).

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

“Departing General Partner” means a former general partner of the Partnership
from and after the effective date of any withdrawal or removal of such former
general partner pursuant to Section 11.1 or 11.2.

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

“Eligibility Certificate” has the meaning assigned to such term in
Section 4.9(b).

“Eligible Holder” means a Limited Partner whose (a) U.S. federal income tax
status would not, in the determination of the General Partner, have the material
adverse effect described in Section 4.9(a)(i) or (b) nationality, citizenship or
other related status would not, in the determination of the General Partner,
create a substantial risk of cancellation or forfeiture as described in
Section 4.9(a)(ii).

“Estimated Incremental Quarterly Tax Amount’ has the meaning assigned to such
term in Section 6.8.

“Estimated Maintenance Capital Expenditures” means an estimate made in good
faith by the Board of Directors of the average quarterly Maintenance Capital
Expenditures that the Partnership will need to incur over the long term to
maintain the levels of oil and natural gas production of the Partnership Group
existing at the time the estimate is made. The Board of

 

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Directors 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 future
Estimated Maintenance Capital Expenditures. 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. 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).

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended,
supplemented or restated from time to time and any successor to such statute.

“Expansion Capital Expenditures” means cash expenditures for Acquisitions or
Capital Improvements. Expansion Capital Expenditures shall include interest (and
related fees) on debt incurred and distributions on equity issued (including
incremental distributions on incentive distribution rights) to finance the
construction of a Capital Improvement and paid in respect of the period
beginning on the date that a Group Member enters into a binding obligation to
commence construction or development of a 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 to fund such construction period interest payments or to fund
distributions in respect of equity issued (including incremental Incentive
Distributions related thereto) to fund the construction of a Capital Improvement
as described in clause (a)(iv) of the definition of Operating Surplus shall also
be deemed to be debt incurred to finance the construction of a Capital
Improvement. Where capital expenditures are made in part for Expansion Capital
Expenditures and in part for other purposes, the General Partner shall determine
the allocation between the amounts paid for each.

“First Liquidation Target Amount” has the meaning assigned to such term in
Section 6.1(c)(i)(C).

“First Target Distribution” means $0.46 per Common Unit per Quarter and $0.46
per Class A Unit per Quarter (or, with respect to periods of less than a full
fiscal quarter, it means the product of $0.46 multiplied by a fraction, the
numerator of which is the number of days in such period and the denominator of
which is the total number of days in such fiscal quarter), subject to adjustment
in accordance with Sections 5.9, 6.6 and 6.8.

“General Partner” means Atlas Resource Partners GP, LLC, a Delaware 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 without reference to
any Limited Partner Interest, including Incentive Distribution Rights or Common
Units, held by it), which ownership interest is evidenced by Class A 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.

 

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“Gross Liability Value” means, with respect to any Liability of the Partnership
described in Treasury Regulation Section 1.752-7(b)(3)(i), the amount of cash
that a willing assignor would pay to a willing assignee to assume such Liability
in an arm’s length transaction.

“Group” means a Person that, with or through any of its Affiliates or
Associates, has any contract, 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), exercising investment
power or disposing of any Partnership Interests with any other Person that
beneficially owns, or whose Affiliates or Associates beneficially own, directly
or indirectly, Partnership Interests.

“Group Member” means a member of the Partnership Group.

“Hedge Contract” means any commodity exchange, swap, forward, cap, floor,
collar, option or other similar agreement or arrangement entered into for the
purpose of reducing the exposure of the Partnership Group to fluctuations in
interest rates or the price of hydrocarbons, basis differentials or currency
exchange rates in their operations and not for speculative purposes.

“Holder” as used in Section 7.13, has the meaning assigned to such term in
Section 7.13(a).

“IDR Reset Common Units” has the meaning assigned to such term in
Section 5.9(a).

“IDR Reset Election” has the meaning assigned to such term in Section 5.9(a).

“Incentive Distribution Right” means a non-voting Limited Partner Interest
issued to the General Partner pursuant to Section 5.2, which Limited Partner
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 holder(s)
of the Incentive Distribution Rights pursuant to Section 6.4(a).

“including” means “including, without limitation.”

“Indemnified Person” has the meaning assigned to such term in Section 7.13(c).

 

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“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 manager, managing
member, officer, director, employee, agent, fiduciary or trustee of any Group
Member, the General Partner or any Departing General Partner or any Affiliate of
any Group Member, the General Partner or any Departing General Partner, (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 a manager, managing member, officer, director,
employee, agent, fiduciary or trustee of another Person; provided that a Person
shall not be an Indemnitee by reason of providing, on a fee-for-services basis,
trustee, fiduciary or custodial services; and (f) any Person that the General
Partner designates as an “Indemnitee” for purposes of this Agreement.

“Ineligible Holder” has the meaning assigned to such term in Section 4.9(c).

“Initial Common Units” means the Common Units distributed in the Initial
Distribution.

“Initial Distribution” means the initial distribution by Atlas Energy, L.P. of
Common Units to the unitholders of Atlas Energy, L.P., as described in the
Registration Statement.

“Initial Unit Price” means with respect to the Common Units, the average of the
closing prices of a Common Unit on the NYSE for the five consecutive Trading
Days immediately following the Closing Date, and for any other class or series
of Partnership Interests, the price per Partnership Interest at which such class
or series of Partnership Interest is initially sold by the Partnership, as
determined by the General Partner, in each case adjusted as the General Partner
determines to be appropriate to give effect to any distribution, subdivision or
combination of Partnership Interests.

“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) issuances of equity
interests of any Group Member; and (c) sales or other voluntary or involuntary
dispositions of any assets of any Group Member other than (i) sales or other
dispositions of inventory, accounts receivable and other assets in the ordinary
course of business and (ii) sales or other dispositions of assets as part of
normal retirements or replacements.

“Investment Capital Expenditures” means capital expenditures other than
Maintenance Capital Expenditures and Expansion Capital Expenditures.

“Liability” means any liability or obligation of any nature, whether accrued,
contingent or otherwise.

“Limited Partner” means, unless the context otherwise requires, the
Organizational Limited Partner, the General Partner (with respect to the
Incentive Distribution Rights received by it pursuant to Section 5.2 and any
Common Units that it may hold), each Additional Limited Partner and any
Departing General Partner upon the change of its status from

 

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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 Partner Interest” means the ownership interest of a Limited Partner in
the Partnership, which may be evidenced by Common Units, Incentive Distribution
Rights or other Partnership Interests 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 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), and
that when the term “Limited Partner Interest” is used herein, such term shall
not include any holder of a Class A Unit or General Partner Interest (solely
with respect to its Class A Units and General Partner Interest), 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 General Partner to
perform the functions described in Section 12.3 as liquidating trustee of the
Partnership within the meaning of the Delaware Act.

“Maintenance Capital Expenditures” means cash expenditures, including
expenditures for the addition or improvement to or replacement of the capital
assets owned by any Group Member, or for the acquisition of existing, or the
construction or development of new, capital assets, including replacement of
equipment and oil and natural gas reserves (including non-proved reserves
attributable to undeveloped leasehold acreage, properties containing estimated
proved reserves and other similar assets), whether through the development,
exploitation and production of an existing leasehold or the acquisition or
development of a new oil or natural gas property, including to offset expected
production declines from producing properties, if such expenditures are made to
maintain the levels of oil and natural gas production of the Partnership Group
for the long term. Maintenance Capital Expenditures shall not include Expansion
Capital Expenditures. Maintenance Capital Expenditures shall include interest
(and related fees) on debt incurred and distributions on equity issued, in each
case, to finance the construction or development of a replacement asset and paid
in respect of the period beginning on the date that a Group Member enters into a
binding obligation to commence constructing or developing a replacement asset
and ending on the earlier to occur of the date that such

 

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replacement asset Commences Commercial Service and the date that such
replacement asset is abandoned or disposed of. Debt incurred to pay or equity
issued to fund construction or development period interest payments, or such
construction or development period distributions on equity, shall also be deemed
to be debt or equity, as the case may be, incurred to finance the construction
or development of a replacement asset.

“Merger Agreement” has the meaning assigned to such term in Section 14.1.

“Minimum Quarterly Distribution” means $0.40 per Common Unit per Quarter and
$0.40 per Class A Unit per Quarter (or with respect to periods of less than a
full fiscal quarter, it means the product of $0.40 multiplied by a fraction, the
numerator of which is the number of days in such period and the denominator of
which is the total number of days in such fiscal quarter), subject to adjustment
in accordance with Sections 5.9, 6.6 and 6.8.

“National Securities Exchange” means an exchange registered with the Commission
under Section 6(a) of the Securities Exchange Act (or any successor to such
Section) and any other securities exchange (whether or not registered with the
Commission under Section 6(a) (or successor to such Section) of the Securities
Exchange Act) that the General Partner shall designate as a National Securities
Exchange for purposes of this Agreement.

“Net Agreed Value” means, (a) in the case of any Contributed Property, the
Agreed Value of such property reduced by any Liabilities either assumed by the
Partnership upon such contribution or to which such property is subject when
contributed, and (b) in the case of any property distributed to a Partner by the
Partnership, the Partnership’s Carrying Value of such property (as adjusted
pursuant to Section 5.4(d)(ii)) at the time such property is distributed,
reduced by any Liability either assumed by such Partner upon such distribution
or to which such property is subject at the time of distribution, in either
case, as determined and required by the Treasury Regulations promulgated under
Section 704(b) of the Code.

“Net Income” means, for any taxable period, the excess, if any, of the
Partnership’s items of income and gain (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss) for
such taxable period over the Partnership’s items of loss and deduction (other
than those items taken into account in the computation of Net Termination Gain
or Net Termination Loss) for such taxable period. The items included in the
calculation of Net Income shall be determined in accordance with Section 5.4(b)
and shall include Simulated Gain but shall not include any items specially
allocated under Section 6.1(d) or Section 6.1(e); provided that the
determination of the items that have been specially allocated under
Section 6.1(d) shall be made as if Section 6.1(d)(xii) were not in this
Agreement.

“Net Loss” means, for any taxable period, the excess, if any, of the
Partnership’s items of loss and deduction (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss) for
such taxable period over the Partnership’s items of income and gain (other than
those items taken into account in the computation of Net Termination Gain or Net
Termination Loss) for such taxable period. The items included in the calculation
of Net Loss shall be determined in accordance with Section 5.4(b) and shall
include

 

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Simulated Gain but shall not include any items specially allocated under
Section 6.1(d) or Section 6.1(e); provided that the determination of the items
that have been specially allocated under Section 6.1(d) shall be made as if
Section 6.1(d)(xii) were not in this Agreement.

“Net Positive Adjustments” means, with respect to any Partner, the excess, if
any, of the total positive adjustments over the total negative adjustments made
to the Capital Account of such Partner pursuant to Book-Up Events and Book-Down
Events.

“Net Termination Gain” means, for any taxable period, the sum, if positive, of
all items of income, gain, loss or deduction recognized by the Partnership after
the Liquidation Date. The items included in the determination of Net Termination
Gain shall be determined in accordance with Section 5.4(b) and shall include
Simulated Gain, but shall not include any items of income, gain or loss
specially allocated under Section 6.1(d) or Section 6.1(e).

“Net Termination Loss” means, for any taxable period, the sum, if negative, of
all items of income, gain, loss or deduction recognized by the Partnership after
the Liquidation Date. The items included in the determination of Net Termination
Loss shall be determined in accordance with Section 5.4(b) and shall include
Simulated Gain, but shall not include any items of income, gain or loss
specially allocated under Section 6.1(d) or Section 6.1(e).

“Nonrecourse Built-in Gain” means with respect to any Contributed Properties or
Adjusted Properties that are subject to a mortgage or pledge securing a
Nonrecourse Liability, the amount of any taxable gain that would be allocated to
the Partners pursuant to Sections 6.2(c)(iii), 6.2(d)(i)(A), 6.2(d)(ii)(A) and
6.2(d)(iii) if such properties were disposed of in a taxable transaction in full
satisfaction of such liabilities and for no other consideration.

“Nonrecourse Deductions” means any and all items of loss, deduction or
expenditure (including any expenditure described in Section 705(a)(2)(B) of the
Code), Simulated Depletion or Simulated Loss that, in accordance with the
principles of Treasury Regulation Section 1.704-2(b)(1) and 1.704-2(c), are
attributable to a Nonrecourse Liability.

“Nonrecourse Liability” has the meaning set forth in Treasury Regulation
Section 1.704-2(b)(3).

“Notice of Election to Purchase” has the meaning assigned to such term in
Section 15.1(b).

“Operating Expenditures” means all cash expenditures of the Partnership Group
(it being understood that, in calculating the amount of Operating Expenditures
in respect of any Subsidiary of the Partnership that is not directly or
indirectly wholly owned by the Partnership, such cash expenditures by such
Subsidiary shall be multiplied by a fraction, the numerator of which is the
percentage of equity in such Subsidiary held directly or indirectly by the
Partnership and the denominator of which is 100), including taxes,
reimbursements of expenses of the General Partner and its Affiliates, payments
made in the ordinary course of business under Hedge Contracts, officer
compensation, repayment of Working Capital Borrowings, debt service payments and
Estimated Maintenance 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;

 

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

(c) Operating Expenditures shall not include (i) Expansion Capital Expenditures,
(ii) actual Maintenance Capital Expenditures, (iii) Investment Capital
Expenditures, (iv) payment of transaction expenses (including taxes) relating to
Interim Capital Transactions, (v) distributions to Partners (including
distributions in respect of any Incentive Distributions Rights) or
(vi) repurchases of Partnership Interests, other than repurchases of Partnership
Interests to satisfy obligations under employee benefit plans, or reimbursements
of expenses of the General Partner for such purchases.

“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) $60 million, (ii) all cash receipts of the Partnership Group
(it being understood that, in calculating the amount of Operating Surplus in
respect of any Subsidiary of the Partnership that is not directly or indirectly
wholly owned by the Partnership, such cash receipts of such Subsidiary shall be
multiplied by a fraction, the numerator of which is the percentage of equity in
such Subsidiary held directly or indirectly by the Partnership and the
denominator of which is 100) for the period beginning on the day following the
Closing Date and ending on the last day of such period, including Working
Capital Borrowings but excluding cash receipts from Interim Capital
Transactions, (iii) all cash receipts of the Partnership Group (it being
understood that, in calculating the amount of Operating Surplus in respect of
any Subsidiary of the Partnership that is not directly or indirectly wholly
owned by the Partnership, such cash receipts of such Subsidiary shall be
multiplied by a fraction, the numerator of which is the percentage of equity in
such Subsidiary held directly or indirectly by the Partnership and the
denominator of which is 100) 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 cash distributions paid
on equity issued (including incremental incentive distributions) to finance all
or a portion of the construction, acquisition, development or improvement of a
Capital Improvement or replacement of a capital asset (such as equipment or
reserves) and paid in respect of the period beginning on the date that the Group
Member enters into a binding obligation to commence the construction,
acquisition, development, replacement or improvement of a Capital Improvement or
replacement of a capital asset and ending on the earlier to occur of the date
the Capital Improvement or capital asset Commences Commercial Service or the
date that it is abandoned or disposed of (equity issued to fund construction
period interest payments on debt incurred (including periodic net payments under
related interest rate swap agreements), or construction period distributions on
equity issued, including incremental incentive distributions, to finance the
construction, acquisition, development or improvement of a Capital Improvement
or replacement of a capital asset shall also be

 

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deemed to be equity issued to finance the construction, acquisition,
development, replacement or improvement of a Capital Improvement or replacement
of a capital asset for purposes of this clause (iv)); less

(b) the sum of (i) Operating Expenditures for the period beginning on the day
following the Closing Date and ending on the last day of such period, (ii) the
amount of cash reserves established by the General Partner for the Partnership
Group (it being understood that, in calculating the amount of Operating Surplus
in respect of any Subsidiary of the Partnership that is not directly or
indirectly wholly owned by the Partnership, such cash reserves for such
Subsidiary shall be multiplied by a fraction, the numerator of which is the
percentage of equity in such Subsidiary held directly or indirectly by the
Partnership and the denominator of which is 100) to provide funds for future
Operating Expenditures, (iii) all Working Capital Borrowings not repaid within
twelve months after having been incurred or repaid within such 12-month period
with the proceeds of additional Working Capital Borrowings and (iv) any cash
loss realized on the disposition of an Investment Capital Expenditure;

provided, however, that disbursements made (including contributions to a Group
Member or disbursements on behalf of a Group Member) or cash reserves
established, increased or reduced after the end of such period but on or before
the date of determination of Available Cash with respect to such period shall be
deemed to have been made, established, increased or reduced, for purposes of
determining Operating Surplus, within such period if the General Partner so
determines.

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

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

“Organizational Limited Partner” means Atlas Energy, L.P. in its capacity as the
organizational limited partner of the Partnership pursuant to this Agreement.

“Outstanding” means, with respect to Partnership Interests, all Partnership
Interests that are issued by the Partnership and reflected as outstanding on the
Partnership’s books and records as of the date of determination; provided,
however, that if at any time any Person or Group (other than the General Partner
or its Affiliates) beneficially owns 20% or more of the Outstanding Units of any
class, all Units owned by such Person or Group shall not be voted (and shall not
be entitled to be voted) on any matter and shall not be considered to be
Outstanding when sending notices of a meeting of Limited Partners to vote on any
matter (unless otherwise required by law), calculating required votes,
determining the presence of a quorum or for other similar purposes under this
Agreement, except that Units so owned shall be considered to be Outstanding for
purposes of Section 11.1(b)(iv) (such Units shall not, however, be treated as a
separate class of Partnership Interests for purposes of this Agreement or the
Delaware Act); provided, further, that the foregoing limitation shall not apply
to (i) any Person or Group who acquired 20% or more of the Outstanding Units of
any class directly from the General Partner or

 

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its Affiliates (other than the Partnership), (ii) any Person or Group who
acquired 20% or more of the Outstanding Units of any class directly or
indirectly from a Person or Group described in clause (i), provided that, upon
or prior to such acquisition, 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 20% or more of the Outstanding Units directly from
the Partnership if the General Partner shall have notified such Person or Group
in writing that such limitation shall not apply.

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

“Partner Nonrecourse Debt Minimum Gain” has the meaning set forth in Treasury
Regulation Section 1.704-2(i)(2).

“Partner Nonrecourse Deductions” means any and all items of loss, deduction or
expenditure (including any expenditure described in Section 705(a)(2)(B) of the
Code), Simulated Depletion or Simulated Loss that, in accordance with the
principles of Treasury Regulation Section 1.704-2(i)(1) and 1.704-2(i)(2), are
attributable to a Partner Nonrecourse Debt.

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

“Partnership” means Atlas Resource Partners, L.P., a Delaware limited
partnership, and any successors thereto.

“Partnership Group” means the Partnership and its Subsidiaries, treated as a
single consolidated entity.

“Partnership Interest” means any equity interest in the Partnership, which shall
include any General Partner Interest and Limited Partner Interests but shall
exclude options, warrants, rights and appreciation rights relating to an equity
interest in the Partnership.

“Partnership Minimum Gain” means that amount determined in accordance with the
principles of Treasury Regulation Section 1.704-2(b)(2) and 1.704-2(d).

“Per Unit Capital Amount” means, as of any date of determination, the Capital
Account, stated on a per Unit basis, underlying any Partnership Interest held by
a Person other than the General Partner or any Affiliate of the General Partner
who holds Partnership Interests.

“Percentage Interest” means as of any date of determination, (a) as to any
holder of Class A Units, the Percentage Interest attributable to such Class A
Units shall equal the product obtained by multiplying (i) 100% less the
percentage applicable to clause (c) below by (ii) the quotient obtained by
dividing (x) the number of Class A Units held by such holder by (y) the sum of
the total number of all Outstanding Common Units and the total number of
Outstanding Class A Units; (b) as to any holder of Common Units, the Percentage
Interest attributable to such Common Units shall equal the product obtained by
multiplying (i) 100% less the percentage applicable to clause (c) below by
(ii) the quotient obtained by dividing (x) the number of Common Units held by
such holder by (y) the sum of the total number of all Outstanding Common Units
and the total number of Outstanding Class A Units; and (c) as to the

 

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holders of additional Partnership Interests issued by the Partnership in
accordance with Section 5.5, the percentage established as a part of such
issuance. Unless the context otherwise requires, references to the Percentage
Interest of any holder of more than one class or series of Partnership Interests
shall mean the aggregate Percentage Interest attributable to all such
Partnership Interests. 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,
government agency or political subdivision thereof or other entity.

“Plan of Conversion” has the meaning assigned to such term in Section 14.1.

“Pro Rata” means (a) when used with respect to Partnership Interests or any
class or classes thereof, apportioned equally among all designated Partnership
Interests 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 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 of the
Partnership, or, with respect to the fiscal quarter of the Partnership that
includes the Closing Date, the portion of such fiscal quarter after the Closing
Date.

“Rate Eligibility Trigger” has the meaning assigned to such term in
Section 4.9(a)(i).

“Recapture Income” means any gain recognized by the Partnership (computed
without regard to any adjustment required by Section 734 or Section 743 of the
Code) upon the disposition of any property or asset of the Partnership, which
gain is characterized as ordinary income because it represents the recapture of
deductions previously taken with respect to such property or asset.

“Record Date” means the date established by the General Partner 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) with respect to Partnership Interests of any class for
which a Transfer Agent has been appointed, the Person in whose name a
Partnership Interest of such class is registered on the books of the Transfer
Agent as of the opening of business on a

 

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particular Business Day or (b) with respect to other classes of Partnership
Interests, the Person in whose name any such other Partnership Interest is
registered on the books that the General Partner has caused to be kept as of the
opening of business on such Business Day.

“Redeemable Interests” means any Partnership Interests for which a redemption
notice has been given, and has not been withdrawn, pursuant to Section 4.10.

“Registration Statement” means the Registration Statement on Form 10 (File
No. 001-35317), as it has been or as it may be amended or supplemented from time
to time, filed by the Partnership with the Commission to register the Common
Units under the Exchange Act.

“Remaining Net Positive Adjustments” means as of the end of any taxable period,
(i) with respect to the Unitholders, the excess of (a) the Net Positive
Adjustments of the Unitholders as of the end of such period over (b) the sum of
those Partners’ Share of Additional Book Basis Derivative Items for each prior
taxable period, (ii) with respect to the General Partner (as holder of the
Class A Units), the excess of (a) the Net Positive Adjustments of the General
Partner as of the end of such period over (b) the sum of the General Partner’s
Share of Additional Book Basis Derivative Items with respect to the Class A
Units for each prior taxable period, and (iii) with respect to the holders of
Incentive Distribution Rights, the excess of (a) the Net Positive Adjustments of
the holders of Incentive Distribution Rights as of the end of such period over
(b) the sum of the Share of Additional Book Basis Derivative Items of the
holders of the Incentive Distribution Rights for each prior taxable period.

“Required Allocations” means any allocation of an item of income, gain, loss,
deduction, Simulated Depletion or Simulated Loss pursuant to Section 6.1(d)(i),
6.1(d)(ii), 6.1(d)(iv), 6.1(d)(v), 6.1(d)(vi), 6.1(d)(vii), 6.1(d)(ix) or
6.1(e).

“Reset MQD” has the meaning assigned to such term in Section 5.9(a).

“Reset Notice” has the meaning assigned to such term in Section 5.9(b).

“Residual Gain” or “Residual Loss” means any item of gain or loss, or Simulated
Gain or Simulated Loss, as the case may be, of the Partnership recognized for
U.S. federal income tax purposes resulting from a sale, exchange or other
disposition of a Contributed Property or Adjusted Property, to the extent such
item of gain or loss or Simulated Gain or Simulated Loss is not allocated
pursuant to Section 6.2(d)(i)(A) or 6.2(d)(ii)(A), respectively, to eliminate
Book-Tax Disparities.

“Second Liquidation Target Amount” has the meaning assigned to such term in
Section 6.1(c)(i)(D).

“Second Target Distribution” means $0.50 per Common Unit per Quarter and $0.50
per Class A Unit per Quarter (or, with respect to periods of less than a full
fiscal quarter, it means the product of $0.50 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 such fiscal quarter), subject to
adjustment in accordance with Sections 5.9, 6.6 and 6.8.

 

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“Securities Act” means the U.S. Securities Act of 1933, as amended, supplemented
or restated from time to time and any successor to such statute.

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended,
supplemented or restated from time to time and any successor to such statute.

“Separation Agreement” means that certain Separation and Distribution Agreement,
dated as of February 23, 2012, by and among the General Partner, the Partnership
and the Organizational Limited Partner.

“Share of Additional Book Basis Derivative Items” means in connection with any
allocation of Additional Book Basis Derivative Items for any taxable period,
(i) with respect to the Unitholders, the amount that bears the same ratio to
such Additional Book Basis Derivative Items as the Unitholders’ Remaining Net
Positive Adjustments as of the end of such taxable period bears to the Aggregate
Remaining Net Positive Adjustments as of that time, (ii) with respect to the
General Partner (as holder of the Class A Units), the amount that bears the same
ratio to such Additional Book Basis Derivative Items as the General Partner’s
Remaining Net Positive Adjustments as of the end of such taxable period bears to
the Aggregate Remaining Net Positive Adjustment as of that time, and (iii) with
respect to the Partners holding Incentive Distribution Rights, the amount that
bears the same ratio to such Additional Book Basis Derivative Items as the
Remaining Net Positive Adjustments of the Partners holding the Incentive
Distribution Rights as of the end of such taxable period bears to the Aggregate
Remaining Net Positive Adjustments as of that time.

“Simulated Basis” means the Carrying Value of any oil and gas property (as
defined in Section 614 of the Code).

“Simulated Depletion” means, with respect to an oil and gas property (as defined
in Section 614 of the Code), a depletion allowance computed in accordance with
U.S. federal income tax principles (as if the Simulated Basis of the property
was its adjusted tax basis) and in the manner specified in Treasury Regulation
Section 1.704-1(b)(2)(iv)(k)(2). For purposes of computing Simulated Depletion
with respect to any property, the Simulated Basis of such property shall be
deemed to be the Carrying Value of such property, and in no event shall such
allowance for Simulated Depletion, in the aggregate, exceed such Simulated
Basis.

“Simulated Gain” means the excess, if any, of the amount realized from the sale
or other disposition of an oil or gas property over the Carrying Value of such
property.

“Simulated Loss” means the excess, if any, of the Carrying Value of an oil or
gas property over the amount realized from the sale or other disposition of such
property.

“Special Approval” means approval by a majority of the members of the Conflicts
Committee.

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

 

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Subsidiaries of such Person or a combination thereof, (b) a partnership (whether
general or limited in which such Person or a Subsidiary of such Person is, at
the date of determination, a general or limited partner of such partnership, but
only if more than 50% of the partnership interests of such partnership
(considering all of the partnership interests of the partnership as a single
class) is owned, directly or indirectly, at the date of determination, by such
Person, by one or more Subsidiaries of such Person, or a combination thereof, or
(c) any other Person (other than a corporation or partnership) in which such
Person, one or more Subsidiaries of such Person, or a combination thereof,
directly or indirectly, at the date of determination, has (i) at least a
majority ownership interest or (ii) the power to elect or direct the election of
a majority of the directors or other governing body of such Person.

“Surviving Business Entity” has the meaning assigned to such term in
Section 14.2(b)(ii).

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

“Third Target Distribution” means $0.60 per Common Unit per Quarter and $0.60
per Class A Unit per Quarter (or, with respect to periods of less than a full
fiscal quarter, it means the product of $0.60 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 such fiscal quarter), subject to
adjustment in accordance with Sections 5.9, 6.6 and 6.8.

“Trading Day” has the meaning assigned to such term in Section 15.1(a).

“transfer” has the meaning assigned to such term in Section 4.4(a).

“Transfer Agent” means such bank, trust company or other Person (including the
General Partner or one of its Affiliates) as shall be appointed from time to
time by the General Partner or the Partnership to act as registrar and transfer
agent for any class of Partnership Interests; provided that if no Transfer Agent
is specifically designated for any class of Partnership Interests, the General
Partner shall act in such capacity.

“Unit” means a Partnership Interest that is designated as a “Unit” and shall
include Common Units but shall not include (a) Class A Units (or the General
Partner Interest represented thereby) or (b) Incentive Distribution Rights.

“Unit Majority” means at least a majority of the Outstanding Common Units,
including Common Units held by the General Partner and its Affiliates.

“Unitholders” means the holders of Partnership Interests.

“Unpaid MQD” has the meaning assigned to such term in Section 6.1(c)(i)(B).

“Unrealized Gain” attributable to any item of Partnership property means, as of
any date of determination, the excess, if any, of (a) the fair market value of
such property as of such date (as determined under Section 5.4(d)) over (b) the
Carrying Value of such property as of such date (prior to any adjustment to be
made pursuant to Section 5.4(d) as of such date).

 

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“Unrealized Loss” attributable to any item of Partnership property means, as of
any date of determination, the excess, if any, of (a) the Carrying Value of such
property as of such date (prior to any adjustment to be made pursuant to
Section 5.4(d) as of such date) over (b) the fair market value of such property
as of such date (as determined under Section 5.4(d)).

“Unrecovered Capital” means at any time, with respect to a Unit, the Initial
Unit Price less the sum of all distributions constituting Capital Surplus
theretofore made in respect of an Initial Common Unit and any distributions of
cash (or the Net Agreed Value of any distributions in kind) in connection with
the dissolution and liquidation of the Partnership theretofore made in respect
of an Initial Common Unit, adjusted as the General Partner determines to be
appropriate to give effect to any distribution, subdivision or combination of
such Units.

“Unrestricted Person” means (a) each Indemnitee, (b) each Partner, (c) each
Person who is or was a member, partner, director, officer, employee or agent of
any Group Member, a General Partner or any Departing General Partner or any
Affiliate of any Group Member, a General Partner or any Departing General
Partner and (d) any Person the General Partner designates as an “Unrestricted
Person” for purposes of this Agreement.

“U.S. GAAP” means U.S. generally accepted accounting principles, as in effect
from time to time, consistently applied.

“Withdrawal Opinion of Counsel” has the meaning assigned to such term in
Section 11.1(b).

“Working Capital Borrowings” means borrowings of the Partnership Group (it being
understood that, in calculating the amount of Working Capital Borrowings in
respect of any Subsidiary of the Partnership that is not directly or indirectly
wholly owned by the Partnership, such borrowings by such Subsidiary shall be
multiplied by a fraction, the numerator of which is the percentage of equity in
such Subsidiary held directly or indirectly by the Partnership and the
denominator of which is 100) made pursuant to a credit facility, commercial
paper facility or other similar financing arrangement that are used solely for
working capital purposes or to pay distributions to the Partners; provided that
when such borrowings are incurred it is the intent of the borrower to repay such
borrowings within 12 months from the date of such borrowings from sources 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 terms “include,” “includes” or “including” or words of
like import shall be deemed to be followed by the words “without limitation;”
and (d) the terms “hereof,” “herein” or “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.

 

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ARTICLE II

ORGANIZATION

SECTION 2.1. Formation.

The Partnership was formed on October 13, 2011 pursuant to the Certificate of
Limited Partnership as filed with the Secretary of State of the State of
Delaware pursuant to the provisions of the Delaware Act. The General Partner and
the Organizational Limited Partner hereby amend and restate the original
Agreement of Limited Partnership of Atlas Resource Partners, L.P. in its
entirety in the form of this Agreement, and this amendment and restatement shall
become effective on the date hereof. Except as expressly provided to the
contrary in this Agreement, the rights, duties (including fiduciary duties),
liabilities and obligations of the Partners and the administration, dissolution
and termination of the Partnership shall be governed by the Delaware Act. All
Partnership Interests shall constitute personal property of the owner thereof
for all purposes.

SECTION 2.2. Name.

The name of the Partnership shall be “Atlas Resource Partners, L.P.” The
Partnership’s business may be conducted under any other name or names as
determined by the General Partner, including the name of the General Partner.
The words “Limited Partnership,” “L.P.,” “Ltd.” or similar words or letters
shall be included in the Partnership’s name where necessary for the purpose of
complying with the laws of any jurisdiction that so requires. The General
Partner may change the name of the Partnership at any time and from time to time
and shall notify the Limited Partners of such change in the next regular
communication to the Limited Partners.

SECTION 2.3. Registered Office; Registered Agent; Principal Office; Other
Offices.

Unless and until changed by the General Partner, the registered office of the
Partnership in the State of Delaware shall be located at 2711 Centerville Road,
Suite 400, Wilmington, Delaware 19808, and the registered agent for service of
process on the Partnership in the State of Delaware at such registered office
shall be The Corporation Service Company. The principal office of the
Partnership shall be located at Park Place Corporate Center One, 1000 Commerce
Drive, 4th Floor, Pittsburgh, Pennsylvania 15275 or such other place as the
General Partner may from time to time designate by notice to the Limited
Partners (which notice may be satisfied by indicating such other place in a
public filing with the Commission). The Partnership may maintain offices at such
other place or places within or outside the State of Delaware as the General
Partner determines to be necessary or appropriate. The address of the General
Partner shall be Park Place Corporate Center One, 1000 Commerce Drive, 4th
Floor, Pittsburgh, Pennsylvania 15275 or such other place as the General Partner
may from time to time designate by notice to the Limited Partners (which notice
may be satisfied by indicating such other place in a public filing with the
Commission).

 

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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, hold and dispose of any
corporation, partnership, joint venture, limited liability company or other
arrangement to engage indirectly in, any business activity that is approved by
the General Partner, in its sole discretion, and that lawfully may be conducted
by a limited partnership organized pursuant to the Delaware Act and, in
connection therewith, to exercise all of the rights and powers conferred upon
the Partnership pursuant to the agreements relating to such business activity;
and (b) do anything necessary or appropriate to the foregoing, including the
making of capital contributions or loans to a Group Member; provided, however,
that the General Partner shall not cause the Partnership to engage, directly or
indirectly, in any business activity that the General Partner determines would
cause the Partnership to be treated as an association taxable as a corporation
or otherwise taxable as an entity for U.S. federal income tax purposes. To the
fullest extent permitted by law, the General Partner shall have no duty or
obligation to propose or approve, and may, in its sole discretion, decline to
propose or approve, the conduct by the Partnership of any business, free of any
duty or obligation whatsoever to the Partnership or any Limited Partner and, in
declining to so propose or approve, shall not be required to act in good faith
or pursuant to any other standard imposed by this Agreement, any other agreement
contemplated hereby or under the Delaware Act or any other law, rule or
regulation or at equity.

SECTION 2.5. Powers.

The Partnership shall be empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance
and accomplishment of the purposes and business described in Section 2.4 and for
the protection and benefit of the Partnership.

SECTION 2.6. Term.

The term of the Partnership commenced upon the filing of the Certificate of
Limited Partnership in accordance with the Delaware Act and shall continue in
existence until the dissolution of the Partnership in accordance with the
provisions of Article XII. The existence of the Partnership as a separate legal
entity shall continue until the cancellation of the Certificate of Limited
Partnership as provided in the Delaware Act.

SECTION 2.7. 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
General Partner may determine. The General Partner hereby declares and warrants
that any Partnership assets for which record title is held in the name of the
General Partner or one or more of its Affiliates or one or more nominees shall
be held by the General Partner or such Affiliate or nominee for the use and
benefit of the Partnership in accordance with the provisions of this

 

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Agreement; provided, however, that the General Partner shall use reasonable
efforts to cause record title to such assets (other than those assets in respect
of which the General Partner determines that the expense and difficulty of
conveyancing makes transfer of record title to the Partnership impracticable) to
be vested in the Partnership or one or more of the Partnership’s designated
Affiliates as soon as reasonably practicable; provided, further, that, prior to
the withdrawal or removal of the General Partner or as soon thereafter as
practicable, the General Partner shall use reasonable efforts to effect the
transfer of record title to the Partnership and, prior to any such transfer,
will provide for the use of such assets in a manner satisfactory to the General
Partner. All Partnership assets shall be recorded as the property of the
Partnership in its books and records, irrespective of the name in which record
title to such Partnership assets is held.

ARTICLE III

RIGHTS OF LIMITED PARTNERS

SECTION 3.1. Limitation of Liability.

The Limited Partners shall have no liability under this Agreement except as
expressly required under this Agreement or the Delaware 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 Delaware Act) of the
Partnership’s business, transact any business in the Partnership’s name or have
the power to sign documents for or otherwise bind the Partnership. Any action
taken by any Affiliate of the General Partner or any officer, director,
employee, manager, member, general partner, agent or trustee of the General
Partner or any of its Affiliates, or any officer, director, employee, manager,
member, general partner, agent or trustee of a Group Member, in its capacity as
such, shall not be deemed to be participating in the control of the business of
the Partnership by a limited partner of the Partnership (within the meaning of
Section 17-303(a) of the Delaware Act) and shall not affect, impair or eliminate
the limitations on the liability of the Limited Partners under this Agreement.

SECTION 3.3. Outside Activities of 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.

 

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SECTION 3.4. Rights of Limited Partners.

(a) In addition to other rights provided by this Agreement or by applicable law
(other than Section 17-305 of the Delaware Act, which is restricted to the
extent set forth below), and except as limited by Section 3.4(b), each Limited
Partner shall have the right, for a purpose reasonably related, as determined by
the General Partner, to such Limited Partner’s interest as a Limited Partner in
the Partnership, upon reasonable written demand stating the purpose of such
demand and at such Limited Partner’s own expense:

(i) to obtain true and full information regarding the status of the business and
financial condition of the Partnership; provided, however, that the requirements
of this Section 3.4(a)(i) shall be satisfied by furnishing to a Limited Partner
upon its demand pursuant to this Section 3.4(a)(i) either (A) the Partnership’s
most recent filings with the Commission on Form 10-K and any subsequent filings
on Form 10-Q and 8-K or (B) if the Partnership is no longer subject to the
reporting requirements of the Exchange Act, the information specified in, and
meeting the requirements of, Rule 144A(d)(4) under the Securities Act;

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

(iii) to obtain a current list of the name and last known business, residence or
mailing address of each Partner;

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

(v) to obtain true and full information regarding the amount of cash and a
description and statement of the Net Agreed Value of any other Capital
Contribution by each Partner and that each Partner has agreed to contribute in
the future, and the date on which each became a Partner; and

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

(b) Notwithstanding any other provision of this Agreement, the General Partner
may keep confidential from the Limited Partners, for such period of time as the
General Partner determines, (i) any information that the General Partner
reasonably believes to be in the nature of trade secrets or (ii) other
information the disclosure of which the General Partner believes (A) is not in
the best interests of the Partnership or the Partnership Group, (B) could damage
the Partnership or the Partnership Group or its business 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).

 

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ARTICLE IV

CERTIFICATES; RECORD HOLDERS;

TRANSFER OF PARTNERSHIP INTERESTS;

REDEMPTION OF PARTNERSHIP INTERESTS

SECTION 4.1. Certificates.

Notwithstanding anything to the contrary in this Agreement, unless the General
Partner shall determine otherwise in respect of some or all of any or all
classes of Partnership Interests, Partnership Interests shall not be evidenced
by physical certificates. Certificates that may be issued, if any, shall be
executed on behalf of the Partnership by the Chairman of the Board, Chief
Executive Officer, President, Chief Financial Officer or any Executive Vice
President or Vice President and the Secretary, any Assistant Secretary or other
authorized officer or director of the General Partner. If a Transfer Agent has
been appointed for a class of Partnership Interests, no Certificate, if any, for
such class of Partnership Interests shall be valid for any purpose until it has
been countersigned by the Transfer Agent for such class of Partnership
Interests; provided, however, that if the General Partner elects to cause the
Partnership to issue Partnership Interests of such class in global form, the
Certificate, if any, shall be valid upon receipt of a certificate from the
Transfer Agent certifying that the Partnership Interests have been duly
registered in accordance with the directions of the Partnership.

SECTION 4.2. Mutilated, Destroyed, Lost or Stolen Certificates.

(a) To the extent any Partnership Interest is represented by a Certificate, if
any mutilated Certificate is surrendered to the Transfer Agent, the appropriate
officers of the General Partner on behalf of the Partnership shall execute, and
the Transfer Agent shall countersign and deliver in exchange therefor, a new
Certificate evidencing the same number and type of Partnership Interests as the
Certificate so surrendered.

(b) The appropriate officers of the General Partner on behalf of the Partnership
shall execute and deliver, and the Transfer Agent shall countersign a new
Certificate in place of any Certificate previously issued if the Record Holder
of the Certificate:

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

(ii) requests the issuance of a new Certificate before the General Partner has
notice that the Certificate has been acquired by a purchaser for value in good
faith and without notice of an adverse claim;

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

 

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(iv) satisfies any other reasonable requirements imposed by the General Partner.

(c) If a Limited Partner fails to notify the General Partner within a reasonable
period of time after such Limited Partner 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, to the fullest extent
permitted by law, 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.

(d) As a condition to the issuance of any new Certificate under this
Section 4.2, the General Partner may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Transfer
Agent) reasonably connected therewith.

SECTION 4.3. Record Holders.

The Partnership shall be entitled to recognize the Record Holder as the Partner
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
for trading. Without limiting the foregoing, when a Person (such as a broker,
dealer, bank, trust company or clearing corporation or an agent of any of the
foregoing) is acting as nominee, agent or in some other representative capacity
for another Person in acquiring and/or holding Partnership Interests, as between
the Partnership on the one hand, and such other Persons on the other, such
representative Person shall be (a) the Record Holder of such Partnership
Interest and (b) bound by this Agreement and shall have the rights and
obligations of a Partner hereunder as, and to the extent, provided herein.

SECTION 4.4. Transfer Generally.

(a) The term “transfer,” when used in this Agreement with respect to a
Partnership Interest, shall be deemed to refer to a transaction (i) by which the
General Partner assigns its Class A Units to another Person, and includes a
sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange
or any other disposition or (ii) by which the holder of a Limited Partner
Interest (including any Incentive Distribution Rights) 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, in each of
cases (i) and (ii), excluding a pledge, encumbrance, hypothecation or mortgage
but 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.

 

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(c) Nothing contained in this Agreement shall be construed to prevent any sale,
assignment, gift, exchange or any other disposition by any stockholder, member,
partner or other owner of the General Partner or any Affiliate of the General
Partner of any or all of the equity interests or other ownership interests in
the General Partner or such Affiliate, including through a merger or
consolidation of the General Partner or any such Affiliate, and the term
“transfer” shall not mean any such sale, assignment, gift, exchange or any other
disposition.

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
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.

(b) The General Partner shall not recognize any transfer of Limited Partner
Interests evidenced by Certificates until the Certificates evidencing such
Limited Partner Interests are surrendered for registration of transfer. No
charge shall be imposed by the General Partner for such transfer; provided that,
as a condition to the issuance of any new Certificate under this Section 4.5,
the General Partner may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed with respect thereto. Upon
surrender of a Certificate for registration of transfer of any Limited Partner
Interests evidenced by a Certificate, and subject to the provisions of this
Section 4.5(b), the appropriate officers of the General Partner on behalf of the
Partnership shall execute and deliver, and in the case of Certificates
evidencing Limited Partner Interests for which a Transfer Agent has been
appointed, 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.

(c) Upon the receipt of proper transfer instructions from the registered owner
of uncertificated Limited Partner Interests, such uncertificated Limited Partner
Interests shall be cancelled, issuance of new equivalent uncertificated Limited
Partner Interests or Certificates shall be made to the holder of the Limited
Partner Interests entitled thereto and the transaction shall be recorded upon
the Partnership’s register.

(d) By acceptance of the transfer of any Limited Partner Interests in accordance
with this Section 4.5, and except as provided in Section 4.9, each transferee of
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 to such Person when
any such transfer or admission is reflected in the books and records of the
Partnership and such Limited Partner becomes the Record Holder of the Limited
Partner

 

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Interests so transferred, (ii) shall become bound, and shall be deemed to have
agreed to be bound, by the terms of this Agreement, (iii) represents that the
transferee has the capacity, power and authority to enter into this Agreement,
and (iv) makes the consents, acknowledgements 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.

(e) Subject to (i) the foregoing provisions of this Section 4.5,
(ii) Section 4.3, (iii) Section 4.8, (iv) with respect to any class or series of
Limited Partner Interests, the provisions of any statement of designations or
amendment to this Agreement establishing such class or series, (v) any
contractual provisions binding on any Limited Partner and (vi) provisions of
applicable law including the Securities Act, Limited Partner Interests shall be
freely transferable.

(f) The General Partner and its Affiliates shall have the right at any time to
transfer any or all of their Common Units to one or more Persons without
Unitholder approval.

SECTION 4.6. Transfer of the General Partner Interest.

(a) Subject to Section 4.6(c), prior to the tenth anniversary of the Closing
Date, the General Partner shall not transfer all or any part of its General
Partner Interest (represented by Class A 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 the merger or consolidation of the General Partner with or into
another Person or the transfer by the General Partner of all or substantially
all of its assets to another Person.

(b) Subject to Section 4.6(c), on or after the tenth anniversary of the Closing
Date, the General Partner may transfer all or any part of its General Partner
Interest (represented by Class A Units) to any Person 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 (represented by
Class A Units) 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 under the Delaware Act
or cause the Partnership to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity for U.S. federal income tax
purposes (to the extent not already so treated or taxed) and (iii) such
transferee also agrees to purchase all (or the appropriate portion thereof, if
applicable) of the partnership or membership interest of the General Partner as
the general partner or managing member, if any, of each other Group Member. In
the case of a transfer pursuant to and in compliance with this Section 4.6, the
transferee or successor (as the case may be) shall, subject to compliance with
the terms of Section 10.2, be admitted to the Partnership as the General Partner
effective immediately prior to the transfer of the General Partner Interest, and
the business of the Partnership shall continue without dissolution.

 

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SECTION 4.7. Transfer of Incentive Distribution Rights.

The General Partner or any other holder of Incentive Distribution Rights may
transfer any or all of its Incentive Distribution Rights to any Person without
Unitholder approval.

SECTION 4.8. Restrictions on Transfers.

(a) Except as provided in Section 4.8(c), notwithstanding the other provisions
of this Article IV, no transfer of any Partnership Interests shall be made if
such transfer would (i) violate the then-applicable federal or state securities
laws or rules and regulations of the Commission, any state securities commission
or any other governmental authority with jurisdiction over such transfer,
(ii) terminate the existence or qualification of the Partnership under the laws
of the jurisdiction of its formation or (iii) cause the Partnership to be
treated as an association taxable as a corporation or otherwise to be taxed as
an entity for U.S. federal income tax purposes (to the extent not already so
treated or taxed).

(b) The General Partner may impose restrictions on the transfer of Partnership
Interests if it receives an Opinion of Counsel that such restrictions are
necessary or advisable to (i) avoid a significant risk of the Partnership
becoming taxable as a corporation or otherwise becoming taxable as an entity for
U.S. federal income tax purposes or (ii) preserve the uniformity of the Limited
Partner Interests (or any class or series thereof). The General Partner may
impose such restrictions by amending this Agreement; provided, however, that any
amendment that would result in the delisting or suspension of trading of any
class of Limited Partner Interests on the principal National Securities Exchange
on which such class of Limited Partner Interests is then listed or admitted for
trading must be approved, prior to such amendment being effected, by the holders
of at least a majority of the Outstanding Limited Partner Interests of such
class.

(c) 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 for trading.

(d) In the event that any Partnership Interest is evidenced in certificated
form, each such certificate shall bear a conspicuous legend in substantially the
following form:

THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF ATLAS RESOURCE
PARTNERS, L.P. THAT THIS SECURITY MAY NOT BE SOLD, OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED IF SUCH TRANSFER WOULD (A) VIOLATE THE THEN-APPLICABLE
FEDERAL OR STATE SECURITIES LAWS OR RULES AND REGULATIONS OF THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER GOVERNMENTAL

 

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AUTHORITY WITH JURISDICTION OVER SUCH TRANSFER, (B) TERMINATE THE EXISTENCE OR
QUALIFICATION OF ATLAS RESOURCE PARTNERS, L.P. UNDER THE LAWS OF THE STATE OF
DELAWARE, OR (C) CAUSE ATLAS RESOURCE PARTNERS, L.P. TO BE TREATED AS AN
ASSOCIATION TAXABLE AS A CORPORATION OR OTHERWISE TO BE TAXED AS AN ENTITY FOR
U.S. FEDERAL INCOME TAX PURPOSES (TO THE EXTENT NOT ALREADY SO TREATED OR
TAXED). ATLAS RESOURCE PARTNERS GP, LLC, THE GENERAL PARTNER OF ATLAS RESOURCE
PARTNERS, L.P., MAY IMPOSE ADDITIONAL RESTRICTIONS ON THE TRANSFER OF THIS
SECURITY IF IT RECEIVES AN OPINION OF COUNSEL THAT SUCH RESTRICTIONS ARE
NECESSARY OR ADVISABLE TO AVOID A SIGNIFICANT RISK OF ATLAS RESOURCE PARTNERS,
L.P. BECOMING TAXABLE AS A CORPORATION OR OTHERWISE BECOMING TAXABLE AS AN
ENTITY FOR U.S. FEDERAL INCOME TAX PURPOSES OR TO PRESERVE THE UNIFORMITY OF THE
LIMITED PARTNER INTERESTS (OR ANY CLASS OR SERIES THEREOF). THE RESTRICTIONS SET
FORTH ABOVE SHALL NOT PRECLUDE THE SETTLEMENT OF ANY TRANSACTIONS INVOLVING THIS
SECURITY ENTERED INTO THROUGH THE FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE
ON WHICH THIS SECURITY IS LISTED OR ADMITTED FOR TRADING.

SECTION 4.9. Eligibility Certificates; Ineligible Holders.

(a) If at any time the General Partner determines, with the advice of counsel,
that:

(i) the Partnership’s status other than as an association taxable as a
corporation for U.S. federal income tax purposes or the failure of the
Partnership otherwise to be subject to an entity-level tax for U.S. federal,
state or local income tax purposes, coupled with the tax status (or lack of
proof of the U.S. federal income tax status) of one or more Limited Partners,
has or will reasonably likely have a material adverse effect on the maximum
applicable rate that can be charged to customers by Subsidiaries of the
Partnership (a “Rate Eligibility Trigger”); or

(ii) any Group Member is subject to any federal, state or local law or
regulation that would create a substantial risk of cancellation or forfeiture of
any property in which the Group Member has an interest based on the nationality,
citizenship or other related status of a Limited Partner (a “Citizenship
Eligibility Trigger”);

then, in each of cases (i) and (ii), the General Partner may adopt such
amendments to this Agreement as it determines to be necessary or advisable to
(A) in the case of a Rate Eligibility Trigger, obtain such proof of the U.S.
federal income tax status of the Limited Partners and, to

 

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the extent relevant, their beneficial owners, as the General Partner determines
to be necessary or advisable to establish those Limited Partners whose U.S.
federal income tax status does not or would not have a material adverse effect
on the maximum applicable rate that can be charged to customers by any Group
Member or (B) in the case of a Citizenship Eligibility Trigger, obtain such
proof of the nationality, citizenship or other related status of the Partner
(or, if the Partner is a nominee holding for the account of another Person, the
nationality, citizenship or other related status of such Person) as the General
Partner determines to be necessary or advisable to establish those Partners
whose status as Partners does not or would not subject any Group Member to a
significant risk of cancellation or forfeiture of any of its properties or
interests therein.

(b) Such amendments may include provisions requiring all Limited Partners to
certify as to their (and their beneficial owners’) status as Eligible Holders
upon demand and on a regular basis, as determined by the General Partner, and
may require transferees of Units to so certify prior to being admitted to the
Partnership as a Limited Partner (any such required certificate, an “Eligibility
Certificate”).

(c) Such amendments may provide that any Limited Partner (and its beneficial
owners) who fails to furnish to the General Partner, within a reasonable period
after a request, an Eligibility Certificate and any other information and proof
of its (and its beneficial owners’) status as an Eligible Holder, or if upon
receipt of such Eligibility Certificate or other requested information the
General Partner determines that a Limited Partner is not an Eligible Holder
(such a Limited Partner, an “Ineligible Holder”), the Limited Partner Interests
owned by such Limited Partner shall be subject to redemption in accordance with
the provisions of Section 4.10. In addition, the General Partner shall be
substituted for any Limited Partner that is an Ineligible Holder as the Limited
Partner in respect of the Ineligible Holder’s Limited Partner Interests.

(d) The General Partner shall, in exercising voting rights in respect of
Partnership Interests held by it on behalf of Ineligible Holders, distribute the
votes in the same ratios as the votes of Limited Partners (including the General
Partner and its Affiliates) in respect of Limited Partner Interests other than
those of Ineligible Holders are cast, either for, against or abstaining as to
the matter.

(e) Upon dissolution of the Partnership, an Ineligible Holder shall have no
right to receive a distribution in kind pursuant to Section 12.4 but shall be
entitled to the cash equivalent thereof, and the Partnership shall provide cash
in exchange for an assignment of the Ineligible Holder’s share of any
distribution in kind. Such payment and assignment shall be treated for
Partnership purposes as a purchase by the Partnership from the Ineligible Holder
of its Limited Partner Interest (representing the right to receive its share of
such distribution in kind).

(f) At any time after a holder can and does certify that it has become an
Eligible Holder, an Ineligible Holder may, upon application to the General
Partner, request that with respect to any Limited Partner Interests of such
Ineligible Holder not redeemed pursuant to Section 4.10, such Ineligible Holder,
upon approval of the General Partner, shall no longer constitute an Ineligible
Holder, and the General Partner shall cease to be deemed to be the Limited
Partner in respect of such Ineligible Holder’s Limited Partner Interests.

 

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SECTION 4.10. Redemption of Partnership Interests of Ineligible Holders.

(a) If at any time a Limited Partner fails to furnish an Eligibility Certificate
or any other information requested within the period of time specified in
amendments adopted pursuant to Section 4.9, or if upon receipt of such
Eligibility Certificate or other information the General Partner determines,
with the advice of counsel, that a Limited Partner is not an Eligible Holder,
the Partnership may, unless the Limited Partner establishes to the satisfaction
of the General Partner that such Limited Partner is an Eligible Holder or has
transferred its Limited Partner Interests to a Person who is an Eligible Holder
and who furnishes an Eligibility Certificate to the General Partner prior to the
date fixed for redemption as provided below, redeem the Limited Partner Interest
of such Limited Partner as follows:

(i) The General Partner shall, not later than the 30th day before the date fixed
for redemption, give notice of redemption to the Limited Partner, at its last
address designated on the records of the Partnership or the Transfer Agent, as
applicable, by registered or certified mail, postage prepaid. The notice shall
be deemed to have been given when so mailed. The notice shall specify the
Redeemable Interests, the date fixed for redemption, the place of payment, that
payment of the redemption price will be made upon redemption of the Redeemable
Interests (or, if later in the case of Redeemable Interests evidenced by
Certificates, upon surrender of the Certificate evidencing the Redeemable
Interests) and that on and after the date fixed for redemption no further
allocations or distributions to which the Limited Partner would otherwise be
entitled in respect of the Redeemable Interests will accrue or be made.

(ii) The aggregate redemption price for Redeemable Interests shall be an amount
equal to the Current Market Price (the date of determination of which shall be
the date fixed for redemption) of Partnership Interests of the class to be so
redeemed multiplied by the number of Partnership Interests of each such class
included among the Redeemable Interests. The redemption price shall be paid, as
determined by the General Partner, in cash or by delivery of a promissory note
of the Partnership in the principal amount of the redemption price, bearing
interest at the rate of 5% annually and payable in three equal annual
installments of principal together with accrued interest, commencing one year
after the redemption date.

(iii) The Limited Partner or his duly authorized representative shall be
entitled to receive the payment for the Redeemable Interests at the place of
payment specified in the notice of redemption on the redemption date (or, if
later in the case of Redeemable Interests evidenced by Certificates, upon
surrender by or on behalf of the Limited Partner at the place specified in the
notice of redemption, of the Certificate evidencing the Redeemable Interests,
duly endorsed in blank or accompanied by an assignment duly executed in blank).

(iv) After the redemption date, Redeemable Interests shall no longer constitute
issued and Outstanding Partnership Interests.

(b) The provisions of this Section 4.10 shall also be applicable to Partnership
Interests held by a Limited Partner as nominee of a Person determined to be an
Ineligible Holder.

 

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(c) Nothing in this Section 4.10 shall prevent the recipient of a notice of
redemption from transferring its Partnership Interest before the redemption date
if such transfer is otherwise permitted under this Agreement. Upon receipt of
notice of such a transfer, the General Partner shall withdraw the notice of
redemption; provided the transferee of such Partnership Interest certifies to
the satisfaction of the General Partner that it is an Eligible Holder. If the
transferee fails to make such certification, such redemption shall be effected
from the transferee on the original redemption date.

ARTICLE V

CAPITAL CONTRIBUTIONS

AND ISSUANCE OF PARTNERSHIP INTERESTS

SECTION 5.1. Organizational Contributions.

In connection with the formation of the Partnership under the Delaware Act, the
General Partner made an initial Capital Contribution to the Partnership in the
amount of $20.00 in exchange for a General Partner Interest consisting of
Class A Units representing a Percentage Interest of 2%, and was admitted as the
General Partner of the Partnership. The Organizational Limited Partner made an
initial Capital Contribution to the Partnership in the amount of $980.00 in
exchange for a Limited Partner Interest consisting of Common Units representing
a Percentage Interest of 98%, and was admitted as a Limited Partner of the
Partnership.

SECTION 5.2. Additional Capital Contributions.

(a) Prior to the Closing Date, the Organizational Limited Partner and the
General Partner contributed to the Partnership, as a Capital Contribution, cash
and ownership interest in the Transferred Assets (as defined in the Separation
Agreement) and the Transferred Liabilities (as defined in the Separation
Agreement), in exchange for Common Units, Class A Units and the Incentive
Distribution Rights, so that, after such Capital Contribution, (i) the General
Partner held (A) 534,694 Class A Units, representing a General Partner Interest
with a Percentage Interest of 2%, subject to all of the rights, privileges and
duties of the General Partner under this Agreement, and (B) the Incentive
Distribution Rights; and (ii) the Organizational Limited Partner held 26,200,000
Common Units, representing a Limited Partner Interest with a Percentage Interest
of 98%.

(b) No Limited Partner will be required by this Agreement to make any additional
Capital Contribution to the Partnership.

SECTION 5.3. Interest and Withdrawal.

No interest on Capital Contributions shall be paid by the Partnership. 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 liquidation of the Partnership may be considered as such
by law and then only to the extent provided for in this Agreement. Except to the
extent expressly provided in this Agreement, no Partner shall have priority over
any other Partner either as to the return of Capital Contributions or as to
profits, losses or distributions. Any such return shall be a compromise to which
all Partners agree within the meaning of Section 17-502(b) of the Delaware Act.

 

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SECTION 5.4. Capital Accounts.

(a) The Partnership shall maintain for each Partner (or a beneficial owner of
Partnership Interests held by a nominee in any case in which the nominee has
furnished the identity of such owner to the Partnership in accordance with
Section 6031(c) of the Code or any other method acceptable to the General
Partner) owning a Partnership Interest a separate Capital Account with respect
to such Partnership Interest in accordance with the rules of Treasury Regulation
Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the
amount of all Capital Contributions made to the Partnership with respect to such
Partnership Interest and (ii) all items of Partnership income and gain
(including Simulated Gain and income and gain exempt from tax) computed in
accordance with Section 5.4(b) and allocated with respect to such Partnership
Interest pursuant to Section 6.1, and decreased by (x) the amount of cash or Net
Agreed Value of all actual and deemed distributions of cash or property made
with respect to such Partnership Interest and (y) all items of Partnership
deduction and loss (including Simulated Depletion and Simulated Loss) computed
in accordance with Section 5.4(b) and allocated with respect to such Partnership
Interest pursuant to Section 6.1.

(b) For purposes of computing the amount of any item of income, gain, loss,
deduction, Simulated Depletion, Simulated Gain or Simulated Loss to be allocated
pursuant to Article VI and to be reflected in the Partners’ Capital Accounts,
the determination, recognition and classification of any such item shall be the
same as its determination, recognition and classification for U.S. federal
income tax purposes (including any method of depreciation, cost recovery or
amortization used for that purpose); provided that:

(i) Solely for purposes of this Section 5.4, the Partnership shall be treated as
owning directly its proportionate share (as determined by the General Partner
based upon the provisions of the applicable governing, organizational or similar
documents) of all property owned by (x) any other Group Member that is
classified as a partnership for U.S. federal income tax purposes and (y) any
other partnership, limited liability company, unincorporated business or other
entity classified as a partnership for U.S. federal income tax purposes of which
a Group Member is, directly or indirectly, a partner, member or other equity
holder.

(ii) All fees and other expenses incurred by the Partnership to promote the sale
of (or to sell) a Partnership Interest that can neither be deducted nor
amortized under Section 709 of the Code, if any, shall, for purposes of Capital
Account maintenance, be treated as an item of deduction at the time such fees
and other expenses are incurred and shall be allocated among the Partners
pursuant to Section 6.1.

(iii) Except as otherwise provided in Treasury Regulation
Section 1.704-1(b)(2)(iv)(m), the computation of all items of income, gain,
loss, deduction, Simulated Depletion, Simulated Gain and Simulated Loss shall be
made without regard to any election under Section 754 of the Code that may be
made by the Partnership and, as to those items described in Section 705(a)(1)(B)
or 705(a)(2)(B) of

 

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the Code, without regard to the fact that such items are not includable in gross
income or are neither currently deductible nor capitalized for U.S. federal
income tax purposes. To the extent an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Section 734(b) or 743(b) of the Code is
required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be
taken into account in determining Capital Accounts, the amount of such
adjustment in the Capital Accounts shall be treated as an item of gain or loss.

(iv) Any income, gain, loss, Simulated Gain, Simulated Loss or deduction
attributable to the taxable disposition of any Partnership property shall be
determined as if the adjusted basis of such property as of such date of
disposition were equal in amount to the Partnership’s Carrying Value with
respect to such property as of such date.

(v) Any item of income of the Partnership that is described in
Section 705(a)(1)(B) of the Code (with respect to items of income that are
exempt from tax) shall be treated as an item of income for the purpose of this
Section 5.4(b), and any item of expense of the Partnership that is described in
Section 705(a)(2)(B) of the Code (with respect to expenditures that are not
deductible and not chargeable to capital accounts) shall be treated as an item
of deduction for the purpose of this Section 5.4(b), in each case without regard
to the fact that such items are not includable in gross income or are neither
currently deductible nor capitalized for U.S. federal income tax purposes.

(vi) In accordance with the requirements of Section 704(b) of the Code, any
deductions for depreciation, cost recovery, amortization or Simulated Depletion
attributable to any Contributed Property shall be determined as if the adjusted
basis of such property on the date it was acquired by the Partnership were equal
to the Agreed Value of such property. Upon an adjustment pursuant to
Section 5.4(d) to the Carrying Value of any Partnership property subject to
depreciation, cost recovery, amortization, or Simulated Depletion, any further
deductions for such depreciation, cost recovery, amortization or Simulated
Depletion attributable to such property shall be determined (A) as if the
adjusted basis of such property were equal to the Carrying Value of such
property immediately following such adjustment and (B) using a rate of
depreciation, cost recovery or amortization derived from the same method and
useful life (or, if applicable, the remaining useful life) as is applied for
U.S. federal income tax purposes; provided, however, that, if the asset has a
zero adjusted basis for U.S. federal income tax purposes, depreciation, cost
recovery or amortization deductions shall be determined using any method that
the General Partner may adopt.

(vii) The Gross Liability Value of each Liability of the Partnership described
in Treasury Regulation Section 1.752-7(b)(3)(i) shall be adjusted at such times
as provided in this Agreement for an adjustment to Carrying Values. The amount
of any such adjustment shall be treated for purposes hereof as an item of loss
(if the adjustment increases the Carrying Value of such Liability of the
Partnership) or an item of gain (if the adjustment decreases the Carrying Value
of such Liability of the Partnership).

 

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(viii) If the Partnership’s adjusted basis in a depreciable or cost recovery
property is reduced for U.S. federal income tax purposes pursuant to
Section 50(c)(1) or (3) of the Code, the amount of such reduction shall, solely
for purposes hereof, be deemed to be an additional depreciation or cost recovery
deduction in the year such property is placed in service and shall be allocated
among the Partners pursuant to Section 6.1. Any restoration of such basis
pursuant to Section 50(c)(2) of the Code shall, to the extent possible, be
allocated in the same manner to the Partners to whom such deemed deduction was
allocated.

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

(d) (i) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on
an issuance of additional Partnership Interests for cash or Contributed
Property, the issuance of Partnership Interests as consideration for the
provision of services or the conversion of the General Partner’s Combined
Interest to Common Units pursuant to Section 11.3(b), the Capital Account of all
Partners and the Carrying Value of each Partnership property immediately prior
to such issuance shall be adjusted upward or downward to reflect any Unrealized
Gain or Unrealized Loss attributable to such Partnership property, as if such
Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each
such property for an amount equal to its fair market value immediately prior to
such issuance and had been allocated among the Partners at such time pursuant to
Section 6.1 in the same manner as any item of gain or loss actually recognized
during such period would have been allocated; provided, however, that in the
event of an issuance of Partnership Interests for a de minimis amount of cash or
Contributed Property, or in the event of an issuance of a de minimis amount of
Partnership Interests as consideration for the provision of services, the
General Partner may determine that such adjustments are unnecessary for the
proper administration of the Partnership. In determining such Unrealized Gain or
Unrealized Loss for purposes of maintaining Capital Accounts, the aggregate fair
market value of all Partnership property (including cash or cash equivalents)
immediately prior to the issuance of additional Partnership Interests shall be
determined by the General Partner using such method of valuation as it may
adopt; provided, however, that the General Partner, in arriving at such
valuation, may determine that it is appropriate to first determine an aggregate
value for the Partnership, derived from the current trading price of the Common
Units, and taking fully into account the fair market value of the Partnership
Interests of all Partners at such time. The General Partner shall allocate such
aggregate value among the assets of the Partnership (in such manner as it
determines) to arrive at a fair market value for individual properties.

(ii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f),
immediately prior to any actual or deemed distribution to a Partner of any
Partnership property (other than a distribution of cash that is not in
redemption or retirement of a Partnership Interest), the Capital Accounts of all
Partners and the Carrying Value of all Partnership property shall be adjusted
upward or downward to reflect any Unrealized Gain or Unrealized Loss
attributable to such Partnership property, as if such Unrealized Gain or
Unrealized Loss had been recognized in a sale of such property immediately prior
to such distribution for an amount equal to its fair market value, and had been
allocated among the Partners, at such time, pursuant to Section 6.1 in the same

 

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manner as any item of gain, loss, Simulated Gain or Simulated Loss actually
recognized during such period would have been allocated; provided, however, that
in the event of a distribution of a de minimis amount of Partnership property,
the General Partner may determine that such adjustments are unnecessary for the
proper administration of the Partnership. In determining such Unrealized Gain or
Unrealized Loss for purposes of maintaining Capital Accounts, the aggregate fair
market value of all Partnership assets (including cash or cash equivalents)
immediately prior to a distribution shall (A) in the case of an actual
distribution that is not made pursuant to Section 12.4 or in the case of a
deemed distribution, be determined in the same manner as that provided in
Section 5.4(d)(i), or (B) in the case of a liquidating distribution pursuant to
Section 12.4, be determined and allocated by the Liquidator using such method of
valuation as it may adopt.

SECTION 5.5. Issuances of Additional Partnership Interests.

(a) The Partnership may issue additional Partnership Interests and options,
rights, warrants and appreciation rights relating to the Partnership Interests
for any Partnership purpose at any time and from time to time to such Persons
for such consideration and on such terms and conditions as the General Partner
shall determine, all without the approval of any Limited Partners.

(b) Each additional Partnership Interest 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 Interests), as shall be fixed by the General Partner, including
(i) the right to share in Partnership profits and losses or items thereof;
(ii) the right to share in Partnership distributions; (iii) the rights upon
dissolution and liquidation of the Partnership; (iv) whether, and the terms and
conditions upon which, the Partnership may or shall be required to redeem the
Partnership Interest (including sinking fund provisions); (v) whether such
Partnership Interest is issued with the privilege of conversion or exchange and,
if so, the terms and conditions of such conversion or exchange; (vi) the terms
and conditions upon which each Partnership Interest will be issued, evidenced by
certificates and assigned or transferred; (vii) the method for determining the
Percentage Interest as to such Partnership Interest; and (viii) the right, if
any, of each such Partnership Interest to vote on Partnership matters, including
matters relating to the relative designations, preferences, rights, powers and
duties of such Partnership Interest.

(c) The General Partner is hereby authorized and directed to take all actions
that it determines to be necessary or appropriate in connection with (i) each
issuance of Partnership Interests and options, rights, warrants and appreciation
rights relating to Partnership Interests pursuant to this Section 5.5, (ii) the
conversion of the Combined Interest into Common Units pursuant to the terms of
this Agreement, (iii) the admission of Additional Limited Partners and (iv) all
additional issuances of Partnership Interests. The General Partner shall
determine the relative rights, powers and duties of the holders of the Units or
other Partnership Interests being so issued. The General Partner shall do all
things necessary to comply with the Delaware Act and is authorized and directed
to do all things that it determines to be necessary or appropriate in connection
with any future issuance of Partnership Interests or in connection with the
conversion

 

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of the Combined Interest into Common 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 Interests are listed or
admitted for trading.

(d) No fractional Units shall be issued by the Partnership. If a distribution,
subdivision or combination of Units would result in the issuance of fractional
Units (but for this Section 5.5(d)), then 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 5.6. Limited Preemptive Rights.

Except as provided in this Section 5.6 and in Section 5.10 or as otherwise
provided in a separate agreement by the Partnership, no Person shall have any
preemptive, preferential or other similar right with respect to the issuance of
any Partnership Interest, whether unissued, held in the treasury or hereafter
created; provided that 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 or subscribe for Partnership Interests from the Partnership whenever,
and on the same terms that, the Partnership issues Partnership Interests to any
Persons, to the extent necessary so that the aggregate Percentage Interests of
the General Partner and its Affiliates, taken together, immediately after such
issuances (including any issuance pursuant to the exercise of the rights
described in this proviso) equals the aggregate Percentage Interests of the
General Partner and its Affiliates, taken together, immediately prior to such
issuances.

SECTION 5.7. Splits and Combinations.

(a) Subject to Section 5.5(d), Section 6.6 and Section 6.8 (dealing with
adjustments of distribution levels), the Partnership may make a Pro Rata
distribution of Partnership Interests to all Record Holders or may effect a
subdivision or combination of Partnership Interests 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 Partnership Interest
basis or stated as a number of Partnership Interests are proportionately
adjusted.

(b) Whenever such a distribution, subdivision or combination of Partnership
Interests is declared, the General Partner shall select a Record Date as of
which the distribution, subdivision or combination shall be effective and shall
send notice thereof at least 20 days prior to such Record Date to each Record
Holder as of a date not less than 10 days prior to the date of such notice. The
General Partner also may cause a firm of independent public accountants selected
by it to calculate the number of Partnership Interests to be held by each Record
Holder after giving effect to such distribution, subdivision or combination. The
General Partner shall be entitled to rely on any certificate provided by such
firm as conclusive evidence of the accuracy of such calculation.

(c) Promptly following any such distribution, subdivision or combination, the
Partnership may issue Certificates or uncertificated Partnership Interests to
the Record Holders of Partnership Interests as of the applicable Record Date
representing the new number of

 

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Partnership Interests held by such Record Holders, or the General Partner may
adopt such other procedures that it determines to be necessary or appropriate to
reflect such changes. If any such combination results in a smaller total number
of Partnership Interests Outstanding, and a Partnership Interest is represented
by a Certificate, 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.

SECTION 5.8. Fully Paid and Non-Assessable Nature of Limited Partner Interests.

All Limited Partner Interests issued pursuant to, and in accordance with the
requirements of, this Article V shall be fully paid and non-assessable Limited
Partner Interests in the Partnership, except as such non-assessability may be
affected by Section 17-607 or 17-804 of the Delaware Act.

SECTION 5.9. Issuance of Common Units in Connection with Reset of Incentive
Distribution Rights.

(a) Subject to the provisions of this Section 5.9, the holder of the Incentive
Distribution Rights (or, if there is more than one holder of the Incentive
Distribution Rights, the holders of a majority in interest of the Incentive
Distribution Rights) shall have the right, at any time when the Partnership has
made a distribution pursuant to Section 6.4(a)(v) for each of the four most
recently completed Quarters and the amount of each such distribution did not
exceed Adjusted Operating Surplus for such Quarter, to make an election (the
“IDR Reset Election”) to cause the Minimum Quarterly Distribution and the Target
Distributions to be reset in accordance with the provisions of Section 5.9(e).
Upon the exercise of the IDR Reset Election, the holder or holders of the
Incentive Distribution Rights will become entitled to receive an aggregate
number of Common Units (the “IDR Reset Common Units”) equal to the quotient
(such quotient, the “Aggregate Quantity of IDR Reset Common Units”) obtained by
dividing (i) the average amount of cash distributions made by the Partnership
for the two full Quarters immediately preceding the giving of the Reset Notice
(as defined in Section 5.9(b)) in respect of the Incentive Distribution Rights
by (ii) the average of the cash distributions made by the Partnership in respect
of each Common Unit for the two full Quarters immediately preceding the giving
of the Reset Notice (such average of cash distributions described in this clause
(ii), the “Reset MQD”). If, at the time of any IDR Reset Election, the General
Partner and its Affiliates are not the holders of a majority in interest of the
Incentive Distribution Rights, then the IDR Reset Election shall be subject to
the prior written concurrence of the General Partner that the conditions
described in the immediately previous sentence have been satisfied. The making
of the IDR Reset Election in the manner specified in Section 5.9(b) shall cause
the Minimum Quarterly Distribution and the Target Distributions to be reset in
accordance with the provisions of Section 5.9(e) and, in connection therewith,
the holder or holders of the Incentive Distribution Rights will become entitled
to receive the Aggregate Quantity of IDR Reset Common Units on the basis
specified above, without any further approval required by the General Partner
(other than as set forth in the prior sentence of this Section 5.9(a)) and
without any approval of the Unitholders, at the time specified in Section 5.9(c)
unless the IDR Reset Election is rescinded pursuant to Section 5.9(d).

(b) To exercise the right specified in Section 5.9(a), the holder of the
Incentive Distribution Rights (or, if there is more than one holder of the
Incentive Distribution

 

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Rights, the holders of a majority in interest of the Incentive Distribution
Rights) shall deliver a written notice (the “Reset Notice”) to the Partnership.
Within 10 Business Days after the receipt by the Partnership of such Reset
Notice, the Partnership shall deliver a written notice to the holder or holders
of the Incentive Distribution Rights of the Partnership’s determination of the
aggregate number of Common Units that each holder of Incentive Distribution
Rights will be entitled to receive.

(c) The holder or holders of the Incentive Distribution Rights will be entitled
to receive the Aggregate Quantity of IDR Reset Common Units and the General
Partner will be entitled to receive the related additional Class A Units
pursuant to Section 5.10 on the 15th Business Day after receipt by the
Partnership of the Reset Notice; provided, however, that the issuance of IDR
Reset Common Units to the holder or holders of the Incentive Distribution Rights
shall not occur prior to the approval of the listing or admission for trading of
such IDR Reset Common Units by the principal National Securities Exchange upon
which the Common Units are then listed or admitted for trading if any such
approval is required pursuant to the rules and regulations of such National
Securities Exchange.

(d) If the principal National Securities Exchange upon which the Common Units
are then traded has not approved the listing or admission for trading of the IDR
Reset Common Units to be issued pursuant to this Section 5.9 on or before the
30th calendar day following the Partnership’s receipt of the Reset Notice and
such approval is required by the rules and regulations of such National
Securities Exchange, then the holder of the Incentive Distribution Rights (or,
if there is more than one holder of the Incentive Distribution Rights, the
holders of a majority in interest of the Incentive Distribution Rights) shall
have the right to either rescind the IDR Reset Election or elect to receive
other Partnership Interests having such terms as the General Partner may
approve, that will provide (i) the same economic value, in the aggregate, as the
Aggregate Quantity of IDR Reset Common Units would have had at the time of the
Partnership’s receipt of the Reset Notice, as determined by the General Partner,
and (ii) for the subsequent conversion of such Partnership Interests into Common
Units within not more than 12 months following the Partnership’s receipt of the
Reset Notice upon the satisfaction of one or more conditions that are reasonably
acceptable to the holder of the Incentive Distribution Rights (or, if there is
more than one holder of the Incentive Distribution Rights, the holders of a
majority in interest of the Incentive Distribution Rights).

(e) The Minimum Quarterly Distribution and the Target Distributions shall be
adjusted at the time of the issuance of Common Units or other Partnership
Interests pursuant to this Section 5.9 such that (i) the Minimum Quarterly
Distribution shall be reset to equal to the Reset MQD, (ii) the First Target
Distribution shall be reset to equal 115% of the Reset MQD, (iii) the Second
Target Distribution shall be reset to equal 125% of the Reset MQD and (iv) the
Third Target Distribution shall be reset to equal 150% of the Reset MQD.

(f) Upon the issuance of IDR Reset Common Units pursuant to Section 5.9(a), the
Capital Account maintained with respect to the Incentive Distribution Rights
shall (i) first, be allocated to IDR Reset Common Units in an amount equal to
the product of (A) the Aggregate Quantity of IDR Reset Common Units and (B) the
Per Unit Capital Amount for an Initial Common Unit, and (ii) second, any
remaining balance in such Capital Account will be retained by the holder of the
Incentive Distributions Rights. In the event that there is not a

 

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sufficient Capital Account associated with the Incentive Distribution Rights to
allocate the full Per Unit Capital Amount for an Initial Common Unit to the IDR
Reset Common Units in accordance with clause (i) of this Section 5.9(f), the IDR
Reset Common Units shall be subject to Section 6.1(d)(x)(A) and
Section 6.1(d)(x)(B).

 

SECTION 5.10.  

No Additional Capital Contributions by the General Partner or Dilution;
Automatic Issuance of Class A Units Upon Issuance of Units.

(a) The Percentage Interest represented by all of the Outstanding Class A Units
shall at all times be equal to 2%, regardless of any issuance of any Limited
Partner Interests or Units by the Partnership, and the General Partner shall not
be obligated to make any capital contribution to the Partnership in order for
such Class A Units to represent such Percentage Interest.

(b) The parties intend that each Class A Unit shall represent the same
Percentage Interest as one Unit. Accordingly, upon issuance of any Limited
Partner Interests or Units by the Partnership (including any IDR Reset Common
Units, but excluding the issuance of Common Units pursuant to Section 5.1 and
5.2(a)), the Partnership will automatically issue to the General Partner,
without further consideration or any requirement of capital contribution by the
General Partner, a number of Class A Units so that the total number of
Outstanding Class A Units after such issuance equals 2% of the sum of (i) the
total number of Outstanding Units after such issuance and (ii) the total number
of Outstanding Class A Units after such issuance.

ARTICLE VI

ALLOCATIONS AND DISTRIBUTIONS

SECTION 6.1. Allocations for Capital Account Purposes.

For purposes of maintaining the Capital Accounts and in determining the rights
of the Partners among themselves, the Partnership’s items of income, gain, loss,
deduction, Simulated Depletion, Simulated Gain and Simulated Loss (computed in
accordance with Section 5.4(b)) shall be allocated among the Partners in each
taxable year (or portion thereof) as provided herein below.

(a) Net Income. After giving effect to the special allocations set forth in
Section 6.1(d), and any allocations to other Partnership Interests, Net Income
for each taxable year and all items of income, gain, loss, deduction and
Simulated Gain taken into account in computing Net Income for such taxable year
shall be allocated to the Partners as follows:

(i) First, 100% to the General Partner in an amount equal to the aggregate Net
Losses allocated to the General Partner pursuant to Section 6.1(b)(iii) for all
previous taxable years until the aggregate Net Income allocated to the General
Partner pursuant to this Section 6.1(a)(i) for the current taxable year and all
previous taxable years is equal to the aggregate Net Losses allocated to the
General Partner pursuant to Section 6.1(b)(iii) for all previous taxable years;

 

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(ii) Second, 100% to the General Partner and the Unitholders, in accordance with
their respective Percentage Interests, until the aggregate Net Income allocated
to such Partners pursuant to this Section 6.1(a)(ii) for the current taxable
year and all previous taxable years is equal to the aggregate Net Losses
allocated to such Partners pursuant to Section 6.1(b)(ii) for all previous
taxable years; and

(iii) Third, the balance, if any, 100% to the General Partner and the
Unitholders in accordance with their respective Percentage Interests.

(b) Net Losses. After giving effect to the special allocations set forth in
Section 6.1(d), and any allocations to other Partnership Interests, Net Losses
for each taxable period and all items of income, gain, loss, deduction and
Simulated Gain taken into account in computing Net Losses for such taxable
period shall be allocated to the Partners as follows:

(i) First, 100% to the Unitholders, Pro Rata, until the aggregate Net Losses
allocated pursuant to this Section 6.1(b)(i) for the current taxable year and
all previous taxable years is equal to the aggregate Net Income allocated to
such Partners pursuant to Section 6.1(a)(iii) for all previous taxable years,
provided that the Net Losses shall not be allocated pursuant to this
Section 6.1(b)(i) to the extent that such allocation would cause any Unitholder
to have a deficit balance in its Adjusted Capital Account at the end of such
taxable year (or increase any existing deficit balance in its Adjusted Capital
Account);

(ii) Second, 100% to the Unitholders, Pro Rata; provided, that Net Losses shall
not be allocated pursuant to this Section 6.1(b)(ii) to the extent that such
allocation would cause any Unitholder to have a deficit balance in its Adjusted
Capital Account at the end of such taxable year (or increase any existing
deficit balance in its Adjusted Capital Account); and

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

(c) Net Termination Gains and Losses. After giving effect to the special
allocations set forth in Section 6.1(d), all items of income, gain, loss,
deduction and Simulated Gain taken into account in computing Net Termination
Gain or Net Termination Loss for such taxable period shall be allocated in the
same manner as such Net Termination Gain or Net Termination Loss is allocated
hereunder. All allocations under this Section 6.1(c) shall be made after Capital
Account balances have been adjusted by all other allocations provided under this
Section 6.1 and after all distributions of Available Cash provided under
Sections 6.4 and 6.5 have been made; provided, however, that solely for purposes
of this Section 6.1(c), Capital Accounts shall not be adjusted for distributions
made pursuant to Section 12.4.

(i) If a Net Termination Gain is recognized (or deemed recognized pursuant to
Section 5.4(d)), such Net Termination Gain shall be allocated among the Partners
in the following manner (and the Capital Accounts of the Partners shall be
increased by the amount so allocated in each of the following subclauses, in the
order listed, before an allocation is made pursuant to the next succeeding
subclause):

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

 

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(B) Second, (x) 2% to the holders of Class A Units, Pro Rata, and (y) 98% to the
holders of Common Units, Pro Rata, until the Capital Account in respect of each
Common Unit then Outstanding is equal to (1) its Unrecovered Capital plus
(2) the Minimum Quarterly Distribution for the Quarter during which the
Liquidation Date occurs, reduced by any distribution pursuant to
Section 6.4(a)(i) with respect to such Common Unit for such Quarter (the amount
determined pursuant to this clause (2) is hereinafter defined as the “Unpaid
MQD”);

(C) Third, (x) 2% to the holders of Class A Units, Pro Rata, and (y) 98% to the
holders of Common Units, Pro Rata, until the Capital Account in respect of each
Common Unit then Outstanding is equal to the sum of (1) its Unrecovered Capital,
(2) the Unpaid MQD and (3) the excess, if any, of (a) the First Target
Distribution less the Minimum Quarterly Distribution for each Quarter of the
Partnership’s existence over (b) the cumulative per Unit amount of any
distributions of Available Cash that is deemed to be Operating Surplus made
pursuant to Section 6.4(a)(ii) (the sum of (1) plus (2) plus (3) is hereinafter
defined as the “First Liquidation Target Amount”);

(D) Fourth, (x) 2% to the holders of Class A Units, Pro Rata, (y) 85% to the
holders of Common Units, Pro Rata, and 13% to the holders of the Incentive
Distribution Rights, Pro Rata, until the Capital Account in respect of each
Common Unit then Outstanding is equal to the sum of (1) the First Liquidation
Target Amount and (2) the excess, if any, of (a) the Second Target Distribution
less the First Target Distribution for each Quarter of the Partnership’s
existence over (b) the cumulative per Unit amount of any distributions of
Available Cash that is deemed to be Operating Surplus made pursuant to
Section 6.4(a)(iii) (the sum of (1) plus (2) is hereinafter defined as the
“Second Liquidation Target Amount”); and

(E) Fifth, (x) 2% to the holders of Class A Units, Pro Rata, (y) 75% to the
holders of Common Units, Pro Rata, and (z) 23% to the holders of the Incentive
Distribution Rights, Pro Rata, until the Capital Account in respect of each
Common Unit then Outstanding is equal to the sum of (1) the Second Liquidation
Target Amount and (2) the excess, if any, of (a) the Third Target Distribution
less the Second Target Distribution for each Quarter of the Partnership’s
existence over (b) the cumulative per Unit amount of any distributions of
Available Cash that is deemed to be Operating Surplus made pursuant to
Section 6.4(a)(iv); and

 

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(F) Thereafter, (x) 2% to the holders of Class A Units, Pro Rata, (y) 50% to the
holders of Common Units, Pro Rata, and (z) 48% to the holders of the Incentive
Distribution Rights, Pro Rata.

(ii) If a Net Termination Loss is recognized (or deemed recognized pursuant to
Section 5.4(d)), such Net Termination Loss shall be allocated among the Partners
in the following manner:

(A) First, 2% to the holders of Class A Units, Pro Rata, and 98% to the holders
of Common Units, Pro Rata, until the Capital Account in respect of each Common
Unit then Outstanding has been reduced to zero; and

(B) Second, the balance, if any, 100% to the General Partner.

(d) Special Allocations. Notwithstanding any other provision of this
Section 6.1, the following special allocations shall be made for such taxable
period:

(i) Partnership Minimum Gain Chargeback. Notwithstanding any other provision of
this Section 6.1, if there is a net decrease in Partnership Minimum Gain during
any Partnership taxable period, each Partner shall be allocated items of
Partnership income and gain for such period (and, if necessary, subsequent
periods) in the manner and amounts provided in Treasury Regulation Sections
1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision.
For purposes of this Section 6.1(d), each Partner’s Adjusted Capital Account
balance shall be determined, and the allocation of income, gain or Simulated
Gain required hereunder shall be effected, prior to the application of any other
allocations pursuant to this Section 6.1(d) with respect to such taxable period
(other than an allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii)). This
Section 6.1(d)(i) is intended to comply with the Partnership Minimum Gain
chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be
interpreted consistently therewith.

(ii) Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the
other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as
provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net
decrease in Partner Nonrecourse Debt Minimum Gain during any Partnership taxable
period, any Partner with a share of Partner Nonrecourse Debt Minimum Gain at the
beginning of such taxable period shall be allocated items of Partnership income,
gain and Simulated Gain for such period (and, if necessary, subsequent periods)
in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4)
and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this
Section 6.1(d), each Partner’s Adjusted Capital Account balance shall be
determined, and the allocation of income, gain or Simulated Gain required
hereunder shall be effected, prior to the application of any other allocations
pursuant to this Section 6.1(d), other than Section 6.1(d)(i) and other than an
allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii), with respect to such
taxable period. This Section 6.1(d)(ii) is intended to comply with the
chargeback of items of income and gain requirement in Treasury Regulation
Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

 

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(iii) Priority Allocations.

(A) If the amount of cash or the Net Agreed Value of any property distributed
(except cash or property distributed pursuant to Section 12.4) to any Unitholder
with respect to its Units or Class A Units, as the case may be for a taxable
year is greater (on a per Unit basis or per Class A Unit basis, as the case may
be) than the amount of cash or the Net Agreed Value of property distributed to
the other Unitholders with respect to their Units or Class A Units, as the case
may be (on a per Unit basis or a per Class A Unit basis, as the case may be),
then each Unitholder receiving such greater cash or property distribution shall
be allocated gross income in an amount equal to the product of (1) the amount by
which the distribution (on a per Unit basis or per Class A Unit basis, as the
case may be) to such Unitholder exceeds the distribution (on a per Unit basis or
per Class A Unit basis, as the case may be) to the Unitholders receiving the
smallest distribution and (2) the number of Units or Class A Units, as the case
may be, owned by the Unitholder receiving the greater distribution.

(B) After the application of Section 6.1(d)(iii)(A), all or any portion of the
remaining items of Partnership gross income or gain for the taxable period, if
any, shall be allocated 100% to the holders of Incentive Distribution Rights,
Pro Rata, until the aggregate amount of such items allocated to the holders of
Incentive Distribution Rights pursuant to this Section 6.1(d)(iii)(B) for the
current taxable year and all previous taxable years is equal to the cumulative
amount of all Incentive Distributions made to the holders of Incentive
Distribution Rights from the Closing Date to a date 45 days after the end of the
current taxable year.

(iv) Qualified Income Offset. In the event any Partner unexpectedly receives any
adjustments, allocations or distributions described in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or
1.704-1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specially
allocated to such Partner in an amount and manner sufficient to eliminate, to
the extent required by the Treasury Regulations promulgated under Section 704(b)
of the Code, the deficit balance, if any, in its Adjusted Capital Account
created by such adjustments, allocations or distributions as quickly as possible
unless such deficit balance is otherwise eliminated pursuant to
Section 6.1(d)(i) or (ii).

(v) Gross Income Allocations. In the event any Partner has a deficit balance in
its Capital Account at the end of any Partnership taxable period in excess of
the sum of (A) the amount such Partner is obligated to restore pursuant to the
provisions of this Agreement and (B) the amount such Partner is deemed obligated
to restore pursuant to Treasury Regulation Sections 1.704-2(g) and
1.704-2(i)(5), such Partner shall be specially allocated items of Partnership
gross income, gain and Simulated Gain in the amount of such excess as quickly as
possible; provided that an allocation pursuant to this Section 6.1(d)(v) shall
be made only if and to the extent that such Partner would have a deficit balance
in its Capital Account as adjusted after all other allocations provided for in
this Section 6.1 have been tentatively made as if this Section 6.1(d)(v) were
not in this Agreement.

 

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(vi) Nonrecourse Deductions. Nonrecourse Deductions for any taxable period shall
be allocated to the Partners in accordance with their respective Percentage
Interests. If the General Partner determines that the Partnership’s Nonrecourse
Deductions should be allocated in a different ratio to satisfy the safe harbor
requirements of the Treasury Regulations promulgated under Section 704(b) of the
Code, the General Partner is authorized, upon notice to the other Partners, to
revise the prescribed ratio to the numerically closest ratio that does satisfy
such requirements.

(vii) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any
taxable period shall be allocated 100% to the Partner that bears the Economic
Risk of Loss with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable in accordance with Treasury Regulation
Section 1.704-2(i)(1). If more than one Partner bears the Economic Risk of Loss
with respect to a Partner Nonrecourse Debt, such Partner Nonrecourse Deductions
attributable thereto shall be allocated between or among such Partners in
accordance with the ratios in which they share such Economic Risk of Loss.

(viii) Nonrecourse Liabilities. For purposes of Treasury Regulation
Section 1.752-3(a)(3), the Partners agree that Nonrecourse Liabilities of the
Partnership in excess of the sum of (A) the amount of Partnership Minimum Gain
and (B) the total amount of Nonrecourse Built-in Gain shall be allocated among
the Partners in accordance with their respective Percentage Interests.

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

(x) Economic Uniformity.

(A) With respect to an event triggering an adjustment to the Carrying Value of
Partnership property pursuant to Section 5.4(d) during any taxable period of the
Partnership ending upon, or after, the issuance of IDR Reset Common Units
pursuant to Section 5.9, any Unrealized Gains and Unrealized Losses shall be
allocated among the Partners in a manner that to the nearest extent possible
results in the Capital Accounts maintained with respect to such IDR Reset Common
Units issued pursuant to Section 5.9 equaling the product of (x) the Aggregate
Quantity of IDR Reset Common Units and (y) the Per Unit Capital Amount for an
Initial Common Unit.

 

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(B) With respect to any taxable period during which an IDR Reset Common Unit is
transferred to any Person who is not an Affiliate of the transferor, all or a
portion of the remaining items of Partnership gross income or gain for such
taxable period shall be allocated 100% to the transferor Partner of such
transferred IDR Reset Common Unit until such transferor Partner has been
allocated an amount of gross income or gain that increases the Capital Account
maintained with respect to such transferred IDR Reset Common Unit to an amount
equal to the Per Unit Capital Amount for an Initial Common Unit.

(xi) Curative Allocation.

(A) Notwithstanding any other provision of this Section 6.1, other than the
Required Allocations, the Required Allocations shall be taken into account in
making the Agreed Allocations so that, to the extent possible, the net amount of
items of income, gain, loss, deduction, Simulated Depletion, Simulated Gain and
Simulated Loss allocated to each Partner pursuant to the Required Allocations
and the Agreed Allocations, together, shall be equal to the net amount of such
items that would have been allocated to each such Partner under the Agreed
Allocations had the Required Allocations and the related Curative Allocation not
otherwise been provided in this Section 6.1. Notwithstanding the preceding
sentence, Required Allocations relating to (1) Nonrecourse Deductions shall not
be taken into account except to the extent that there has been a decrease in
Partnership Minimum Gain and (2) Partner Nonrecourse Deductions shall not be
taken into account except to the extent that there has been a decrease in
Partner Nonrecourse Debt Minimum Gain. Allocations pursuant to this
Section 6.1(d)(xi)(A) shall only be made with respect to Required Allocations to
the extent the General Partner determines that such allocations will otherwise
be inconsistent with the economic agreement among the Partners. Further,
allocations pursuant to this Section 6.1(d)(xi)(A) shall be deferred with
respect to allocations pursuant to clauses (1) and (2) hereof to the extent the
General Partner determines that such allocations are likely to be offset by
subsequent Required Allocations.

(B) The General Partner shall, with respect to each taxable period, (1) apply
the provisions of Section 6.1(d)(xi)(A) in whatever order is most likely to
minimize the economic distortions that might otherwise result from the Required
Allocations, and (2) divide all allocations pursuant to Section 6.1(d)(xi)(A)
among the Partners in a manner that is likely to minimize such economic
distortions.

 

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

(A) In the case of any allocation of Additional Book Basis Derivative Items
(other than an allocation of Unrealized Gain or Unrealized Loss under
Section 5.4(d) hereof), the General Partner shall allocate additional items of
gross income and gain away from the holders of Incentive Distribution Rights to
the Unitholders, or additional items of deduction and loss away from the
Unitholders to the holders of Incentive Distribution Rights, to the extent that
the Additional Book Basis Derivative Items allocated to the Unitholders exceed
their Share of Additional Book Basis Derivative Items. For this purpose, the
Unitholders shall be treated as being allocated Additional Book Basis Derivative
Items to the extent that such Additional Book Basis Derivative Items have
reduced the amount of income that would otherwise have been allocated to the
Unitholders under this Agreement (e.g., Additional Book Basis Derivative Items
taken into account in computing cost of goods sold would reduce the amount of
book income otherwise available for allocation among the Partners). Any
allocation made pursuant to this Section 6.1(d)(xii)(A) shall be made after all
of the other Agreed Allocations have been made as if this Section 6.1(d)(xii)
were not in this Agreement and, to the extent necessary, shall require the
reallocation of items that have been allocated pursuant to such other Agreed
Allocations.

(B) In the case of any negative adjustments to the Capital Accounts of the
Partners resulting from a Book-Down Event or from the recognition of a Net
Termination Loss, such negative adjustment (1) shall first be allocated, to the
extent of the Aggregate Remaining Net Positive Adjustments, in such a manner, as
determined by the General Partner, that to the extent possible the aggregate
Capital Accounts of the Partners will equal the amount that would have been the
Capital Account balance of the Partners if no prior Book-Up Events had occurred,
and (2) any negative adjustment in excess of the Aggregate Remaining Net
Positive Adjustments shall be allocated pursuant to Section 6.1(c) hereof.

(C) In making the allocations required under this Section 6.1(d)(xii), the
General Partner may apply whatever conventions or other methodology it
determines will satisfy the purpose of this Section 6.1(d)(xii).

(e) Simulated Depletion and Simulated Loss.

(i) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(k),
Simulated Depletion with respect to each oil and gas property shall be allocated
among the General Partner and the Unitholders Pro Rata.

(ii) Simulated Loss with respect to the disposition of an oil and gas property
shall be allocated among the Partners in proportion to their allocable share of
total amount realized from such disposition under Section 6.2(c)(i).

 

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SECTION 6.2. Allocations for Tax Purposes.

(a) Except as otherwise provided herein, for U.S. federal income tax purposes,
each item of income, gain, loss and deduction shall be allocated among the
Partners in the same manner as its correlative item of “book” income, gain, loss
or deduction is allocated pursuant to Section 6.1.

(b) The deduction for depletion with respect to each separate oil and gas
property (as defined in Section 614 of the Code) shall be computed for U.S.
federal income tax purposes separately by the Partners rather than by the
Partnership in accordance with Section 613A(c)(7)(D) of the Code. Except as
provided in Section 6.2(c)(iii), for purposes of such computation (before taking
into account any adjustments resulting from an election made by the Partnership
under Section 754 of the Code), the adjusted tax basis of each oil and gas
property (as defined in Section 614 of the Code) shall be allocated among the
Partners Pro Rata. Each Partner shall separately keep records of his share of
the adjusted tax basis in each oil and gas property, allocated as provided
above, adjust such share of the adjusted tax basis for any cost or percentage
depletion allowable with respect to such property, and use such adjusted tax
basis in the computation of its cost depletion or in the computation of his gain
or loss on the disposition of such property by the Partnership.

(c) Except as provided in Section 6.2(c)(iii), for the purposes of the separate
computation of gain or loss by each Partner on the sale or disposition of each
separate oil and gas property (as defined in Section 614 of the Code), the
Partnership’s allocable share of the “amount realized” (as such term is defined
in Section 1001(b) of the Code) from such sale or disposition shall be allocated
for U.S. federal income tax purposes among the Partners as follows:

(i) first, to the extent such amount realized constitutes a recovery of the
Simulated Basis of the property, to the Partners in the same proportion as the
depletable basis of such property was allocated to the Partners pursuant to
Section 6.2(b) (without regard to any special allocation of basis under
Section 6.2(c)(iii)).

(ii) second, the remainder of such amount realized, if any, to the Partners so
that, to the maximum extent possible, the amount realized allocated to each
Partner under this Section 6.2(c)(ii) will equal such Partner’s share of the
Simulated Gain recognized by the Partnership from such sale or disposition.

(iii) The Partners recognize that with respect to Contributed Property and
Adjusted Property there will be a difference between the Carrying Value of such
property at the time of contribution or revaluation, as the case may be, and the
adjusted tax basis of such property at that time. All items of tax depreciation,
cost recovery, amortization, adjusted tax basis of depletable properties, amount
realized and gain or loss with respect to such Contributed Property and Adjusted
Property shall be allocated among the Partners to take into account the
disparities between the Carrying Values and the adjusted tax basis with respect
to such properties in accordance with the principles of Treasury Regulation
Section 1.704-3(d).

 

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(d) In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property other than an oil and gas property
pursuant to Section 6.2(c), items of income, gain, loss, depreciation,
amortization and cost recovery deductions shall be allocated for U.S. federal
income tax purposes among the Partners as follows:

(i) (A) In the case of a Contributed Property, such items attributable thereto
shall be allocated among the Partners in the manner provided under
Section 704(c) of the Code that takes into account the variation between the
Agreed Value of such property and its adjusted basis at the time of
contribution; and (B) any item of Residual Gain or Residual Loss attributable to
a Contributed Property shall be allocated among the Partners in the same manner
as its correlative item of “book” gain or loss is allocated pursuant to
Section 6.1.

(ii) (A) In the case of an Adjusted Property, such items shall (1) first, be
allocated among the Partners in a manner consistent with the principles of
Section 704(c) of the Code to take into account the Unrealized Gain or
Unrealized Loss attributable to such property and the allocations thereof
pursuant to Section 5.4(d)(i) or 5.4(d)(ii), and (2) second, in the event such
property was originally a Contributed Property, be allocated among the Partners
in a manner consistent with Section 6.2(d)(i)(A); and (B) any item of Residual
Gain or Residual Loss attributable to an Adjusted Property shall be allocated
among the Partners in the same manner as its correlative item of “book” gain or
loss is allocated pursuant to Section 6.1.

(iii) The General Partner shall apply the principles of Treasury Regulation
Section 1.704-3(d) to eliminate Book-Tax Disparities.

(e) For the proper administration of the Partnership and for the preservation of
uniformity of the Limited Partner Interests (or any class or classes thereof),
the General Partner shall (i) adopt such conventions as it deems appropriate in
determining the amount of depreciation, amortization and cost recovery
deductions; (ii) make special allocations for U.S. federal income tax purposes
of income (including gross income) or deductions; and (iii) amend the provisions
of this Agreement as appropriate (A) to reflect the proposal or promulgation of
Treasury Regulations under Section 704(b) or Section 704(c) of the Code or
(B) otherwise to preserve or achieve uniformity of the Limited Partner Interests
(or any class or classes thereof). The General Partner may adopt such
conventions, make such allocations and make such amendments to this Agreement as
provided in this Section 6.2(e) only if such conventions, allocations or
amendments would not have a material adverse effect on the Partners, the holders
of any class or classes of Limited Partner Interests issued and Outstanding or
the Partnership, and if such allocations are consistent with the principles of
Section 704 of the Code.

(f) The General Partner may determine to depreciate or amortize the portion of
an adjustment under Section 743(b) of the Code attributable to unrealized
appreciation in any Adjusted Property (to the extent of the unamortized Book-Tax
Disparity) using a predetermined rate derived from the depreciation or
amortization method and useful life applied to the Partnership’s common basis of
such property, despite any inconsistency of such approach with Treasury
Regulation Section 1.167(c)-1(a)(6), Treasury Regulation Section 1.197-2(g)(3),
or any

 

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successor regulations thereto. If the General Partner determines that such
reporting position cannot reasonably be taken, the General Partner may adopt
depreciation and amortization conventions under which all purchasers acquiring
Limited Partner Interests in the same month would receive depreciation and
amortization deductions, based upon the same applicable rate as if they had
purchased a direct interest in the Partnership’s property. If the General
Partner chooses not to utilize such aggregate method, the General Partner may
use any other depreciation and amortization conventions to preserve the
uniformity of the intrinsic tax characteristics of any Limited Partner
Interests, so long as such conventions would not have a material adverse effect
on the Limited Partners or the Record Holders of any class or classes of Limited
Partner Interests.

(g) In accordance with Treasury Regulation Sections 1.1245-1(e) and 1.1250-1(f),
any gain allocated to the Partners upon the sale or other taxable disposition of
any Partnership asset shall, to the extent possible, after taking into account
other required allocations of gain pursuant to this Section 6.2, be
characterized as Recapture Income in the same proportions and to the same extent
as such Partners (or their predecessors in interest) have been allocated any
deductions directly or indirectly giving rise to the treatment of such gains as
Recapture Income.

(h) All items of income, gain, loss, deduction and credit recognized by the
Partnership for U.S. federal income tax purposes and allocated to the Partners
in accordance with the provisions hereof shall be determined without regard to
any election under Section 754 of the Code which may be made by the Partnership;
provided, however, that such allocations, once made, shall be adjusted (in the
manner determined by the General Partner) to take into account those adjustments
permitted or required by Sections 734 and 743 of the Code.

(i) Each item of Partnership income, gain, loss and deduction shall, for U.S.
federal income tax purposes, be determined on an annual basis and prorated on a
monthly basis and shall be allocated to the Partners as of the opening of the
National Securities Exchange on which the Partnership Interests are listed or
admitted for trading on the first Business Day of each month; provided, however,
that gain or loss on a sale or other disposition of any assets of the
Partnership or any other extraordinary item of income or loss realized and
recognized other than in the ordinary course of business, as determined by the
General Partner in its sole discretion, shall be allocated to the Partners as of
the opening of the National Securities Exchange on which the Partnership
Interests are listed or admitted for trading on the first Business Day of the
month in which such gain or loss is recognized for U.S. federal income tax
purposes. The General Partner may revise, alter or otherwise modify such methods
of allocation to the extent permitted or required by Section 706 of the Code and
the regulations or rulings promulgated thereunder.

(j) Allocations that would otherwise be made to a Limited Partner under the
provisions of this Article VI shall instead be made to the beneficial owner of
Limited Partner Interests held by a nominee in any case in which the nominee has
furnished the identity of such owner to the Partnership in accordance with
Section 6031(c) of the Code or any other method determined by the General
Partner.

 

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SECTION 6.3. Requirement and Characterization of Distributions; Distributions to
Record Holders.

(a) Except as described in Section 6.3(b), within 45 days following the end of
each Quarter (or if such 45th day is not a Business Day, then the Business Day
immediately following such 45th day) commencing with the Quarter ending on
March 31, 2012, an amount equal to 100% of Available Cash with respect to such
Quarter shall, subject to Section 17-607 of the Delaware Act, be distributed in
accordance with this Article VI by the Partnership to the Partners as of the
Record Date selected by the General Partner. All amounts of Available Cash
distributed by the Partnership on any date from any source shall be deemed to be
Operating Surplus until the sum of all amounts of Available Cash theretofore
distributed by the Partnership to the Partners pursuant to Section 6.4 equals
the Operating Surplus from the Closing Date through the close of the immediately
preceding Quarter. Any remaining amounts of Available Cash distributed by the
Partnership on such date shall, except as otherwise provided in Section 6.5, be
deemed to be “Capital Surplus.” All distributions required to be made under this
Agreement shall be made subject to Section 17-607 of the Delaware Act.

(b) Notwithstanding Section 6.3(a), in the event of the dissolution and
liquidation of the Partnership, all cash received during or after the Quarter in
which the Liquidation Date occurs, other than from borrowings described in
(a)(ii) of the definition of Available Cash, shall be applied and distributed
solely in accordance with, and subject to the terms and conditions of,
Section 12.4.

(c) The General Partner may treat taxes paid by the Partnership on behalf of, or
amounts withheld with respect to, all or less than all of the Partners, as a
distribution of Available Cash to such Partners, as determined by the General
Partner.

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

SECTION 6.4. Distributions of Available Cash from Operating Surplus.

(a) Available Cash with respect to any Quarter that is deemed to be Operating
Surplus pursuant to the provisions of Section 6.3 or 6.5 shall, subject to
Section 17-607 of the Delaware Act, be distributed as follows, except as
otherwise required by Section 5.5(b) in respect of additional Partnership
Interests issued pursuant thereto:

(i) First, (A) 2% to the holders of Class A Units, Pro Rata, and (B) 98% to the
holders of Common Units, Pro Rata, until there has been distributed in respect
of each Class A Unit then Outstanding and each Common Unit then Outstanding an
amount equal to the Minimum Quarterly Distribution for such Quarter;

(ii) Second, (A) 2% to the holders of Class A Units, Pro Rata, and (B) 98% to
the holders of Common Units, Pro Rata, until there has been distributed in
respect of each Class A Unit then Outstanding and each Common Unit then
Outstanding an amount equal to the First Target Distribution for such Quarter;

 

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(iii) Third, (A) 2% to the holders of Class A Units, Pro Rata, (B) 85% to the
holders of Common Units, Pro Rata, and (C) 13% to the holders of the Incentive
Distribution Rights, Pro Rata, until there has been distributed in respect of
each Class A Unit then Outstanding and each Common Unit then Outstanding an
amount equal to the Second Target Distribution for such Quarter; and

(iv) Fourth, (A) 2% to the holders of Class A Units, Pro Rata, (B) 75% to the
holders of Common Units, Pro Rata, and (C) 23% to the holders of the Incentive
Distribution Rights, Pro Rata, until there has been distributed in respect of
each Class A Unit then Outstanding and each Common Unit then Outstanding an
amount equal to the Third Target Distribution for such Quarter; and

(v) Thereafter, (A) 2% to the holders of Class A Units, Pro Rata, (B) 50% to the
holders of Common Units, Pro Rata, and 48% to the holders of the Incentive
Distribution Rights, Pro Rata.

provided, however, if the Minimum Quarterly Distribution, First Target
Distribution, Second Target Distribution and Third Target Distribution have been
reduced to zero pursuant to the second sentence of Section 6.6(a), the
distribution of Available Cash that is deemed to be Operating Surplus with
respect to any Quarter will be made solely in accordance with Section 6.4(a)(v).

SECTION 6.5. Distributions of Available Cash from Capital Surplus.

Available Cash that is deemed to be Capital Surplus pursuant to the provisions
of Section 6.3(a) shall, subject to Section 17-607 of the Delaware Act, be
distributed, unless the provisions of Section 6.3 require otherwise, as follows:

(a) First, 2% to the holders of Class A Units, Pro Rata, and 98% to the holders
of Common Units, Pro Rata, 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; and

(b) Second, any remaining Available Cash shall be distributed as if it were
Operating Surplus and shall be distributed in accordance with Section 6.4.

SECTION 6.6. Adjustment of Minimum Quarterly Distribution and Target
Distribution Levels.

(a) The Minimum Quarterly Distribution, First Target Distribution, Second Target
Distribution and Third Target Distribution shall be proportionately adjusted in
the event of any distribution, combination or subdivision (whether effected by a
distribution payable in Partnership Interests or otherwise) of Units or other
Partnership Interests in accordance with Section 5.7. 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

 

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Target Distribution and Third Target Distribution shall be adjusted
proportionately downward to equal the product obtained by multiplying the
otherwise applicable Minimum Quarterly Distribution, First Target Distribution,
Second Target Distribution or Third Target Distribution, as the case may be, by
a fraction, the numerator of which is the Unrecovered Capital of the Common
Units immediately after giving effect to such distribution and the denominator
of which is the Unrecovered Capital of the Common Units immediately prior to
giving effect to such distribution.

(b) The Minimum Quarterly Distribution, First Target Distribution, Second Target
Distribution and Third Target Distribution shall also be subject to adjustment
pursuant to Section 5.9 and Section 6.8.

SECTION 6.7. Special Provisions Relating to the Holders of Incentive
Distribution Rights.

Notwithstanding anything to the contrary set forth in this Agreement, the
holders of the Incentive Distribution Rights (a) shall (i) possess the rights
and obligations provided in this Agreement with respect to a Limited Partner
pursuant to Articles III and VII and (ii) have a Capital Account as a Partner
pursuant to Section 5.4 and all other provisions related thereto and (b) shall
not (i) be entitled to vote on any matters requiring the approval or vote of the
holders of Outstanding Units, except as required by law, (ii) be entitled to any
distributions from the Partnership other than as provided in Section 6.4(a) and
Section 12.4 or (iii) be allocated items of income, gain, loss or deduction
other than as specified in this Article VI.

SECTION 6.8. Entity-Level Taxation.

If legislation is enacted or the interpretation of existing legislation is
modified by a governmental authority, which, after giving effect to such
enactment or modification, results in any Group Member becoming subject to
federal, state, or local or non-U.S. income or withholding taxes in excess of
the amount of such taxes due from any Group Member prior to such enactment or
modification (including any increase in the rate of such taxation applicable to
such Group Member), then the General Partner may, at its option, reduce the
Minimum Quarterly Distribution, First Target Distribution, Second Target
Distribution and Third Target Distribution by the amount of income or
withholding taxes that are payable by reason of any such new legislation or
interpretation (the “Incremental Income Taxes”), or any portion thereof selected
by the General Partner, in the manner provided in this Section 6.8. If the
General Partner elects to reduce the Minimum Quarterly Distribution, First
Target Distribution, Second Target Distribution or Third Target Distribution for
any Quarter with respect to all or a portion of any Incremental Income Taxes,
the General Partner shall estimate for such Quarter the Partnership Group’s
aggregate liability (the “Estimated Incremental Quarterly Tax Amount”) for all
(or the relevant portion of) such Incremental Income Taxes; provided that any
difference between such estimate and the actual liability for Incremental Income
Taxes (or the relevant portion thereof) for such Quarter may, to the extent
determined by the General Partner, 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 adjusted to equal the product obtained
by multiplying (a) the amounts therefor that are set out herein prior to the
application of this Section 6.8 times (b) the

 

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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 General
Partner. 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.

ARTICLE VII

MANAGEMENT AND OPERATION OF BUSINESS

SECTION 7.1. Management.

(a) The General Partner shall conduct, direct and manage all activities of the
Partnership. Except as otherwise expressly provided in this Agreement, but
without limitation on the ability of the General Partner to delegate its rights
and powers to other Persons, all management powers over the business and affairs
of the Partnership shall be exclusively vested in the General Partner, and no
Limited Partner shall have any management power over the business and affairs of
the Partnership. In addition to the powers now or hereafter granted to a general
partner of a limited partnership under applicable law or that are granted to the
General Partner under any other provision of this Agreement, the General Partner
shall, subject to Section 7.4 and the other terms set forth in this Agreement,
have full power and authority to do all things and on such terms as it
determines to be necessary or appropriate to conduct the business of the
Partnership, to exercise all powers set forth in Section 2.5 and to effectuate
the purposes set forth in Section 2.4, including the following:

(i) the making of any expenditures, the lending or borrowing of money, the
assumption or guarantee of, or other contracting for, indebtedness and other
liabilities, the issuance of evidences of indebtedness, including indebtedness
that is convertible or exchangeable into Partnership Interests, and the
incurring of any other obligations;

(ii) the making of tax, regulatory and other filings, or rendering of periodic
or other reports to governmental or other agencies having jurisdiction over the
business or assets of the Partnership;

(iii) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation
or exchange of any or all of the assets of the Partnership or the merger or
other combination of the Partnership with or into another Person;

(iv) the use of the assets of the Partnership (including cash on hand) for any
purpose consistent with the terms of this Agreement, including the financing of
the conduct of operations, including operations of any Group Member; subject to
Section 7.7(a), the lending of funds to other Persons (including other Group
Members); the repayment or guarantee of obligations and the making of capital
contributions;

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

 

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with the other party to the contract to have no recourse against the General
Partner or its assets other than its interest in the Partnership, even if the
same results in the terms of the transaction being less favorable to the
Partnership than would otherwise be the case);

(vi) the distribution of Partnership cash;

(vii) the selection, employment, retention and dismissal of employees (including
employees having titles such as “president,” “vice president,” “secretary” and
“treasurer”) and agents, internal and outside attorneys, accountants,
consultants and contractors of the General Partner or any Group Member and the
determination of their compensation and other terms of employment or hiring;

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

(ix) the formation of, or acquisition of an interest in, and the contribution of
property and the making of loans to, any further limited or general
partnerships, joint ventures, corporations, limited liability companies or other
Persons (including the acquisition of interests in, and the contributions of
property to, any Group Member from time to time);

(x) the control of any matters affecting the rights and obligations of the
Partnership, including the bringing and defending of actions at law or in equity
and otherwise engaging in the conduct of litigation, arbitration or mediation
and the incurring of legal expenses and the settlement of claims and litigation;

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

(xii) the entering into of listing agreements with any National Securities
Exchange and the delisting of some or all of the Limited Partner Interests from,
or requesting that trading be suspended on, any such National Securities
Exchange;

(xiii) the purchase, sale or other acquisition or disposition of Partnership
Interests, or the issuance of options, rights, warrants, appreciation rights and
tracking and phantom interests relating to Partnership Interests;

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

(xv) the entering into of agreements with any of its Affiliates to render
services to a Group Member or to itself in the discharge of its duties as
General Partner of the Partnership; and

(xvi) the registering for resale under the Securities Act and applicable state
securities laws of any Partnership Interests held or hereafter acquired by the
General Partner or any Affiliate of the General Partner.

 

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(b) Notwithstanding any other provision of this Agreement, the Delaware Act or
any applicable law, rule or regulation, each of the Partners and each other
Person who may acquire an interest in Partnership Interests or is otherwise
bound by this Agreement hereby (i) approves, ratifies and confirms the
execution, delivery and performance by the parties thereto of this Agreement and
the Separation Agreement and the other agreements described in or filed as
exhibits to the Registration Statement that are related to the transactions
contemplated by the Registration Statement; (ii) agrees that the General Partner
(on its own or 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 Interests or is otherwise bound by this Agreement; and
(iii) agrees that the execution, delivery or performance by the General Partner,
any Group Member or any Affiliate of any of them, of this Agreement or any
agreement authorized or permitted under this Agreement (including the exercise
by the General Partner or any Affiliate of the General Partner of the rights
accorded pursuant to Article XV), shall not constitute a breach by the General
Partner of any duty that the General Partner may owe the Partnership or the
Limited Partners or any other Persons under this Agreement (or any other
agreements) or of any duty existing at law, in equity or otherwise.

SECTION 7.2. Duties.

Except as expressly set forth in this Agreement or the Delaware Act, neither the
General Partner nor any other Indemnitee shall have any duties or liabilities,
including fiduciary duties, to the Partnership, any Group Member or any Limited
Partner, and the Partners agree that the provisions of this Agreement, to the
extent that they restrict, eliminate or otherwise modify the duties and
liabilities, including fiduciary duties, of the General Partner or any other
Indemnitee otherwise existing at law or in equity, replace such other duties and
liabilities of the General Partner or such other Indemnitee. The Limited
Partners and any other Person who acquires an interest in a Partnership Interest
or any other Person who is bound by this Agreement shall be deemed to have
expressly approved this Section 7.2.

SECTION 7.3. Certificate of Limited Partnership.

The General Partner has caused the Certificate of Limited Partnership to be
filed with the Secretary of State of the State of Delaware as required by the
Delaware Act. The General Partner shall use all reasonable efforts to cause to
be filed such other certificates or documents that the General Partner
determines to be necessary or appropriate for the formation, continuation,
qualification and operation of a limited partnership (or a partnership in which
the limited partners have limited liability) in the State of Delaware or any
other state in which the Partnership may elect to do business or own property.
To the extent the General Partner determines such action to be necessary or
appropriate, the General Partner shall file amendments to and restatements of
the Certificate of Limited Partnership and do all things to maintain the
Partnership as a limited partnership (or a partnership or other entity in which
the limited partners have limited liability) under the laws of the State of
Delaware or of any other state in which the Partnership may elect to do business
or own property. Subject to the terms of Section 3.4(a), the General Partner
shall not be required, before or after filing, to deliver or mail a copy of the
Certificate of Limited Partnership, any qualification document or any amendment
thereto to any Limited Partner.

 

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SECTION 7.4. Restrictions on the General Partner’s Authority.

Except as provided in Articles XII and XIV, the General Partner may not sell,
exchange or otherwise dispose of all or substantially all of the assets of the
Partnership Group, taken as a whole, in a single transaction or a series of
related transactions, to a Person who is not a member of the Partnership Group,
without the approval of the holders of a Unit Majority; provided, however, that
this provision shall not preclude or limit the General Partner’s ability to
mortgage, pledge, hypothecate or grant a security interest in all or
substantially all of the assets of the Partnership Group and shall not apply to
any forced sale of any or all of the assets of the Partnership Group pursuant to
the foreclosure of, or other realization upon, any such encumbrance.

SECTION 7.5. Reimbursement of the General Partner.

(a) Except as provided in this Section 7.5 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 from the Partnership or the
Partnership Group on a monthly basis, or such other basis as the General Partner
may determine, for (i) all direct and indirect expenses it incurs or payments it
makes on behalf of the Partnership Group (including salary, bonus, incentive
compensation, employee benefits and other amounts paid to any Person, including
Affiliates of the General Partner, to perform services for the Partnership Group
or for the General Partner in the discharge of its duties to the Partnership
Group) and (ii) all other expenses allocable to the Partnership Group or
otherwise incurred by the General Partner in connection with managing and
operating the Partnership Group’s business and affairs (including expenses
allocated to the General Partner by its Affiliates). The General Partner shall
determine the expenses that are allocable to the Partnership Group.
Reimbursements pursuant to this Section 7.5 shall be in addition to any
reimbursement to the General Partner as a result of indemnification pursuant to
Section 7.8.

(c) The General Partner, without the approval of the Limited Partners (who shall
have no right to vote in respect thereof), may propose and adopt on behalf of
the Partnership benefit plans, programs and practices (including plans, programs
and practices involving the issuance of Partnership Interests or options to
purchase or rights, warrants or appreciation rights or phantom or tracking
interests relating to Partnership Interests), or cause the Partnership to issue
Partnership Interests in connection with, or pursuant to, any benefit plan,
program or practice maintained or sponsored by the General Partner or any of its
Affiliates, in each case for the benefit of employees and directors of the
General Partner or any of its Affiliates, 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 Interests that the General Partner or such Affiliate
is obligated to provide to any employees and directors pursuant to any such
benefit plans, programs or practices. Expenses incurred by the General Partner
in connection with any such plans,

 

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programs and practices (including the net cost to the General Partner or such
Affiliate of Partnership Interests purchased by the General Partner or such
Affiliate from the Partnership or otherwise, to fulfill options or awards under
such plans, programs and practices) shall be reimbursed in accordance with
Section 7.5(b). Any and all obligations of the General Partner under any benefit
plans, programs or practices adopted by the General Partner as permitted by this
Section 7.5(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 Section 11.2 or the transferee of or successor to all of the
General Partner’s General Partner Interest (represented by Class A Units).

(d) The General Partner and its Affiliates may charge any member of the
Partnership Group a management fee to the extent necessary to allow the
Partnership Group to reduce the amount of any state franchise or income tax or
any tax based upon the revenues or gross margin of any member of the Partnership
Group if the tax benefit produced by the payment of such management fee or fees
exceeds the amount of such fee or fees.

SECTION 7.6. Outside Activities.

(a) The General Partner, for so long as it is the General Partner of the
Partnership, (i) agrees that its sole business will be to act as a general
partner 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) and (ii) shall not engage in any business or activity or incur any
debts or liabilities except in connection with or incidental to (A) its
performance as general partner or managing member, if any, of one or more Group
Members or as described in or contemplated by the Registration Statement,
(B) the acquiring, owning or disposing of debt securities or equity interests in
any Group Member or (C) the guarantee of, and mortgage, pledge, or encumbrance
of any or all of its assets in connection with, any indebtedness of any
Affiliate of the General Partner. It is expressly understood that the
restrictions set forth in this Section 7.6(a) shall not apply to any Person
(including any Unrestricted Person) other than the General Partner.

(b) Each Unrestricted Person (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. No such business interest or
activity shall constitute a breach of this Agreement or any duty otherwise
existing at law, in equity or otherwise or obligation of any type whatsoever, to
the Partnership, any Group Member, any Partner, any Person who acquires an
interest in a Partnership Interest or other person who is bound by this
Agreement. None of any Group Member, any Limited Partner or any other Person
shall have any rights by virtue of this Agreement or the partnership
relationship established hereby in any business ventures of any Unrestricted
Person.

(c) Notwithstanding anything to the contrary in this Agreement, (i) the engaging
in competitive activities by any Unrestricted Person (other than the General
Partner) in

 

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accordance with the provisions of this Section 7.6 is hereby approved by the
Partnership and all Partners, (ii) it shall be deemed not to be a breach by the
General Partner or any other Unrestricted Persons of this Agreement or any duty
otherwise existing at law, in equity or otherwise or obligation of any type
whatsoever, to the Partnership, any Group Member, any Partner, any Person who
acquires an interest in a Partnership Interest or other person who is bound by
this Agreement for the Unrestricted Persons (other than the General Partner) to
engage in such business interests and activities in preference to or to the
exclusion of the Partnership or any other Group Member and (iii) the
Unrestricted Persons (including the General Partner) shall have no obligation
hereunder or as a result of any duty otherwise existing at law, in equity or
otherwise or obligation of any type whatsoever, to present business
opportunities to the Partnership or any other Group Member. Notwithstanding
anything to the contrary in this Agreement, the doctrine of corporate
opportunity, or any analogous doctrine, shall not apply to any Unrestricted
Person (including the General Partner). No Unrestricted Person (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 such Unrestricted Person (including the General Partner) shall not be liable
to the Partnership, any Group Member, any Partner, any Person who acquires an
interest in a Partnership Interest or other person who is bound by this
Agreement for breach of this Agreement or any duty otherwise existing at law, in
equity or otherwise or obligation of any type whatsoever, by reason of the fact
that such Unrestricted Person (including the General Partner) pursues or
acquires for itself, directs such opportunity to another Person or does not
communicate such opportunity or information to the Partnership.

(d) The General Partner and each of its Affiliates may acquire Units or other
Partnership Interests in addition to those acquired on or prior to 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 and/or other
Partnership Interests acquired by them. The term “Affiliates” when used in this
Section 7.6(d) with respect to the General Partner shall not include any Group
Member.

(e) Notwithstanding anything to the contrary in this Agreement, to the extent
that any provision of this Agreement purports or is interpreted to have the
effect of restricting, modifying or eliminating any duty that might otherwise,
as a result of the law of the State of Delaware or any other applicable law, be
owed by the General Partner to the Partnership, any Group Member, any Partner,
any Person who acquires an interest in a Partnership Interest or other person
who is bound by this Agreement, or to constitute a waiver or consent by the
Partnership, any Group Member, any Partner, any Person who acquires an interest
in a Partnership Interest or other person who is bound by this Agreement, then
in each case such provisions shall be deemed to have been approved by such
Persons.

SECTION 7.7. Loans from the General Partner; Loans or Contributions from the
Partnership or Group Members.

(a) The General Partner or any of its Affiliates may, but shall be under no
obligation to, lend to any Group Member, and any Group Member may borrow from
the General Partner or any of its Affiliates, funds needed or desired by the
Group Member for such periods of time and in such amounts as the General Partner
may determine. The borrowing party shall

 

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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 7.7(a), the term “Group Member” shall
include any Affiliate of a Group Member that is controlled by the Group Member.

(b) The Partnership may lend or contribute to any Group Member, and any Group
Member may borrow from the Partnership, funds on terms and conditions determined
by the General Partner.

(c) No borrowing by any Group Member or the approval thereof by the General
Partner shall be deemed to constitute a breach of any duty hereunder or
otherwise existing at law, in equity or otherwise, of the General Partner or its
Affiliates to the Partnership or the Limited Partners by reason of the fact that
the purpose or effect of such borrowing is directly or indirectly to enable
distributions to the General Partner or its Affiliates (including in their
capacities as Limited Partners), including distributions that exceed the General
Partner’s Percentage Interest of the total amount distributed to all Partners.

SECTION 7.8. 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 threatened, pending or completed claims, demands,
actions, suits or proceedings, whether civil, criminal, administrative or
investigative, and whether formal or informal and including appeals, 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 and acting (or refraining to
act) in such capacity on behalf of or for the benefit of the Partnership;
provided that the Indemnitee shall not be indemnified and held harmless pursuant
to this Agreement 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 Agreement,
the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in
the case of a criminal matter, acted with knowledge that the Indemnitee’s
conduct was unlawful. Any indemnification pursuant to this Section 7.8 shall be
made only out of the assets of the Partnership, it being agreed that the General
Partner shall not be personally liable for such indemnification and shall have
no obligation to contribute or loan any monies or property to the Partnership to
enable it to effectuate such indemnification.

(b) To the fullest extent permitted by law, expenses (including legal fees and
expenses) incurred by an Indemnitee who is indemnified pursuant to
Section 7.8(a) in appearing at, participating in or defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Partnership prior to 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 7.8, 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 ultimately determined that the Indemnitee is not entitled to be
indemnified as authorized by this Section 7.8.

 

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(c) The indemnification provided by this Section 7.8 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, in equity 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 General Partner
or its Affiliates for the cost of) insurance, on behalf of the General Partner,
its Affiliates, the Indemnitees and such other Persons as the General Partner
shall determine, against any liability that may be asserted against, or expense
that may be incurred by, such Person in connection with the Partnership’s
activities or such Person’s activities on behalf of the Partnership, regardless
of whether the Partnership would have the power to indemnify such Person against
such liability under the provisions of this Agreement.

(e) For purposes of this Section 7.8, the Partnership shall be deemed to have
requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Partnership also imposes
duties on, or otherwise involves services by, it to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute “fines”
within the meaning of Section 7.8(a); and action taken or omitted by it with
respect to any employee benefit plan in the performance of its duties for a
purpose reasonably believed by it to be in the best interest of the participants
and beneficiaries of the plan shall be deemed to be for a purpose that is in the
best interests of the Partnership.

(f) In no event may an Indemnitee subject the Limited Partners to personal
liability by reason of the indemnification provisions set forth in this
Agreement.

(g) An Indemnitee shall not be denied indemnification in whole or in part under
this Section 7.8 because the Indemnitee had an interest in the transaction with
respect to which the indemnification applies.

(h) The provisions of this Section 7.8 are for the benefit of the Indemnitees
and their heirs, successors, assigns, executors 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 7.8 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 7.8 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.

 

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SECTION 7.9. 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, any other Persons who acquire an interest in a Partnership Interest or
any other Person who is bound by this Agreement, for losses sustained or
liabilities incurred as a result of any act or omission of an Indemnitee unless
there has been a final and non-appealable judgment entered by a court of
competent jurisdiction determining that, in respect of the matter in question,
the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in
the case of a criminal matter, acted with knowledge that the Indemnitee’s
conduct was criminal. The Limited Partners, any other Person who acquires an
interest in a Partnership Interest and any other Person who is bound by this
Agreement, each on their own behalf and on behalf of the Partnership, waives any
and all rights to claim punitive damages or damages based upon the Federal or
State income taxes paid or payable by any such Limited Partner or other Person.

(b) Subject to its obligations and duties as General Partner set forth in
Section 7.1(a), the General Partner may exercise any of the powers granted to it
by this Agreement and perform any of the duties imposed upon it hereunder either
directly or by or through its agents, and the General Partner shall not be
responsible for any misconduct or negligence on the part of any such agent
appointed by the General Partner in good faith.

(c) To the extent that, at law or in equity, an Indemnitee has duties and
liabilities relating thereto to the Partnership, the Partners, any Person who
acquires an interest in a Partnership Interest or any other Person who is bound
by this Agreement, any Indemnitee acting in connection with the Partnership’s
business or affairs shall not be liable, to the fullest extent permitted by law,
to the Partnership, to any Partner, to any other Person who acquires an interest
in a Partnership Interest or to any other Person who is bound by this Agreement
for its reliance on the provisions of this Agreement.

(d) Any amendment, modification or repeal of this Section 7.9 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 7.9 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 7.10. Resolution of Conflicts of Interest; Standards of Conduct and
Modification of Duties.

(a) Unless otherwise expressly provided in this Agreement, whenever a potential
conflict of interest exists or arises between the General Partner or any of its
Affiliates (other than the Partnership, any Group Member or any Partner), on the
one hand, and the Partnership, any Group Member or any Partner, on the other,
any resolution or course of action by the General Partner or its Affiliates in
respect of such conflict of interest (including any course of action pursuant to
Articles XIII, XIV and XV or other provision of this Agreement) shall
conclusively be permitted and deemed approved by all Partners, and shall not
constitute a breach of this Agreement, or of any agreement contemplated herein,
or of any duty stated

 

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hereunder or implied by law or equity or otherwise, if the resolution or course
of action in respect of such conflict of interest is (i) approved by Special
Approval, (ii) approved by the vote of a majority of the Outstanding Common
Units (excluding Common Units owned by the General Partner and its Affiliates),
(iii) on terms no less favorable to the Partnership than those generally being
provided to or available from unrelated third parties or (iv) fair and
reasonable to the Partnership, taking into account the totality of the
relationships between the parties involved (including other transactions that
may be particularly favorable or advantageous to the Partnership). The General
Partner shall be authorized but not required in connection with its resolution
of such conflict of interest to seek Special Approval or Unitholder approval of
such resolution, and the General Partner may also adopt a resolution or course
of action that has not received Special Approval or Unitholder approval. If
Special Approval is sought, then it shall be presumed that, in making its
decision, the Conflicts Committee acted in good faith, and if neither Special
Approval nor Unitholder approval is 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 either case, 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 or any
duty otherwise existing at law or equity, the existence of the conflicts of
interest described in the Registration Statement and any actions of the General
Partner taken in connection therewith are hereby approved by all Partners and
shall not constitute a breach of this Agreement or of any duty hereunder or
existing at law, in equity or otherwise.

(b) Whenever the General Partner, the Board of Directors or any committee of the
Board of Directors (including the Conflicts Committee), makes a determination or
takes or declines to take any other action, or any Affiliate of the General
Partner causes the General Partner to do so, in its capacity as the general
partner of the Partnership as opposed to in its individual capacity, whether
under this Agreement or any other agreement contemplated hereby or otherwise,
then, unless another express standard is provided for in this Agreement, the
General Partner, the Board of Directors, such committee or such Affiliate
causing the General Partner, in its capacity as the general partner of the
Partnership as opposed to in its individual capacity, 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 other agreement contemplated hereby or under the Delaware Act or
any other law, rule or regulation or at equity (including fiduciary standards).
A determination, other action or failure to act by the General Partner, the
Board of Directors, any committee of the Board of Directors (including the
Conflicts Committee), or such Affiliate causing the General Partner to do so,
will be deemed to be in good faith unless the applicable party believed such
determination, other action or failure to act was adverse to the interests of
the Partnership. In any proceeding brought by the Partnership, any Limited
Partner, any Person who acquires an interest in a Partnership Interest or any
other Person who is bound by this Agreement challenging such action,
determination or failure to act, the Person bringing or prosecuting such
proceeding shall have the burden of proving that such determination, action or
failure to act was not in good faith.

(c) Whenever the General Partner or any of its Affiliates or any other
Indemnitee makes a determination or takes or declines to take any other action,
or any Affiliate

 

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of the General Partner causes the General Partner to do so, in the General
Partner’s individual capacity as opposed to in its capacity as the general
partner of the Partnership, whether under this Agreement or any other agreement
contemplated hereby or otherwise, then the General Partner, such Affiliates and
such Indemnitee are entitled, to the fullest extent permitted by law, to make
such determination or to take or decline to take such other action free of any
duty existing at law, in equity or otherwise or obligation whatsoever to the
Partnership, any Partner, any other Person who acquires an interest in a
Partnership Interest or any other Person bound by this Agreement, and the
General Partner, such Affiliates and such Indemnitee shall not, to the fullest
extent permitted by law, be required to act in good faith or pursuant to any
other standard imposed by this Agreement, any other agreement contemplated
hereby or under the Delaware Act or any other law, rule or regulation or at
equity. By way of illustration and not of limitation, whenever the phrases, “at
the option of the General Partner,” “in its discretion” or some variation of
those phrases, are 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, any of its Affiliates or any Indemnitee votes or transfers its
Partnership Interests or refrains from voting or transferring its Partnership
Interests, 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 partnership.

(d) Notwithstanding anything to the contrary in this Agreement, none of the
General Partner, any Affiliate of the General Partner or any Indemnitee shall
have any duty or obligation, express or implied, to (i) sell or otherwise
dispose of any asset of or equity interest in the Partnership Group or
(ii) permit any Group Member to use any facilities or assets of the General
Partner, its Affiliates or any Indemnitee, except as may be provided in any
definitive agreement entered into from time to time specifically dealing with
such use. Any determination by the General Partner, any of its Affiliates or
Indemnitee to enter into such contracts shall be in its sole discretion.

(e) The Limited Partners, each Person who acquires an interest in a Partnership
Interest and each other Person who is bound by this Agreement hereby authorize
the General Partner, on behalf of the Partnership as a partner or member of a
Group Member, to approve actions by the general partner or managing member of
such Group Member similar to those actions permitted to be taken by the General
Partner pursuant to this Section 7.10.

(f) Nothing in this Section 7.10 shall be deemed to expand any duties or
liabilities of the General Partner, its Affiliates or any other Indemnitee to
the Partnership, any Group Member, any Partner, any Person who acquires an
interest in a Partnership Interest or other person who is bound by this
Agreement for breach of this Agreement, to the extent that those duties or
liabilities shall have been limited pursuant to Section 7.2, 7.6 or 7.10.

SECTION 7.11. Other Matters Concerning the General Partner.

(a) The General Partner may rely upon, 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.

 

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

SECTION 7.12. Purchase or Sale of Partnership Interests.

The General Partner may cause the Partnership to purchase or otherwise acquire
Partnership Interests. As long as Partnership Interests are held by any Group
Member, such Partnership Interests shall not be considered Outstanding for any
purpose, except as otherwise provided herein. The General Partner or any
Affiliate of the General Partner may also purchase or otherwise acquire and sell
or otherwise dispose of Partnership Interests for its own account, subject to
the provisions of Articles IV and X.

SECTION 7.13. Registration Rights of the General Partner and its Affiliates.

(a) If (i) the General Partner or any Affiliate of the General Partner or the
Partnership (including for purposes of this Section 7.13, any Person that is an
Affiliate of the General Partner or Partnership at the date hereof
notwithstanding that it may later cease to be an Affiliate of the General
Partner or Partnership, including, if permitted by the General Partner,
individual Affiliates who are officers, directors or employees of the General
Partner or any of its Affiliates) holds Partnership Interests 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 Interests (the “Holder”) to dispose of the
number of Partnership Interests it desires to sell at the time, in such manner
and in such amounts as it desires without registration under the Securities Act,
then at the option and upon the request of the Holder, the Partnership shall
file with the Commission as promptly as practicable after receiving such
request, and use all commercially reasonable efforts to cause to become
effective and remain effective for a period of not less than six months
following its effective date or such shorter period as shall terminate when all
Partnership Interests 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 Interests specified by the Holder; provided,
however, that if the Conflicts Committee (which may be requested to review the
matter by any member of the Board of Directors) determines in good faith that
the requested registration would be materially detrimental to the Partnership
and its Partners because such registration would (A) materially interfere with a
significant acquisition, reorganization or other similar transaction

 

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involving the Partnership; or (B) require premature disclosure of material
information that the Partnership has a bona fide business purpose for preserving
as confidential, then the Partnership shall have the right to postpone such
requested registration for a period of not more than six months after receipt of
the Holder’s request, such right to postpone not to be used more than once in
any 12-month period. In connection with any registration pursuant to the
immediately preceding sentence, the Partnership shall (i) promptly prepare and
file (A) such documents as may be necessary to register or qualify the
securities subject to such registration under the securities laws of such states
as the Holder shall reasonably request; provided, however, that no such
qualification shall be required in any jurisdiction where, as a result thereof,
the Partnership would become subject to general service of process or to
taxation or qualification to do business as a foreign corporation or partnership
doing business in such jurisdiction solely as a result of such registration, and
(B) such documents as may be necessary to apply for listing or to list the
Partnership Interests 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 Interests in such states. Except as
set forth in Section 7.13(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. It is expressly
understood that there shall be no limit on the number of registration demands
pursuant to this Section 7.13.

(b) If the Partnership shall at any time propose to file a registration
statement under the Securities Act for an offering of Partnership Interests for
cash (other than an offering relating solely to a benefit plan or a registration
statement relating solely to a Rule 145 transaction), the Partnership shall use
all commercially reasonable efforts to include such number or amount of
Partnership Interests held by any Holder in such registration statement as the
Holder shall request; provided that the Partnership is not required to make any
effort or take any action to so include the Partnership Interests of the Holder
once the registration statement is declared effective by the Commission or
otherwise becomes effective under the Securities Act, including any registration
statement providing for the offering from time to time of Partnership Interests
pursuant to Rule 415 of the Securities Act. If the proposed offering pursuant to
this Section 7.13(c) 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 Interests would adversely and materially
affect the timing or success of the offering, the Partnership shall include in
such offering only that number or amount, if any, of Partnership Interests 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 7.13(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 7.13, 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 7.8, 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”)

 

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from and against any and all losses, claims, damages, liabilities (joint or
several) and 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 Indemnified Person may be
involved, or is threatened to be involved, as a party or otherwise, under the
Securities Act or otherwise (hereinafter referred to in this Section 7.13(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 Interests
were registered under the Securities Act or any state securities or Blue Sky
laws, in any preliminary prospectus (if used prior to the effective date of such
registration statement), or in any summary or final prospectus or any free
writing 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 any
free writing 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 7.13(a) and 7.13(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 or after
the Affiliate of the General Partner ceases to be an Affiliate of the General
Partner, 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 Interests 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. The provisions of Section 7.13(c) shall
continue in effect thereafter.

(e) The rights to cause the Partnership to register Partnership Interests
pursuant to this Section 7.13 may be assigned (but only with all related
obligations) by a Holder to a transferee or assignee of some or all of such
Holder’s Partnership Interests; provided that (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 Interests 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 7.13 as if such transferee or assignee were a Holder.

(f) Any request to register Partnership Interests pursuant to this Section 7.13
shall (i) specify the Partnership Interests intended to be offered and sold by
the Person making the request, (ii) express such Person’s present intent to
offer such Partnership Interests for distribution, (iii) describe the nature or
method of the proposed offer and sale of Partnership Interests 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 Interests.

 

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(g) The Partnership agrees to use commercially reasonable efforts to take all
actions and deliver, or cause to be delivered, all prospectuses, supplemental
prospectuses and any free writing prospectuses to Holders, as directed by
Holders, as required by applicable law.

SECTION 7.14. Reliance by Third Parties.

Notwithstanding anything to the contrary in this Agreement, any Person dealing
with the Partnership shall be entitled to assume that the General Partner and
any officer of the General Partner authorized by the General Partner to act on
behalf of and in the name of the Partnership has full power and authority to
encumber, sell or otherwise use in any manner any and all assets of the
Partnership and to enter into any authorized contracts on behalf of the
Partnership, and such Person shall be entitled to deal with the General Partner
or any such officer as if it were the Partnership’s sole party in interest, both
legally and beneficially. Each of the Limited Partners, each other Person who
acquires an interest in a Partnership Interest and each other Person who is
bound by this Agreement hereby waives, to the fullest extent permitted by law,
any and all defenses or other remedies that may be available against such Person
to contest, negate or disaffirm any action of the General Partner or any such
officer in connection with any such dealing. In no event shall any Person
dealing with the General Partner or any such officer or its representatives be
obligated to ascertain that the terms of this Agreement have been complied with
or to inquire into the necessity or expedience of any act or action of the
General Partner or its representatives. Each and every certificate, document or
other instrument executed on behalf of the Partnership by the General Partner or
any such officer or its representatives shall be conclusive evidence in favor of
any and every Person relying thereon or claiming thereunder that (a) at the time
of the execution and delivery of such certificate, document or instrument, this
Agreement was in full force and effect, (b) the Person executing and delivering
such certificate, document or instrument was duly authorized and empowered to do
so for and on behalf of the Partnership and (c) such certificate, document or
instrument was duly executed and delivered in accordance with the terms and
provisions of this Agreement and is binding upon the Partnership.

ARTICLE VIII

BOOKS, RECORDS, ACCOUNTING AND REPORTS

SECTION 8.1. Records and Accounting.

The General Partner shall keep or cause to be kept at the principal office of
the Partnership appropriate books and records with respect to the Partnership’s
business, including all books and records necessary to provide to the Limited
Partners any information required to be provided pursuant to Section 3.4(a). Any
books and records maintained by or on behalf of the Partnership in the regular
course of its business, including the record of the Record Holders of Units or
other Partnership Interests, books of account and records of Partnership
proceedings, may be kept on, or be in the form of, computer disks, hard drives,
punch cards, magnetic tape, photographs, micrographics or any other information
storage device; provided, that the books and records so maintained are
convertible into clearly legible written form within a reasonable period of
time. The books of the Partnership shall be maintained, for financial reporting
purposes, on an accrual basis in accordance with U.S. GAAP. The Partnership
shall not be required to keep books maintained on a cash basis, and the General
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calculate cash-based measures, including Operating Surplus and Adjusted
Operating Surplus, by making such adjustments to its accrual basis books to
account for non-cash items and other adjustments as the General Partner
determines to be necessary or appropriate.

SECTION 8.2. Fiscal Year.

The fiscal year of the Partnership shall be a calendar year ending December 31.

SECTION 8.3. Reports.

(a) As soon as practicable, but in no event later than 120 days after the close
of each fiscal year of the Partnership, the General Partner shall cause to be
furnished or made available, by any reasonable means (including posting on or
making accessible through the Partnership’s or the SEC’s website) to each Record
Holder of a Partnership Interest as of a date selected by the General Partner,
an annual report containing financial statements of the Partnership for such
fiscal year of the Partnership, presented in accordance with U.S. GAAP,
including a balance sheet and statements of operations, Partnership equity and
cash flows, such statements to be audited by a firm of independent public
accountants selected by the General Partner.

(b) As soon as practicable, but in no event later than 90 days after the close
of each Quarter except the last Quarter of each fiscal year, the General Partner
shall cause to be furnished or made available, by any reasonable means
(including posting on or making accessible through the Partnership’s or the
SEC’s website) to each Record Holder of a Partnership Interest, as of a date
selected by the General Partner in its discretion, a report containing unaudited
financial statements of the Partnership and such other information as may be
required by applicable law, regulation or rule of any National Securities
Exchange on which the Units are listed or admitted for trading, or as the
General Partner determines to be necessary or appropriate.

ARTICLE IX

TAX MATTERS

SECTION 9.1. Tax Returns and Information.

The Partnership shall timely file all returns of the Partnership that are
required for federal, state and local income tax purposes on the basis of the
accrual method and the taxable year that it is required by law to adopt, from
time to time, as determined by the General Partner. In the event the Partnership
is required to use a taxable year other than a year ending on December 31, the
General Partner shall use reasonable efforts to change the taxable year of the
Partnership to a year ending on December 31. The tax information reasonably
required by Record Holders for federal and state income tax reporting purposes
with respect to a taxable year shall be furnished to them within 90 days of the
close of the calendar year in which the Partnership’s taxable year ends,
provided that, if the 90th day is not a Business Day, then the 90th day shall be
deemed to be the next Business Day. The classification, realization and
recognition of income, gain, losses and deductions and other items shall be on
the accrual method of accounting for U.S. federal income tax purposes.

 

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SECTION 9.2. Tax Elections.

(a) The Partnership shall make the election under Section 754 of the Code in
accordance with applicable regulations thereunder, subject to the reservation of
the right to seek to revoke any such election upon the General Partner’s
determination that such revocation is in the best interests of the Limited
Partners. Notwithstanding any other provision herein contained, for the purposes
of computing the adjustments under Section 743(b) of the Code, the General
Partner shall be authorized (but not required) to adopt a convention whereby the
price paid by a transferee of a Limited Partner Interest will be deemed to be
the lowest quoted closing price of the Limited Partner Interests on any National
Securities Exchange on which such Limited Partner Interests are listed or
admitted for trading during the calendar month in which such transfer is deemed
to occur pursuant to Section 6.2(g) without regard to the actual price paid by
such transferee.

(b) Except as otherwise provided herein, the General Partner shall determine
whether the Partnership should make any other elections permitted by the Code.

SECTION 9.3. Tax Controversies.

Subject to the provisions hereof, the General Partner is designated as the Tax
Matters Partner (as defined in the Code) and is authorized and required to
represent the Partnership (at the Partnership’s expense) in connection with all
examinations of the Partnership’s affairs by tax authorities, including
resulting administrative and judicial proceedings, and to expend Partnership
funds for professional services and costs associated therewith. Each Partner
agrees to cooperate with the General Partner and to do or refrain from doing any
or all things reasonably required by the General Partner to conduct such
proceedings.

SECTION 9.4. Withholding.

Notwithstanding any other provision of this Agreement, the General Partner is
authorized to take any action that may be required to cause the Partnership and
other Group Members to comply with any withholding requirements established
under the Code or any other federal, state or local law (including pursuant to
Sections 1441, 1442, 1445 and 1446 of the Code) or established under any foreign
law. To the extent that the Partnership is required or elects to withhold and
pay over to any taxing authority any amount resulting from the allocation or
distribution of income to any Partner (including by reason of Section 1446 of
the Code), the General Partner may treat the amount withheld as a distribution
of cash pursuant to Section 6.3 or 12.4(c) in the amount of such withholding
from such Partner.

ARTICLE X

ADMISSION OF PARTNERS

SECTION 10.1. Admission of Limited Partners.

(a) By acceptance of the transfer of any Limited Partner Interests in accordance
with Article IV, including the acceptance of any Limited Partner Interests in
the Initial Distribution, or the acceptance of any Limited Partner Interests
issued pursuant to Article V

 

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or pursuant to a merger, consolidation or conversion pursuant to Article XIV,
and except as provided in Section 4.9, each transferee of, or other 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 Person becomes the Record Holder of the
Limited Partner Interests so transferred or issued, (ii) shall become bound by
and shall be deemed to have agreed to be bound by the terms of, and shall be
deemed to have executed, this Agreement, (iii) represents that such Person 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,
acknowledgements and waivers contained in this Agreement, in each case, with or
without execution of this Agreement by such Person. The transfer or issuance 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 a 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
without acquiring a Limited Partner Interest and until such Person is reflected
in the books and records of the Partnership as the Record Holder of such Limited
Partner Interest. The rights and obligations of a Person who is an Ineligible
Holder shall be determined in accordance with Section 4.9 hereof.

(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 share in the profits and losses, to receive distributions, to receive
allocations of income, gain, loss, deduction or credit or any similar item or to
any other rights to which the transferor was entitled until the transferee
becomes a Limited Partner pursuant to Section 10.1(a).

SECTION 10.2. 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 Class A 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 such General Partner’s Interest (represented by Class A 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, shall be authorized to and shall carry on
the business of the Partnership without dissolution.

 

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SECTION 10.3. 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 Delaware Act to amend
the records of the Partnership to reflect such admission and, if necessary, to
prepare as soon as practicable an amendment to this Agreement and, if required
by law, the General Partner shall prepare and file an amendment to the
Certificate of Limited Partnership.

ARTICLE XI

WITHDRAWAL OR REMOVAL OF PARTNERS

SECTION 11.1. Withdrawal of the General Partner.

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

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

(ii) the General Partner transfers all of its rights as General Partner pursuant
to Section 4.6;

(iii) the General Partner is removed pursuant to Section 11.2;

(iv) the General Partner (A) makes a general assignment for the benefit of
creditors; (B) files a voluntary bankruptcy petition for relief under Chapter 7
of the United States Bankruptcy Code; (C) files a petition or answer seeking for
itself a liquidation, dissolution or similar relief (but not a reorganization)
under any law; (D) files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against the General Partner
in a proceeding of the type described in clauses (A)-(C) of this
Section 11.1(a)(iv); or (E) seeks, consents to or acquiesces in the appointment
of a trustee (but not a debtor-in-possession), receiver or liquidator of the
General Partner or of all or any substantial part of its properties;

(v) a final and non-appealable order of relief under Chapter 7 of the United
States Bankruptcy Code is entered by a court with appropriate jurisdiction
pursuant to a voluntary or involuntary petition by or against the General
Partner; or

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

 

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If an Event of Withdrawal specified in Section 11.1(a)(iv), 11.1(a)(v),
11.1(a)(vi)(A), 11.1(a)(vi)(B), 11.1(a)(vi)(C) or 11.1(a)(vi)(E) occurs, the
withdrawing General Partner shall give notice to the Limited Partners within 30
days after such occurrence. The Partners hereby agree that only the Events of
Withdrawal described in this Section 11.1 shall result in the withdrawal of the
General Partner from the Partnership.

(b) Withdrawal of the General Partner from the Partnership upon the occurrence
of an Event of Withdrawal shall not constitute a breach of this Agreement under
the following circumstances: (i) at any time during the period beginning on the
Closing Date and ending at 12:00 midnight, Eastern Time, on the tenth
anniversary of the Closing Date, the General Partner voluntarily withdraws by
giving at least 90 days’ advance notice of its intention to withdraw to the
Limited Partners; provided that prior to the effective date of such withdrawal,
the withdrawal is approved by Unitholders holding at least a majority of the
Outstanding Common Units (excluding Common Units held by the General Partner and
its Affiliates) and the General Partner delivers to the Partnership an Opinion
of Counsel (“Withdrawal Opinion of Counsel”) that such withdrawal (following the
selection of the successor General Partner) would not result in the loss of the
limited liability under the Delaware Act of any Limited Partner or cause any
Group Member to be treated as an association taxable as a corporation or
otherwise to be taxed as an entity for U.S. federal income tax purposes (to the
extent not already treated or taxed as such); (ii) at any time after 12:00
midnight, Eastern Time, on the tenth anniversary of the Closing Date, 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 clause (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 pursuant to Section 11.1(a)(i) above, a successor is not selected by
the Unitholders as provided herein or the Partnership does not receive a
Withdrawal Opinion of Counsel, the Partnership shall be dissolved in accordance
with Section 12.1 unless the business of the Partnership is continued pursuant
to Section 12.2. Any successor General Partner elected in accordance with the
terms of this Section 11.1 shall be subject to the provisions of Section 10.2.

 

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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 two-thirds of the Outstanding Common Units
(including Common Units held by the General Partner and its Affiliates). Any
such action by such holders for removal of the General Partner must also provide
for the election of a successor General Partner by the Unitholders holding a
majority of Outstanding Common Units (including Common Units held by the General
Partner and its Affiliates). Such removal shall be effective immediately
following the admission of a successor General Partner pursuant to Section 10.2.
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 10.2, automatically become a successor
general partner or managing member, to the extent applicable, of the other Group
Members of which the General Partner is a general partner or a managing member.
The right of the holders of Outstanding Units to remove the General Partner
shall not exist or be exercised unless the Partnership has received an opinion
opining as to the matters covered by a Withdrawal Opinion of Counsel. Any
successor General Partner elected in accordance with the terms of this
Section 11.2 shall be subject to the provisions of Section 10.2.

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 Common 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, then the Departing General
Partner shall have the option, exercisable prior to the effective date of the
withdrawal or removal of such Departing General Partner, to require its
successor to purchase any or all of the following, as determined by the
Departing General Partner: (A) its General Partner Interest (represented by
Class A Units), (B) its general partner interest (or equivalent interest), if
any, in the other Group Members and/or (C) all of its or its Affiliates’
Incentive Distribution Rights ((A), (B) and/or (C), as determined by the
Departing General Partner, 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 withdrawal or removal,
or, if there is not agreement as to the fair market value of such Combined
Interest at the effective date of such withdrawal or removal, within ten
(10) days after such fair market value is determined pursuant to this
Section 11.3(a). 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 withdrawal
or removal 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 all (and not less than all) of the items under
clauses (A), (B) and (C) of the definition of Combined Interests of the
Departing General Partner for such fair

 

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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 7.5,
including any employee-related liabilities (including severance liabilities),
incurred in connection with the termination of any employees employed by the
Departing General Partner or its Affiliates for the benefit of the Partnership
or the other Group Members.

For purposes of this Section 11.3(a), the fair market value of a 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 withdrawal or
removal, 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 withdrawal or removal, 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 for trading, the value of the Partnership’s
assets, the rights and obligations of the Departing General Partner, the value
of the Incentive Distribution Rights and the General Partner Interest
(represented by Class A Units) and other factors it may deem relevant, but shall
not discount the value of the Combined Interest for illiquidity or minority
interest status.

(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 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 withdrawal or removal, by an
investment banking firm or other independent expert selected pursuant to (and
following the guidelines set forth in) 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 such 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 business of 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
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shall, at the effective date of its admission to the Partnership, contribute to
the Partnership cash in the amount equal to the product of (i) the quotient
obtained by dividing (A) the Percentage Interest of the General Partner Interest
of the Departing General Partner by (B) a percentage equal to 100% less the
Percentage Interest of the General Partner Interest of the Departing General
Partner and (ii) the Net Agreed Value of the Partnership’s assets on such date.
In such event, such successor General Partner shall, subject to the following
sentence, be entitled to its Percentage Interest of all Partnership allocations
and distributions to which the Departing 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. Withdrawal of Limited Partners.

(a) No Limited Partner shall have any right to withdraw from the Partnership;
provided, however, that when a transferee of a Limited Partner’s Limited Partner
Interest becomes a Record Holder of the Limited Partner Interest so transferred,
such transferring Limited Partner shall cease to be a Limited Partner with
respect to the Limited Partner Interest so transferred.

ARTICLE XII

DISSOLUTION AND LIQUIDATION

SECTION 12.1. Dissolution.

The Partnership shall not be dissolved by the admission of Additional Limited
Partners or by the admission of a successor General Partner in accordance with
the terms of this Agreement. Upon the removal or withdrawal of the General
Partner, if a successor General Partner is elected pursuant to Section 11.1 or
11.2, the Partnership shall not be dissolved and such successor General Partner
shall continue the business of the Partnership. The Partnership shall dissolve,
and (subject to Section 12.2) its affairs shall be wound up, upon:

(a) an Event of Withdrawal of the General Partner as provided in Section 11.1(a)
(other than Section 11.1(a)(ii)), unless a successor is elected and an Opinion
of Counsel is received as provided in Section 11.1(b) or 11.2 and such successor
is admitted to the Partnership pursuant to Section 10.2;

(b) an election to dissolve the Partnership by the General Partner that is
approved by the holders of a Unit Majority;

(c) the entry of a decree of judicial dissolution of the Partnership pursuant to
the provisions of the Delaware Act; or

(d) at any time there are no Limited Partners, unless the Partnership is
continued without dissolution in accordance with the Delaware Act.

 

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SECTION 12.2. Continuation of the Business of the Partnership After Dissolution.

Upon (a) dissolution of the Partnership following an Event of Withdrawal caused
by the withdrawal or removal of the General Partner as provided in
Section 11.1(a)(i) or (iii) and the failure of the Partners to select a
successor to such Departing General Partner pursuant to Section 11.1 or 11.2,
then within 90 days thereafter, or (b) dissolution of the Partnership upon an
event constituting an Event of Withdrawal as defined in Section 11.1(a)(iv),
11.1(a)(v) or 11.1(a)(vi), then, to the maximum extent permitted by law, within
180 days thereafter, the holders of a Unit Majority may elect to continue the
business of the Partnership on the same terms and conditions set forth in this
Agreement by appointing as a successor General Partner a Person approved by the
holders of a Unit Majority. Unless such an election is made within the
applicable time period as set forth above, the Partnership shall conduct only
activities necessary to wind up its affairs. If such an election is so made,
then:

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

(ii) if the successor General Partner is not the former General Partner, then
the interest of the former General Partner shall be treated in the manner
provided in Section 11.3; and

(iii) the successor General Partner shall be admitted to the Partnership as
General Partner, effective as of the Event of Withdrawal, by agreeing in writing
to be bound by this Agreement; provided that the right of the holders of a Unit
Majority to approve a successor General Partner and to continue the business of
the Partnership shall not exist and may not be exercised unless the Partnership
has received an Opinion of Counsel that (x) the exercise of the right would not
result in the loss of limited liability of any Limited Partner under the
Delaware Act and (y) the Partnership would not be treated as an association
taxable as a corporation or otherwise be taxable as an entity for U.S. federal
income tax purposes upon the exercise of such right to continue (to the extent
not already so treated or taxed).

SECTION 12.3. Liquidator.

Upon dissolution of the Partnership, unless the business of the Partnership is
continued pursuant to Section 12.2, the General Partner shall select one or more
Persons to act as Liquidator. The Liquidator (if other than the General Partner)
shall be entitled to receive such compensation for its services as may be
approved by the holders of a Unit Majority. The Liquidator (if other than the
General Partner) shall agree not to resign at any time without 15 days’ prior
notice and may be removed at any time, with or without cause, by notice of
removal approved by the holders of a Unit Majority. Upon dissolution, removal or
resignation of the Liquidator, a successor and substitute Liquidator (who shall
have and succeed to all rights, powers and duties of the original Liquidator)
shall within 30 days thereafter be approved by the holders of a Unit Majority.
The right to approve a successor or substitute Liquidator in the manner provided
herein shall be deemed to refer also to any such successor or substitute
Liquidator approved in the manner herein provided. Except as expressly provided
in this Article XII, the Liquidator approved in the manner provided herein shall
have and may exercise,

 

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without further authorization or consent of any of the parties hereto, all of
the powers conferred upon the General Partner under the terms of this Agreement
(but subject to all of the applicable limitations, contractual and otherwise,
upon the exercise of such powers, other than the limitation on sale set forth in
Section 7.4) 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 17-804 of
the Delaware Act and the following:

(a) Disposition of Assets. The assets may be disposed of by public or private
sale or by distribution in kind to one or more Partners on such terms as the
Liquidator and such Partner or Partners may agree; provided that no Partner
agreement is necessary in respect of any pro rata distribution in kind of freely
tradable publicly traded securities pursuant to this sentence. 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) Discharge of Liabilities. Liabilities of the Partnership include amounts
owed to the Liquidator as compensation for serving in such capacity (subject to
the terms of Section 12.3) and amounts owed to Partners otherwise than in
respect of their distribution rights under Article VI. With respect to any
liability that is contingent, conditional or unmatured or is otherwise not yet
due and payable, the Liquidator shall either settle such claim for such amount
as it thinks appropriate or establish a reserve of cash or other assets to
provide for its payment. When paid, any unused portion of the reserve shall be
distributed as additional liquidation proceeds.

(c) Liquidation Distributions. All property and all cash in excess of that
required to discharge liabilities as provided in Section 12.4(b) shall be
distributed to the Partners in accordance with, and to the extent of, the
positive balances in their respective Capital Accounts, as determined after
taking into account all Capital Account adjustments (other than those made by
reason of distributions pursuant to this Section 12.4(c)) for the taxable year
of the Partnership during which the liquidation of the Partnership occurs (with
such date of occurrence being determined pursuant to Treasury Regulation
Section 1.704-1(b)(2)(ii)(g)), and such distribution shall be made by the end of
such taxable year (or, if later, within 90 days after said date of such
occurrence).

 

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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 State of
Delaware shall be canceled and such other actions as may be necessary to
terminate the Partnership shall be taken.

SECTION 12.6. Return of Contributions.

The General Partner shall not be personally liable for, and shall have no
obligation to contribute or loan any monies or property to the Partnership to
enable it to effectuate, the return of the Capital Contributions of the Limited
Partners or Unitholders, or any portion thereof, it being expressly understood
that any such return shall be made solely from Partnership assets.

SECTION 12.7. Waiver of Partition.

To the maximum extent permitted by law, each Partner hereby waives any right to
partition of the Partnership property.

SECTION 12.8. Capital Account Restoration.

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

ARTICLE XIII

AMENDMENT OF PARTNERSHIP AGREEMENT;

MEETINGS; RECORD DATE

SECTION 13.1. Amendments to be Adopted Solely by the General Partner.

Each Partner agrees that the General Partner, without the approval of any
Partner, may amend any provision of this Agreement and execute, swear to,
acknowledge, deliver, file and record whatever documents may be required in
connection therewith, to reflect:

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

(b) admission, substitution, withdrawal or removal of Partners in accordance
with this Agreement;

 

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(c) a change that the General Partner determines to be necessary or appropriate
to qualify or continue the qualification of the Partnership as a limited
partnership or a partnership in which the Limited Partners have limited
liability under the laws of any state or to ensure that the Group Members will
not be treated as associations taxable as corporations or otherwise taxed as
entities for U.S. federal income tax purposes;

(d) a change that the General Partner 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 federal or state agency or judicial authority or contained in any federal
or state statute (including the Delaware Act) or (B) facilitate the trading of
the Limited Partner Interests or Units (including the division of any class or
classes of Outstanding Limited Partner Interests into different classes to
facilitate uniformity of tax consequences within such classes of Limited Partner
Interests) or comply with any rule, regulation, guideline or requirement of any
National Securities Exchange on which the Limited Partner Interests or Units are
or will be listed or admitted to trading, (iii) to be necessary or appropriate
in connection with action taken by the General Partner pursuant to Section 5.7
or to implement the tax-related provisions of this Agreement or (iv) to be
required to effect the intent expressed in the Registration Statement or the
intent of the provisions of this Agreement or is otherwise contemplated by this
Agreement;

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

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

(g) an amendment that the General Partner determines to be necessary or
appropriate in connection with the authorization or issuance of any class or
series of Partnership Interests, or any options, warrants, rights and/or
appreciation rights relating to any Partnership Interest, pursuant to
Section 5.5;

(h) an amendment expressly permitted in this Agreement to be made by the General
Partner acting alone;

(i) an amendment effected, necessitated or contemplated by a Merger Agreement or
Plan of Conversion approved in accordance with Section 14.3, or an amendment
contemplated by Section 14.6;

 

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(j) an amendment that the General Partner determines to be necessary or
appropriate to reflect and account for the formation by the Partnership of, or
investment by the Partnership in, any corporation, partnership, joint venture,
limited liability company or other entity, in connection with the conduct by the
Partnership of activities permitted by the terms of Section 2.4;

(k) a merger, conveyance or conversion pursuant to Section 14.3(d);

(l) an amendment contemplated by Section 4.9; or

(m) any other amendments substantially similar to the foregoing.

SECTION 13.2. Amendment Procedures.

Amendments to this Agreement may be proposed only by the General Partner. To the
fullest extent permitted by law, the General Partner shall have no duty or
obligation to propose or approve any amendment to this Agreement and may decline
to do so in its sole discretion, free of any duty or obligation whatsoever to
the Partnership or any Limited Partner and, in declining to propose or approve
an amendment, to the fullest extent permitted by law, shall not be required to
act in good faith or pursuant to any other standard imposed by this Agreement,
any other agreement contemplated hereby or under the Delaware Act or any other
law, rule or regulation or at equity. A proposed amendment shall be effective
upon its approval by the General Partner and, except as otherwise provided in
Section 13.1 or 13.3, the holders of a Unit Majority, unless a greater or
different percentage of Outstanding Units is required under this Agreement or by
Delaware law. Each proposed amendment that requires the approval of the holders
of a specified percentage of Outstanding Units shall be set forth in a writing
that contains the text of the proposed amendment. If such an amendment is
proposed, the General Partner shall seek the written approval of the requisite
percentage of Outstanding Units or call a meeting of the Unitholders to consider
and vote on such proposed amendment. The General Partner shall notify all Record
Holders upon final adoption of any such proposed amendments. The General Partner
shall be deemed to have notified all Record Holders as required by this
Section 13.2 if it has either (i) filed such amendment with the Commission via
its Electronic Data Gathering, Analysis and Retrieval system (or any successor
system) and such amendment is publicly available on such system or (ii) made
such amendment available on any publicly available website maintained by or on
behalf of the Partnership.

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 and its Affiliates) required to take
any action shall be amended, altered, changed, repealed or rescinded in any
respect that would have the effect of (i) in the case of any provision of this
Agreement other than Section 11.2 or 13.4, reducing such voting percentage or
(ii) in the case of Section 11.2 or 13.4, increasing such percentage, in each of
cases (i) and (ii) 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 or
increased, as applicable.

 

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(b) Notwithstanding the provisions of Sections 13.1 and 13.2, no amendment to
this Agreement may (i) enlarge the obligations of any Limited Partner without
its consent, unless such shall be deemed to have occurred as a result of an
amendment approved pursuant to Section 13.3(c) or (ii) enlarge the obligations
of, restrict in any way any action by or rights of, or reduce in any way the
amounts distributable, reimbursable or otherwise payable to, the General Partner
or any of its Affiliates without its consent, which consent may be given or
withheld at its option.

(c) Except as provided in Section 14.3, and without limitation of the General
Partner’s authority to adopt amendments to this Agreement without the approval
of any Partners 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 if the General
Partner determines that such amendment will affect the limited liability of any
Limited Partner under applicable partnership law of the state under whose laws
the Partnership is organized (it being understood that the General Partner may
rely on any Opinion of Counsel in making such determination, but no such Opinion
of Counsel shall be required).

(e) Except as provided in Section 13.1, this Section 13.3 shall only be amended
with the approval of the holders of at least 90% of the Outstanding Units.

SECTION 13.4. Special Meetings.

All acts of Limited Partners to be taken pursuant to this Agreement shall be
taken in the manner provided in this Article XIII. Special meetings of the
Limited Partners may be called by the General Partner or by Limited Partners
owning 20% or more of the Outstanding Units of the class or classes for which a
meeting is proposed. Limited Partners shall call a special meeting by delivering
to the General Partner one or more requests in writing stating that the signing
Limited Partners wish to call a special meeting and indicating the general or
specific purposes for which the special meeting is to be called. Within 60 days
after receipt of such a call from Limited Partners or within such greater time
as may be reasonably necessary for the Partnership to comply with any statutes,
rules, regulations, listing agreements or similar requirements governing the
holding of a meeting or the solicitation of proxies for use at such a meeting,
the General Partner shall send a notice of the meeting to the Limited Partners
either directly or indirectly through the Transfer Agent. A meeting shall be
held at a time and place determined by the General Partner on a date not less
than 10 days nor more than 60 days after the time that notice of the meeting is
provided as set forth in Section 16.1. Limited Partners shall not vote on
matters that would cause the Limited Partners to be deemed to be taking part in
the management and control of the business and affairs of the Partnership so as
to jeopardize the Limited Partners’ limited liability under the Delaware Act or
the law of any other state in which the Partnership is qualified to do business.

 

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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 Limited Partner Interests for which a meeting
is proposed in writing by mail or other means of written communication in
accordance with Section 16.1. The notice shall be deemed to have been given at
the time when deposited in the mail or sent by other means of written
communication.

SECTION 13.6. Record Date.

For purposes of determining the Limited Partners entitled to notice of or to
vote at a meeting of the Limited Partners or to give approvals without a meeting
as provided in Section 13.11 the General Partner may set a Record Date, which
shall not be less than 10 nor more than 60 days before (a) the date of the
meeting (unless such requirement conflicts with any rule, regulation, guideline
or requirement of any U.S. federal securities laws or any National Securities
Exchange on which the Limited Partner Interests are listed or admitted for
trading, in which case such U.S. federal securities laws or 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 General Partner
to give such approvals. If the General Partner does not set a Record Date, then
(x) 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 immediately preceding the day on which notice is given, and (y) 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 General Partner 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.

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 objection, 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.

 

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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 the Outstanding Units owned or deemed
owned by the General Partner or any of its Affiliates) represented in person or
by proxy shall constitute a quorum at a meeting of Limited Partners of such
class or classes unless any such action by the Limited Partners requires
approval by holders of a greater percentage of such Units, in which case the
quorum shall be such greater percentage. At any meeting of the Limited Partners
duly called and held in accordance with this Agreement at which a quorum is
present, the act of Limited Partners holding Outstanding Units that in the
aggregate represent a majority of the Outstanding Units entitled to vote and be
present in person or by proxy at such meeting shall be deemed to constitute the
act of all Limited Partners, unless a greater or different percentage is
required with respect to such action under the provisions of this Agreement, in
which case the act of the Limited Partners holding Outstanding Units that in the
aggregate represent at least such greater or different percentage shall be
required. The Limited Partners present at a duly called or held meeting at which
a quorum is present may continue to transact business until adjournment,
notwithstanding the withdrawal of enough Limited Partners to leave less than a
quorum, if any action taken (other than adjournment) is approved by the required
percentage of Outstanding Units specified in this Agreement (including
Outstanding Units deemed owned by the General Partner or any of its Affiliates).
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 or its Affiliates) represented either
in person or by proxy, but no other business may be transacted, except as
provided in Section 13.7.

SECTION 13.10. Conduct of a Meeting.

The General Partner shall have full power and authority concerning the manner of
conducting any meeting of the Limited Partners or solicitation of approvals in
writing, including the determination of Persons entitled to vote, the existence
of a quorum, the satisfaction of the requirements of Section 13.4, the conduct
of voting, the validity and effect of any proxies and the determination of any
controversies, votes or challenges arising in connection with or during the
meeting or voting. The General Partner shall designate a Person to serve as
chairman of any meeting and shall further designate a Person to take the minutes
of any meeting. All minutes shall be kept with the records of the Partnership
maintained by the General Partner. The General Partner may make such other
regulations consistent with applicable law and this Agreement as it may deem
advisable concerning the conduct of any meeting of the Limited Partners or
solicitation of approvals in writing, including regulations in regard to the
appointment of proxies, the appointment and duties of inspectors of votes and
approvals, the submission and examination of proxies and other evidence of the
right to vote, and the revocation of approvals in writing.

SECTION 13.11. Action Without a Meeting.

If authorized by the General Partner, any action that may be taken at a meeting
of the Limited Partners may be taken without a meeting, without prior notice and
without a vote, 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 owned or deemed

 

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owned by the General Partner and its Affiliates) 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 Limited Partner Interests are listed or admitted for trading, in which
case the rule, regulation, guideline or requirement of such exchange shall
govern). Prompt notice of the taking of action without a meeting shall be given
to the Limited Partners who have not approved in writing. The General Partner
may specify that any written ballot submitted to Limited Partners for the
purpose of taking any action without a meeting shall be returned to the
Partnership within the time period, which shall be not less than 20 days,
specified by the General Partner. If a ballot returned to the Partnership does
not vote all of the Units held by the Limited Partners, the Partnership shall be
deemed to have failed to receive a ballot for the Units that were not voted. If
approval of the taking of any action by the Limited Partners is solicited by any
Person other than by or on behalf of the General Partner, the written approvals
shall have no force and effect unless and until (a) they are deposited with the
Partnership in care of the General Partner, (b) approvals sufficient to take the
action proposed are dated as of a date not more than 90 days prior to the date
sufficient approvals are deposited with the Partnership and (c) an Opinion of
Counsel is delivered to the General Partner to the effect that the exercise of
such right and the action proposed to be taken with respect to any particular
matter (i) will not cause the Limited Partners to be deemed to be taking part in
the management and control of the business and affairs of the Partnership so as
to jeopardize the Limited Partners’ limited liability, and (ii) is otherwise
permissible under the state statutes then governing the rights, duties and
liabilities of the Partnership and the Partners. Nothing contained in this
Section 13.11 shall be deemed to require the General Partner to solicit all
Limited Partners in connection with a matter approved by the holders of the
requisite percentage of Units acting by written consent without a meeting.

SECTION 13.12. Voting and Other Rights.

(a) Only those Record Holders of the Outstanding Units on the Record Date set
pursuant to Section 13.6 (and also subject to the limitations contained in the
definition of “Outstanding”) shall be entitled to notice of, and to vote at, a
meeting of Limited Partners or to act with respect to matters as to which the
holders of the Outstanding Units have the right to vote or to act. All
references in this Agreement to votes of, or other acts that may be taken by,
the Outstanding Units shall be deemed to be references to the votes or acts of
the Record Holders of such Outstanding Units.

(b) With respect to Units that are held for a Person’s account by another Person
(such as a broker, dealer, bank, trust company or clearing corporation, or an
agent of any of the foregoing), in whose name such Units are registered, such
other Person shall, in exercising the voting rights in respect of such Units on
any matter, and unless the arrangement between such Persons provides otherwise,
vote such Units in favor of, and at the direction of, the Person who is the
beneficial owner, and the Partnership shall be entitled to assume it is so
acting without further inquiry. The provisions of this Section 13.12(b) (as well
as all other provisions of this Agreement) are subject to the provisions of
Section 4.3.

 

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ARTICLE XIV

MERGER, CONSOLIDATION OR CONVERSION

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)) or convert into any such entity, whether such entity is formed
under the laws of the State of Delaware or any other state of the United States
of America, pursuant to a written agreement or plan of merger or consolidation
(“Merger Agreement”) or a written plan of conversion (“Plan of Conversion”), as
the case may be, in accordance with this Article XIV. It is expressly agreed
that any merger or consolidation of any member of the Partnership Group (other
than the Partnership) shall not be subject to the requirements of this Article
XIV.

SECTION 14.2. Procedure for Merger, Consolidation or Conversion.

(a) Merger, consolidation or conversion of the Partnership pursuant to this
Article XIV requires the prior consent of the General Partner; provided,
however, that, to the maximum extent permitted by law, the General Partner shall
have no duty or obligation to consent to any merger, consolidation or conversion
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, consolidation or conversion, shall not be
required to act in good faith or pursuant to any other standard imposed by this
Agreement, any other agreement contemplated hereby or under the Delaware Act or
any other law, rule or regulation or at equity.

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

(i) the names and jurisdictions of formation or organization of each of the
business entities proposing to merge or consolidate;

(ii) 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”);

(iii) the terms and conditions of the proposed merger or consolidation;

(iv) 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 general or limited partner interests, rights, securities
or obligations of the Surviving Business Entity, the cash, property or
interests, rights, securities or obligations of any general or limited
partnership, corporation, trust, limited liability company, unincorporated
business or

 

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other entity (other than the Surviving Business Entity) which the holders of
such general or limited partner interests, securities or rights are to receive
in exchange for, or upon conversion of their interests, securities or rights,
and (ii) in the case of securities represented by certificates, upon the
surrender of such certificates, which cash, property or general or limited
partner interests, rights, securities or obligations of the Surviving Business
Entity or any general or limited partnership, corporation, trust, limited
liability company, unincorporated business or other entity (other than the
Surviving Business Entity), or evidences thereof, are to be delivered;

(v) 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, operating agreement or other similar charter or governing document)
of the Surviving Business Entity to be effected by such merger or consolidation;

(vi) 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

(vii) such other provisions with respect to the proposed merger or consolidation
that the General Partner determines to be necessary or appropriate.

(c) If the General Partner shall determine to consent to the conversion, the
General Partner may approve and adopt a Plan of Conversion containing such terms
and conditions that the General Partner determines to be necessary or
appropriate.

SECTION 14.3. Approval by Limited Partners.

(a) Except as provided in Section 14.3(d), the General Partner, upon its
approval of the Merger Agreement or the Plan of Conversion, as the case may be,
shall direct that the Merger Agreement or the Plan of Conversion, as applicable,
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 or the Plan of Conversion, as
applicable, shall be included in or enclosed with the notice of a special
meeting or the written consent.

(b) Except as provided in Section 14.3(d) and 14.3(e), the Merger Agreement or
the Plan of Conversion, as applicable, shall be approved upon receiving the
affirmative vote or consent of the holders of a Unit Majority, unless the Merger
Agreement or Plan of Conversion, as the case may be, effects an amendment to any
provision of this Agreement that, if contained in an amendment to this Agreement
adopted pursuant to Article XIII, would require for its approval the vote or
consent of a greater percentage of the Outstanding Units or of any class of
Limited Partners, in which case such greater percentage vote or consent shall be
required for approval of the Merger Agreement or the Plan of Conversion, as the
case may be.

 

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(c) Except as provided in Section 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 or the certificate of conversion pursuant to
Section 14.4, the merger, consolidation or conversion may be abandoned pursuant
to provisions therefor, if any, set forth in the Merger Agreement or the Plan of
Conversion, as the case may be.

(d) Notwithstanding anything else contained in this Article XIV or in this
Agreement, the General Partner is permitted, without Limited Partner approval,
to convert the Partnership or any Group Member into a new limited liability
entity, to merge the Partnership or any Group Member into, or convey all of the
Partnership’s assets to, another limited liability entity that shall be newly
formed and shall have no assets, liabilities or operations at the time of such
conversion, merger or conveyance other than those it receives from the
Partnership or other Group Member if (i) the General Partner has received an
Opinion of Counsel that the conversion, merger or conveyance, as the case may
be, would not result in the loss of the limited liability of any Limited Partner
as compared to its limited liability under the Delaware Act or cause the
Partnership to be treated as an association taxable as a corporation or
otherwise to be taxed as an entity for U.S. federal income tax purposes (to the
extent not previously treated as such), (ii) the purpose of such conversion,
merger or conveyance is to effect a change in the legal form of the Partnership
into another limited liability entity and (iii) the General Partner determines
that the governing instruments of the new entity provide the Limited Partners
and the General Partner with substantially the same rights and obligations as
are herein contained.

(e) Additionally, notwithstanding anything else contained in this Article XIV or
in this Agreement, the General Partner is permitted, without Limited Partner
approval, to merge or consolidate the Partnership with or into another entity if
(i) the General Partner has received an Opinion of Counsel that the merger or
consolidation, as the case may be, would not result in the loss of the limited
liability of any Limited Partner as compared to its limited liability under the
Delaware Act or cause the Partnership to be treated as an association taxable as
a corporation or otherwise to be taxed as an entity for U.S. federal income tax
purposes (to the extent not previously treated as such), (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 Interests
to be issued by the Partnership in such merger or consolidation does not exceed
20% of the Partnership Interests (other than Incentive Distribution Rights)
Outstanding immediately prior to the effective date of such merger or
consolidation.

SECTION 14.4. Certificate of Merger or Conversion.

Upon the required approval, if any, by the General Partner and the Unitholders
of a Merger Agreement or a Plan of Conversion, as the case may be, a certificate
of merger or certificate of conversion, as applicable, shall be executed and
filed with the Secretary of State of the State of Delaware in conformity with
the requirements of the Delaware Act.

 

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SECTION 14.5. Effect of Merger, Consolidation or Conversion.

(a) At the effective time of the 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) At the effective time of the conversion:

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

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

(iii) all liabilities and obligations of the Partnership shall continue to be
liabilities and obligations of the converted entity in its new organizational
form without impairment or diminution by reason of the conversion;

(iv) all rights of creditors or other parties with respect to or against the
prior interest holders or other owners of the Partnership in their capacities as
such in existence as of the effective time of the conversion will continue in
existence as to those liabilities and obligations and may be pursued by such
creditors and obligees as if the conversion did not occur;

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

 

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(vi) the Partnership Interests that are to be converted into partnership
interests, shares, evidences of ownership or other securities in the converted
entity as provided in the Plan of Conversion or certificate of conversion shall
be so converted, and Partners shall be entitled only to the rights provided in
the Plan of Conversion or certificate of conversion.

(c) A merger, consolidation or conversion effected pursuant to this Article XIV
shall not be deemed to result in a transfer or assignment of assets or
liabilities from one entity to another.

SECTION 14.6. Amendment of Partnership Agreement.

Pursuant to Section 17-211(g) of the Delaware Act, an agreement or plan of
merger or consolidation approved in accordance with Section 17-211(b) of the
Delaware 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
Article XIV shall be effective at the effective time or date of the merger or
consolidation.

ARTICLE XV

RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS

SECTION 15.1. Right to Acquire Limited Partner Interests.

(a) Notwithstanding any other provision of this Agreement, if at any time the
General Partner and its Affiliates hold more than two-thirds of the total
Limited Partner Interests of any class then Outstanding, the General Partner
shall then have the right, which right it may assign and transfer in whole or in
part to the Partnership or any Affiliate of the General Partner, exercisable in
its sole discretion, to purchase all, but not less than all, of such Limited
Partner Interests of such class then Outstanding held by Persons other than the
General Partner and its Affiliates, at the greater of (x) the Current Market
Price as of the date three days prior to the date that the notice described in
Section 15.1(b) is mailed and (y) the highest price paid by the General Partner
or any of its Affiliates for any such Limited Partner Interest of such class
purchased during the 90-day period preceding the date that the notice described
in Section 15.1(b) is mailed. As used in this Agreement, (i) “Current Market
Price” as of any date of any class of Limited Partner Interests means the
average of the daily Closing Prices (as hereinafter defined) per Limited Partner
Interest of such class for the 20 consecutive Trading Days (as hereinafter
defined) immediately prior to such date; (ii) “Closing Price” for any day means
the last sale price on such day, regular way, or in case no such sale takes
place on such day, the average of the closing bid and asked prices on such day,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted for
trading on the principal National Securities Exchange on which such Limited
Partner Interests of such class are listed or admitted to trading or, if such
Limited Partner Interests of such class are not listed or admitted for 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 the primary reporting system

 

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then in use in relation to such Limited Partner Interest of such class, or, if
on any such day such Limited Partner Interests of such class are not quoted by
any such organization, the average of the closing bid and asked prices on such
day as furnished by a professional market maker making a market in such Limited
Partner Interests of such class selected by the General Partner, or if on any
such day no market maker is making a market in such Limited Partner Interests of
such class, the fair value of such Limited Partner Interests on such day as
determined by the General Partner; and (iii) “Trading Day” means a day on which
the principal National Securities Exchange on which such Limited Partner
Interests of any class are listed or admitted for trading is open for the
transaction of business or, if Limited Partner Interests of a class are not
listed or admitted for trading on any National Securities Exchange, a day on
which banking institutions in New York City generally are open.

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

 

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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) In the case of Limited Partner Interests evidenced by Certificates, at any
time from and after the Purchase Date, a holder of an Outstanding Limited
Partner Interest subject to purchase as provided in this Section 15.1 may
surrender his Certificate evidencing such Limited Partner Interest to the
Transfer Agent in exchange for payment of the amount described in
Section 15.1(a), therefor, without interest thereon.

ARTICLE XVI

GENERAL PROVISIONS

SECTION 16.1. Addresses and Notices; Written Communications.

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 Interests 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 Interests by reason of any assignment or
otherwise. Notwithstanding the foregoing, if (i) a Partner shall consent to
receiving notices, demands, requests, reports or proxy materials via electronic
mail or by the Internet or (ii) the rules of the Commission shall permit any
report or proxy materials to be delivered electronically or made available via
the Internet, any such notice, demand, request, report or proxy materials shall
be deemed given or made when delivered or made available via such mode of
delivery. An affidavit or certificate of making of any notice, payment or report
in accordance with the provisions of this Section 16.1 executed by the General
Partner, the Transfer Agent or the mailing organization shall be prima facie
evidence of the giving or making of such notice, payment or report. If any
notice, payment or report addressed to a Record Holder at the address of such
Record Holder appearing on the books and records of the Transfer Agent or the
Partnership is returned by the United States Postal Service marked to indicate
that the United States Postal Service is unable to deliver it, such notice,
payment or report and any subsequent notices, payments and reports shall be
deemed to have been duly given or made without further mailing (until such time
as such Record Holder or another Person notifies the Transfer Agent or the
Partnership of a change in his address) if they are available for the Partner at
the principal office of the Partnership for a period of one year from the date
of the giving or making of such notice, payment or report to the other Partners.
Any notice to the Partnership shall be deemed given if received by the General
Partner at the principal office of the Partnership designated pursuant to
Section 2.3. The General Partner may rely and shall be protected in relying on
any notice or other document from a Partner or other Person if believed by it to
be genuine. The terms “in writing,” “written communications,” “written notice”
and words of similar import shall be deemed satisfied under this Agreement by
use of e-mail and other forms of electronic communication.

 

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SECTION 16.2. Further Action.

The parties shall execute and deliver all documents, provide all information and
take or refrain from taking action as may be necessary or appropriate to achieve
the purposes of this Agreement.

SECTION 16.3. Binding Effect.

This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.

SECTION 16.4. Integration.

This Agreement constitutes the entire agreement among the parties hereto
pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.

SECTION 16.5. Creditors.

None of the provisions of this Agreement shall be for the benefit of, or shall
be enforceable by, any creditor of the Partnership.

SECTION 16.6. Waiver.

No failure by any party to insist upon the strict performance of any covenant,
duty, agreement or condition of this Agreement or to exercise any right or
remedy consequent upon a breach thereof shall constitute waiver of any such
breach of any other covenant, duty, agreement or condition.

SECTION 16.7. Third-Party Beneficiaries.

Each Partner agrees that (a) 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 and (b) any Unrestricted Person 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
Unrestricted Person.

SECTION 16.8. Counterparts.

This Agreement may be executed in counterparts, all of which together shall
constitute an agreement binding on all the parties hereto, notwithstanding that
all such parties are not signatories to the original or the same counterpart.
Each party shall become bound by this Agreement immediately upon affixing its
signature hereto or, in the case of a Person acquiring a Limited Partner
Interest pursuant to Section 10.1(a), without execution hereof.

 

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SECTION 16.9. Applicable Law; Forum; Venue and Jurisdiction.

(a) This Agreement shall be construed in accordance with and governed by the
laws of the State of Delaware, without regard to the principles of conflicts of
law.

(b) Each of the Partners and each Person holding any beneficial interest in the
Partnership (whether through a broker, dealer, bank, trust company or clearing
corporation or an agent of any of the foregoing or otherwise):

(i) irrevocably agrees that, unless the Partnership (through the approval of the
General Partner) consents in writing to the selection of an alternative forum,
the Court of Chancery of the State of Delaware shall be the sole and exclusive
forum for any claims, suits, actions or proceedings (A) arising out of or
relating in any way to this Agreement (including any claims, suits or actions to
interpret, apply or enforce the provisions of this Agreement or the duties,
obligations or liabilities among Partners or of Partners to the Partnership, or
the rights or powers of, or restrictions on, the Partners or the Partnership),
(B) brought in a derivative manner on behalf of the Partnership, (C) asserting a
claim of breach of a duty owed by any director, officer or other employee of the
Partnership or the General Partner or any Indemnitee, or owed by the General
Partner, to the Partnership or the Partners, (D) asserting a claim arising
pursuant to any provision of the Delaware Act or (E) asserting a claim governed
by the internal affairs doctrine, in each case regardless of whether such
claims, suits, actions or proceedings sound in contract, tort, fraud or
otherwise, are based on common law, statutory, equitable, legal or other
grounds, or are derivative or direct claims; provided that if and only if the
Court of Chancery of the State of Delaware dismisses any such claims, suits,
actions or proceedings for lack of subject matter jurisdiction, such claims,
suits, actions or proceedings may be brought in another state or federal court
sitting in the State of Delaware;

(ii) irrevocably submits, unless the Partnership (through the approval of the
General Partner) consents in writing to the selection of an alternative forum,
to the exclusive jurisdiction of the Court of Chancery of the State of Delaware
in connection with any such claim, suit, action or proceeding; provided that if
and only if the Court of Chancery of the State of Delaware dismisses any such
claims, suits, actions or proceedings for lack of subject matter jurisdiction,
it irrevocably submits to the exclusive jurisdiction of any state or federal
court sitting in the State of Delaware;

(iii) irrevocably agrees not to, and irrevocably waives any right to, assert in
any such claim, suit, action or proceeding that (A) it is not personally subject
to the jurisdiction of the Court of Chancery of the State of Delaware (unless
the Partnership (through the approval of the General Partner) consents in
writing to the selection of an alternative forum) or of any other court to which
proceedings in the Court of Chancery of the State of Delaware may be appealed
(unless the Partnership (through the approval of the General Partner) consents
in writing to the selection of an alternative forum);

 

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provided that if and only if the Court of Chancery of the State of Delaware
dismisses any such claims, suits, actions or proceedings for lack of subject
matter jurisdiction, then it irrevocably agrees not to, and irrevocably waives
any right to, assert in any such claim, suit, action or proceeding that (A) it
is not personally subject to the jurisdiction of any state or federal court
sitting in the State of Delaware, (B) such claim, suit, action or proceeding is
brought in an inconvenient forum, or (C) the venue of such claim, suit, action
or proceeding is improper;

(iv) expressly waives any requirement for the posting of a bond by a party
bringing such claim, suit, action or proceeding; and

(v) consents to process being served in any such claim, suit, action or
proceeding by mailing, certified mail, return receipt requested, a copy thereof
to such party at the address in effect for notices hereunder, and agrees that
such services shall constitute good and sufficient service of process and notice
thereof; provided, nothing in clause (v) hereof shall affect or limit any right
to serve process in any other manner permitted by law.

SECTION 16.10. Invalidity of Provisions.

If any provision or part of a provision of this Agreement is or becomes for any
reason, invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions and/or parts thereof contained
herein shall not be affected thereby and this Agreement shall, to the fullest
extent permitted by law, be reformed and construed as if such invalid, illegal
or unenforceable provision, or part of a provision, had never been contained
herein, and such provisions and/or part shall be reformed so that it would be
valid, legal and enforceable to the maximum extent possible.

SECTION 16.11. 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 16.12. Facsimile and PDF Signatures.

The use of facsimile signatures and signatures delivered by email in portable
document format (.pdf) 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.

[Signature page follows]

 

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

 

GENERAL PARTNER: ATLAS RESOURCE PARTNERS GP, LLC By:  

/s/ Jonathan Z. Cohen

Name:   Jonathan Z. Cohen Title:   Vice Chairman ORGANIZATIONAL LIMITED PARTNER:
ATLAS ENERGY, L.P. By:   Atlas Energy GP, LLC, its General Partner By:  

/s/ Jonathan Z. Cohen

Name:   Jonathan Z. Cohen Title:   Chairman of the Board

[Signature Page to Amended and Restated Limited Partnership Agreement of

Atlas Resource Partners, L.P.]