Exhibit 10.1

 

Execution Version

 

 

SERIES A PREFERRED UNIT AND COMMON UNIT

 

PURCHASE AGREEMENT

 

 

by and among

 

 

PHILLIPS 66 PARTNERS LP

 

 

and

 

 

THE PURCHASERS PARTY HERETO

 

 

September 21, 2017

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

ARTICLE I. DEFINITIONS

1

 

 

 

Section 1.01

Definitions

1

Section 1.02

Accounting Procedures and Interpretation

7

 

 

 

ARTICLE II. AGREEMENT TO SELL AND PURCHASE

8

 

 

 

Section 2.01

Sale and Purchase

8

Section 2.02

Closing

9

Section 2.03

Mutual Conditions

9

Section 2.04

Conditions to Each Purchaser’s Obligations

9

Section 2.05

Conditions to the Partnership’s Obligations

10

Section 2.06

Deliveries at the Closing

10

Section 2.07

Independent Nature of Purchasers’ Obligations and Rights

12

 

 

 

ARTICLE III. REPRESENTATIONS AND WARRANTIES AND COVENANTS RELATED TO THE
PARTNERSHIP

12

 

 

 

Section 3.01

Organization and Good Standing

13

Section 3.02

Capitalization and Valid Issuance of Units

13

Section 3.03

Ownership of the Material Subsidiaries

14

Section 3.04

Partnership SEC Documents

15

Section 3.05

Financial Statements

15

Section 3.06

Independent Registered Public Accounting Firm

15

Section 3.07

No Material Adverse Effect

16

Section 3.08

No Registration Required

16

Section 3.09

No Restrictions or Registration Rights

16

Section 3.10

Litigation

16

Section 3.11

No Default

16

Section 3.12

No Conflicts

16

Section 3.13

Authority: Enforceability

17

Section 3.14

Approvals

17

Section 3.15

Distribution Restrictions

18

Section 3.16

MLP Status

18

Section 3.17

Investment Company Status

18

Section 3.18

Certain Fees

18

Section 3.19

Labor and Employment Matters

18

Section 3.20

Insurance

19

Section 3.21

Internal Controls

19

Section 3.22

Disclosure Controls and Procedures

19

Section 3.23

Sarbanes-Oxley

19

Section 3.24

Listing and Maintenance Requirements

20

 

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Section 3.25

Environmental Compliance

20

Section 3.26

ERISA Compliance

20

Section 3.27

Tax Returns

21

Section 3.28

Permits

21

Section 3.29

Title to Real and Personal Property

21

Section 3.30

Rights-of-Way

22

Section 3.31

Form S-3 Eligibility

22

Section 3.32

No Unlawful Payments

22

Section 3.33

Compliance with Anti-Money Laundering Laws

23

Section 3.34

No Conflicts with Sanctions Laws

23

Section 3.35

Related Party Transactions

23

Section 3.36

No Side Agreements

23

Section 3.37

Required Disclosures and Descriptions

24

Section 3.38

Contribution Agreement Representations and Warranties

24

 

 

 

ARTICLE IV. REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE PURCHASERS

24

 

 

 

Section 4.01

Existence

24

Section 4.02

Authorization; Enforceability

24

Section 4.03

No Breach

24

Section 4.04

Certain Fees

25

Section 4.05

Unregistered Securities

25

Section 4.06

Sufficient Funds

26

Section 4.07

No Prohibited Trading

26

 

 

 

ARTICLE V. MUTUAL COVENANTS

27

 

 

 

Section 5.01

Conduct of Business

27

Section 5.02

Listing of Units

27

Section 5.03

Cooperation; Further Assurances

27

Section 5.04

Lock-up Agreement

27

Section 5.05

Use of Proceeds

30

Section 5.06

Tax Information

30

 

 

 

ARTICLE VI. INDEMNIFICATION, COSTS AND EXPENSES

30

 

 

 

Section 6.01

Indemnification by the Partnership

30

Section 6.02

Indemnification by the Purchasers

31

Section 6.03

Indemnification Procedure.

32

Section 6.04

Tax Matters

33

 

 

 

ARTICLE VII. TERMINATION

33

 

 

 

Section 7.01

Termination

33

Section 7.02

Certain Effects of Termination

33

 

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ARTICLE VIII. MISCELLANEOUS

34

 

 

 

Section 8.01

Expenses

34

Section 8.02

Interpretation

34

Section 8.03

Survival of Provisions

35

Section 8.04

No Waiver: Modifications in Writing

35

Section 8.05

Binding Effect

35

Section 8.06

Non-Disclosure

36

Section 8.07

Communications

36

Section 8.08

Removal of Legend

37

Section 8.09

Entire Agreement

38

Section 8.10

Assignment

38

Section 8.11

Governing Law: Submission to Jurisdiction

39

Section 8.12

Waiver of Jury Trial

39

Section 8.13

Exclusive Remedy

40

Section 8.14

No Recourse Against Others

40

Section 8.15

No Third-Party Beneficiaries

41

Section 8.16

Certain Adjustments

41

Section 8.17

Execution in Counterparts

41

 

Schedule A — Purchasers; Purchased Units; Funding Obligation

Schedule B — Material Subsidiaries

 

Exhibit A — Contribution, Conveyance and Assumption Agreement

Exhibit B — Form of Registration Rights Agreement

Exhibit C — Form of Second Amended and Restated Agreement of Limited Partnership

Exhibit D — Form of General Partner Waiver

Exhibit E-1 — Form of Opinion of Latham & Watkins LLP

Exhibit E-2 — Form of Opinion of Richards, Layton & Finger, P.A.

Exhibit F — Form of Joinder Agreement

 

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SERIES A PREFERRED UNIT AND COMMON UNIT
PURCHASE AGREEMENT

 

This SERIES A PREFERRED UNIT AND COMMON UNIT PURCHASE AGREEMENT, dated as of
September 21, 2017 (this “Agreement”), is entered into by and among PHILLIPS 66
PARTNERS LP, a Delaware limited partnership (the “Partnership”), and the
purchasers set forth on Schedule A hereto (the “Purchasers”).

 

WHEREAS, the Partnership desires to issue and sell to the Purchasers, and the
Purchasers desire to purchase from the Partnership, the Purchased Units (as
defined below), in accordance with the provisions of this Agreement; and

 

WHEREAS, the Partnership has agreed to provide the Purchasers with certain
registration rights with respect to the Purchased Common Units and the
Conversion Units (as defined below).

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:

 

ARTICLE I.
DEFINITIONS

 

Section 1.01                            Definitions. As used in this Agreement,
the following terms have the meanings indicated:

 

“Active Placement Agents” means, collectively, Barclays Capital Inc., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, JP Morgan Securities LLC and RBC
Capital Markets, LLC.

 

“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. For the avoidance of
doubt, for purposes of this Agreement, none of the Partnership Entities, on the
one hand, and any Purchaser, on the other hand, shall be deemed to be Affiliates
of each other.

 

“Agreement” has the meaning set forth in the introductory paragraph of this
Agreement.

 

“Anti-Money Laundering Laws” has the meaning specified in Section 3.33.

 

“Business Day” means any day other than a Saturday, Sunday, any federal legal
holiday or day on which banking institutions in the State of New York or the
State of Texas are authorized or required by Law or other governmental action to
close.

 

“Closing” has the meaning specified in Section 2.02.

 

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“Closing Date” means the date on which the Closing occurs.

 

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

 

“Common Unit Purchase Price” means an amount equal to $47.5873 per Purchased
Common Unit.

 

“Common Units” means common units representing limited partner interests in the
Partnership having the terms set forth in the Partnership Agreement.

 

“Confidentiality Agreements” means the confidentiality agreements entered into
by the Partnership and each of the Purchasers or their Affiliates, as
applicable, as may be amended from time to time.

 

“Consent” has the meaning specified in Section 3.14.

 

“Contract” means any contract, agreement, indenture, note, bond, mortgage, deed
of trust, loan, instrument, lease, license, commitment or other arrangement,
understanding, undertaking, commitment or obligation, whether written or oral.

 

“Contribution Agreement” means that certain Contribution, Conveyance and
Assumption Agreement, dated as of September 19, 2017, by and among P66 Company,
Phillips PDI, the General Partner and the Partnership, a copy of which is
attached hereto as Exhibit A.

 

“Conversion Units” means the Common Units issuable upon conversion of the
Purchased Preferred Units or PIK Units.

 

“Delaware LP Act” means the Delaware Revised Uniform Limited Partnership Act, as
amended.

 

“Drop-Dead Date” means October 31, 2017.

 

“Environmental Law” any and all applicable federal, state, local and foreign
laws, rules, regulations, requirements, decisions, judgments, decrees, orders
and the common law relating to pollution or the protection, cleanup or
restoration of the environment, natural resources or human health or safety,
including those relating to the generation, storage, treatment, use, handling,
transportation, Release or threat of Release of hazardous or toxic substances,
materials or wastes.

 

“ERISA” has the meaning specified in Section 3.26.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and the rules and regulations of the Commission promulgated thereunder.

 

“First Reserve” means FR XIII Pantheon Holdings, L.L.C., a Delaware limited
liability company.

 

“Funding Obligation” means, with respect to a particular Purchaser, an amount
equal to (a) the Preferred Unit Purchase Price multiplied by the number of
Purchased Preferred Units to

 

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be purchased by such Purchaser on the Closing Date pursuant to Section 2.01,
plus (b) the Common Unit Purchase Price multiplied by the number of Purchased
Common Units to be purchased by such Purchaser on the Closing Date pursuant to
Section 2.01.

 

“GAAP” means generally accepted accounting principles in the United States of
America as of the date hereof; provided, however, that for the financial
statements of the Partnership prepared as of a certain date, GAAP referenced
therein shall be GAAP as of the date of such financial statements.

 

“General Partner” means Phillips 66 Partners GP LLC, a Delaware limited
liability company.

 

“General Partner Units” has the meaning specified in Section 3.02(b).

 

“Governmental Authority” means, with respect to a particular Person, any
country, state, county, city and political subdivision in which such Person or
such Person’s property is located or which exercises valid jurisdiction over any
such Person or such Person’s property, and any court, agency, department,
commission, board, bureau or instrumentality of any of them and any monetary
authority which exercises valid jurisdiction over any such Person or such
Person’s property. Unless otherwise specified, all references to Governmental
Authority herein with respect to the Partnership mean a Governmental Authority
having jurisdiction over the Partnership Entities or any of their respective
properties.

 

“Hazardous Materials” means any material (including pollutants, contaminants,
hazardous or toxic substances or wastes) that is listed, classified or otherwise
regulated by or may give rise to liability under any Environmental Law,
including crude oil and any fraction thereof, any petroleum products, natural
gas liquids and naturally occurring radioactive materials.

 

“Incentive Distribution Rights” has the meaning specified in Section 3.02(a).

 

“Indemnified Party” has the meaning specified in Section 6.03(b).

 

“Indemnifying Party” has the meaning specified in Section 6.03(b).

 

“Initial Purchaser” means (a) the Lead Purchaser and its Affiliates, as a group,
(b) First Reserve and its Affiliates, as a group, and (c) Tortoise and its
Affiliates, as a group.

 

“Joinder Agreement” has the meaning set forth in Section 8.10.

 

“Knowledge” means, with respect to the Partnership, the actual knowledge of Tom
Liberti and John Zuklic.

 

“Law” means any federal, state, local or foreign order, writ, injunction,
judgment, settlement, award, decree, statute, law (including common law),
rule or regulation.

 

“Lead Purchaser” means Stonepeak Screwdriver SPV LLC, a Delaware limited
liability company, in its capacity as lead purchaser for the Purchasers under
this Agreement.

 

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“Lien” means any security interest, lien, deed of trust, mortgage, pledge,
charge, claim, restriction, easement, encumbrance or other similar interest or
right.

 

“Material Adverse Effect” means (x) any change, event or effect that,
individually or together with any other changes, events or effects, has had or
would reasonably be expected to have a material adverse effect on (a) the
business, properties, condition (financial or otherwise) or results of
operations of the Partnership Entities, taken as a whole or (b) the ability of
any of the Partnership Entities, as applicable, to perform its obligations under
the Transaction Documents; provided, however, that a Material Adverse Effect
shall not include any adverse effect on the foregoing to the extent such adverse
effect results from, arises out of, or relates to (i) a general deterioration in
the economy or changes in the general state of the markets or industries in
which any of the Partnership Entities operates (including, for the avoidance of
doubt, adverse changes (A) in commodity prices, (B) in capital spending by
energy sector participants or their customers, (C) in production profiles in oil
and gas producing basins in North America and (D) otherwise associated with the
effects of distress in the energy sector as of the date of this Agreement and
the resulting effect on the Partnership Entities, taken as a whole), except,
with respect to this clause (i), to the extent that such Partnership Entities,
taken as a whole, are adversely affected in a disproportionate manner as
compared to other industry participants, (ii) any deterioration in the condition
of the capital markets or any inability on the part of the Partnership Entities
to access the capital markets, (iii) the outbreak or escalation of hostilities
involving the United States, the declaration by the United States of a national
emergency, acts of war (whether or not declared) or the occurrence of any other
calamity or crisis, including acts of terrorism, hurricane, flood, tornado,
earthquake or other natural disaster, (iv) any change in accounting requirements
or principles imposed upon the Partnership Entities or their respective
businesses or any change in applicable Law, or the interpretation thereof, other
than a change that would result in the Partnership being treated as a
corporation for United States federal Tax purposes, (v) any change in the credit
rating and/or outlook of any of the Partnership Entities or any of their
securities (except that the underlying causes of any such changes may be
considered in determining whether a Material Adverse Effect has occurred),
(vi) changes in the market price or trading volume of the Common Units (except
that the underlying causes of any such changes may be considered in determining
whether a Material Adverse Effect has occurred) or (vii) any failure of the
Partnership to meet any internal or external projections, forecasts or estimates
of revenue or earnings for any period (except that the underlying causes of any
such failures may be considered in determining whether a Material Adverse Effect
has occurred) or (y) solely for purposes of Section 2.02 and Section 2.04, the
issuance or granting of any decision, order or other ruling in connection with
the Specified Matter (as defined in Section 8.14 of the Contribution Agreement)
that would require the portion of the crude oil pipeline included in the DAPL
Assets (as defined in the Contribution Agreement) located beneath the Missouri
River to completely cease operation for any period of time.

 

“Material Subsidiaries” means the Subsidiaries of the Partnership listed on
Schedule B attached hereto.

 

“National Securities Exchange” means an exchange registered with the Commission
under Section 6(a) of the 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

 

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successor to such Section) of the Exchange Act) that the General Partner shall
designate as a National Securities Exchange for purposes of this Agreement.

 

“Non-Affiliate Transfer Period” has the meaning set forth in Section 5.04(a).

 

“NYSE” means the New York Stock Exchange.

 

“OFAC” has the meaning specified in Section 3.34.

 

“Organizational Documents” means, as applicable, an entity’s agreement or
certificate of limited partnership, limited liability company agreement,
certificate of formation, certificate or articles of incorporation, bylaws or
other similar organizational documents.

 

“P66 Company” means Phillips 66 Company, a Delaware corporation.

 

“Partnership” has the meaning set forth in the introductory paragraph of this
Agreement.

 

“Partnership Agreement” means the First Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of July 26, 2013, as amended
from time to time in accordance with the terms thereof (including, as the
context requires, by the Second A&R LPA).

 

“Partnership Entities” means, collectively, the Partnership, the General
Partner, and each of the Partnership’s majority owned Subsidiaries.

 

“Partnership Indemnified Parties” has the meaning specified in Section 6.02.

 

“Partnership Parties” means, collectively, the Partnership and the General
Partner.

 

“Partnership SEC Documents” means the Partnership’s forms, registration
statements, reports, schedules and statements filed by it under the Exchange Act
or the Securities Act, as applicable.

 

“Permits” has the meaning specified in Section 3.28.

 

“Person” means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company, unincorporated
organization, government or any agency, instrumentality or political subdivision
thereof or any other form of entity.

 

“Phillips PDI” means Phillips Project Development Inc., a Delaware corporation.

 

“Piggyback Registration” has the meaning given such term in the Registration
Rights Agreement.

 

“PIK Units” means any additional Series A Preferred Units issued by the
Partnership to the Purchasers as in-kind distributions pursuant to the Second
A&R LPA.

 

“Placement Agent Engagement Letters” means, collectively, (a) any engagement
letter entered into by the Partnership, on the one hand, and the Active
Placement Agents, on the other

 

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hand, and (b) any joinder letter to any such engagement letter entered into by
the Partnership and any other Person in its capacity as a placement agent under
such engagement letter.

 

“Placement Agents” means, collectively, the Active Placement Agents and any
additional placement agent that executes a joinder letter to a Placement Agent
Engagement Letter.

 

“Preferred Unit Purchase Price” means an amount equal to $54.27 per Purchased
Preferred Unit.

 

“Purchased Common Units” has the meaning specified in Section 2.01(a).

 

“Purchased Preferred Units” has the meaning specified in Section 2.01(b).

 

“Purchased Units” means, collectively, the Purchased Common Units and the
Purchased Preferred Units.

 

“Purchaser Indemnified Party” has the meaning specified in Section 6.01.

 

“Purchasers” has the meaning specified in the introductory paragraph of this
Agreement.

 

“Registration Rights Agreement” means the Registration Rights Agreement, to be
entered into at the Closing, by and among the Partnership the Purchasers, in
substantially the form attached hereto as Exhibit B.

 

“Release” means any spilling, leaking, seepage, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, or migrating in, into or through the environment, or in,
into, from or through any building or structure.

 

“Representatives” means, with respect to a specified Person, the investors,
officers, directors, partners, members, managers, employees, agents, advisors,
counsel, accountants, investment bankers and other representatives of such
Person.

 

“Rights-of-Way” has the meaning specified in Section 3.30.

 

“Second A&R LPA” has the meaning specified in Section 2.06(a)(i).

 

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and the rules and regulations of the Commission promulgated thereunder.

 

“Series A Preferred Units” means the Partnership’s Series A Perpetual
Convertible Preferred Units.

 

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

 

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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 general or limited partner interests of such partnership is
owned, directly or indirectly, at the date of determination, by such Person, by
one or more Subsidiaries of such Person, or a combination thereof; or (c) any
other Person (other than a corporation or a partnership) as to which such Person
consolidates for accounting purposes or 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.

 

“Tax Return” means any return, report or similar filing (including the attached
schedules) filed or required to be filed with respect to Taxes (and any
amendments thereto), including any information return, claim for refund or
declaration of estimated Taxes.

 

“Taxes” means any and all domestic or foreign, federal, state, local or other
taxes of any kind (together with any and all interest, penalties, additions to
tax and additional amounts imposed with respect thereto) imposed by any
Governmental Authority, including taxes on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, unemployment, social security, workers’
compensation or net worth, and taxes in the nature of excise, withholding, ad
valorem or value added, and including any liability in respect of any items
described above as a transferee or successor, pursuant to Section 1.1502-6 of
the Treasury Regulations (or any similar provisions of state, local or foreign
Law), or as an indemnitor, guarantor, surety or in a similar capacity under any
Contract.

 

“Third-Party Claim” has the meaning specified in Section 6.03(b).

 

“Tortoise” means each of Tortoise Direct Opportunities Fund, LP, a Delaware
limited partnership; Tortoise MLP & Pipeline Fund, a series of Managed Portfolio
Series, a Delaware statutory trust; Tortoise VIP MLP & Pipeline Portfolio, a
series of Managed Portfolio Series, a Delaware statutory trust; Tortoise Energy
Infrastructure Corporation, a Maryland corporation; Tortoise MLP Fund, Inc., a
Maryland corporation; Tortoise Power and Energy Infrastructure Fund, Inc., a
Maryland corporation; Tortoise Pipeline & Energy Fund, Inc., a Maryland
corporation; Tortoise Energy Infrastructure Fund, Inc., a Maryland corporation;
and Texas Mutual Insurance Company, a Texas insurance company.

 

“Total Funding Obligation” means the aggregate amount of the Funding Obligations
of all of the Purchasers.

 

“Transaction Documents” means, collectively, this Agreement, the Registration
Rights Agreement, the Second A&R LPA, the Contribution Agreement and any and all
other agreements or instruments executed and delivered to the Purchasers by the
Partnership or the General Partner hereunder or thereunder, as applicable.

 

Section 1.02                            Accounting Procedures and
Interpretation. Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all determinations with respect to

 

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accounting matters hereunder shall be made, and all financial statements of the
Partnership and certificates and reports as to financial matters required to be
furnished to the Purchasers hereunder shall be prepared, in accordance with GAAP
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q promulgated by the Commission) and in compliance as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the Commission with respect thereto.

 

ARTICLE II.
AGREEMENT TO SELL AND PURCHASE

 

Section 2.01                            Sale and Purchase.

 

(a)                                 Subject to the terms and conditions hereof,
at the Closing, each Purchaser hereby agrees to purchase from the Partnership
the number of Common Units set forth opposite such Purchaser’s name on
Schedule A, with any fractional Common Units being rounded to the nearest whole
number of Common Units (with fractional Common Units equal to or greater than a
0.5 Common Unit being rounded to the next higher Common Unit) (collectively, the
“Purchased Common Units”).

 

(b)                                 Subject to the terms and conditions hereof,
at the Closing, each Purchaser hereby agrees to purchase from the Partnership
the number of Series A Preferred Units set forth opposite such Purchaser’s name
on Schedule A, with any fractional Series A Preferred Units being rounded to the
nearest whole number of Series A Preferred Units (with fractional Series A
Preferred Units equal to or greater than a 0.5 Series A Preferred Unit being
rounded to the next higher Series A Preferred Unit) (collectively, the
“Purchased Preferred Units”).

 

(c)                                  Subject to the terms and conditions hereof,
at the Closing, the Partnership hereby agrees to issue and sell to the
Purchasers the Purchased Common Units and the Purchased Preferred Units.

 

(d)                                 At the Closing, the Purchasers shall
purchase (i) the Purchased Preferred Units for a cash purchase price equal to
the Preferred Unit Purchase Price per Series A Preferred Unit and (ii) the
Purchased Common Units for a cash purchase price equal to the Common Unit
Purchase Price per Common Unit, and upon the Closing, the Purchasers shall be
bound by the terms and provisions of the Second A&R LPA.

 

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Section 2.02                            Closing. The consummation of the
purchase and sale of the Purchased Units hereunder (the “Closing”) shall take
place (a) on the later of (i) October 6, 2017 and (ii) the first Business Day
following the first date on which the conditions set forth in Section 2.03.
Section 2.04 and Section 2.05 (other than those conditions that by their nature
are to be satisfied at the Closing, but subject to the fulfillment or waiver of
those conditions) shall be satisfied or waived in accordance with this Agreement
or (b) at such other time and place as the Partnership and the Purchasers may
agree. The Closing shall take place at the offices of Latham & Watkins LLP, 811
Main Street, Suite 3700, Houston, Texas 77002 (or such other location as agreed
to by the Partnership and the Purchasers).

 

Section 2.03                            Mutual Conditions. The respective
obligations of each party to consummate the purchase and sale of the Purchased
Units at the Closing shall be subject to the satisfaction, on or prior to the
Closing Date, of each of the following conditions (any or all of which may be
waived by a party on behalf of itself in writing, in whole or in part, to the
extent permitted by applicable Law):

 

(a)                                 no statute, rule, order, decree or
regulation shall have been enacted or promulgated, and no action shall have been
taken, by any Governmental Authority which temporarily, preliminarily or
permanently restrains, precludes, enjoins or otherwise prohibits the
consummation of the transactions contemplated hereby or makes the transactions
contemplated hereby illegal;

 

(b)                                  there shall not be pending any suit, action
or proceeding by any Governmental Authority seeking to restrain, preclude,
enjoin or prohibit the transactions contemplated by this Agreement; and

 

(c)                                  the closing of the transactions
contemplated by the Contribution Agreement shall have occurred, or shall occur
concurrently with the Closing.

 

Section 2.04                            Conditions to Each Purchaser’s
Obligations. The obligation of a Purchaser to consummate its purchase of
Purchased Units shall be subject to the satisfaction on or prior to the Closing
Date of each of the following conditions (any or all of which may be waived by
the applicable Purchaser with respect to itself in writing, in whole or in part,
to the extent permitted by applicable Law):

 

(a)                                 the representations and warranties of the
Partnership contained in this Agreement shall be true and correct in all
material respects (other than those representations and warranties contained in
Section 3.01, Section 3.02, Section 3.03, Section 3.13, Section 3.16 or
Section 3.18 or other representations and warranties that are qualified by
materiality or Material Adverse Effect, which, in each case, shall be true and
correct in all respects) when made and as of the Closing Date (except that
representations and warranties made as of a specific date shall be required to
be true and correct as of such date only);

 

(b)                                 the Partnership shall have performed and
complied in all material respects with all of the covenants and agreements
contained in this Agreement that are required to be performed or complied with
by it on or prior to the Closing Date;

 

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(c)                                  the NYSE shall have authorized, subject to
official notice of issuance, the listing of the Purchased Common Units and the
Conversion Units;

 

(d)                                 no notice of delisting from the NYSE shall
have been received by the Partnership with respect to the Common Units;

 

(e)                                  there shall not have occurred a Material
Adverse Effect; and

 

(f)                                   the Partnership shall have delivered, or
caused to be delivered, to the Purchaser the Partnership’s closing deliveries
described in Section 2.06(a), as applicable.

 

Section 2.05                            Conditions to the Partnership’s
Obligations. The obligation of the Partnership to consummate the sale and
issuance of the Purchased Units to each Purchaser shall be subject to the
satisfaction on or prior to the Closing Date of each of the following conditions
(any or all of which may be waived by the Partnership in writing, in whole or in
part, to the extent permitted by applicable Law):

 

(a)                                 the representations and warranties of such
Purchaser contained in this Agreement shall be true and correct in all material
respects (other than those representations and warranties that are qualified by
materiality, which, in each case, shall be true and correct in all
respects) when made and as of the Closing Date (except that representations and
warranties made as of a specific date shall be required to be true and correct
as of such date only);

 

(b)                                 such Purchaser shall have performed and
complied in all material respects with all of the covenants and agreements
contained in this Agreement that are required to be performed or complied with
by it on or prior to the Closing Date; and

 

(c)                                  such Purchaser shall have delivered, or
caused to be delivered, to the Partnership the Purchaser’s closing deliveries
described in Section 2.06(b), as applicable.

 

Section 2.06                            Deliveries at the Closing.

 

(a)                                 Deliveries of the Partnership. At the
Closing, the Partnership shall deliver, or cause to be delivered, to the
Purchasers:

 

(i)                                     a fully executed copy of the Second
Amended and Restated Agreement of Limited Partnership of the Partnership,
substantially in the form attached hereto as Exhibit C (the “Second A&R LPA”);

 

(ii)                                  an executed counterpart of the
Registration Rights Agreement;

 

(iii)                               a fully executed “Supplemental Listing
Application” approving the Purchased Common Units and the Conversion Units for
listing by the NYSE;

 

(iv)                              A fully executed waiver of the General Partner
with respect to certain of its and its Affiliates’ rights under the Partnership
Agreement, in substantially the form attached hereto as Exhibit D;

 

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(v)                                 evidence of issuance of the Purchased Common
Units credited to book-entry accounts maintained by the transfer agent of the
Partnership, bearing a restrictive notation meeting the requirements of the
Partnership Agreement, free and clear of any Liens, other than transfer
restrictions under this Agreement, the Partnership Agreement or the Delaware LP
Act and applicable federal and state securities Laws and those created by the
Purchasers;

 

(vi)                              evidence of issuance of the Purchased
Preferred Units credited to book-entry accounts maintained by the transfer agent
of the Partnership, bearing a restrictive notation meeting the requirements of
the Partnership Agreement, free and clear of any Liens, other than transfer
restrictions under this Agreement, the Partnership Agreement or the Delaware LP
Act and applicable federal and state securities Laws and those created by the
Purchasers;

 

(vii)                           a certificate of the Chief Financial Officer and
the Treasurer of the General Partner, on behalf of the Partnership, dated the
Closing Date, certifying, in their applicable capacities, to the effect that the
conditions set forth in Section 2.03(c), Section 2.04(a), Section 2.04(b) and
Section 2.04(f) have been satisfied;

 

(viii)                        a certificate of the Secretary or Assistant
Secretary of the General Partner, on behalf of the Partnership, dated the
Closing Date, certifying as to and attaching (A) the certificate of limited
partnership of the Partnership, (B) the Second A&R LPA, (C)  resolutions of the
board of directors of the General Partner authorizing the execution and delivery
of the Transaction Documents and the consummation of the transactions
contemplated thereby, including the issuance of the Purchased Units, the PIK
Units and the Conversion Units, and (D) the incumbency of the officers
authorized to execute the Transaction Documents on behalf of the Partnership or
the General Partner (on its own behalf or on behalf of the Partnership), as
applicable, setting forth the name and title and bearing the signatures of such
officers;

 

(ix)                              a certificate of the Secretary of State of
each applicable state, dated within ten Business Days prior to the Closing Date,
to the effect that each of the Partnership Parties and Material Subsidiaries is
in good standing in its respective jurisdiction of formation;

 

(x)                                 an opinion from each of Latham & Watkins LLP
and Richards, Layton & Finger, P.A., counsel for the Partnership, in
substantially the forms attached hereto as Exhibit E-1 and Exhibit E-2,
respectively, which shall be addressed to the Purchasers and dated the Closing
Date;

 

(xi)                              a counterpart to any Joinder Agreement
required by Section 8.10 executed by the Partnership;

 

(xii)                           a cross-receipt executed by the Partnership and
delivered to the Purchasers certifying as to the amounts that it has received
from the Purchasers; and

 

(xiii)                        such other documents relating to the transactions
contemplated by this Agreement as the Purchasers or their respective counsel may
reasonably request.

 

(b)                                 Deliveries of Each Purchaser. At the
Closing, each Purchaser shall deliver or cause to be delivered to the
Partnership:

 

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(i)                                     payment of such Purchaser’s respective
Funding Obligation payable by wire transfer of immediately available funds to an
account designated in advance of the Closing Date by the Partnership;

 

(ii)                                  a counterpart of the Registration Rights
Agreement, which shall have been duly executed by such Purchaser;

 

(iii)                               a certificate of an authorized officer of
such Purchaser, dated the Closing Date, in his or her applicable capacity, to
the effect that the conditions set forth in Section 2.05(a) and
Section 2.05(b) have been satisfied;

 

(iv)                              a duly executed Internal Revenue Service
Form W-9 from such Purchaser;

 

(v)                                 a counterpart to any Joinder Agreement
required by Section 8.10 executed by such Purchaser;

 

(vi)                              a cross-receipt executed by such Purchaser and
delivered to the Partnership certifying that it has received from the
Partnership the number of Purchased Units to be received by such Purchaser in
connection with the Closing; and

 

(vii)                           such other documents relating to the
transactions contemplated by this Agreement as the Partnership or its counsel
may reasonably request.

 

Section 2.07                            Independent Nature of Purchasers’
Obligations and Rights. The obligations of each Purchaser under any Transaction
Document are several and not joint with the obligations of any other Purchaser,
and no Purchaser shall be responsible in any way for the performance of the
obligations of any other Purchaser under any Transaction Document. The failure
of any Purchaser to perform, or waiver by the Partnership of such performance,
under any Transaction Document shall not excuse performance by any other
Purchaser or the Partnership, and the waiver by any Purchaser of performance of
the Partnership under any Transaction Document shall not excuse performance by
the Partnership with respect to any other Purchaser. Nothing contained herein or
in any other Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights, including the rights arising out of this Agreement or
out of the other Transaction Documents, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such
purpose.

 

ARTICLE III.
REPRESENTATIONS AND WARRANTIES AND
COVENANTS RELATED TO THE PARTNERSHIP

 

The Partnership represents and warrants to and covenants with the Purchasers as
follows:

 

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Section 3.01                            Organization and Good Standing.

 

(a)                                 Each of the Partnership Entities has been
duly formed and each is validly existing and in good standing under the laws of
its respective jurisdiction of organization, with all requisite corporate,
limited partnership or limited liability company, as the case may be, power and
authority (i) to own or lease and to operate its properties and conduct its
business as described in the Partnership SEC Documents, if any; (ii) to execute
and deliver each of the Transaction Documents to which such Partnership Entity
is a party and consummate the transactions contemplated thereby; and (iii) in
the case of the Partnership, to issue, sell and deliver the Purchased Units,
except, in the case of clause (i), where the failure to have such power or
authority would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect.

 

(b)                                 Each of the Partnership Entities is duly
qualified to do business and is in good standing in each jurisdiction in which
its respective ownership or lease of property or the conduct of its respective
businesses requires such qualification, except where the failure to be so
qualified or in good standing would not, individually or in the aggregate, be
reasonably likely to have a Material Adverse Effect.

 

(c)                                  The Organizational Documents of each of the
Partnership Entities have been, and in the case of the Second A&R LPA, at the
Closing will be, duly authorized, executed and delivered by any Partnership
Entity party thereto (and, in the case of the Organizational Documents of the
General Partner, by all parties thereto) and are, and in the case of the Second
A&R LPA, at the Closing will be, valid and legally binding agreements of the
applicable Partnership Entity, enforceable against such Partnership Entity
thereto in accordance with their respective terms; provided, that, with respect
to each such agreement, the enforceability thereof may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar Laws from time to time in effect affecting creditors’ rights and
remedies generally and by general principles of equity (regardless of whether
such principles are considered in a proceeding in equity or at law).

 

Section 3.02                            Capitalization and Valid Issuance of
Units.

 

(a)                                 As of the date hereof, the issued and
outstanding limited partner interests of the Partnership consist of 110,505,502
Common Units and the incentive distribution rights of the Partnership (as
defined in the Partnership Agreement, the “Incentive Distribution Rights”).  All
such Common Units and Incentive Distribution Rights and the limited partner
interests represented thereby have been duly authorized and validly issued in
accordance with the Partnership Agreement, and have been fully paid (to the
extent required by the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by Sections 17-303, 17-607 and 17-804 of the
Delaware LP Act). As of the date hereof, there are no, and as of the Closing
Date, there will be no, limited partner interests of the Partnership that are
senior to or pari passu with, in right of distribution, the Series A Preferred
Units.

 

(b)                                 The General Partner is the sole general
partner of the Partnership and has full power and authority to act as general
partner of the Partnership as described in the Partnership SEC Documents; the
General Partner is, and at the Closing Date will be, the sole

 

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general partner of the Partnership, and, as of the date hereof, owns
(i) 2,187,386 general partner units representing an approximate 2% general
partner interest in the Partnership (the “General Partner Units”) and (ii) 100%
of the Incentive Distribution Rights; the General Partner Units have been duly
authorized and validly issued in accordance with the Partnership Agreement, and
have been fully paid (to the extent required under the Partnership Agreement);
and the General Partner owns the Incentive Distribution Rights and the General
Partner Units free and clear of all Liens (except for restrictions on
transferability as described the Partnership SEC Documents).

 

(c)                                  At the Closing Date, the Purchased Units to
be issued and sold by the Partnership hereunder will have been duly authorized
and, when issued and delivered and paid for as provided herein, will be duly and
validly issued in accordance with the Partnership Agreement, and will be fully
paid (to the extent required under the Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by Sections 17-303, 17-607 and
17-804 of the Delaware LP Act) and will be free of any and all Liens and
restrictions on transfer, other than (i) restrictions on transfer under the
Partnership Agreement, this Agreement or applicable state and federal securities
Laws, (ii) with respect to each Purchaser’s Purchased Units and the limited
partner interests represented thereby, such Liens as are created by such
Purchaser and (iii) such Liens as arise under the Partnership Agreement or the
Delaware LP Act.

 

(d)                                 Except for any such preemptive rights that
have been waived, there are no persons entitled to statutory, preemptive or
other similar contractual rights to subscribe for the Purchased Units; and,
except (i) for the Purchased Units to be issued pursuant to this Agreement,
(ii) for awards issued pursuant to the Partnership’s long-term incentive plans
or (iii) as disclosed in the Partnership SEC Documents, no options, warrants or
other rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, partnership
securities or ownership interests in the Partnership are outstanding.

 

(e)                                  Upon issuance in accordance with this
Agreement and the Partnership Agreement, the PIK Units and the Conversion Units
will be duly authorized, validly issued, fully paid (to the extent required by
the Partnership Agreement) and nonassessable (except as such nonassessability
may be affected by Sections 17-303, 17-607 and 17-804 of the Delaware LP
Act) and will be free of any and all Liens and restrictions on transfer, other
than (i) restrictions on transfer under the Partnership Agreement, this
Agreement or applicable state and federal securities Laws, (ii) with respect to
each Purchaser’s PIK Units and Conversion Units, such Liens as are created by
such Purchaser and (iii) such Liens as arise under the Partnership Agreement or
the Delaware LP Act.

 

Section 3.03                            Ownership of the Material Subsidiaries.
All of the outstanding shares of capital stock or other equity interests of each
Material Subsidiary (a) have been duly authorized and validly issued (in
accordance with the Organizational Documents of such Material Subsidiary), and
are fully paid (in the case of an interest in a limited partnership or limited
liability company, to the extent required under the Organizational Documents of
such Material Subsidiary) and non-assessable (except as such nonassessability
may be affected by the applicable Law of such Material Subsidiary’s jurisdiction
of formation), and (b) are wholly owned, directly or indirectly, by the
Partnership, free and clear of all Liens, except restrictions on transferability
in the Organizational Documents of such Material Subsidiary. Other than the
Material Subsidiaries, as of the date hereof, the Partnership has no direct or
indirect ownership

 

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interest in any Person other than the Material Subsidiaries that would be deemed
a “significant subsidiary” of the Partnership as such term is defined in
Rule 405 under the Securities Act (assuming, for purposes of this Section 3.03,
that the conditions described in such definition are determined as of the date
hereof).

 

Section 3.04                            Partnership SEC Documents. Since
January 1, 2017, the Partnership’s forms, registration statements, reports,
schedules and statements required to be filed by it under the Exchange Act have
been filed with the Commission on a timely basis. The Partnership SEC Documents,
at the time filed (or in the case of registration statements, solely on the
dates of effectiveness), except to the extent corrected by a subsequent
Partnership SEC Document, (a) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made in the case of any such documents other than a registration
statement, not misleading and (b) complied as to form in all material respects
with the applicable requirements of the Exchange Act and the Securities Act, as
the case may be.

 

Section 3.05                            Financial Statements. The historical
financial statements (including the related notes) contained or incorporated by
reference in the Partnership SEC Documents, (a) comply as to form in all
material respects with the applicable accounting requirements under the
Securities Act and the Exchange Act (except that certain supporting schedules
are omitted because they are not required, significant or applicable or the
information is included in the financial statements or related notes),
(b) present fairly in all material respects the financial position, results of
operations and cash flows of the entities purported to be shown thereby on the
basis stated therein at the respective dates or for the respective periods and
(c) have been prepared in accordance with GAAP consistently applied throughout
the periods involved, in each case except to the extent disclosed therein. The
other financial information of the Partnership Entities, including non-GAAP
financial measures, if any, contained or incorporated by reference in the
Partnership SEC Documents has been derived from the accounting records of the
Partnership Entities, and fairly presents in all material respects the
information purported to be shown thereby. Nothing has come to the attention of
the Partnership that has caused it to believe that the statistical and
market-related data included in the Partnership SEC Documents is not based on or
derived from sources that are reliable and accurate in all material respects as
of the date on which the applicable Partnership SEC Documents were filed.

 

Section 3.06                            Independent Registered Public Accounting
Firm. (a) Ernst & Young LLP, which has audited certain financial statements of
the Partnership, is an independent registered public accounting firm with
respect to each entity it has audited within the applicable rules and
regulations adopted by the Commission and the Public Company Accounting
Oversight Board (United States) and as required by the Securities Act; and
(b) to the Knowledge of the Partnership, Deloitte & Touche LLP, which has
audited certain financial statements of each of DCP Sand Hills Pipeline, LLC and
DCP Southern Hills Pipeline, LLC, was an independent auditing firm with respect
to such applicable entities at the time of such audit, and has performed such
audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States) and has not resigned or been dismissed as
independent registered public accountants of the Partnership as a result of or
in connection with any disagreement with the Partnership or any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure.

 

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Section 3.07                            No Material Adverse Effect. Since
December 31, 2016, except as described in the Partnership SEC Documents, there
has not been any Material Adverse Effect.

 

Section 3.08                            No Registration Required. Assuming the
accuracy of the representations and warranties of the applicable Purchaser
contained in Article IV, the issuance and sale of the Purchased Units to such
Purchaser pursuant to this Agreement is exempt from registration requirements of
the Securities Act, and neither the Partnership nor, to the Knowledge of the
Partnership, any Person acting on its behalf, has taken nor will take any action
hereafter that would cause the loss of such exemption.

 

Section 3.09                            No Restrictions or Registration Rights.
Except as described in the Partnership Agreement, there are no restrictions upon
the voting or transfer of, any equity securities of the Partnership. Except for
such rights that have been waived or as expressly set forth in the Registration
Rights Agreement, neither the offering nor sale of the Purchased Units as
contemplated by this Agreement gives rise to any rights for or relating to the
registration of any Purchased Units or other securities of the Partnership.
Except as described in the Partnership Agreement, the Partnership has not
granted registration rights to any Person other than the Purchasers that would
provide such Person priority over the Purchasers’ rights with respect to any
Piggyback Registration.

 

Section 3.10                            Litigation. Except as described in the
Partnership SEC Documents or the Transaction Documents, there are no legal,
governmental or regulatory investigations, actions, suits, claims, orders,
injunctions or proceedings pending or, to the Knowledge of the Partnership,
threatened to which any Partnership Entity is or may be a party or to which any
property of any Partnership Entity is or may be the subject that, individually
or in the aggregate, if determined adversely to a Partnership Entity, would
reasonably be expected to have a Material Adverse Effect or which challenge the
validity of any of the Transaction Documents or the right of either of the
Partnership or the General Partner to enter into any of the Transaction
Documents or to consummate the transactions contemplated by this Agreement.

 

Section 3.11                            No Default. No Partnership Entity is
(a) in violation of its Organizational Documents; (b) in default, and no event
has occurred that, with notice or lapse of time or both, would result in any
breach or violation of, or constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which such Partnership Entity is a party or by which such Partnership Entity is
bound or to which any of the property of any Partnership Entity is subject; or
(c) in violation of any law or statute or any judgment, order, rule or
regulation of any court, arbitrator, Governmental Authority or any
self-regulatory organization or other non-governmental regulatory authority
(including, without limitation, the rules and regulations of the NYSE)
applicable to such Partnership Entity or any of its properties, except, in the
case of clauses (b) and (c) above, for any such breach, default, prospective
default or violation that is disclosed in the Partnership SEC Documents or would
not, individually or in the aggregate, have a Material Adverse Effect or prevent
the consummation of the transactions contemplated by this Agreement.

 

Section 3.12                            No Conflicts. The issuance and sale by
the Partnership of the Purchased Units, the application of the proceeds thereof,
the execution, delivery and performance by the

 

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Partnership of the Transaction Documents and the consummation of the
transactions contemplated thereby will not (a) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under (or constitute any event which, with notice, lapse of time or
both, would result in any breach or violation of), or result in the creation or
imposition of any Lien upon any property or assets of any Partnership Entity
pursuant to, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which any Partnership Entity is a party or by which
any Partnership Entity is bound or to which any of the property of any
Partnership Entity is subject; (b) result in any violation of the provisions of
the Organizational Documents of any Partnership Entity; or (c) result in the
violation of any law or statute or any judgment, order, rule or regulation of
any court, arbitrator, Governmental Authority or any self-regulatory
organization or other non-governmental regulatory authority (including, without
limitation, the rules and regulations of the NYSE)  applicable to such
Partnership Entity or any of its properties, except, in the case of clauses
(a) and (c) above, for any such conflict, breach, violation or default that
would not, individually or in the aggregate, have a Material Adverse Effect or
prevent the consummation of the transactions contemplated by this Agreement.

 

Section 3.13                            Authority: Enforceability. The
Partnership has all requisite power and authority under the Partnership
Agreement and the Delaware LP Act to issue, sell and deliver the Purchased
Units, in accordance with and upon the terms and conditions set forth in this
Agreement and the Partnership Agreement. At the Closing, all limited partnership
and limited liability company action, as the case may be, required to be taken
by the Partnership Entities for the authorization, issuance, sale and delivery
of the Purchased Units, the execution and delivery of the Transaction Documents
and the consummation of the transactions contemplated thereby shall have been
validly taken.  No approval from the holders of outstanding Common Units is
required under the Partnership Agreement or the rules of the NYSE in connection
with the Partnership’s issuance and sale of the Purchased Units to the
Purchasers.  Each of the Transaction Documents has been duly and validly
authorized and has been or, with respect to the Transaction Documents to be
delivered at the Closing, will be, validly executed and delivered by the
Partnership or the General Partner, as the case may be. Each of the Transaction
Documents constitutes, or will constitute, the legal, valid and binding
obligations of the Partnership or the General Partner, as the case may be, and,
to the Knowledge of the Partnership, each of the other parties thereto, in each
case enforceable in accordance with its terms; provided that, with respect to
each such agreement, the enforceability thereof may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar Laws from time to time in effect affecting creditors’ rights and
remedies generally and by general principles of equity (regardless of whether
such principles are considered in a proceeding in equity or at law).

 

Section 3.14                            Approvals. No approval, authorization,
consent, waiver, license, qualification, written exemption from, or order of or
filing with any Governmental Authority, or of or with any self-regulatory
organization or other non-governmental regulatory authority (including, without
limitation, the NYSE), or approval of the security holders of any of the
Partnership Entities (each, a “Consent”), is required in connection with the
issuance and sale of the Purchased Units by the Partnership, the execution,
delivery and performance of this Agreement and the other Transaction Documents
by the Partnership Entities party hereto or thereto and the consummation by the
Partnership Entities of the transactions contemplated hereby or thereby, other
than Consents (a) required by the Commission in connection with the

 

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Partnership’s obligations under the Registration Rights Agreement, (b) required
under state securities or “Blue Sky” Laws, (c) that have been, or prior to the
Closing Date will be, obtained and (d) Consents, the absence or omission of
which would not, individually or in the aggregate, have a Material Adverse
Effect.

 

Section 3.15                            Distribution Restrictions. No
Partnership Entity is prohibited, or as a result of the transactions
contemplated by this Agreement, will be prohibited, directly or indirectly,
under any agreement or other instrument to which it is a party or is subject,
from paying any distributions or dividends, from making any other distribution
on such Partnership Entity’s interests, from repaying to any other Partnership
Entity any loans or advances to such Partnership Entity or from transferring any
of such Partnership Entity’s properties or assets to the Partnership or any
other Partnership Entity, except as described in the Partnership SEC Documents
or under the Credit Agreement, dated as of June 7, 2013, among the Partnership,
Holdings and the lenders parties thereto, as amended.

 

Section 3.16                            MLP Status. The Partnership is properly
treated as a partnership for United States federal income Tax purposes and more
than 90% of the Partnership’s current gross income is qualifying income under
Section 7704(d) of the Internal Revenue Code of 1986, as amended (the “Code”). 
The Partnership reasonably anticipates that more than 90% of its gross income
will be qualifying income under Section 7704(d) of the Code following the
consummation of the transactions contemplated by the Contribution Agreement.

 

Section 3.17                            Investment Company Status. None of the
Partnership Entities is, and immediately after the sale of the Purchased Units
hereunder and the application of the net proceeds from such sale, none of the
Partnership Entities will be required to register as an “investment company” or
an entity “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder.

 

Section 3.18                            Certain Fees. Except pursuant to the
Placement Agent Engagement Letters, no fees or commissions are or will be
payable by the Partnership Entities to brokers, placement agents, finders or
investment bankers with respect to the sale of any of the Purchased Units or the
consummation of the transactions contemplated by this Agreement. The Partnership
agrees that it will indemnify and hold harmless the Purchasers from and against
any and all claims, demands, or liabilities for broker’s, finder’s, placement,
or other similar fees or commissions incurred by any of the Partnership Entities
or alleged to have been incurred by any of the Partnership Entities in
connection with the sale of the Purchased Units or the consummation of the
transactions contemplated by this Agreement.

 

Section 3.19                            Labor and Employment Matters. No labor
disturbance by or dispute with employees of any of the Partnership Entities
exists or, to the Knowledge of the Partnership, is contemplated or threatened,
and to the Knowledge of the Partnership, there is no existing or imminent labor
disturbance by, or dispute with, the employees of any of their principal
suppliers, contractors or customers, except, in each case, as would not have,
individually or in the aggregate, a Material Adverse Effect.

 

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Section 3.20                            Insurance. The Partnership Entities
have, or are entitled to the benefit of, insurance (including self-insurance)
covering their respective properties, operations, personnel and businesses,
including business interruption insurance, which insurance is in amounts and
insures against such losses and risks as are reasonably adequate to protect the
Partnership Entities and their respective businesses in a commercially
reasonable manner; all such insurance is fully in force on the date hereof and
the Partnership Entities have no reason to believe that they will not be able to
renew such insurance as and when such insurance expires, except for such
insurance for which the failure to be outstanding and duly in force would not
have a Material Adverse Effect; and no Partnership Entity has received notice
from any insurer or agent of such insurer that capital improvements or other
expenditures are required or necessary to be made in order to continue such
insurance.

 

Section 3.21                            Internal Controls. The Partnership
maintains a system of internal accounting controls that comply with the
requirements of the Exchange Act and are sufficient to provide reasonable
assurance that (a) transactions are executed in accordance with management’s
general or specific authorization; (b) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; and (c) access to assets is permitted only
in accordance with management’s general or specific authorization.  The
Partnership’s internal accounting controls are effective and none of the
Partnership Parties is aware of (A) any significant deficiencies in the design
or operation of internal controls over financial reporting that are reasonably
likely to adversely affect the ability of the Partnership to record, process,
summarize and report financial information, or any material weaknesses in
internal controls over financial reporting of the Partnership or (B) any fraud,
whether or not material, that involves management or other employees who have a
significant role in the internal controls over financial reporting of the
Partnership.

 

Section 3.22                            Disclosure Controls and Procedures.  The
Partnership maintains effective “disclosure controls and procedures” (as defined
in Rule 13a-15(e) of the Exchange Act) that comply with the requirements of the
Exchange Act and that have been designed to ensure that information required to
be disclosed by the Partnership in reports that it will file or submit under the
Exchange Act will be recorded, processed, summarized and reported within the
time periods specified in the Commission’s rules and forms, including controls
and procedures designed to ensure that such information is accumulated and
communicated to the General Partner’s management as appropriate to allow timely
decisions regarding required disclosure, and the interactive data in eXtensible
Business Reporting Language included in the Partnership SEC Documents fairly
presents the information called for in all material respects and has been
prepared in accordance with the Commission’s rules and guidelines applicable
thereto. The Partnership has carried out evaluations of the effectiveness of its
disclosure controls and procedures as required by Rule 13a-15 of the Exchange
Act.

 

Section 3.23                            Sarbanes-Oxley. The Partnership and, to
the Knowledge of the Partnership, the General Partner’s directors or officers,
in their capacities as such, are in compliance in all material respects with all
applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith.

 

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Section 3.24                            Listing and Maintenance Requirements.
The Common Units are listed on the NYSE, and the Partnership has not received
any notice of delisting. The issuance and sale of the Purchased Units and
issuance of Common Units upon conversion of the Purchased Units do not
contravene NYSE rules and regulations.

 

Section 3.25                            Environmental Compliance. Except as
described in the Partnership SEC Documents, (a) the Partnership Entities and
their respective properties, assets and operations (i) are, and at all prior
times were, in compliance with Environmental Laws, (ii) have received and are in
compliance with all permits, licenses, certificates or other authorizations or
approvals required of them under applicable Environmental Laws to conduct their
respective businesses, (iii) have not received notice of any actual or potential
liability under or relating to, or actual or potential violation of, any
Environmental Laws, including for the investigation or remediation of any
Release or threat of Release of Hazardous Materials, and have no knowledge of
any event or condition that would reasonably be expected to result in any such
notice, (iv) are not conducting or paying for, in whole or in part, any
investigation, remediation or other corrective action pursuant to any
Environmental Law at any location, and (v) are not a party to any order, decree
or agreement that imposes any obligation or liability under any Environmental
Law; (b) there are no costs or liabilities associated with Environmental Laws of
or relating to the Partnership Entities; except, in the case of each of clauses
(a) and (b) above, for any such matter as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; and
(c) (i) there are no proceedings that are pending or, to the Knowledge of the
Partnership, known to be contemplated, against the Partnership Entities under
any Environmental Laws in which a Governmental Authority is also a party, other
than such proceedings regarding which it is reasonably believed that no monetary
sanctions of $100,000 or more will be imposed, (ii)  to the Knowledge of the
Partnership, there are no facts or issues regarding compliance with
Environmental Laws, or liabilities or other obligations under Environmental
Laws, including the Release or threat of Release of Hazardous Materials, that
would reasonably be expected to have a Material Adverse Effect, and (iii) none
of the Partnership Entities currently expect to make material capital
expenditures in order to comply with any Environmental Laws as currently in
effect.

 

Section 3.26                            ERISA Compliance. None of the following
events has occurred or exists with respect to any of the Partnership Entities:
(a) a failure to fulfill the obligations, if any, under the minimum funding
standards of Section 302 of the Employee Retirement Security Act of 1974, as
amended (“ERISA”), and the regulations and published interpretations thereunder
with respect to any Plan (as defined below), determined without regard to any
waiver of such obligations or extension of any amortization period, and which
would result in a Material Adverse Effect, (b) an audit or investigation by the
Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit
Guaranty Corporation or any other federal or state governmental agency or any
foreign regulatory agency with respect to the employment or compensation of
employees of or seconded to the Partnership Entities that would constitute a
Material Adverse Effect or (c) any breach of any contractual obligation, or any
violation of law or applicable qualification standards, with respect to the
employment or compensation of employees of or seconded to the Partnership
Entities by any such Partnership Entity that would constitute a Material Adverse
Effect. None of the following events has occurred or is reasonably likely to
occur with respect to any of the Partnership Entities that would cause a
Material Adverse Effect: (w) an increase in the aggregate amount of
contributions required to be made to

 

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all Plans in the current fiscal year compared to the amount of such
contributions made by the Partnership Entities in the most recently completed
fiscal year, (x) an increase in the Partnership Entities’ “accumulated
post-retirement benefit obligations” (within the meaning of Statement of
Financial Accounting Standards 106) compared to the amount of such obligations
in the most recently completed fiscal year, (y) any event or condition giving
rise to a liability under Title IV of ERISA or (z) the filing of a claim by one
or more employees of, former employees of, or employees seconded to the
Partnership Entities related to its or their employment. For purposes of this
Section 3.26, the term “Plan” means a plan (within the meaning of
Section 3(3) of ERISA) subject to Title IV of ERISA with respect to which any
Partnership Entity may have any liability.

 

Section 3.27                            Tax Returns. Each of the Partnership
Entities has filed (or has obtained extensions with respect to filing) all
foreign, federal, state and local Tax Returns (including, without limitation,
any information returns, statements, forms, filings and reports) that are
required to be filed through the date hereof, except in any case in which the
failure so to file would not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect, and has paid all Taxes (including,
without limitation, any estimated Taxes) required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of the
foregoing is due and payable, other than (a) those that are currently being
contested in good faith by appropriate actions and for which adequate reserves
have been established or (b) those which, if not paid, would not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect, and, to the Knowledge of the Partnership Parties, no Tax deficiencies
have been or could reasonably be expected to be asserted against the Partnership
that could, individually or in the aggregate reasonably be expected to have a
Material Adverse Effect.  To the Knowledge of the Partnership Parties, there are
no audits, examinations, investigations, actions, suits, claims or other
proceedings in respect of any material Taxes pending or threatened in writing
nor has any deficiency for any material Tax been assessed by any Governmental
Authority in writing against any Partnership Entity.  To the Knowledge of the
Partnership Parties, none of the Partnership Entities has entered into any
transaction that, as of the date of this Agreement, has been identified by the
Internal Revenue Service in published guidance as a “listed transaction” as
defined under Section 1.6011-4(b)(2) of the Treasury Regulations promulgated
under the Code.

 

Section 3.28                            Permits. The Partnership Entities
possess all licenses, certificates, permits and other authorizations (“Permits”)
issued by, and have made all declarations and filings with, the appropriate
Governmental Authorities that are necessary for the ownership or lease of their
respective properties or the conduct of their respective businesses as described
in the Partnership SEC Documents, except where the failure to so possess or make
the same would not, individually or in the aggregate, have a Material Adverse
Effect; and except as described in the Partnership SEC Documents, none of the
Partnership Entities has received notice of any revocation or modification of
any such license, certificate, permit or authorization or has reasonable basis
to believe that any such license, certificate, permit or authorization will not
be renewed in the ordinary course, except, in each case, as would not have,
individually or in the aggregate, a Material Adverse Effect.

 

Section 3.29                            Title to Real and Personal Property.
Except as described in the Partnership SEC Documents or the Transaction
Documents and except to the extent that failure

 

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of the following to be true, individually or in the aggregate, would not have a
Material Adverse Effect, the Partnership Entities have indefeasible title to all
real property and good title to all personal property described in the
Partnership SEC Documents as being owned by any of them, free and clear of all
Liens, other than as do not materially affect the value of such property and do
not materially interfere with the use of such properties, taken as a whole, as
they have been used in the past and are proposed to be used in the future as
described in the Partnership SEC Documents; and all of the property described in
Partnership SEC Documents as being held under lease by the Partnership Entities
are held thereby under valid, subsisting and enforceable leases, except to the
extent that the failure to so hold does not materially interfere with the use of
such properties, taken as a whole, as they have been used in the past and are
proposed to be used in the future as described in the Partnership SEC Documents.

 

Section 3.30                            Rights-of-Way. The Partnership Entities
have such easements or rights-of-way from each person (collectively,
“Rights-of-Way”) as are necessary to conduct their business in the manner
described, and subject to the limitations contained, in the Partnership SEC
Documents, except for (a) qualifications, reservations and encumbrances that do
not have, individually or in the aggregate, a Material Adverse Effect and
(b) such rights-of-way that do not have, individually or in the aggregate, a
Material Adverse Effect; the Partnership Entities have fulfilled and performed
all their material obligations with respect to such Rights-of-Way and no event
has occurred that allows, or after notice or lapse of time would allow,
revocation or termination thereof or would result in any impairment of the
rights of the holder of any such Rights-of-Way, except for such revocations,
terminations and impairments that would not have a Material Adverse Effect; and,
except as described in or incorporated by reference in the Partnership SEC
Documents, none of such Rights-of-Way contains any restriction that is
materially burdensome to the Partnership Entities, taken as a whole.

 

Section 3.31                            Form S-3 Eligibility. The Partnership is
eligible to register the Purchased Common Units and the Conversion Units for
resale by the Purchasers under Form S-3 promulgated under the Securities Act.

 

Section 3.32                            No Unlawful Payments. No Partnership
Entity nor, to the Knowledge of the Partnership, any director, officer, agent,
employee or affiliate of any Partnership Entity has (i) used any Partnership
Entity funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from Partnership Entity funds; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977, as amended, and the
rules and regulations thereunder, or any applicable law or regulation
implementing the OECD Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions, or committed an offense under
the Bribery Act 2010 of the United Kingdom, or any other applicable anti-bribery
or anti-corruption Law; or (iv) made, offered, agreed, requested or taken an act
in furtherance of any unlawful bribe or other unlawful benefit, including,
without limitation, any rebate, payoff, influence payment, kickback or other
unlawful or improper payment or benefit. The Partnership Entities, P66 Company
and Phillips PDI have instituted, maintain and enforce, and will continue to
maintain and enforce, policies and procedures designed to promote and ensure
compliance with all such applicable laws and regulations.

 

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Section 3.33                            Compliance with Anti-Money Laundering
Laws. The operations of the Partnership Entities are and have been conducted at
all times in compliance with applicable financial recordkeeping and reporting
requirements, including those of the Currency and Foreign Transactions Reporting
Act of 1970, as amended by the USA Patriot Act, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines issued, administered or enforced by any
Governmental Authority (collectively, “Anti-Money Laundering Laws”); and no
action, suit or proceeding by or before any court or Governmental Authority or
any arbitrator or non-governmental authority involving the Partnership Entities
with respect to Anti-Money Laundering Laws is pending or, to the Knowledge of
the Partnership, threatened.

 

Section 3.34                            No Conflicts with Sanctions Laws. No
Partnership Entity nor any of their respective directors, officers or employees,
nor, to the Knowledge of the Partnership, any agent, affiliate or other person
associated with or acting on behalf of any Partnership Entity is currently the
subject or the target of any sanctions administered or enforced by the U.S.
government (including, without limitation, the Office of Foreign Assets Control
of the U.S. Department of the Treasury or the U.S. Department of State and
including, without limitation, the designation as a “specially designated
national” or “blocked person”), the United Nations Security Council, the
European Union, Her Majesty’s Treasury or other relevant sanctions authority
(collectively, “Sanctions”), nor are any of the Partnership Entities located,
organized or resident in a country or territory that is the subject or target of
Sanctions, including, without limitation, the Crimea Region of Ukraine,
Cuba, Iran, North Korea, Sudan and Syria (each, a “Sanctioned Country”); and the
Partnership Entities will not directly or indirectly use the proceeds of the
transactions contemplated hereby, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other person
or entity (i) to fund or facilitate any activities of or business with any
person that, at the time of such funding or facilitation, is the subject or
target of Sanctions; (ii) to fund or facilitate any activities of or business in
any Sanctioned Country; or (iii) in any other manner that will result in a
violation by any person (including any person participating in the transaction,
whether as an underwriter, advisor, investor or otherwise) of Sanctions. Since
January 1, 2014, none of the Partnership Entities have knowingly engaged in or
are now knowingly engaged in any dealings or transactions with any person that
at the time of the dealing or transaction is or was the subject or the target of
Sanctions or with any Sanctioned Country.

 

Section 3.35                            Related Party Transactions. Except as
described in the Partnership SEC Documents, no Partnership Entity has, directly
or indirectly (a) extended credit, arranged to extend credit, or renewed any
extension of credit, in the form of a personal loan, to or for any director or
executive officer of the General Partner or its Affiliates, or to or for any
family member or Affiliate of any director or executive officer of the General
Partner or its Affiliates or (b) made any material modification to the term of
any personal loan to any director or executive officer of the General Partner or
its Affiliates, or any family member or Affiliate of any director or executive
officer of the General Partner or its Affiliates.

 

Section 3.36                            No Side Agreements. There are no binding
agreements by, among or between the Partnership or any of its Affiliates, on the
one hand, and any Purchaser or any of its Affiliates, on the other hand, with
respect to the transactions contemplated hereby other than the Transaction
Documents.

 

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Section 3.37                            Required Disclosures and Descriptions.
There are no legal or governmental proceedings (including an audit or
examination by any taxing authority) pending or, to the Knowledge of the
Partnership, threatened, against any of the Partnership Entities, or to which
any of the Partnership Entities is a party, or to which any of their respective
Properties is subject, that are required to be described in the Partnership SEC
Documents but are not described as required, and there are no Contracts that are
required to be described in the Partnership SEC Documents or to be filed as an
exhibit to the Partnership SEC Documents that are not described or filed as
required by the Securities Act or the Exchange Act.

 

Section 3.38                            Contribution Agreement Representations
and Warranties. To the Knowledge of the Partnership, as of the date hereof, all
representations and warranties set forth in the Contribution Agreement are true
and correct in all material respects.

 

ARTICLE IV.
REPRESENTATIONS AND WARRANTIES AND
 COVENANTS OF THE PURCHASERS

 

Each of the Purchasers, severally but not jointly, represents and warrants and
covenants to the Partnership as follows:

 

Section 4.01                            Existence. Such Purchaser is duly
organized and validly existing and in good standing under the Laws of its state
of formation, with all necessary power and authority to own properties and to
conduct its business as currently conducted.

 

Section 4.02                            Authorization; Enforceability. Such
Purchaser has all necessary legal power and authority to enter into, deliver and
perform its obligations under the Transaction Documents to which it is a party.
The execution, delivery and performance of such Transaction Documents by such
Purchaser and the consummation by it of the transactions contemplated thereby
have been duly and validly authorized by all necessary action on the part of
such Purchaser, and no further consent or authorization by any other Person is
required for the execution, delivery and performance of such Transactions
Documents by such Purchaser and the consummation by such Purchaser of the
transactions contemplated thereby. Each of the Transaction Documents to which
such Purchaser is a party has been duly executed and delivered by such
Purchaser, where applicable, and constitutes a legal, valid and binding
obligation of such Purchaser; provided, however, that with respect to each such
agreement, the enforceability thereof may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar Laws from
time to time in effect affecting creditors’ rights and remedies generally and by
general principles of equity (regardless of whether such principles are
considered in a proceeding in equity or at law).

 

Section 4.03                            No Breach. The execution, delivery and
performance of the Transaction Documents to which such Purchaser is a party by
such Purchaser and the consummation by such Purchaser of the transactions
contemplated thereby will not (a) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any material agreement to which such Purchaser is a party or by which such
Purchaser is bound or to which any of the property or assets of such Purchaser
is subject, (b) conflict with or result in any violation of the provisions of
the Organizational Documents of such Purchaser, or (c) violate any

 

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Law of any Governmental Authority or body having jurisdiction over such
Purchaser or the property or assets of such Purchaser, except in the case of
clauses (a) and (c), for such conflicts, breaches, violations or defaults as
would not prevent the consummation of the transactions contemplated by such
Transaction Documents.

 

Section 4.04                            Certain Fees. No fees or commissions are
or will be payable by such Purchaser to brokers, finders or investment bankers
with respect to the purchase of any of the Purchased Units or the consummation
of the transactions contemplated by this Agreement, except for fees or
commissions for which no Partnership Entity shall be responsible. Each Purchaser
agrees that it will indemnify and hold harmless the Partnership Entities from
and against any and all claims, demands, or liabilities for broker’s, finder’s,
placement, or other similar fees or commissions incurred by or on behalf of such
Purchaser or alleged to have been incurred by or on behalf of such Purchaser in
connection with the purchase of the Purchased Units or the consummation of the
transactions contemplated by this Agreement.

 

Section 4.05                            Unregistered Securities.

 

(a)                                 Accredited Investor Status; Sophisticated
Purchaser. Such Purchaser is an “accredited investor” within the meaning of
Rule 501 of Regulation D under the Securities Act and is able to bear the risk
of its investment in the Purchased Units, the PIK Units and the Conversion
Units, as applicable. Such Purchaser has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the purchase of and investment in the Purchased Units, the PIK Units
and the Conversion Units, as applicable.

 

(b)                                 Institutional Account. Such Purchaser is an
Institutional Account as defined in FINRA Rule 4512(c) and a sophisticated
institutional investor, experienced in investing in private equity transactions
and capable of evaluating investment risks independently, both in general and
with regard to all transactions and investment strategies involving a security
or securities, including the transactions contemplated hereby.

 

(c)                                  Information. Such Purchaser and its
Representatives have been furnished with all materials relating to the business,
finances and operations of the Partnership that have been requested and
materials relating to the offer and sale of, and investment in, the Purchased
Units, PIK Units and Conversion Units, as applicable, that have been requested
by such Purchaser. Such Purchaser and its Representatives have been afforded the
opportunity to ask questions of the Partnership and its Representatives. Neither
such inquiries nor any other due diligence investigations conducted at any time
by such Purchasers and its Representatives shall modify, amend or affect such
Purchaser’s right (i) to rely on the Partnership’s representations and
warranties contained in Article III above or (ii) to indemnification or any
other remedy based on, or with respect to the accuracy or inaccuracy of, or
compliance with, the representations, warranties, covenants and agreements in
any Transaction Document. Such Purchaser understands that its purchase of the
Purchased Units involves a high degree of risk. Such Purchaser has sought such
accounting, legal and Tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the Purchased
Units.

 

(d)                                 Residency. Such Purchaser shall cooperate
with the Partnership to provide any information reasonably necessary for any
applicable securities filings.

 

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(e)                                  Legends. Such Purchaser understands that,
until such time as the Purchased Common Units and the Conversion Units, as
applicable, have been sold pursuant to an effective registration statement under
the Securities Act, or the applicable Purchased Units, PIK Units or Conversion
Units, as applicable, are eligible for resale pursuant to Rule 144 promulgated
under the Securities Act without any restriction as to the number of securities
as of a particular date that can then be immediately sold, the Purchased Units,
PIK Units and Conversion Units will bear a restrictive legend as provided in the
Partnership Agreement.

 

(f)                                   Purchase Representation. Such Purchaser is
purchasing the Purchased Units for its own account and not with a view to
distribution in violation of any securities laws. Such Purchaser has been
advised and understands that neither the Purchased Units, the PIK Units nor the
Conversion Units have been registered under the Securities Act or under the
“blue sky” laws of any jurisdiction and may be resold only if registered
pursuant to the provisions of the Securities Act (or if eligible, pursuant to
the provisions of Rule 144 promulgated under the Securities Act or pursuant to
another available exemption from the registration requirements of the Securities
Act). Such Purchaser has been advised and understands that the Partnership, in
issuing the Purchased Units, is relying upon, among other things, the
representations and warranties of such Purchaser contained in this Article IV in
concluding that such issuance is a “private offering” and is exempt from the
registration provisions of the Securities Act.

 

(g)                                  Rule 144. Such Purchaser understands that
there is no public trading market for the Series A Preferred Units or the PIK
Units, that none is expected to develop, the Purchased Units are characterized
as “restricted securities” under the federal securities Laws and that the
Purchased Units, the PIK Units and the Conversion Units must be held
indefinitely unless and until the Purchased Units, the PIK Units or the
Conversion Units, as applicable, are registered under the Securities Act or an
exemption from registration is available. Such Purchaser has been advised of and
is knowledgeable with respect to the provisions of Rule 144 promulgated under
the Securities Act.

 

(h)                                 Reliance by the Partnership. Such Purchaser
understands that the Purchased Units are being offered and sold in reliance on a
transactional exemption from the registration requirements of federal and state
securities Laws and that the Partnership is relying upon the truth and accuracy
of the representations, warranties, agreements, acknowledgments and
understandings of such Purchaser set forth herein in order to determine the
applicability of such exemptions and the suitability of such Purchaser to
acquire the Purchased Units and the PIK Units, and any Conversion Units issuable
upon conversion thereof.

 

Section 4.06                            Sufficient Funds. Such Purchaser will
have available to it at the Closing sufficient funds to enable such Purchaser to
pay in full at the Closing the entire amount of such Purchaser’s respective
Funding Obligation in immediately available cash funds.

 

Section 4.07                            No Prohibited Trading. Such Purchaser
has not (a) offered, sold, contracted to sell, sold any option or contract to
purchase, purchased any option or contract to sell, granted any option, right or
warrant to purchase, lent, or otherwise transferred or disposed of, directly or
indirectly, any of the Purchased Units or (b) directly or indirectly engaged in
any short sales or other derivative or hedging transactions with respect to the
Purchased Units, including by means of any swap or other transaction or
arrangement that transfers or that is

 

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designed to, or that might reasonably be expected to, result in the transfer to
another, in whole or in part, of any of the economic consequences of ownership
of any Purchased Units, regardless of whether any transaction described in this
Section 4.07 is to be settled by delivery of Series A Preferred Units, Common
Units or other securities, in cash or otherwise.

 

ARTICLE V.
MUTUAL COVENANTS

 

Section 5.01                            Conduct of Business. During the period
commencing on the date of this Agreement and ending on the Closing Date, each of
the Partnership Entities will use commercially reasonable efforts to conduct its
business in the ordinary course of business (other than as contemplated by the
Contribution Agreement) preserve intact its existence and business organization,
Permits, goodwill and present business relationships with all material
customers, suppliers, licensors, distributors and others having significant
business relationships with the Partnership Entities (or any of them), to the
extent the Partnership believes in its sole discretion that such relationships
are and continue to be beneficial to the Partnership Entities and their
businesses; provided, however, that during such period, the Partnership shall
provide reasonably prompt written notice to the Purchasers regarding any
material adverse developments in respect of the foregoing. Prior to the Closing,
none of the Partnership Entities will modify, amend or waive in any material
respect any provision of the Partnership Agreement or the Contribution Agreement
that is material to (a) the rights of the Partnership or (b) the rights of the
Purchasers, in their capacity as purchasers of the applicable Purchased Units,
in each case, without the prior written consent of the Purchasers possessing the
right to acquire not less than a majority of the Purchased Units.

 

Section 5.02                            Listing of Units. Prior to the Closing,
the Partnership will use its commercially reasonable efforts to obtain approval
for listing, subject to notice of issuance, of the Purchased Common Units and
the Conversion Units on the NYSE.

 

Section 5.03                            Cooperation; Further Assurances. Each of
the Partnership and the Purchasers shall use its respective commercially
reasonable efforts to obtain all approvals and consents required by or necessary
to consummate the transactions contemplated by this Agreement and the other
Transaction Documents. Each of the Partnership and the Purchasers agrees to
execute and deliver all such documents or instruments, to take all commercially
reasonable action and to do all other commercially reasonable things it
determines to be necessary, proper or advisable under applicable Laws and
regulations or as otherwise reasonably requested by the other to consummate the
transactions contemplated by this Agreement.

 

Section 5.04                            Lock-up Agreement.

 

(a)                                 Without the prior written consent of the
Partnership, except as specifically provided in this Agreement or as otherwise
provided in the Partnership Agreement, each Purchaser of Purchased Preferred
Units shall not, and shall cause its respective Affiliates not to, (i) prior to
the first anniversary of the Closing Date, offer, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend, or otherwise transfer or
dispose of, directly or indirectly, any of the Purchased Preferred Units or PIK
Units held by such Purchaser; (ii) prior to the second anniversary of the

 

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Closing Date, directly or indirectly engage in any short sales or other
derivative or hedging transactions with respect to the Purchased Preferred Units
or PIK Units held by such Purchaser that are designed to, or that might
reasonably be expected to, result in the transfer to another, in whole or in
part, any of the economic consequences of ownership of any Purchased Preferred
Units, PIK Units or Conversion Units; (iii) transfer any Purchased Preferred
Units or PIK Units held by such Purchaser to any non-U.S. resident individual,
non-U.S. corporation or partnership, or any other non-U.S. entity, including any
foreign Governmental Authority, including by means of any swap or other
transaction or arrangement that transfers or that is designed to, or that might
reasonably be expected to, result in the transfer to another, in whole or in
part, of any of the economic consequences of ownership of any Purchased
Preferred Units or PIK Units, regardless of whether any transaction described
above is to be settled by delivery of Series A Preferred Units, Common Units or
other securities, in cash or otherwise (provided, however, that the foregoing
clause (iii) shall not apply if, prior to any such transfer or arrangement, such
individual, corporation, partnership or other entity establishes to the
satisfaction of the Partnership, its entitlement to a complete exemption from
Tax withholding, including under Code Sections 1441, 1442, 1445 and 1471 through
1474, and the Treasury regulations thereunder); or (iv) effect any transfer of
Purchased Preferred Units, PIK Units or Conversion Units in a manner that
violates the terms of the Partnership Agreement; provided, however, that such
Purchaser may at any time on and after the Closing Date pledge all or any
portion of its Purchased Preferred Units, PIK Units or Conversion Units to any
holders of obligations owed by the Purchaser, including without limitation to
the trustee for, or Representative of, such holders, and, in each case, as
applicable, subject to clauses (iii) and (iv) above, any such pledge, and any
foreclosure, sale or other remedy exercised thereupon, shall in each case not be
considered a breach of this Section 5.04(a); provided further that, subject to
clauses (ii), (iii) and (iv) above, such Purchaser may transfer or sell any
Purchased Preferred Units, PIK Units, and/or Conversion Units to (A) an
Affiliate of such Purchaser or (B) any other Purchaser. Notwithstanding the
foregoing, any transferee (which, for the avoidance of doubt, shall not include
any pledgee of Purchased Preferred Units, PIK Units or Conversion Units)
receiving any Purchased Preferred Units pursuant to this Section 5.04(a) shall
(1) to the extent still applicable, agree to the restrictions set forth in this
Section 5.04(a) and (2) to the extent still applicable, take all actions
necessary to become a party to the Confidentiality Agreement between the
transferee of such Purchased Preferred Units and the Partnership. For the
avoidance of doubt, in no way does this Section 5.04(a) prohibit changes in the
composition of any Purchaser or its partners or members so long as such changes
in composition only relate to changes in direct or indirect ownership of the
Purchaser or its partners or members so long as such changes in composition only
relate to changes in direct or indirect ownership of the Purchaser among such
Purchaser, its Affiliates and the limited partners of the private equity fund
vehicles that indirectly own such Purchaser. After the first anniversary of the
Closing Date, a Purchaser or other holder of Series A Preferred Units may
transfer Series A Preferred Units, PIK Units and/or Conversion Units, as
applicable, representing, on an as-converted basis, an underlying value of
Conversion Units in an aggregate amount of not less than $50 million based on
the closing trading price of Common Units on the date immediately preceding the
date of such transfer on the NYSE or other National Securities Exchange on which
the Common Units are then listed for trading (or such lesser amount if such
lesser amount (x) constitutes all of the remaining Series A Preferred Units held
by such Purchaser or (y) has been approved in writing by the General Partner, in
its sole discretion), subject to compliance with applicable securities Laws and
the Partnership Agreement; provided,

 

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however, that the provisions of this sentence shall not eliminate, modify or
reduce the obligations set forth in clauses (ii), (iii) or (iv) above.
Notwithstanding anything to the contrary in clause (i) of this Section 5.04(a),
but subject to clauses (ii), (iii) and (iv) of this Section 5.04(a), (A) during
the period beginning on the date hereof and ending on the date that is 60 days
after the Closing Date (the “Non-Affiliate Transfer Period”), the Lead Purchaser
and its Affiliates may transfer or dispose of Purchased Units to one or more
non-Affiliates of the Lead Purchaser, subject to the consent of the Partnership
as to the identity of the transferee (which consent shall not be unreasonably
withheld, conditioned or delayed), in a maximum of two transfers or dispositions
of Preferred Units and (B) each Initial Purchaser may, during the one-year
period after the Closing Date, transfer or dispose of Preferred Units to any
current or future limited partner of any investment entity managed or controlled
by such Initial Purchaser’s current general partner or a general partner or
manager that is an Affiliate of such current general partner and is an
endowment, pension or insurance investment entity; provided further, that any
transfers made pursuant to clause (A) or (B) of this sentence by an Initial
Purchaser (1) must consist of Purchased Preferred Units in an amount not less
than $25 million based on the Preferred Unit Purchase Price, (2) the aggregate
amount of Purchased Preferred Units and rights to purchase Purchased Preferred
Units of such Initial Purchaser and its Affiliates transferred pursuant to this
sentence and Section 8.10 shall not be greater than $100 million based on the
Preferred Unit Purchase Price, and (3) such transfers are subject to the consent
of the Partnership as to the identity of the transferee (which consent shall not
be unreasonably withheld, conditioned or delayed).  For the avoidance of doubt,
nothing in this Section 5.04(a) shall restrict the Purchasers of Purchased
Common Units from taking any action with respect to such Purchaser’s Purchased
Common Units in accordance with the Partnership Agreement and applicable
securities Laws.

 

(b)                                 Without the prior written consent of the
Purchasers holding a majority of the Purchased Units, during the period
commencing on the date of this Agreement and ending 90 days after the Closing
Date, the Partnership will not (i) offer, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend, or otherwise transfer or dispose
of, directly or indirectly, any Common Units or any securities convertible into
or exercisable or exchangeable for Common Units, or publicly disclose the
intention to make any offer, sale, pledge, disposition or filing with respect to
any of the foregoing, or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
the Common Units or any such other securities, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Units or such other securities, in cash or otherwise, other than (A) as
specifically provided in this Agreement or in the Contribution Agreement or the
Registration Rights Agreement, (B) grants or issuances of equity awards pursuant
to the incentive compensation plans or non-employee director compensation
program described in the Partnership SEC Documents, (C) the filing by the
Partnership of a registration statement on Form S-8, (D) offers or sales of
Common Units pursuant to the Partnership’s “at the market” offering program
pursuant to the registration statement on Form S-3 (File No. 333-209870) filed
with the Commission on March 1, 2016, as amended by Amendment No. 1 thereto
filed with the Commission on May 10, 2016, and (E) any grants or issuances of
Common Units upon exercise or vesting of phantom units, performance units or
other equity-based awards to the extent outstanding on the date hereof pursuant
to the Partnership’s incentive compensation plans.  For the avoidance of doubt,
nothing in this Section 5.04(b) shall restrict or otherwise limit the
Partnership from (x) offering and selling securities that are not Common Units
or securities

 

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convertible or exchangeable for Common Units or (y) from filing with the
Commission an additional registration statement on Form S-3 covering an “at the
market” offering program, provided that the Partnership shall not make any
offers or sales of Common Units under such additional registration statement
until the expiration of the lock-up period identified in this Section 5.04(b).

 

Section 5.05                            Use of Proceeds. The Partnership shall
use the proceeds of the offering of the Purchased Units to fund a portion of the
consideration payable by the Partnership under the Contribution Agreement, as
well as for general partnership purposes.

 

Section 5.06                            Tax Information. Following receipt of a
written request from any Purchaser that, together with its Affiliates, continues
to own Purchased Preferred Units, the Partnership shall provide such Purchaser
with (i) any information such Purchaser and its Representatives may reasonably
request in order to determine such Purchaser’s current and anticipated Capital
Account in relation to each Common Unit to evaluate the economic and tax
implications of either a liquidation or conversion of the Series A Preferred
Units and (ii) a good faith estimate (and reasonable supporting calculations) of
whether there is sufficient Unrealized Gain attributable to the Partnership
property on the date of such request such that, if any of such Purchaser’s
Series A Preferred Units were converted to Common Units and such Unrealized Gain
was allocated to such Purchaser pursuant to Section 5.5(d)(iii) of the
Partnership Agreement (taking proper account of allocations of higher priority),
such Purchaser’s Capital Account in respect of its Common Units would be equal
to the Per Unit Capital Amount for an Initial Common Unit without any need for
corrective allocations under Section 6.2(h) of the Partnership Agreement.  Each
such Purchaser, together with its Affiliates, shall be entitled to make such a
request not more than once per calendar year.

 

For purposes of this Section 5.06, all capitalized terms used but not defined
herein shall have the meanings assigned to them in the Partnership Agreement.

 

ARTICLE VI.
INDEMNIFICATION, COSTS AND EXPENSES

 

Section 6.01                            Indemnification by the Partnership. The
Partnership agrees to indemnify each Purchaser and its Representatives
(collectively, “Purchaser Indemnified Parties”) from costs, losses, liabilities,
damages or expenses of any kind or nature whatsoever, and hold each of them
harmless against any and all actions, suits, proceedings (including any
investigations, litigation or inquiries), demands and causes of action, and, in
connection therewith, promptly upon demand, pay or reimburse each of them for,
any and all costs, losses, damages, liabilities or expenses of any kind or
nature whatsoever (including, without limitation, legal fees and other expenses
reasonably incurred in connection with any suit, action or proceeding or any
claim asserted), joint or several, that the Purchaser Indemnified Party may
incur, whether or not involving a Third-Party Claim, insofar as such loss,
claim, damage or liability arises out of, or is based upon, (a) the failure of
any of the representations or warranties made by the Partnership contained
herein to be true and correct in all material respects (other than those
representations and warranties contained in Section 3.01, Section 3.02,
Section 3.03, Section 3.13, Section 3.16 or Section 3.18 or other
representations and warranties that are qualified by materiality or Material
Adverse Effect, which, in each case, shall be true and correct

 

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in all respects) when made and as of the Closing Date (except for any
representations and warranties made as of a specific date, which shall be
required to be true and correct as of such date only) or (b) the breach of any
covenants of the Partnership contained herein, provided that, in the case of the
immediately preceding clause (a), such claim for indemnification is made prior
to the expiration of the survival period of such representation or warranty;
provided further that (x) for purposes of determining when an indemnification
claim has been made, the date upon which a Purchaser Indemnified Party shall
have given notice (stating in reasonable detail the basis of the claim for
indemnification) to the Partnership shall constitute the date upon which such
claim has been made and (y) the aggregate liability of the Partnership (i) to
each Purchaser pursuant to this Section 6.01 shall not be greater in amount than
such Purchaser’s respective Funding Obligation and (ii) to all Purchasers
pursuant to this Section 6.01 shall not exceed the Total Funding Obligation. To
the fullest extent permitted by Law, no Purchaser Indemnified Party shall be
entitled to recover special, indirect, exemplary, lost profits, speculative or
punitive damages under this Section 6.01; provided, however, that such
limitation shall not prevent any Purchaser Indemnified Party from recovering
under this Section 6.01 for any such damages to the extent that such damages are
payable to a third party in connection with any Third-Party Claims.

 

Section 6.02                            Indemnification by the Purchasers. Each
Purchaser agrees, severally and not jointly, to indemnify the Partnership, the
General Partner and their respective Representatives (collectively, “Partnership
Indemnified Parties”) from costs, losses, liabilities, damages, or expenses of
any kind or nature whatsoever, and hold each of them harmless against, any and
all actions, suits, proceedings (including any investigations, litigation or
inquiries), demands, and causes of action, and, in connection therewith,
promptly upon demand, pay or reimburse each of them for, any and all costs,
losses, damages, liabilities or expenses of any kind or nature whatsoever
(including, without limitation, legal fees and other expenses reasonably
incurred in connection with any suit, action or proceeding or any claim
asserted), joint or several, that the Partnership Indemnified Party may incur,
whether or not involving a Third-Party Claim, insofar as such loss, claim,
damage or liability arises out of, or is based upon, (a) the failure of any of
the representations or warranties made by such Purchaser contained herein to be
true and correct in all material respects (other than those representations and
warranties contained in Section 4.01, Section 4.02, Section 4.04,
Section 4.05(a), Section 4.05(c) and Section 4.05(f) or other representations
and warranties that are qualified by materiality or Material Adverse Effect or
words of similar import, with respect to which such representation or warranty,
or applicable portions thereof, which, in each case, shall be true and correct
in all respects) when made and as of the Closing Date and (b) the breach of any
of the covenants of such Purchaser contained herein, provided that, in the case
of the immediately preceding clause (a), such claim for indemnification relating
to a breach of any representation or warranty is made prior to the expiration of
the survival period of such representation or warranty; provided further that
(x) for purposes of determining when an indemnification claim has been made, the
date upon which a Partnership Indemnified Party shall have given notice (stating
in reasonable detail the basis of the claim for indemnification) to such
Purchaser shall constitute the date upon which such claim has been made and
(y) the liability of each such Purchaser shall not be greater in amount than the
sum of such Purchaser’s respective Funding Obligation plus any distributions
paid to such Purchaser with respect to the Purchased Units, the PIK Units and
the Conversion Units, if applicable. To the fullest extent permitted by Law, no
Partnership Indemnified Party shall be entitled to recover special, indirect,
exemplary, lost profits, speculative or punitive damages

 

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under this Section 6.02; provided, however, that such limitation shall not
prevent any Partnership Indemnified Party from recovering under this
Section 6.02 for any such damages to the extent that such damages are payable to
a third party in connection with any Third-Party Claims.

 

Section 6.03                            Indemnification Procedure.

 

(a)                                 A claim for indemnification for any matter
not involving a Third-Party Claim may be asserted by notice to the party from
whom indemnification is sought; provided, however, that failure to so notify the
indemnifying party shall not preclude the indemnified party from any
indemnification which it may claim in accordance with this Article VI, except as
otherwise provided in Section 6.01 and Section 6.02.

 

(b)                                 Promptly after any Partnership Indemnified
Party or Purchaser Indemnified Party (hereinafter, the “Indemnified Party”) has
received notice of any indemnifiable claim hereunder, or the commencement of any
action, suit or proceeding by a third person, which the Indemnified Party
believes in good faith is an indemnifiable claim under this Agreement (each a
“Third-Party Claim”), the Indemnified Party shall give the indemnitor hereunder
(the “Indemnifying Party”) written notice of such Third-Party Claim, but failure
to so notify the Indemnifying Party will not relieve the Indemnifying Party from
any liability it may have to such Indemnified Party hereunder except to the
extent that the Indemnifying Party is materially prejudiced by such failure.
Such notice shall state the nature and the basis of such Third-Party Claim to
the extent then known. The Indemnifying Party shall have the right to defend and
settle, at its own expense and by its own counsel who shall be reasonably
acceptable to the Indemnified Party, any such matter as long as the Indemnifying
Party pursues the same diligently and in good faith. If the Indemnifying Party
undertakes to defend or settle, it shall promptly, and in no event later than 10
days, notify the Indemnified Party of its intention to do so, and the
Indemnified Party shall cooperate with the Indemnifying Party and its counsel in
all commercially reasonable respects in the defense thereof and the settlement
thereof. Such cooperation shall include, but shall not be limited to, furnishing
the Indemnifying Party with any books, records and other information reasonably
requested by the Indemnifying Party and in the Indemnified Party’s possession or
control. Such cooperation of the Indemnified Party shall be at the cost of the
Indemnifying Party. After the Indemnifying Party has notified the Indemnified
Party of its intention to undertake to defend or settle any such asserted
liability, and for so long as the Indemnifying Party diligently pursues such
defense, the Indemnifying Party shall not be liable for any additional legal
expenses incurred by the Indemnified Party in connection with any defense or
settlement of such asserted liability; provided, however, that the Indemnified
Party shall be entitled (i) at its expense, to participate in the defense of
such asserted liability and the negotiations of the settlement thereof and
(ii) if (A) the Indemnifying Party has, within 10 Business Days of when the
Indemnified Party provides written notice of a Third-Party Claim, failed (1) to
assume the defense or employ counsel reasonably acceptable to the Indemnified
Party or (2) to notify the Indemnified Party of such assumption or (B) if the
defendants in any such action include both the Indemnified Party and the
Indemnifying Party and counsel to the Indemnified Party shall have concluded
that there may be reasonable defenses available to the Indemnified Party that
are different from or in addition to those available to the Indemnifying Party
or if the interests of the Indemnified Party reasonably may be deemed to
conflict with the interests of the Indemnifying Party, then the Indemnified
Party shall have the right to select a separate counsel and to assume such legal
defense and otherwise to participate in the defense of

 

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such action, with the expenses and fees of such separate counsel and other
expenses related to such participation to be reimbursed by the Indemnifying
Party as incurred. Notwithstanding any other provision of this Agreement, the
Indemnifying Party shall not settle any indemnified claim without the consent of
the Indemnified Party, unless the settlement thereof imposes no liability or
obligation on, and includes a complete release from liability of, and does not
include any admission of wrongdoing or malfeasance by, the Indemnified Party.

 

Section 6.04                            Tax Matters. All indemnification
payments under this Article VI shall be adjustments to the applicable
Purchaser’s Funding Obligation except as otherwise required by applicable Law.

 

ARTICLE VII.
TERMINATION

 

Section 7.01                            Termination. This Agreement may be
terminated at any time prior to the Closing:

 

(a)                                 by mutual written consent of the Partnership
and a Purchaser, with respect to itself but not any other Purchaser;

 

(b)                                 by written notice from either the
Partnership or a Purchaser, with respect to itself but not any other Purchaser,
if any Governmental Authority with lawful jurisdiction shall have issued a final
order, decree or ruling or taken any other final action restraining, enjoining
or otherwise prohibiting the transactions contemplated by the Transaction
Documents and such order, decree, ruling or other action is or shall have become
final and nonappealable;

 

(c)                                  by written notice from either the
Partnership or a Purchaser, with respect to itself but not any other Purchaser,
if the Contribution Agreement is terminated for any reason; or

 

(d)                                 by written notice from a Purchaser, with
respect to itself but not any other Purchaser, if the Closing does not occur by
11:59 p.m. on the Drop-Dead Date; provided, however, that no party may terminate
this Agreement pursuant to this Section 7.01(d) if such party is, at the time of
providing such written notice, in breach of any of its obligations under this
Agreement.

 

Section 7.02                            Certain Effects of Termination. In the
event that this Agreement is terminated pursuant to Section 7.01:

 

(a)                                 except as set forth in Section 7.02(b), this
Agreement shall become null and void and have no further force or effect, but
the parties shall not be released from any liability arising from or in
connection with any breach hereof occurring prior to such termination;

 

(b)                                 regardless of any purported termination of
this Agreement, the provisions of Article VI and all indemnification rights and
obligations of the Partnership and the Purchasers thereunder, this Section 7.02
and the provisions of Article VIII shall remain operative and in full force and
effect as between the Partnership and the Purchasers, unless the Partnership and
the Purchasers possessing the right to acquire not less than majority of the
Purchased Units execute a

 

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writing that expressly (with specific references to the applicable Articles,
Sections or subsections of this Agreement) terminates such rights and
obligations as between the Partnership and the Purchasers; and

 

(c)                                  each of the Confidentiality Agreements
shall remain in effect in accordance with Section 8.06(a).

 

ARTICLE VIII.
MISCELLANEOUS

 

Section 8.01                            Expenses. Except as set forth below, all
costs and expenses, including fees and disbursements of counsel, financial
advisors and accountants, incurred in connection with the Transaction Documents
and the transactions contemplated thereby shall be paid by the party incurring
such costs and expenses; provided, however, that, if the Closing occurs,
promptly following receipt of an invoice therefore containing reasonable
supporting detail, the Partnership shall reimburse (i) FR XIII Pantheon
Holdings, L.L.C. (as a Purchaser hereunder) for the reasonable fees and expenses
of Simpson Thacher & Bartlett LLP, counsel to such Purchaser, of up to $100,000
and (ii) the Lead Purchaser for the reasonable fees and expenses of Sidley
Austin LLP, counsel to the Lead Purchaser, of up to $200,000 (with legal fees
and expenses of Sidley Austin LLP in excess of $200,000 to be paid pro rata by
all of the Purchasers in proportion to the Funding Obligation of each
Purchaser).

 

Section 8.02                            Interpretation. Article, Section,
Schedule and Exhibit references in this Agreement are references to the
corresponding Article, Section, Schedule or Exhibit to this Agreement, unless
otherwise specified. All Exhibits and Schedules to this Agreement are hereby
incorporated and made a part hereof as if set forth in full herein and are an
integral part of this Agreement. All references to instruments, documents,
Contracts and agreements are references to such instruments, documents,
Contracts and agreements as the same may be amended, supplemented and otherwise
modified from time to time, unless otherwise specified. The word “including”
shall mean “including but not limited to” and shall not be construed to limit
any general statement that it follows to the specific or similar items or
matters immediately following it. Whenever the Partnership has an obligation
under the Transaction Documents, the expense of complying with that obligation
shall be an expense of the Partnership unless otherwise specified. Any reference
in this Agreement to “$” shall mean U.S. dollars. Whenever any determination,
consent or approval is to be made or given by a Purchaser, such action shall be
in such Purchaser’s sole discretion, unless otherwise specified in this
Agreement. If any provision in the Transaction Documents is held to be illegal,
invalid, not binding or unenforceable, (a) such provision shall be fully
severable and the Transaction Documents shall be construed and enforced as if
such illegal, invalid, not binding or unenforceable provision had never
comprised a part of the Transaction Documents, and the remaining provisions
shall remain in full force and effect, and (b) the parties hereto shall
negotiate in good faith to modify the Transaction Documents so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible. When calculating the period of
time before which, within which or following which any act is to be done or step
taken pursuant to the Transaction Documents, the date that is the reference date
in calculating such period shall be excluded. If the last day of such period is
not a Business Day, the period in question shall end on the next

 

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succeeding Business Day. Any words imparting the singular number only shall
include the plural and vice versa. The words such as “herein,” “hereinafter,”
“hereof” and “hereunder” refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.
The provision of a Table of Contents, the division of this Agreement into
Articles, Sections and other subdivisions and the insertion of headings are for
convenience of reference only and shall not affect or be utilized in construing
or interpreting this Agreement.

 

Section 8.03                            Survival of Provisions. To the fullest
extent permitted by Law, the representations and warranties set forth in
Section 3.01, Section 3.02, Section 3.03, Section 3.13, Section 3.16,
Section 3.18, Section 4.01, Section 4.02, Section 4.04, Section 4.05(a),
Section 4.05(c) and Section 4.05(f) hereunder shall survive the execution and
delivery of this Agreement indefinitely, the representations and warranties set
forth in Section 3.26 shall survive until 60 days after the applicable statute
of limitations (taking into account any extensions thereof) and the other
representations and warranties set forth herein shall survive for a period of 12
months following the Closing Date, regardless of any investigation made by or on
behalf of the Partnership or the Purchasers. The covenants made in this
Agreement or in any other Transaction Document shall survive the Closing and
remain operative and in full force and effect in accordance with their
respective terms until fully performed. Regardless of any purported general
termination of this Agreement, the provisions of Article VI and all
indemnification rights and obligations of the Partnership and the Purchasers
thereunder, and this Article VIII shall remain operative and in full force and
effect as between the Partnership and each Purchaser, unless the Partnership and
the applicable Purchaser execute a writing that expressly (with specific
references to the applicable Section or subsection of this Agreement) terminates
such rights and obligations as between the Partnership and such Purchaser.

 

Section 8.04                            No Waiver: Modifications in Writing.

 

(a)                                 Delay. No failure or delay on the part of
any party in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to a
party at law or in equity or otherwise.

 

(b)                                 Specific Waiver. Except as otherwise
provided herein, no amendment, waiver, consent, modification or termination of
any provision of this Agreement shall be effective unless signed by each of the
parties thereto affected by such amendment, waiver, consent, modification or
termination. Any waiver, amendment, supplement or modification of or to any
provision of this Agreement shall be effective only in the specific instance and
for the specific purpose for which made or given. Except where notice is
specifically required by this Agreement, no notice to or demand on the
Partnership in any case shall entitle the Partnership to any other or further
notice or demand in similar or other circumstances. Any investigation by or on
behalf of any party shall not be deemed to constitute a waiver by the party
taking such action of compliance with any representation, warranty, covenant or
agreement contained herein.

 

Section 8.05                            Binding Effect. This Agreement shall be
binding upon the Partnership, each of the Purchasers and their respective
successors and permitted assigns. Except as expressly

 

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provided in this Agreement, this Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and permitted assigns.

 

Section 8.06                            Non-Disclosure.

 

(a)                                 Any Purchaser may share Evaluation Material
and Discussion Information (as each is defined in each of the Confidentiality
Agreements) with (i) any of the limited partners of the private equity fund
vehicles that indirectly own such Purchaser at any time, provided that any such
limited partner will be deemed to be a “Representative” of such Purchaser under
its Confidentiality Agreement, and (ii) during the Non-Affiliate Transfer
Period, the Lead Purchaser may, with the prior written consent of the
Partnership (which consent shall not be unreasonably withheld, conditioned or
delayed), share Evaluation Material and Discussion Information (as defined in
the Lead Purchaser’s Confidentiality Agreement), including the identity of the
Partnership, the size of the investment and its pricing terms with respect to
the Series A Preferred Units, with any bona fide potential transferee of
Purchased Units in accordance with Section 5.04(a), provided that such potential
transferee executes a letter agreement with the Lead Purchaser agreeing (x) that
it and its respective representatives shall be deemed “Representatives” under
the Lead Purchaser’s Confidentiality Agreement and shall be responsible for any
breaches of such Confidentiality Agreement as if originally a party thereto and
(y) that the Partnership is an express third-party beneficiary of such letter
agreement. Except as set forth in the preceding sentence, this Agreement shall
not impact the terms and provisions of any of the Confidentiality Agreements.
The Confidentiality Agreements shall continue to be in full force and effect,
pursuant to the terms and conditions thereof, but for the avoidance of doubt,
Evaluation Material (as defined in each of the Confidentiality
Agreements) refers only to information furnished by or on behalf of the
Partnership prior to the date hereof.

 

(b)                                 Other than filings made by the Partnership
with the Commission, the Partnership and any of its Representatives may disclose
the identity of, or any other information concerning, the Purchasers or any of
their respective Affiliates only after providing the Purchasers a reasonable
opportunity to review and comment on such disclosure (with such comments being
incorporated or reflected, to the extent reasonable, in any such disclosure);
provided, however, that nothing in this Section 8.06 shall delay any required
filing or other disclosure with the NYSE or any Governmental Authority or
otherwise hinder the Partnership Entities’ or their Representatives’ ability to
timely comply with all Laws or rules and regulations of the NYSE or other
Governmental Authority.

 

(c)                                  Notwithstanding anything to the contrary in
this Section 8.06, the Partnership and the General Partner agree that each
Purchaser may (i) publicize its ownership in the Partnership, as well as the
identity of the Partnership, the size of the investment and its pricing terms
with respect to the Series A Preferred Units on its internet site or in
marketing materials, press releases, published “tombstone” announcements or any
other print or electronic medium and (ii) display the Partnership’s corporate
logo in conjunction with any such reference.

 

Section 8.07                            Communications. All notices and demands
provided for hereunder shall be in writing and shall be given by registered or
certified mail, return receipt requested, telecopy,

 

36

--------------------------------------------------------------------------------

 

electronic mail, air courier guaranteeing overnight delivery or personal
delivery to the following addresses:

 

(a)                                 if to the Purchasers, to the addresses set
forth on Schedule A.

 

(b)                                 if to the Partnership, to:

 

Phillips 66 Partners LP

c/o Phillips 66 Partners GP LLC

2331 CityWest Blvd.

Houston, Texas 77042

Attention: Treasurer

 

with a copy (which shall not constitute notice) to:

 

Phillips 66 Partners LP

c/o Phillips 66 Partners GP LLC

2331 CityWest Blvd.

Houston, Texas 77042

Attention: General Counsel

 

Latham & Watkins LLP

811 Main Street, Suite 3700

Houston TX 77002

Attention:                       William N. Finnegan IV

Thomas G. Brandt

Facsimile: (713) 546-5401

Email:                bill.finnegan@lw.com

thomas.brandt@lw.com

 

or to such other address as the Partnership or the Purchasers may designate in
writing.  All notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; upon actual
receipt if sent by certified or registered mail, return receipt requested, or
regular mail, if mailed; upon actual receipt of the facsimile, if sent via
facsimile; when sent, if sent by electronic mail prior to 5:00 p.m. Houston,
Texas time on a Business Day, or on the next succeeding Business Day, if not;
and upon actual receipt when delivered to an air courier guaranteeing overnight
delivery.

 

Section 8.08                            Removal of Legend. In connection with a
sale of Purchased Units, PIK Units or Conversion Units by a Purchaser in
reliance on Rule 144 promulgated under the Securities Act, the applicable
Purchaser or its broker shall deliver to the Partnership a broker representation
letter providing to the Partnership any information the Partnership deems
necessary to determine that the sale of such Purchased Units, PIK Units or
Conversion Units is made in compliance with Rule 144 promulgated under the
Securities Act, including, as may be appropriate, a certification that the
Purchaser is not an affiliate (as defined in Rule 144 promulgated under the
Securities Act) of the Partnership and a certification as to the length of time
the such units have been held. Upon receipt of such representation letter, the
Partnership

 

37

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shall promptly remove the notation of a restrictive legend in such Purchaser’s
book-entry account maintained by the Partnership, including the legend referred
to in Section 4.05, and the Partnership shall bear all costs associated with the
removal of such legend in the Partnership’s books. Upon the request of a
Purchaser or its permitted assignee, the Partnership shall take all steps
necessary to promptly effect the removal of the legend described in
Section 4.05, and the Partnership shall bear all costs associated with the
removal of such legend in the Partnership’s books (other than costs and expenses
of any outside counsel of the Purchaser) if the applicable Purchased Units, PIK
Units or Conversion Units have been sold pursuant to an effective registration
statement under the Securities Act; are eligible for sale, transfer or other
disposition under Rule 144 promulgated under the Securities Act; or otherwise
may be sold, transferred or disposed of in accordance with the Securities Act,
so long as such Purchaser or its permitted assignee provides to the Partnership
any information the Partnership deems reasonably necessary to determine that the
legend is no longer required under the Securities Act or applicable state Laws,
including (if there is no such registration statement) a certification that the
holder is not an affiliate (as defined in Rule 144 promulgated under the
Securities Act) of the Partnership, a covenant to inform the Partnership if it
should thereafter become an affiliate (as defined in Rule 144 promulgated under
the Securities Act) and to consent to the notation of an appropriate
restriction, and a certification as to the length of time such units have been
held. The Partnership shall cooperate with each Purchaser to effect the removal
of the legend referred to in Section 4.05 at any time such legend is no longer
appropriate.

 

Section 8.09                            Entire Agreement. This Agreement, the
other Transaction Documents, the Confidentiality Agreements and the other
agreements and documents referred to herein or therein are intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein and therein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to in this Agreement, the other Transaction Documents or the
Confidentiality Agreements with respect to the rights granted by the Partnership
or any of its Affiliates or the Purchasers or any of their respective
Affiliates. This Agreement, the other Transaction Documents, the Confidentiality
Agreements and the other agreements and documents referred to herein or therein
supersede all prior agreements and understandings among the parties with respect
to such subject matter.

 

Section 8.10                            Assignment.  Prior to the Closing, the
Lead Purchaser and its Affiliates may transfer or assign their rights to
purchase Purchased Units under this Agreement to one or more Persons, subject to
the consent of the Partnership as to the identity of the transferee (which
consent shall not be unreasonably withheld, conditioned or delayed); provided,
however, that the Lead Purchaser may transfer its right to purchase Purchased
Units to (a) an Affiliate of the Lead Purchaser or (b) any other Purchaser;
provided further, that (a) any assignment made pursuant to this Section 8.10 by
a Purchaser must consist of the right and related obligations to purchase
Purchased Units in an amount not less than $25 million based on the Preferred
Unit Purchase Price, (b) the aggregate amount of Purchased Preferred Units and
rights to purchase Purchased Preferred Units of such Purchaser and its
Affiliates transferred pursuant to this Section 8.10 and Section 5.04(a) shall
not be greater than $100 million based on the Preferred Unit Purchase Price,
(c) any assignee of the Lead Purchaser’s or its Affiliates’ rights pursuant to
this Section 8.10 must execute and deliver to the Partnership at the Closing a
Joinder Agreement in the form attached hereto as Exhibit F (the “Joinder
Agreement”) and (d) a maximum of two transfers may

 

38

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be made pursuant to this Section 8.10 and Section 5.04(a).  If, and only if,
such assignee consummates the purchase at the Closing, then concurrently with
the Closing, the assignor shall be released in full from its obligations under
this Agreement with respect to the assigned portion of the Purchased Units and
the assignee shall be considered a Purchaser hereunder with respect to such
portion of the Purchased Units. Prior to and until the Closing occurs, the
assignor shall remain fully responsible for its obligations under the Agreement,
notwithstanding any execution of a Joinder Agreement by the assignee. In the
event of any such assignment, Schedule A shall be amended to reflect the
assignee as an additional or alternate Purchaser and the corresponding number of
Purchased Units to be purchased by such assignee.

 

Section 8.11                            Governing Law: Submission to
Jurisdiction. This Agreement, and all claims or causes of action (whether in
contract or tort) that may be based upon, arise out of or relate to this
Agreement or the negotiation, execution or performance of this Agreement
(including any claim or cause of action based upon, arising out of or related to
any representation or warranty made in or in connection with this Agreement),
will be construed in accordance with and governed by the Laws of the State of
Delaware without regard to principles of conflicts of laws. Any action against
any party relating to the foregoing shall be brought in any federal or state
court of competent jurisdiction located within the State of Delaware, and the
parties hereto hereby irrevocably submit to the exclusive jurisdiction of any
federal or state court located within the State of Delaware over any such
action. The parties hereby irrevocably waive, to the fullest extent permitted by
applicable Law, any objection which they may now or hereafter have to the laying
of venue of any such dispute brought in such court or any defense of
inconvenient forum for the maintenance of such dispute. Each of the parties
hereto agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by Law.
Each of the parties hereto consents to process being served in any such action
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
service shall, to the fullest extent permitted by Law, constitute good and
sufficient service of process and notice thereof; provided, however, that
nothing in the foregoing shall affect or limit any right to serve process in any
other manner permitted by Law.

 

Section 8.12                            Waiver of Jury Trial. THE PARTIES TO
THIS AGREEMENT EACH HEREBY WAIVES, AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING UNDER THIS AGREEMENT OR (b) IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED
HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN
CONTRACT, TORT, EQUITY OR OTHERWISE. THE PARTIES TO THIS AGREEMENT EACH HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT
MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

39

--------------------------------------------------------------------------------

 

Section 8.13                            Exclusive Remedy.

 

(a) Each party hereto hereby acknowledges and agrees that the rights of each
party to consummate the transactions contemplated hereby are special, unique and
of extraordinary character and that, if any party violates or fails or refuses
to perform any covenant or agreement made by it herein, the non-breaching party
may be without an adequate remedy at law. If any party violates or fails or
refuses to perform any covenant or agreement made by such party herein, the
non-breaching party subject to the terms hereof and in addition to any remedy at
law for damages or other relief, may (at any time prior to the valid termination
of this Agreement pursuant to Article VII) institute and prosecute an action in
any court of competent jurisdiction to enforce specific performance of such
covenant or agreement or seek any other equitable relief.

 

(b) The sole and exclusive remedy for any and all claims arising under, out of,
or related to this Agreement or the transactions contemplated hereby, shall be
the rights of indemnification set forth in Article VI only and, to the fullest
extent permitted by Law, no Person will have any other entitlement, remedy or
recourse, whether in contract, tort or otherwise, it being agreed that all of
such other remedies, entitlements and recourse are expressly waived and released
by the parties hereto to the fullest extent permitted by Law. Notwithstanding
anything in the foregoing to the contrary, nothing in this Agreement shall limit
or otherwise restrict a fraud claim brought by any party hereto or the right to
seek specific performance pursuant to Section 8.12(a).

 

Section 8.14                            No Recourse Against Others.

 

(a)                                 All claims, obligations, liabilities or
causes of action (whether in contract or in tort, in law or in equity, or
granted by statute) that may be based upon, in respect of, arise under, out or
by reason of, be connected with or relate in any manner to this Agreement, or
the negotiation, execution or performance of this Agreement (including any
representation or warranty made in, in connection with, or as an inducement to,
this Agreement), may be made only against (and are expressly limited to) the
Partnership and the Purchasers. To the fullest extent permitted by Law, no
Person other than the Partnership or the Purchasers, including no stockholder,
Affiliate or Representative thereof, nor any stockholder, Affiliate or
Representative of any of the foregoing, shall have any liability (whether in
contract or in tort, in law or in equity, or granted by statute) for any claims,
causes of action, obligations or liabilities arising under, out of, in
connection with or related in any manner to this Agreement or based on, in
respect of or by reason of this Agreement or its negotiation, execution,
performance or breach; and, to the maximum extent permitted by Law, each of the
Partnership and the Purchasers hereby waives and releases all such liabilities,
claims, causes of action and obligations against any such third Person.

 

(b)                                 Without limiting the foregoing, to the
maximum extent permitted by Law, (i) each of the Partnership and the Purchasers
hereby waives and releases any and all rights, claims, demands or causes of
action that may otherwise be available at law or in equity, or granted by
statute, to avoid or disregard the entity form of the other or otherwise impose
liability of the other on any third Person in respect of the transactions
contemplated hereby, whether granted by statute or based on theories of equity,
agency, control, instrumentality, alter ego, domination, sham, single business
enterprise, piercing the veil, unfairness, undercapitalization or otherwise; and
(ii) each of the Partnership and the Purchasers disclaims any reliance upon any
third Person with respect to the performance of this Agreement or any
representation or warranty made in, in connection with or as an inducement to
this Agreement.

 

40

--------------------------------------------------------------------------------

 

Section 8.15                            No Third-Party Beneficiaries. Nothing in
this Agreement, express or implied, is intended to or shall confer upon any
Person, other than the Partnership and the Purchasers, (and (a) for purposes of
Articles III and IV and this Section 8.15 only, the Placement Agents; (b) for
purposes of Article VI only, the Purchaser Indemnified Parties and the
Partnership Indemnified Parties; and (c) for purposes of Section 8.14 only, the
Placement Agents and any stockholder, Affiliate or Representative of the
Partnership or the Purchasers, or any stockholder, Affiliate or Representative
of any of the foregoing), any right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement; it being understood and agreed, that,
notwithstanding anything to the contrary contained herein, the Placement Agents
shall be entitled to rely on Articles III and IV, Section 8.14 and this
Section 8.15. Notwithstanding anything to the contrary contained herein,
Articles III and IV, Section 8.14 and this Section 8.15 may not be modified,
waived or terminated in any manner that impacts or is adverse in any respect to
the Placement Agents without the prior written consent of the Active Placement
Agents.

 

Section 8.16                            Certain Adjustments. Notwithstanding
anything to the contrary in this Agreement, upon the occurrence of any
transaction described in clauses (1) through (8) of Section 5.11(b)(v)(E) of the
Second A&R LPA that occurs following the date of this Agreement and prior to the
Closing Date, the Common Unit Purchase Price and the Preferred Unit Price, as
applicable and without duplication, shall be proportionately adjusted in
accordance with the terms of Section 5.11(b)(v)(E) of the Second A&R LPA to
account for any such transaction.

 

Section 8.17                            Execution in Counterparts. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which counterparts, when so executed
and delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same agreement.

 

[Signature Page Follows]

 

41

--------------------------------------------------------------------------------

 

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

 

 

PHILLIPS 66 PARTNERS LP

 

 

 

By: Phillips 66 Partners GP LLC, its general partner

 

 

 

 

 

 

 

By:

/s/ John D. Zuklic

 

Name:

John D. Zuklic

 

Title:

Vice President & Treasurer

 

 

 

 

 

 

 

STONEPEAK SCREWDRIVER SPV LLC

 

 

 

BY: STONEPEAK SCREWDRIVER HOLDINGS, LLC, ITS MANAGING MEMBER

 

 

 

By:

/s/ Adrienne Saunders

 

Name:

Adrienne Saunders

 

Title:

General Counsel, Chief Compliance Officer and Secretary

 

 

 

 

 

 

 

FR XIII PANTHEON HOLDINGS, L.L.C.

 

 

 

 

By:

/s/ Gary D. Reaves

 

Name:

Gary D. Reaves

 

Title:

President

 

 

 

 

 

 

 

TORTOISE DIRECT OPPORTUNITIES FUND, LP

 

 

 

By: TORTOISE DIRECT OPPORTUNITIES GP, LLC, its General Partner

 

 

 

By:

/s/ Kyle Krueger

 

Name:

Kyle Krueger

 

Title:

Director

 

[Signature page to Series A Preferred Unit and Common Unit Purchase Agreement]

 

--------------------------------------------------------------------------------

 

 

TORTOISE MLP & PIPELINE FUND

 

 

 

By: TORTOISE CAPITAL ADVISORS, L.L.C., as its Investment Adviser

 

 

 

By:

/s/ Brian Kessens

 

Name:

Brian Kessens

 

Title:

Managing Director

 

 

 

 

 

 

 

TORTOISE VIP MLP & PIPELINE PORTFOLIO

 

 

 

By: TORTOISE CAPITAL ADVISORS, L.L.C., as its Investment Adviser

 

 

 

By:

/s/ Brian Kessens

 

Name:

Brian Kessens

 

Title:

Managing Director

 

 

 

 

 

 

 

TORTOISE ENERGY INFRASTRUCTURE CORPORATION

 

 

 

By: TORTOISE CAPITAL ADVISORS, L.L.C., as its Investment Adviser

 

 

 

By:

/s/ Brian Kessens

 

Name:

Brian Kessens

 

Title:

Managing Director

 

 

 

 

 

 

 

TORTOISE MLP FUND, INC.

 

 

 

By: TORTOISE CAPITAL ADVISORS, L.L.C., as its Investment Adviser

 

 

 

By:

/s/ Brian Kessens

 

Name:

Brian Kessens

 

Title:

Managing Director

 

[Signature page to Series A Preferred Unit and Common Unit Purchase Agreement]

 

--------------------------------------------------------------------------------

 

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

 

 

By: TORTOISE CAPITAL ADVISORS, L.L.C., as its Investment Adviser

 

 

 

By:

/s/ Brian Kessens

 

Name:

Brian Kessens

 

Title:

Managing Director

 

 

 

 

 

 

 

TORTOISE PIPELINE & ENERGY FUND, INC.

 

 

 

By: TORTOISE CAPITAL ADVISORS, L.L.C., as its Investment Adviser

 

 

 

 

 

By:

/s/ Brian Kessens

 

Name:

Brian Kessens

 

Title:

Managing Director

 

 

 

 

 

 

 

TORTOISE ENERGY INDEPENDENCE FUND, INC.

 

 

 

By: TORTOISE CAPITAL ADVISORS, L.L.C., as its Investment Adviser

 

 

 

By:

/s/ Brian Kessens

 

Name:

Brian Kessens

 

Title:

Managing Director

 

 

 

 

 

 

 

TEXAS MUTUAL INSURANCE COMPANY

 

 

 

By: TORTOISE CAPITAL ADVISORS, L.L.C., as its Investment Adviser

 

 

 

By:

/s/ Brian Kessens

 

Name:

Brian Kessens

 

Title:

Managing Director

 

[Signature page to Series A Preferred Unit and Common Unit Purchase Agreement]

 

--------------------------------------------------------------------------------

 

Schedule A

 

Purchaser

 

Purchased
Common Units

 

Purchased Preferred
Units

 

Funding
Obligation

 

Stonepeak Screwdriver SPV LLC

717 5th Avenue, 25th Floor

New York, NY  10022

Attn: Jack Howell

 

1,050,701

 

11,608,624

 

$

680,000,048.18

 

FR XIII Pantheon Holdings, L.L.C.

c/o First Reserve Corporation

One Lafayette Place

Greenwich, CT 06830

Attention: Gary Reaves
David McFarland

 

3,152,102

 

1,842,639

 

$

250,000,042.03

 

Tortoise Direct Opportunities Fund, LP

11550 Ash Street, Suite 300

Leawood, KS 66211

Attention: Kyle Krueger

 

0

 

368,528

 

$

20,000,014.56

 

Tortoise MLP & Pipeline Fund

11550 Ash Street, Suite 300

Leawood, KS 66211

Attention: Brian Kessens

 

852,407

 

0

 

$

40,563,747.63

 

Tortoise VIP MLP & Pipeline Portfolio

11550 Ash Street, Suite 300

Leawood, KS 66211

Attention: Brian Kessens

 

1,805

 

0

 

$

85,895.08

 

Tortoise Energy Infrastructure Corporation

11550 Ash Street, Suite 300

Leawood, KS 66211

Attention: Brian Kessens

 

583,711

 

0

 

$

27,777,230.47

 

Tortoise MLP Fund, Inc.

11550 Ash Street, Suite 300

Leawood, KS 66211

Attention: Brian Kessens

 

537,734

 

0

 

$

25,589,309.18

 

Tortoise Power and Energy Infrastructure Fund, Inc.

11550 Ash Street, Suite 300

Leawood, KS 66211

Attention: Brian Kessens

 

28,667

 

0

 

$

1,364,185.13

 

Tortoise Pipeline & Energy Fund, Inc.

11550 Ash Street, Suite 300

Leawood, KS 66211

Attention: Brian Kessens

 

37,151

 

0

 

$

1,767,915.78

 

Tortoise Energy Independence Fund, Inc.

11550 Ash Street, Suite 300

Leawood, KS 66211

Attention: Brian Kessens

 

32,400

 

0

 

$

1,541,828.52

 

Texas Mutual Insurance Company

c/o Tortoise Capital Advisors, L.L.C.

11550 Ash Street, Suite 300

Leawood, KS 66211

Attention: Brian Kessens

 

27,526

 

0

 

$

1,309,888.02

 

Total:

 

6,304,204

 

13,819,791

 

$

1,050,000,104.58

 

 

Schedule A to Series A Preferred Unit and Common Unit Purchase Agreement

 

--------------------------------------------------------------------------------

 

Schedule B

 

Material Subsidiaries

 

Entity

 

Jurisdiction of Incorporation or Formation

Phillips 66 Carrier LLC

 

Delaware

Phillips 66 Partners Finance Corporation

 

Delaware

Phillips 66 Partners Holdings LLC

 

Delaware

Phillips 66 Sand Hills LLC

 

Delaware

Phillips 66 Southern Hills LLC

 

Delaware

Phillips 66 Sweeny Frac LLC

 

Delaware

 

Schedule B to Series A Preferred Unit and Common Unit Purchase Agreement

 

--------------------------------------------------------------------------------

 

Exhibit A

 

Contribution, Conveyance and Assumption Agreement

 

[See Attached.]

 

--------------------------------------------------------------------------------

 

Exhibit B

 

Form of Registration Rights Agreement

 

[See Attached.]

 

--------------------------------------------------------------------------------

 

REGISTRATION RIGHTS AGREEMENT

 

 

BY AND AMONG

 

 

PHILLIPS 66 PARTNERS LP

 

 

AND

 

 

THE PURCHASERS NAMED ON SCHEDULE A
HERETO

 

 

DATED [·], 2017

 

 

[Form of Registration Rights Agreement]

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

Page

 

 

Article I. DEFINITIONS

1

 

 

 

Section 1.01

Definitions

1

Section 1.02

Registrable Securities

5

 

 

 

Article II. REGISTRATION RIGHTS

6

 

 

 

Section 2.01

Shelf Registration

6

Section 2.02

Piggyback Registration

9

Section 2.03

Underwritten Offering

10

Section 2.04

Further Obligations

12

Section 2.05

Cooperation by Holders

16

Section 2.06

Restrictions on Public Sale by Holders of Registrable Securities

16

Section 2.07

Expenses

16

Section 2.08

Indemnification

17

Section 2.09

Securities Act Reporting

19

Section 2.10

Transfer or Assignment of Registration Rights

20

Section 2.11

Limitation on Subsequent Registration Rights

20

Section 2.12

Limitation on Obligations for Series A Preferred Units

20

 

 

 

Article III. MISCELLANEOUS

21

 

 

 

Section 3.01

Communications

21

Section 3.02

Binding Effect

22

Section 3.03

Assignment of Rights

22

Section 3.04

Recapitalization, Exchanges, Etc. Affecting Units

22

Section 3.05

Aggregation of Registrable Securities

22

Section 3.06

Specific Performance

22

Section 3.07

Counterparts

22

Section 3.08

Governing Law, Submission to Jurisdiction

22

Section 3.09

Waiver of Jury Trial

23

Section 3.10

Entire Agreement

23

Section 3.11

Amendment

23

Section 3.12

No Presumption

24

Section 3.13

Obligations Limited to Parties to Agreement

24

Section 3.14

Interpretation

24

 

 

 

SCHEDULE A — Purchaser Name; Notice and Contact Information

A-1

SCHEDULE B — Purchasers Deemed to have Delivered the Piggyback Opt-out Notice

B-1

 

[Form of Registration Rights Agreement]

 

i

--------------------------------------------------------------------------------

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT, dated as of [·], 2017 (this “Agreement”), is
entered into by and among PHILLIPS 66 PARTNERS LP, a Delaware limited
partnership (the “Partnership”), and each of the Persons set forth on Schedule A
hereto (the “Purchasers”).

 

WHEREAS, this Agreement is made in connection with the closing of the issuance
and sale of the Series A Preferred Units and Common Units (the date of such
closing, the “Closing Date”) pursuant to the Series A Preferred Unit and Common
Unit Purchase Agreement, dated as of [·], 2017, by and among the Partnership and
the Purchasers (the “Purchase Agreement”); and

 

WHEREAS, the Partnership has agreed to provide the registration and other rights
set forth in this Agreement for the benefit of the Purchasers pursuant to the
Purchase Agreement.

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereby agree as follows:

 

ARTICLE IX.
DEFINITIONS

 

Section 9.01                            Definitions. As used in this Agreement,
the following terms have the meanings indicated:

 

“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” (including, with correlative meanings, “controlled by” and “under
common control with”) 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. For
the avoidance of doubt, for purposes of this Agreement, neither the Partnership,
on the one hand, nor any Purchaser, on the other hand, shall be deemed to be
Affiliates of each other.

 

“Agreement” has the meaning specified in the introductory paragraph of this
Agreement.

 

“Business Day” means any day other than a Saturday, Sunday, any federal legal
holiday or day on which banking institutions in the State of New York or the
State of Texas are authorized or required by law or other governmental action to
close.

 

“Closing Date” has the meaning specified in the recitals to this Agreement.

 

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

 

“Common Unit Price” means $47.5873 per Common Unit.

 

“Common Unit Registrable Securities” means the Conversion Unit Registrable
Securities and the PIPE Unit Registrable Securities.

 

[Form of Registration Rights Agreement]

 

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“Common Units” means the common units representing limited partner interests in
the Partnership and having the rights and obligations specified in the
Partnership Agreement.

 

“Conversion Unit Registrable Securities” means the Common Units issuable upon
conversion of the Series A Preferred Units, all of which are subject to the
rights provided herein until such time as such securities cease to be
Registrable Securities pursuant to Section 1.02.

 

“Conversion Unit Registration Statement” has the meaning specified in
Section 2.01(a)(ii).

 

“Effective Date” means, with respect to any Registration Statement, the date of
effectiveness of such Registration Statement.

 

“Effectiveness Period” has the meaning specified in Section 2.01(a)(iv).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time, and the rules and regulations of the Commission promulgated thereunder.

 

“First Reserve” means FR XIII Pantheon Holdings, L.L.C., a Delaware limited
liability company.

 

“General Partner” means Phillips 66 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.

 

“Holder” means the record holder of any Registrable Securities.

 

“Holder Underwriter Registration Statement” has the meaning specified in
Section 2.04(q).

 

“Included Registrable Securities” has the meaning specified in Section 2.02(a).

 

“Initiating Holder” has the meaning specified in Section 2.03(b).

 

“Liquidated Damages” has the meaning specified in Section 2.01(b).

 

“Liquidated Damages Multiplier” means the product of (a) (i) with respect to any
Registration Statement for the Common Unit Registrable Securities, the Common
Unit Price or (ii) with respect to the Registration Statement for the Series A
Preferred Unit Registrable Securities, the Preferred Unit Price and (b) (i) in
the case of clause (a)(i), the number of PIPE Unit Registrable Securities or
Conversion Unit Registrable Securities, as applicable, then held by the
applicable Holder and to be included on the applicable PIPE Unit Registration
Statement or Conversion Unit Registration Statement, and (ii) in the case of
clause (a)(ii), the number of Series A Preferred Unit Registrable Securities
then held by the applicable Holder and to be included on the applicable
Preferred Unit Registration Statement.

 

“Losses” has the meaning specified in Section 2.08(a).

 

[Form of Registration Rights Agreement]

 

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“Managing Underwriter” means, with respect to any Underwritten Offering, the
book running lead manager of such Underwritten Offering.

 

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

 

“Other Holder” has the meaning specified in Section 2.02(a).

 

“Partnership” has the meaning specified in the introductory paragraph of this
Agreement.

 

“Partnership Agreement” means the Second Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of the date hereof, as amended.

 

“Person” means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company, unincorporated
organization, government or any agency, instrumentality or political subdivision
thereof or any other form of entity.

 

“Phillips 66” means Phillips 66, a Delaware corporation.

 

“Piggyback Notice” has the meaning specified in Section 2.02(a).

 

“Piggyback Opt-Out Notice” has the meaning specified in Section 2.02(a).

 

“Piggyback Registration” has the meaning specified in Section 2.02(a).

 

“PIK Units” means any additional Series A Perpetual Convertible Preferred Units
issued by the Partnership to the holders of Series A Preferred Units pursuant to
Section 5.11(b)(i)(A) of the Partnership Agreement.

 

“PIPE Unit Registrable Securities” means the Common Units to be issued and sold
to the Purchasers on the Closing Date pursuant to the Purchase Agreement, all of
which are subject to the rights provided herein until such time as such
securities cease to be Registrable Securities pursuant to Section 1.02.

 

“PIPE Unit Registration Statement” has the meaning specified in
Section 2.01(a)(i).

 

“Preferred Unit Price” means $54.27 per Series A Preferred Unit.

 

“Preferred Unit Registration Statement” has the meaning specified in
Section 2.01(a)(iii).

 

“Purchase Agreement” has the meaning specified in the recitals to this
Agreement.

 

[Form of Registration Rights Agreement]

 

3

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“Purchased Units” has the meaning given to such term in the Purchase Agreement.

 

“Purchasers” has the meaning specified in the introductory paragraph of this
Agreement.

 

“Registrable Securities” means the Common Unit Registrable Securities and the
Series A Preferred Unit Registrable Securities.

 

“Registration” means any registration pursuant to this Agreement, including
pursuant to a Registration Statement or a Piggyback Registration.

 

“Registration Expenses” has the meaning specified in Section 2.07(a).

 

“Registration Statement” has the meaning specified in Section 2.01(a)(ii).

 

“Rule 144” means Rule 144 (or any successor or similar provision adopted by the
Commission then in effect) promulgated under the Securities Act.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time,
and the rules and regulations of the Commission promulgated thereunder.

 

“Selling Expenses” has the meaning specified in Section 2.07(a).

 

“Selling Holder” means a Holder who is selling Registrable Securities pursuant
to a Registration Statement.

 

“Selling Holder Indemnified Persons” has the meaning specified in
Section 2.08(a).

 

“Series A Preferred Unit Registrable Securities” means the Series A Preferred
Units, all of which are subject to the rights of Series A Preferred Unit
Registrable Securities provided herein until such time as such securities either
(a) convert into Common Units pursuant to the terms of the Partnership Agreement
or (b) cease to be Registrable Securities pursuant to Section 1.02.

 

“Series A Preferred Units” means the Series A Perpetual Convertible Preferred
Units representing limited partner interests in the Partnership and having the
rights and obligations specified in the Partnership Agreement to be issued and
sold to the Purchasers pursuant to the Purchase Agreement, including any PIK
Units issued in connection therewith.

 

“Stonepeak” means Stonepeak Screwdriver SPV LLC, a Delaware limited liability
company.

 

“Target Effective Date” means (a) with respect to the PIPE Unit Registration
Statement for the PIPE Unit Registrable Securities, 90 days from the date
hereof, (b) with respect to the Conversion Unit Registration Statement for the
Conversion Unit Registrable Securities, the second anniversary of the date
hereof, and (c) with respect to the Preferred Unit Registration Statement for
the Series A Preferred Unit Registrable Securities, 90 days from the date
hereof.

 

[Form of Registration Rights Agreement]

 

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“Tortoise” means each of Tortoise Direct Opportunities Fund, LP, a Delaware
limited partnership; Tortoise MLP & Pipeline Fund, a series of Managed Portfolio
Series, a Delaware statutory trust; Tortoise VIP MLP & Pipeline Portfolio, a
series of Managed Portfolio Series, a Delaware statutory trust; Tortoise Energy
Infrastructure Corporation, a Maryland corporation; Tortoise MLP Fund, Inc., a
Maryland corporation; Tortoise Power and Energy Infrastructure Fund, Inc., a
Maryland corporation; Tortoise Pipeline & Energy Fund, Inc., a Maryland
corporation; Tortoise Energy Infrastructure Fund, Inc., a Maryland corporation;
and Texas Mutual Insurance Company, a Texas insurance company.

 

“Underwriter” means, with respect to any Underwritten Offering, the underwriters
of such Underwritten Offering.

 

“Underwritten Offering” means an offering (including an offering pursuant to a
Registration Statement) in which Common Units are sold to an Underwriter on a
firm commitment basis for reoffering to the public or an offering that is a
“bought deal” with one or more investment banks.

 

“WKSI” means a well-known seasoned issuer (as defined in the rules and
regulations of the Commission).

 

Section 9.02                            Registrable Securities. Any Registrable
Security will cease to be a Registrable Security upon the earliest to occur of
the following: (a) when a registration statement covering such Registrable
Security becomes or has been declared effective by the Commission and such
Registrable Security has been sold or disposed of pursuant to such effective
registration statement, (b) when such Registrable Security has been disposed of
(excluding transfers or assignments by a Holder to an Affiliate or to another
Holder or any of its Affiliates or to any assignee or transferee to whom the
rights under this Agreement have been transferred pursuant to Section 2.10)
pursuant to any section of Rule 144, (c) when such Registrable Security is held
by Phillips 66, the Partnership or any of their respective direct or indirect
subsidiaries and (d) when such Registrable Security has been sold or disposed of
in a private transaction in which the transferor’s rights under this Agreement
are not assigned to the transferee of such securities pursuant to Section 2.10.
In addition, a Holder will cease to have rights to require Registration of any
Registrable Securities held by such Holder under this Agreement (i) with respect
to Series A Preferred Unit Registrable Securities, the date on which all
Series A Preferred Unit Registrable Securities have been converted into Common
Units pursuant to Article V of the Partnership Agreement, (ii) with respect to
Conversion Unit Registrable Securities, on the later of (A) the second
anniversary of the date on which all Series A Preferred Units have been
converted into Common Units pursuant to Article V of the Partnership Agreement
and (B) if such Holder is an affiliate (as defined in Rule 144) of the
Partnership, the date on which such Holder ceases to be an affiliate of the
Partnership, and (iii) with respect to PIPE Unit Registrable Securities, on the
later of (A) the fifth anniversary of the date on which the PIPE Unit
Registration Statement is effective and, (B) if such Holder is an affiliate (as
defined in Rule 144) of the Partnership, the date on which such Holder ceases to
be an affiliate of the Partnership.  For the avoidance of doubt, the provisions
of this Section 1.02 do not modify the transfer restrictions applicable to the
Holders set forth in the Partnership Agreement (including
Section 5.11(b)(vii) thereof).

 

[Form of Registration Rights Agreement]

 

5

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ARTICLE X.
REGISTRATION RIGHTS

 

Section 10.01                     Shelf Registration.

 

(a)                                 Shelf Registration Statements.

 

(i)                                     The Partnership shall use its
commercially reasonable efforts to (A) prepare and file an initial registration
statement under the Securities Act to permit the resale of the PIPE Unit
Registrable Securities from time to time as permitted by Rule 415 (or any
similar provision adopted by the Commission then in effect) of the Securities
Act (a “PIPE Unit Registration Statement”) and (B) cause such initial PIPE Unit
Registration Statement to become effective no later than the Target Effective
Date for the PIPE Unit Registrable Securities.

 

(ii)                                  The Partnership shall use its commercially
reasonable efforts to (A) prepare and file an initial registration statement
under the Securities Act (or an amendment to the Registration Statement filed
pursuant to Section 2.01(a)(i)) to permit the resale of the Conversion Unit
Registrable Securities from time to time as permitted by Rule 415 (or any
similar provision adopted by the Commission then in effect) of the Securities
Act (a “Conversion Unit Registration Statement”) and (B) cause such initial
Conversion Unit Registration Statement or such amendment to become effective no
later than the Target Effective Date for the Conversion Unit Registrable
Securities.

 

(iii)                               The Partnership shall use its commercially
reasonable efforts to (A) prepare and file an initial registration statement
under the Securities Act to permit the resale of the Series A Preferred Unit
Registrable Securities from time to time as permitted by Rule 415 (or any
similar provision adopted by the Commission then in effect) of the Securities
Act (a “Preferred Unit Registration Statement” and, each Preferred Unit
Registration Statement, PIPE Unit Registration Statement or Conversion Unit
Registration Statement, a “Registration Statement”) and (B) cause such initial
Preferred Unit Registration Statement to become effective no later than the
Target Effective Date for the Series A Preferred Unit Registrable Securities.

 

(iv)                              The Partnership will use its commercially
reasonable efforts to cause the Registration Statements filed pursuant to this
Section 2.01(a) to be continuously effective under the Securities Act, with
respect to any Holder, until the earliest to occur of the following: (A) the
date on which there are no longer any Registrable Securities outstanding and
(B) (1) with respect to Series A Preferred Unit Registrable Securities, the 
date on which all Series A Preferred Units have been converted into Common Units
pursuant to Article V of the Partnership Agreement, (2) with respect to
Conversion Unit Registrable Securities, the later of (I) the second anniversary
of the date on which all Series A Preferred Units have been converted into
Common Units pursuant to Article V of the Partnership Agreement and, (II) if
such Holder is an affiliate (as defined in Rule 144) of the Partnership, the
date on which such Holder ceases to be an affiliate of the Partnership, and
(3) with respect to PIPE Unit Registrable Securities, on the later of (I) the
fifth anniversary of the date on which the PIPE Unit Registration Statement is

 

[Form of Registration Rights Agreement]

 

6

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effective and, (II) if such Holder is an affiliate (as defined in Rule 144) of
the Partnership, the date on which such Holder ceases to be an affiliate of the
Partnership (in each case of clause (A) or (B), the “Effectiveness Period”). A
Registration Statement filed pursuant to this Section 2.01(a) shall be on such
appropriate registration form of the Commission as shall be selected by the
Partnership; provided, however, that if the Partnership is then eligible, it
shall file such Registration Statement on Form S-3. A Registration Statement
when declared effective (including the documents incorporated therein by
reference) will comply as to form in all material respects with all applicable
requirements of the Securities Act and the Exchange Act and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading
(and, in the case of any prospectus contained in such Registration Statement, in
the light of the circumstances under which a statement is made). As soon as
practicable following the date that a Registration Statement becomes effective,
but in any event within three Business Days of such date, the Partnership shall
provide the Holders with written notice of the effectiveness of such
Registration Statement.

 

(b)                                 Failure to Become Effective.

 

(i)                                     If a Registration Statement required by
Section 2.01(a) does not become or is not declared effective by the applicable
Target Effective Date, then each Holder shall be entitled to a payment (with
respect to each of the Holder’s Registrable Securities which are included in
such Registration Statement), as liquidated damages and not as a penalty, of
(A) for each non-overlapping 30-day period for the first 60 days following the
applicable Target Effective Date, an amount equal to 0.25% of the applicable
Liquidated Damages Multiplier, and (B) for each non-overlapping 30-day period
beginning on the 61st day following the applicable Target Effective Date, an
amount equal to the amount set forth in clause (A) plus an additional 0.25% of
the applicable Liquidated Damages Multiplier for each subsequent 60 days (i.e.,
0.5% for 61-120 days, 0.75% for 121-180 days, and 1.0% thereafter), up to a
maximum amount equal to 1.0% of the applicable Liquidated Damages Multiplier per
non-overlapping 30-day period (the “Liquidated Damages”), until such time as
such Registration Statement is declared or becomes effective or there are no
longer any Registrable Securities outstanding. The Liquidated Damages payable
pursuant to the immediately preceding sentence shall be payable within 10
Business Days after the end of each such 30-day period.

 

(ii)                                  Any Liquidated Damages payable by the
Partnership pursuant to Section 2.01(b)(i) shall be paid to each Holder in
immediately available funds to the account or accounts specified by the
applicable Holders in writing; provided, however, that if the Partnership
certifies that it is unable to pay Liquidated Damages in cash because such
payment would result in a breach of or constitute a default under a credit
facility or other debt instrument, then the Partnership shall pay such
Liquidated Damages using as much cash as is permitted without causing a breach
of or default under such credit facility or other debt instrument and may pay
the balance of any such Liquidated Damages in kind in the form of the issuance
of additional Common Units. Upon any issuance of Common Units as Liquidated
Damages, the Partnership shall promptly (A) prepare and file an

 

[Form of Registration Rights Agreement]

 

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amendment to the Registration Statement prior to its effectiveness adding such
Common Units to such Registration Statement as additional Registrable Securities
and (B) prepare and file a supplemental listing application with the New York
Stock Exchange (or such other National Securities Exchange on which the Common
Units are then listed and traded) to list such additional Common Units. The
determination of the number of Common Units to be issued as Liquidated Damages
shall be equal to quotient of (x) the dollar amount of the balance of such
Liquidated Damages due to each such Holder divided by (y) the volume-weighted
average closing price of the Common Units on the New York Stock Exchange (or
such other National Securities Exchange on which the Common Units are then
listed and traded) for the 10 trading days ending on the first trading day
immediately preceding the date on which the Liquidated Damages payment is due.
Any payment of Liquidated Damages shall be prorated for any period of less than
30 days accruing during any period for which a holder is entitled to receive
Liquidated Damages hereunder.

 

(c)                                  Waiver of Liquidated Damages. If the
Partnership is unable to cause (i) the PIPE Unit Registration Statement to
become effective on or before the applicable Target Effective Date, then the
Partnership may request a waiver of the Liquidated Damages with respect thereto,
which may be granted by the consent of the Holders of at least a majority of the
PIPE Unit Registrable Securities, in their sole discretion, and which such
waiver shall apply to all the Holders of PIPE Unit Registrable Securities
included on such Registration Statement, or (ii) the Conversion Unit
Registration Statement or the Preferred Unit Registration Statement to become
effective on or before the applicable Target Effective Date, then the
Partnership may request a waiver of the Liquidated Damages with respect thereto,
which may be granted by the consent of Holders of at 66 2/3% of the outstanding
Conversion Unit Registrable Securities or the Series A Preferred Unit
Registrable Securities, as applicable, and which such waiver shall apply to all
the Holders of Registrable Securities included on such Registration Statement.

 

(d)                                                Delay Rights. 
Notwithstanding anything to the contrary contained herein, the Partnership may,
upon written notice to any Selling Holder whose Registrable Securities are
included in a Registration Statement, suspend such Selling Holder’s use of any
prospectus which is a part of such Registration Statement (in which event the
Selling Holder shall suspend sales of the Registrable Securities pursuant to
such Registration Statement) if (i) the Partnership is pursuing an acquisition,
merger, reorganization, disposition or other similar transaction and the
Partnership determines in good faith that the Partnership’s ability to pursue or
consummate such a transaction would be materially and adversely affected by any
required disclosure of such transaction in such Registration Statement or
(ii) the Partnership has experienced some other material non-public event, the
disclosure of which at such time, in the good faith judgment of the Partnership,
would materially and adversely affect the Partnership; provided, however, that
in no event shall the Selling Holders be suspended from selling Registrable
Securities pursuant to such Registration Statement for a period that exceeds an
aggregate of 60 days in any 180-day period or 105 days in any 365-day period.
Upon disclosure of such information or the termination of the condition
described above, the Partnership shall provide prompt notice to the Selling
Holders whose Registrable Securities are included in such Registration
Statement, and shall promptly terminate any suspension of sales it has put into
effect and shall take such other actions necessary

 

[Form of Registration Rights Agreement]

 

8

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or appropriate to permit registered sales of Registrable Securities as
contemplated in this Agreement.

 

Section 10.02                     Piggyback Registration.

 

(a)                                 Participation. If at any time the
Partnership proposes to file (i) a Registration Statement (other than a
Registration Statement contemplated by Section 2.01(a)) on behalf of any other
Holder, other than Phillips 66 or any of its Affiliates, who has registration
rights related to an Underwritten Offering undertaken pursuant to Section 2.03
(“Other Holder”), or (ii) a prospectus supplement relating to the sale of Common
Units by any Other Holders to an effective “automatic” registration statement,
so long as the Partnership is a WKSI at such time or, whether or not the
Partnership is a WKSI, so long as the Common Unit Registrable Securities were
previously included in the underlying shelf Registration Statement or are
included on an effective Registration Statement, or in any case in which Holders
may participate in such offering without the filing of a post-effective
amendment, in each case, for the sale of Common Units by Other Holders in an
Underwritten Offering undertaken pursuant to Section 2.03, then the Partnership
shall give not less than three Business Days’ notice (or two Business Days’
notice in connection with any overnight or bought Underwritten Offering)
(including notification by electronic mail) (the “Piggyback Notice”) of such
proposed Underwritten Offering to each Holder that, together with its
Affiliates, owns at least $20 million of Common Unit Registrable Securities
(based on the Common Unit Price), and such Piggyback Notice shall offer such
Holder the opportunity to include in such Underwritten Offering such number of
Registrable Securities (the “Included Registrable Securities”) as such Holder
may request in writing (a “Piggyback Registration”); provided, however, that the
Partnership shall not be required to offer such opportunity (A) to such Holders
if the Holders, together with their Affiliates, do not offer a minimum of $25
million of Common Unit Registrable Securities (based on the Common Unit Price),
in the aggregate, or (B) to such Holders if the Partnership has been advised by
the Managing Underwriter that the inclusion of Common Unit Registrable
Securities for sale for the benefit of such Holders will have an adverse effect
on the price, timing or distribution of the Common Units in such Underwritten
Offering, in which case the amount of Common Unit Registrable Securities to be
offered for the accounts of Holders shall be determined based on the provisions
of Section 2.02(b). Each Piggyback Notice shall be provided to Holders on a
Business Day pursuant to Section 3.01 and receipt of such notice shall be
confirmed and kept confidential by the Holders until either (x) such proposed
Underwritten Offering has been publicly announced by the Partnership or (y) the
Holders have received notice from the Partnership that such proposed
Underwritten Offering has been abandoned, which the Partnership shall provide to
the Holders reasonably promptly after the final decision to abandon a proposed
Underwritten Offering has been made. Each such Holder will have three Business
Days (or one Business Day in connection with any overnight or bought
Underwritten Offering) after such Piggyback Notice has been delivered to request
in writing to the Partnership the inclusion of Registrable Securities in the
Underwritten Offering. If no request for inclusion from a Holder is received by
the Partnership within the specified time, such Holder shall have no further
right to participate in such Underwritten Offering. If, at any time after giving
written notice of the Partnership’s intention to undertake an Underwritten
Offering and prior to the pricing of such Underwritten Offering, such
Underwritten Offering is terminated or delayed pursuant to the provisions of
this Agreement, the Partnership may, at its election, give written notice of
such determination to the

 

[Form of Registration Rights Agreement]

 

9

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Selling Holders and, (1) in the case of a termination of such Underwritten
Offering, shall be relieved of its obligation to sell any Included Registrable
Securities in connection with such terminated Underwritten Offering, and (2) in
the case of a determination to delay such Underwritten Offering, shall be
permitted to delay offering any Included Registrable Securities for the same
period as the delay in the Underwritten Offering. Any Selling Holder shall have
the right to withdraw such Selling Holder’s request for inclusion of such
Selling Holder’s Common Unit Registrable Securities in such Underwritten
Offering by giving written notice to the Partnership of such withdrawal at least
one Business Day prior to the time of pricing of such Underwritten Offering. Any
Holder may deliver written notice (a “Piggyback Opt-Out Notice”) to the
Partnership requesting that such Holder not receive notice from the Partnership
of any proposed Underwritten Offering; provided, however, that such Holder may
later revoke any such Piggyback Opt-Out Notice in writing. Following receipt of
a Piggyback Opt-Out Notice from a Holder (unless subsequently revoked), the
Partnership shall not be required to deliver any notice to such Holder pursuant
to this Section 2.02(a) and such Holder shall no longer be entitled to
participate in Underwritten Offerings pursuant to this Section 2.02(a), unless
such Piggyback Opt-Out Notice is revoked by such Holder. The Holders listed on
Schedule B shall each be deemed to have delivered a Piggyback Opt-Out Notice as
of the date hereof. Each Holder’s rights under this Section 2.02(a) shall
terminate upon such Holder (together with its Affiliates) ceasing to hold at
least $20 million of Common Unit Registrable Securities (based on the Common
Unit Price). Each Holder shall notify the Partnership in writing when such
Holder (together with its Affiliates) holds less than $20 million of Common Unit
Registrable Securities (based on the Common Unit Price).

 

(b)                                 Priority of Piggyback Registration. If the
Managing Underwriter or Underwriters of any proposed Underwritten Offering for
Other Holders advise the Partnership that the total amount of Common Unit
Registrable Securities that Holders intend to include in such offering exceeds
the number that can be sold in such offering without being likely to have an
adverse effect on the price, timing or distribution of the Common Units offered
or the market for the Common Units, then the Partnership shall include the
number of Common Units that such Managing Underwriter or Underwriters advise the
Partnership can be sold without having such adverse effect, with such number to
be allocated (i) first, to the Common Units requested to be included therein by
the Initiating Holder; and (ii) second, pro rata among the Holders who are
exercising piggyback registration rights pursuant to this Section 2.02 related
to such offering (based, for each such Holder, on the percentage derived by
dividing (x) the number of Common Units proposed to be sold by such Holder in
such Underwritten Offering by (y) the aggregate number of Common Units proposed
to be sold by all Holders in such Underwritten Offering).

 

Section 10.03                     Underwritten Offering.

 

(a)                                 Purchaser Demand Rights.  Following the
first anniversary of the date of this Agreement, if (i) the Holders of a
majority of the outstanding Common Unit Registrable Securities or (ii) a Holder
that, together with its Affiliates, holds at least $100 million of Common Unit
Registrable Securities (based on the Common Unit Price), in the aggregate, elect
to dispose of Common Unit Registrable Securities under a Registration Statement
pursuant to an Underwritten Offering and reasonably expect gross proceeds of at
least $50 million from such Underwritten Offering (together with any Registrable
Securities to be disposed of by a Selling

 

[Form of Registration Rights Agreement]

 

10

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Holder that has elected to participate in such Underwritten Offering pursuant to
Section 2.02), the Partnership shall, at the written request of such Selling
Holder(s), enter into an underwriting agreement in a form as is customary in
Underwritten Offerings of securities by the Partnership with the Managing
Underwriter or Underwriters selected by the Partnership, which shall include
indemnities to the effect and to the extent provided in Section 2.08 and other
provisions consistent with this Agreement, and shall take all such other
reasonable actions as are requested by the Managing Underwriter or Underwriters
in order to expedite or facilitate the disposition of such Common Unit
Registrable Securities; provided, however, that the Partnership shall have no
obligation to facilitate or participate in, including entering into any
underwriting agreement for, any Underwritten Offering other than (A) two
Underwritten Offerings at the request of Stonepeak or any of its Affiliates,
(B) one Underwritten Offering at the request of First Reserve or any of its
Affiliates and (C) one Underwritten Offering at the request of Tortoise or any
of its Affiliates; provided further that (x) none of the foregoing Underwritten
Offerings in clauses (A) through (C) above shall occur within 365 days of each
other and (y) if the Partnership, Phillips 66 or any of their respective
Affiliates is conducting or actively pursuing a securities offering of the
Partnership’s Common Units with anticipated gross offering proceeds of at least
$100 million (other than in connection with any at-the-market offering or
similar continuous offering program), then the Partnership may suspend such
Selling Holder’s right to require the Partnership to conduct an Underwritten
Offering on such Selling Holder’s behalf pursuant to this Section 2.03;
provided, however, that the Partnership may only suspend such Selling Holder’s
right to require the Partnership to conduct an Underwritten Offering pursuant to
this Section 2.03 once in any six-month period and in no event for a period that
exceeds an aggregate of 60 days in any 180-day period or 105 days in any 365-day
period.

 

(b)                                 General Procedures. In connection with any
Underwritten Offering contemplated by Section 2.02 or Section 2.03(a), the
underwriting agreement into which each Selling Holder and the Partnership shall
enter shall contain such representations, covenants, indemnities (subject to
Section 2.08) and other rights and obligations as are customary in firm
commitment Underwritten Offerings of securities by the Partnership. No Selling
Holder shall be required to make any representations or warranties to or
agreements with the Partnership or the Underwriters other than representations,
warranties or agreements regarding such Selling Holder’s authority to enter into
such underwriting agreement and to sell, and its ownership of, the securities
being registered on its behalf, its intended method of distribution and any
other representation required by law. If any Selling Holder disapproves of the
terms of an Underwritten Offering contemplated by this Section 2.03, such
Selling Holder may elect to withdraw therefrom by notice to the Partnership and
the Managing Underwriter; provided, however, that such withdrawal must be made
at least one Business Day prior to the time of pricing of such Underwritten
Offering to be effective; provided further that, in the event the Managing
Underwriter or Underwriters of any proposed Underwritten Offering advise the
Partnership that the total amount of Common Unit Registrable Securities that
Holders intend to include in such offering exceeds the number that can be sold
in such offering without being likely to have an adverse effect on the price,
timing or distribution of the Common Unit Registrable Securities offered or the
market for the Common Units, and the amount of Common Unit Registrable
Securities requested to be included in such Underwritten Offering by the Holder
that initiated such Underwritten Offering pursuant to Section 2.03(a) (the
“Initiating Holder”) is reduced by 50% or more, the Initiating Holder will have
the right to withdraw from such Underwritten Offering by delivering notice to
the

 

[Form of Registration Rights Agreement]

 

11

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Partnership at least one Business Day prior to the time of pricing of such
Underwritten Offering, in which case the Partnership will have no obligation to
proceed with such Underwritten Offering and such Underwritten Offering, whether
or not completed, will not decrease the number of Underwritten Offerings the
Initiating Holder shall have the right and option to request under this
Section 2.03. No such withdrawal or abandonment shall affect the Partnership’s
obligation to pay Registration Expenses.

 

Section 10.04                     Further Obligations. In connection with its
obligations under this Article II, the Partnership will:

 

(a)                                 promptly prepare and file with the
Commission such amendments and supplements to a Registration Statement and the
prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective for the Effectiveness Period and as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities covered by such Registration
Statement;

 

(b)                                 if a prospectus supplement will be used in
connection with the marketing of an Underwritten Offering under a Registration
Statement and the Managing Underwriter at any time shall notify the Partnership
in writing that, in the sole judgment of such Managing Underwriter, inclusion of
detailed information to be used in such prospectus supplement is of material
importance to the success of such Underwritten Offering, the Partnership shall
use its commercially reasonable efforts to include such information in such
prospectus supplement;

 

(c)                                  furnish to each Selling Holder (i) as far
in advance as reasonably practicable before filing a Registration Statement or
any other registration statement contemplated by this Agreement or any
supplement or amendment thereto, upon request, copies of reasonably complete
drafts of all such documents proposed to be filed (including exhibits and each
document incorporated by reference therein to the extent then required by the
rules and regulations of the Commission), and provide each such Selling Holder
the opportunity to object to any information pertaining to such Selling Holder
and its plan of distribution that is contained therein and, to the extent timely
received, make the corrections reasonably requested by such Selling Holder with
respect to such information prior to filing such Registration Statement or such
other registration statement and the prospectus included therein or any
supplement or amendment thereto, and (ii) such number of copies of such
Registration Statement or such other registration statement and the prospectus
included therein and any supplements and amendments thereto as such Persons may
reasonably request in order to facilitate the resale or other disposition of the
Registrable Securities covered by such Registration Statement or other
registration statement;

 

(d)                                 if applicable, use its commercially
reasonable efforts to promptly register or qualify the Registrable Securities
covered by any Registration Statement or any other registration statement
contemplated by this Agreement under the securities or blue sky laws of such
jurisdictions as the Selling Holders or, in the case of an Underwritten
Offering, the Managing Underwriter, shall reasonably request; provided, however,
that the Partnership will not be required to qualify generally to transact
business in any jurisdiction where it is not then required

 

[Form of Registration Rights Agreement]

 

12

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to so qualify or to take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject;

 

(e)                                  promptly notify each Selling Holder, at any
time when a prospectus relating thereto is required to be delivered by any of
them under the Securities Act, of (i) the filing of a Registration Statement or
any other registration statement contemplated by this Agreement or any
prospectus or prospectus supplement to be used in connection therewith, or any
amendment or supplement thereto, and, with respect to a Registration Statement
or any other registration statement or any post-effective amendment thereto,
when the same has become effective; and (ii) the receipt of any written comments
from the Commission with respect to any filing referred to in clause (i) and any
written request by the Commission for amendments or supplements to any such
Registration Statement or any other registration statement or any prospectus or
prospectus supplement thereto;

 

(f)                                   promptly notify each Selling Holder, at
any time when a prospectus relating thereto is required to be delivered by any
of them under the Securities Act, of (i) the happening of any event as a result
of which the prospectus or prospectus supplement contained in a Registration
Statement or any other registration statement contemplated by this Agreement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading (in the case of any prospectus contained
therein, in the light of the circumstances under which a statement is made);
(ii) the issuance or express threat of issuance by the Commission of any stop
order suspending the effectiveness of a Registration Statement or any other
registration statement contemplated by this Agreement, or the initiation of any
proceedings for that purpose; or (iii) the receipt by the Partnership of any
notification with respect to the suspension of the qualification of any
Registrable Securities for sale under the applicable securities or blue sky laws
of any jurisdiction. Following the provision of such notice, the Partnership
agrees to, as promptly as practicable, amend or supplement the prospectus or
prospectus supplement or take other appropriate action so that the prospectus or
prospectus supplement does not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances then
existing and to take such other action as is reasonably necessary to remove a
stop order, suspension, threat thereof or proceedings related thereto;

 

(g)                                  upon request and subject to appropriate
confidentiality obligations, furnish to each Selling Holder copies of any and
all transmittal letters or other correspondence with the Commission or any other
governmental agency or self-regulatory body or other body having jurisdiction
(including any domestic or foreign securities exchange) relating to such
offering of Registrable Securities;

 

(h)                                 in the case of an Underwritten Offering,
furnish, or use its reasonable efforts to cause to be furnished, upon request,
(i) an opinion of counsel for the Partnership addressed to the Underwriters,
dated the date of the closing under the applicable underwriting agreement, and
(ii) a “comfort letter” addressed to the Underwriters, dated the pricing date of
such Underwritten Offering, and a letter of like kind dated the date of the
closing under the applicable underwriting agreement, in each case, signed by the
independent public accountants who have certified the

 

[Form of Registration Rights Agreement]

 

13

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Partnership’s financial statements included or incorporated by reference into
the applicable registration statement, and each of the opinion and the “comfort
letter” shall be in customary form and covering substantially the same matters
with respect to such registration statement (and the prospectus and any
prospectus supplement) as have been customarily covered in opinions of issuer’s
counsel and in accountants’ letters delivered to the Underwriters in
Underwritten Offerings of securities by the Partnership and such other matters
as such Underwriters may reasonably request;

 

(i)                                     otherwise use its commercially
reasonable efforts to comply with all applicable rules and regulations of the
Commission;

 

(j)                                    make available to the appropriate
representatives of the Managing Underwriter during normal business hours access
to such information and Partnership personnel as is reasonable and customary to
enable such parties to establish a due diligence defense under the Securities
Act; provided, however, that the Partnership need not disclose any non-public
information to any such representative unless and until such representative has
entered into a confidentiality agreement with the Partnership;

 

(k)                                 use its commercially reasonable efforts to
cause all Common Unit Registrable Securities registered pursuant to this
Agreement to be listed on the New York Stock Exchange (or such other National
Securities Exchange on which the Common Units are then listed and traded) or a
nationally recognized quotation system on which similar securities issued by the
Partnership are then listed; provided, however, that, for the avoidance of
doubt, the Partnership shall have no obligation to cause any Series A Preferred
Unit Registrable Securities registered pursuant to this Agreement to be listed
on any National Securities Exchange or nationally recognized quotation system;

 

(l)                                     use its commercially reasonable efforts
to cause Registrable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Partnership to enable the Selling Holders to
consummate the disposition of such Registrable Securities;

 

(m)                             provide a transfer agent, which may be the
General Partner or one of its Affiliates as provided in the Partnership
Agreement, and registrar for all Registrable Securities covered by any
Registration Statement not later than the Effective Date of such Registration
Statement;

 

(n)                                 enter into customary agreements and take
such other actions as are reasonably requested by the Selling Holders or the
Underwriters, if any, in order to expedite or facilitate the disposition of
Registrable Securities (including using commercially reasonable efforts to make
appropriate officers of the General Partner available to participate in
customary marketing activities); provided, however, that (i) the officers of the
General Partner shall not be required to dedicate an unreasonably burdensome
amount of time in connection with any roadshow and related marketing activities
for any Underwritten Offering and (ii) if the Partnership, using commercially
reasonable efforts, is unable to make such appropriate officers of the General
Partner available to participate in connection with any such roadshow or related
marketing activities (whether in person or otherwise), the Partnership shall
make such appropriate officers available to participate via conference call or
other means of communication;

 

[Form of Registration Rights Agreement]

 

14

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(o)                                 if reasonably requested by a Selling Holder,
(i) incorporate in a prospectus supplement or post-effective amendment such
information as such Selling Holder reasonably requests to be included therein
relating to the sale and distribution of Registrable Securities, including
information with respect to the number of Registrable Securities being offered
or sold, the purchase price being paid therefor and any other terms of the
offering of the Registrable Securities to be sold in such offering; and
(ii) make all required filings of such prospectus supplement or post-effective
amendment after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment;

 

(p)                                 if reasonably required by the Partnership’s
transfer agent, the Partnership shall promptly deliver any authorizations,
certificates and directions required by the transfer agent which authorize and
direct the transfer agent to transfer Registrable Securities without legend upon
sale by the Holder of such Registrable Securities under a Registration
Statement; and

 

(q)                                 if any Holder could reasonably be deemed to
be an “underwriter,” as defined in Section 2(a)(11) of the Securities Act, in
connection with a Registration Statement and any amendment or supplement thereof
(a “Holder Underwriter Registration Statement”), then the Partnership will
reasonably cooperate with such Holder in allowing such Holder to conduct
customary “underwriter’s due diligence” with respect to the Partnership and
satisfy its obligations in respect thereof. In addition, at any Holder’s
request, the Partnership will furnish to such Holder, on the date of the
effectiveness of the Holder Underwriter Registration Statement and thereafter
from time to time on such dates as such Holder may reasonably request (provided
that such request shall not be more frequently than on an annual basis unless
such Holder is offering Registrable Securities pursuant to a Holder Underwriter
Registration Statement), (i) a “comfort letter,” dated such date, from the
Partnership’s independent certified public accountants in form and substance as
has been customarily given by independent certified public accountants to
underwriters in Underwritten Offerings of securities by the Partnership,
addressed to such Holder, (ii) an opinion, dated as of such date, of counsel
representing the Partnership for purposes of the Holder Underwriter Registration
Statement, in form, scope and substance as has been customarily given in
Underwritten Offerings of securities by the Partnership, accompanied by standard
“10b-5” negative assurance for such offerings, addressed to such Holder and
(iii) a standard officer’s certificate from the chief executive officer or chief
financial officer, or other officers serving such functions, of the General
Partner addressed to the Holder, as has been customarily given by such officers
in Underwritten Offerings of securities by the Partnership. The Partnership will
also use its reasonable efforts to provide legal counsel to such Holder with an
opportunity to review and comment upon any such Holder Underwriter Registration
Statement, and any amendments and supplements thereto, prior to its filing with
the Commission.

 

Notwithstanding anything to the contrary in this Section 2.04, the Partnership
will not name a Holder as an underwriter (as defined in Section 2(a)(11) of the
Securities Act) in any Registration Statement or Holder Underwriter Registration
Statement, as applicable, without such Holder’s consent. If the staff of the
Commission requires the Partnership to name any Holder as an underwriter (as
defined in Section 2(a)(11) of the Securities Act), and such Holder does not
consent thereto, then such Holder’s Registrable Securities shall not be included
on the applicable Registration Statement, and the Partnership shall have no
further obligations

 

[Form of Registration Rights Agreement]

 

15

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hereunder with respect to Registrable Securities held by such Holder, unless
such Holder has not had an opportunity to conduct customary underwriter’s due
diligence as set forth in subsection (q) of this Section 2.04 with respect to
the Partnership at the time such Holder’s consent is sought.

 

Each Selling Holder, upon receipt of notice from the Partnership of the
happening of any event of the kind described in subsection (f) of this
Section 2.04, shall forthwith discontinue offers and sales of the Registrable
Securities by means of a prospectus or prospectus supplement until such Selling
Holder’s receipt of the copies of the supplemented or amended prospectus
contemplated by subsection (f) of this Section 2.04 or until it is advised in
writing by the Partnership that the use of the prospectus may be resumed and has
received copies of any additional or supplemental filings incorporated by
reference in the prospectus, and, if so directed by the Partnership, such
Selling Holder will, or will request the Managing Underwriter or Managing
Underwriters, if any, to deliver to the Partnership (at the Partnership’s
expense) all copies in their possession or control, other than permanent file
copies then in such Selling Holder’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.

 

Section 10.05                     Cooperation by Holders. The Partnership shall
have no obligation to include Registrable Securities of a Holder in a
Registration Statement or in an Underwritten Offering pursuant to
Section 2.03(a) if such Holder has failed to timely furnish such information
that the Partnership determines, after consultation with its counsel, is
reasonably required in order for any registration statement or prospectus
supplement, as applicable, to comply with the Securities Act.

 

Section 10.06                     Restrictions on Public Sale by Holders of
Registrable Securities. Each Holder of Common Unit Registrable Securities who is
participating in an Underwritten Offering and is included in a Registration
Statement agrees to enter into a customary letter agreement (including standard
carve-outs and exceptions) with underwriters providing that such Holder will not
effect any public sale or distribution of Common Unit Registrable Securities
during the 45 calendar day period beginning on the date of a prospectus or
prospectus supplement filed with the Commission with respect to the pricing of
such Underwritten Offering; provided, however, that, notwithstanding the
foregoing, (i) the duration of the foregoing restrictions shall be no longer
than the duration of the shortest restriction imposed by the Underwriters on the
Partnership or the officers, directors or any other Affiliate of the Partnership
on whom a restriction is imposed and (ii) the restrictions set forth in this
Section 2.06 shall not apply to any Common Unit Registrable Securities that are
included in such Underwritten Offering by such Holder.

 

Section 10.07                     Expenses.

 

(a)                                 Certain Definitions. “Registration Expenses”
shall not include Selling Expenses but otherwise means all expenses incident to
the Partnership’s performance under or compliance with this Agreement to effect
the Registration of Registrable Securities on a Registration Statement pursuant
to Section 2.01, a Piggyback Registration pursuant to Section 2.02, or an
Underwritten Offering pursuant to Section 2.03, and the disposition of such
Registrable

 

[Form of Registration Rights Agreement]

 

16

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Securities, including all registration, filing, securities exchange listing and
National Securities Exchange fees, all registration, filing, qualification and
other fees and expenses of complying with securities or blue sky laws, fees of
the Financial Industry Regulatory Authority, fees of transfer agents and
registrars, all word processing, duplicating and printing expenses, and the fees
and disbursements of counsel and independent public accountants for the
Partnership, including the expenses of any special audits or “cold comfort”
letters required by or incident to such performance and compliance. “Selling
Expenses” means all underwriting fees, discounts and selling commissions and
transfer taxes allocable to the sale of the Registrable Securities, plus any
costs or expenses related to any roadshows conducted in connection with the
marketing of any Underwritten Offering.

 

(b)                                 Expenses. The Partnership will pay all
reasonable Registration Expenses, as determined in good faith, in connection
with a shelf Registration, a Piggyback Registration or an Underwritten Offering,
whether or not any sale is made pursuant to such shelf Registration, Piggyback
Registration or Underwritten Offering. Each Selling Holder shall pay its pro
rata share of all Selling Expenses in connection with any sale of its
Registrable Securities hereunder. In addition, except as otherwise provided in
Section 2.08, the Partnership shall not be responsible for professional fees
(including legal fees) incurred by Holders in connection with the exercise of
such Holders’ rights hereunder.

 

Section 10.08                     Indemnification.

 

(a)                                 By the Partnership. In the event of a
Registration of any Registrable Securities under the Securities Act pursuant to
this Agreement, the Partnership will indemnify and hold harmless each Selling
Holder thereunder, its directors, officers, managers, partners, employees and
agents and each Person, if any, who controls such Selling Holder within the
meaning of the Securities Act and the Exchange Act, and its directors, officers,
managers, partners, employees or agents (collectively, the “Selling Holder
Indemnified Persons”), against any losses, claims, damages, expenses or
liabilities (including reasonable attorneys’ fees and expenses) (collectively,
“Losses”), joint or several, to which such Selling Holder Indemnified Person may
become subject under the Securities Act, the Exchange Act or otherwise, insofar
as such Losses (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact (in the case of any prospectus, in light
of the circumstances under which such statement is made) contained in (which,
for the avoidance of doubt, includes documents incorporated by reference in) the
applicable Registration Statement or other registration statement contemplated
by this Agreement, any preliminary prospectus, prospectus supplement or final
prospectus contained therein, or any amendment or supplement thereof, or any
free writing prospectus relating thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in light of the circumstances under which they were made) not
misleading, and will reimburse each such Selling Holder Indemnified Person for
any legal or other expenses reasonably incurred by them in connection with
investigating, defending or resolving any such Loss or actions or proceedings;
provided, however, that the Partnership will not be liable in any such case if
and to the extent that any such Loss arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity

 

[Form of Registration Rights Agreement]

 

17

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with information furnished by such Selling Holder Indemnified Person in writing
specifically for use in the applicable Registration Statement or other
registration statement, preliminary prospectus, prospectus or prospectus
supplement, as applicable. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Selling Holder
Indemnified Person, and shall survive the transfer of such securities by such
Selling Holder.

 

(b)                                 By Each Selling Holder. Each Selling Holder
agrees severally and not jointly to indemnify and hold harmless the Partnership,
the General Partner and the General Partner’s directors, officers, employees and
agents and each Person, who, directly or indirectly, controls the Partnership
within the meaning of the Securities Act or of the Exchange Act to the same
extent as the foregoing indemnity from the Partnership to the Selling Holders,
but only with respect to information regarding such Selling Holder furnished in
writing by or on behalf of such Selling Holder expressly for inclusion in a
Registration Statement or any other registration statement contemplated by this
Agreement, any preliminary prospectus, prospectus supplement or final prospectus
contained therein, or any amendment or supplement thereto or any free writing
prospectus relating thereto; provided, however, that the liability of each
Selling Holder shall not be greater in amount than the dollar amount of the
proceeds (net of any Selling Expenses) received by such Selling Holder from the
sale of the Registrable Securities giving rise to such indemnification.

 

(c)                                  Notice. Promptly after receipt by an
indemnified party hereunder of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party hereunder, notify the indemnifying party in writing thereof,
but the omission to so notify the indemnifying party shall not relieve it from
any liability that it may have to any indemnified party other than under this
Section 2.08(c), except to the extent that the indemnifying party is materially
prejudiced by such failure. In any action brought against any indemnified party,
it shall notify the indemnifying party of the commencement thereof. The
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 2.08 for any legal expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation and of liaison with counsel so selected;
provided, however, that, (i) if the indemnifying party has failed to assume the
defense or employ counsel reasonably satisfactory to the indemnified party or
(ii) if the defendants in any such action include both the indemnified party and
the indemnifying party and counsel to the indemnified party shall have concluded
that there may be reasonable defenses available to the indemnified party that
are different from or additional to those available to the indemnifying party,
or if the interests of the indemnified party reasonably may be deemed to
conflict with the interests of the indemnifying party, then the indemnified
party shall have the right to select a separate counsel and to assume such legal
defense and otherwise to participate in the defense of such action, with the
reasonable expenses and fees of such separate counsel and other reasonable
expenses related to such participation to be reimbursed by the indemnifying
party as incurred. Notwithstanding any other provision of this Agreement, no
indemnifying party shall settle any action brought against any indemnified party
with respect to which such indemnified party may be entitled to indemnification
hereunder

 

[Form of Registration Rights Agreement]

 

18

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without the consent of the indemnified party, unless the settlement thereof
imposes no liability or obligation on, includes a complete and unconditional
release from liability of, and does not contain any admission of wrongdoing by,
the indemnified party.

 

(d)                                 Contribution. If the indemnification
provided for in this Section 2.08 is held by a court or government agency of
competent jurisdiction to be unavailable to any indemnified party or is
insufficient to hold them harmless in respect of any Losses, then each such
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Losses in such proportion as is appropriate to reflect the relative
fault of the indemnifying party, on the one hand, and of the indemnified party,
on the other hand, in connection with the statements or omissions that resulted
in such Losses, as well as any other relevant equitable considerations;
provided, however, that in no event shall any Selling Holder be required to
contribute an aggregate amount in excess of the dollar amount of proceeds (net
of Selling Expenses) received by such Selling Holder from the sale of
Registrable Securities giving rise to such indemnification. The relative fault
of the indemnifying party, on the one hand, and the indemnified party, on the
other, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact has been made by, or relates to, information
supplied by such party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if
contributions pursuant to this paragraph were to be determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to herein. The amount paid by an
indemnified party as a result of the Losses referred to in the first sentence of
this paragraph shall be deemed to include any legal and other expenses
reasonably incurred by such indemnified party in connection with investigating,
defending or resolving any Loss that is the subject of this paragraph. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who is not
guilty of such fraudulent misrepresentation.

 

(e)                                  Other Indemnification. The provisions of
this Section 2.08 shall be in addition to any other rights to indemnification or
contribution that an indemnified party may have pursuant to law, equity,
contract or otherwise.

 

Section 10.09                     Securities Act Reporting. With a view to
making available the benefits of certain rules and regulations of the Commission
that may permit the resale of the Registrable Securities without registration,
the Partnership agrees to use its commercially reasonable efforts to:

 

(a)                                 make and keep public information regarding
the Partnership available, as those terms are understood and defined under the
Securities Act, at all times from and after the date hereof;

 

(b)                                 file with the Commission in a timely manner
all reports and other documents required of the Partnership under the Securities
Act and the Exchange Act at all times from and after the date hereof; and

 

[Form of Registration Rights Agreement]

 

19

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(c)                                  so long as a Holder owns any Registrable
Securities, furnish (i) to the extent accurate, forthwith upon request, a
written statement of the Partnership that it has complied with the reporting
requirements of Rule 144, or any other available safe-harbor or exemption, under
the Securities Act (or any similar provision then in effect) and (ii) unless
otherwise available via the Commission’s EDGAR filing system, to such Holder
forthwith upon request a copy of the most recent annual or quarterly report of
the Partnership, and such other reports and documents so filed as such Holder
may reasonably request in availing itself of any rule or regulation of the
Commission allowing such Holder to sell any such securities without
registration.

 

Section 10.10                     Transfer or Assignment of Registration Rights.
The rights to cause the Partnership to register Registrable Securities under
this Article II may be transferred or assigned by each Holder to one or more
transferees or assignees of Registrable Securities; provided, however, that
(a) unless any such transferee or assignee is an Affiliate of, and after such
transfer or assignment continues to be an Affiliate of, such Holder, the amount
of Registrable Securities transferred or assigned to such transferee or assignee
shall represent at least $50 million of Registrable Securities (based on the
Common Unit Price), or such lesser amount if it constitutes the remaining
holdings of the Holder and its Affiliates; (b) the Partnership is given written
notice prior to any said transfer or assignment, stating the name and address of
each such transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned; and (c) each
such transferee or assignee assumes in writing responsibility for its portion of
the obligations of such transferring Holder under this Agreement.

 

Section 10.11                     Limitation on Subsequent Registration Rights.
From and after the date hereof, the Partnership shall not, without the prior
written consent of the Holders of at least a majority of the outstanding Common
Unit Registrable Securities and securities convertible into Common Unit
Registrable Securities (voting on an as-converted basis as described in
Section 5.11(b)(ii)(A) of the Partnership Agreement), voting as a single class,
enter into any agreement with any current or future holder of any securities of
the Partnership that would allow such current or future holder to require the
Partnership to include securities in any registration statement filed by the
Partnership for Other Holders on a basis other than pari passu with, or
expressly subordinate to, the piggyback rights of the Holders of Common Unit
Registrable Securities hereunder; provided, that in no event shall the
Partnership enter into any agreement that would permit another holder of
securities of the Partnership to participate on a pari passu basis (in terms of
priority of cut-back based on advice of underwriters) with a Purchaser
requesting registration or takedown in an Underwritten Offering pursuant to
Section 2.03(a).

 

Section 10.12                     Limitation on Obligations for Series A
Preferred Units.  Notwithstanding anything to the contrary in this Agreement,
nothing contained herein shall be construed to require the Partnership to
(a) conduct an underwritten offering for the public sale, resale or any other
disposition of Series A Preferred Unit Registrable Securities, (b) except as
expressly provided in this Agreement, otherwise assist in the public resale of
any Series A Preferred Unit Registrable Securities, (c) provide any Holder of
Series A Preferred Unit Registrable Securities any rights to include any
Series A Preferred Unit Registrable Securities in any underwritten offering
relating to the sale by the Partnership or any other Person of any securities of
the Partnership or (d) cause any Series A Preferred Unit Registrable Securities
to be listed on any securities exchange or nationally recognized quotation
system.

 

[Form of Registration Rights Agreement]

 

20

--------------------------------------------------------------------------------

 

ARTICLE XI.
MISCELLANEOUS

 

Section 11.01                     Communications. All notices, demands and other
communications provided for hereunder shall be in writing and shall be given by
registered or certified mail, return receipt requested, telecopy, air courier
guaranteeing overnight delivery, personal delivery or (in the case of any notice
given by the Partnership to the Purchasers) email to the following addresses:

 

(a)                                 If to the Purchasers, to the addresses set
forth on Schedule A.

 

(b)                                 If to the Partnership:

 

Phillips 66 Partners LP

c/o Phillips 66 Partners GP LLC
2331 CityWest Blvd.

Houston, Texas 77042

Attention: [·]

Facsimile: [·]

Email: [·]

 

with a copy (which shall not constitute notice) to:

 

Phillips 66 Partners LP

c/o Phillips 66 Partners GP LLC
2331 CityWest Blvd.

Houston, Texas 77042

Attention: [General Counsel]

Facsimile: [·]

Email: [·]

 

Latham & Watkins LLP

811 Main Street, Suite 3700

Houston TX  77002

Attention: William N. Finnegan IV

Thomas G. Brandt

Facsimile: (713) 546-5401

Email:            bill.finnegan@lw.com

thomas.brandt@lw.com

 

or to such other address as the Partnership or the Purchasers may designate to
each other in writing from time to time or, if to a transferee or assignee of
the Purchasers or any transferee or assignee thereof, to such transferee or
assignee at the address provided pursuant to Section 2.10. All notices and
communications shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; upon actual receipt if sent by certified or
registered mail, return receipt requested, or regular mail, if mailed; upon
actual receipt of the facsimile or email copy, if

 

[Form of Registration Rights Agreement]

 

21

--------------------------------------------------------------------------------

 

sent via facsimile or email; and upon actual receipt when delivered to an air
courier guaranteeing overnight delivery.

 

Section 11.02                     Binding Effect. This Agreement shall be
binding upon the Partnership, each of the Purchasers and their respective
successors and permitted assigns, including subsequent Holders of Registrable
Securities to the extent permitted herein. Except as expressly provided in this
Agreement, this Agreement shall not be construed so as to confer any right or
benefit upon any Person other than the parties to this Agreement and their
respective successors and permitted assigns.

 

Section 11.03                     Assignment of Rights. Except as provided in
Section 2.10, neither this Agreement nor any of the rights, benefits or
obligations hereunder may be assigned or transferred, by operation of law or
otherwise, by any party hereto without the prior written consent of the other
parties hereto.

 

Section 11.04                     Recapitalization, Exchanges, Etc. Affecting
Units. The provisions of this Agreement shall apply to the full extent set forth
herein with respect to any and all units of the Partnership or any successor or
assign of the Partnership (whether by merger, acquisition, consolidation,
reorganization, sale of assets or otherwise) that may be issued in respect of,
in exchange for or in substitution of, the Registrable Securities, and shall be
appropriately adjusted for combinations, unit splits, recapitalizations, pro
rata distributions of units and the like occurring after the date of this
Agreement.

 

Section 11.05                     Aggregation of Registrable Securities. All
Registrable Securities held or acquired by Persons who are Affiliates of one
another shall be aggregated together for the purpose of determining the
availability of any rights under this Agreement.

 

Section 11.06                     Specific Performance. Damages in the event of
breach of this Agreement by a party hereto may be difficult, if not impossible,
to ascertain, and it is therefore agreed that each such Person, in addition to
and without limiting any other remedy or right it may have, will have the right
to seek an injunction or other equitable relief in any court of competent
jurisdiction, enjoining any such breach, and enforcing specifically the terms
and provisions hereof, and each of the parties hereto hereby waives any and all
defenses it may have on the ground of lack of jurisdiction or competence of the
court to grant such an injunction or other equitable relief. The existence of
this right will not preclude any such Person from pursuing any other rights and
remedies at law or in equity that such Person may have.

 

Section 11.07                     Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same agreement.

 

Section 11.08                     Governing Law, Submission to Jurisdiction.
This Agreement, and all claims or causes of action (whether in contract or tort)
that may be based upon, arise out of or relate to this Agreement or the
negotiation, execution or performance of this Agreement (including any claim or
cause of action based upon, arising out of or related to any representation or
warranty made in or in connection with this Agreement), will be construed in
accordance with

 

[Form of Registration Rights Agreement]

 

22

--------------------------------------------------------------------------------

 

and governed by the laws of the State of Delaware without regard to principles
of conflicts of laws. Any action against any party relating to the foregoing
shall be brought in any federal or state court of competent jurisdiction located
within the State of Delaware, and the parties hereto hereby irrevocably submit
to the exclusive jurisdiction of any federal or state court located within the
State of Delaware over any such action. The parties hereby irrevocably waive, to
the fullest extent permitted by applicable law, any objection which they may now
or hereafter have to the laying of venue of any such dispute brought in such
court or any defense of inconvenient forum for the maintenance of such dispute.
Each of the parties hereto agrees that a judgment in any such dispute may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Each of the parties hereto consents to process being served in
any such action 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 service shall, to the fullest extent permitted by law, constitute good
and sufficient service of process and notice thereof; provided, however, that
nothing in the foregoing shall affect or limit any right to serve process in any
other manner permitted by law.

 

Section 11.09                     Waiver of Jury Trial. THE PARTIES TO THIS
AGREEMENT EACH HEREBY WAIVE, AND AGREE TO CAUSE THEIR AFFILIATES TO WAIVE, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR (B) IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED
HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN
CONTRACT, TORT, EQUITY OR OTHERWISE. THE PARTIES TO THIS AGREEMENT EACH HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT
MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

 

Section 11.10                     Entire Agreement. This Agreement, the Purchase
Agreement and the other agreements and documents referred to herein and therein
are intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein or in the
Purchase Agreement with respect to the rights granted by the Partnership or any
of its Affiliates or the Purchasers or any of their respective Affiliates set
forth herein or therein. This Agreement, the Purchase Agreement and the other
agreements and documents referred to herein or therein supersede all prior
agreements and understandings between the parties with respect to such subject
matter.

 

Section 11.11                     Amendment. This Agreement may be amended only
by means of a written amendment signed by the Partnership and the Holders of at
least a majority of the outstanding Common Unit Registrable Securities and
securities convertible into Common Unit Registrable Securities (voting on an
as-converted basis as described in Section 5.11(b)(ii)(A) of

 

[Form of Registration Rights Agreement]

 

23

--------------------------------------------------------------------------------

 

the Partnership Agreement), voting as a single class; provided, however, that no
such amendment shall adversely affect the rights of any Holder hereunder without
the consent of such Holder. Any amendment, supplement or modification of or to
any provision of this Agreement, any waiver of any provision of this Agreement,
and any consent to any departure by the Partnership or any Holder from the terms
of any provision of this Agreement shall be effective only in the specific
instance and for the specific purpose for which such amendment, supplement,
modification, waiver or consent has been made or given.

 

Section 11.12                     No Presumption. This Agreement has been
reviewed and negotiated by sophisticated parties with access to legal counsel
and, to the fullest extent permitted by law, shall not be construed against the
drafter.

 

Section 11.13                     Obligations Limited to Parties to Agreement.
To the fullest extent permitted by law, each of the parties hereto covenants,
agrees and acknowledges that, other than as set forth herein, no Person other
than the Purchasers, the Holders, their respective permitted assignees and the
Partnership shall have any obligation hereunder and that, notwithstanding that
one or more of such Persons may be a corporation, partnership or limited
liability company, no recourse under this Agreement or under any documents or
instruments delivered in connection herewith shall be had against any former,
current or future director, officer, employee, agent, general or limited
partner, manager, member, stockholder or Affiliate of any of such Persons or
their respective permitted assignees, or any former, current or future director,
officer, employee, agent, general or limited partner, manager, member,
stockholder or Affiliate of any of the foregoing, whether by the enforcement of
any assessment or by any legal or equitable proceeding, or by virtue of any
applicable law, it being expressly agreed and acknowledged that no personal
liability whatsoever shall attach to, be imposed on or otherwise be incurred by
any former, current or future director, officer, employee, agent, general or
limited partner, manager, member, stockholder or Affiliate of any of such
Persons or any of their respective assignees, or any former, current or future
director, officer, employee, agent, general or limited partner, manager, member,
stockholder or Affiliate of any of the foregoing, as such, for any obligations
of such Persons or their respective permitted assignees under this Agreement or
any documents or instruments delivered in connection herewith or for any claim
based on, in respect of or by reason of such obligation or its creation, except,
in each case, for any assignee of any Purchaser or a Selling Holder hereunder.

 

Section 11.14                     Interpretation. Article, Section and Schedule
references in this Agreement are references to the corresponding Article,
Section or Schedule to this Agreement, unless otherwise specified. All Schedules
to this Agreement are hereby incorporated and made a part hereof as if set forth
in full herein and are an integral part of this Agreement. All references to
instruments, documents, contracts and agreements are references to such
instruments, documents, contracts and agreements as the same may be amended,
supplemented and otherwise modified from time to time, unless otherwise
specified. The word “including” shall mean “including but not limited to” and
shall not be construed to limit any general statement that it follows to the
specific or similar items or matters immediately following it. Whenever the
Partnership has an obligation under this Agreement, the expense of complying
with that obligation shall be an expense of the Partnership unless otherwise
specified. Any reference in this Agreement to “$” shall mean U.S. dollars.
Whenever any determination, consent or approval

 

[Form of Registration Rights Agreement]

 

24

--------------------------------------------------------------------------------

 

is to be made or given by a Purchaser, such action shall be in such Holder’s
sole discretion, unless otherwise specified in this Agreement. If any provision
in this Agreement is held to be illegal, invalid, not binding or unenforceable,
(a) such provision shall be fully severable and this Agreement shall be
construed and enforced as if such illegal, invalid, not binding or unenforceable
provision had never comprised a part of this Agreement, and the remaining
provisions shall remain in full force and effect, and (b) the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible. When calculating the period of
time before which, within which or following which any act is to be done or step
taken pursuant to this Agreement, the date that is the reference date in
calculating such period shall be excluded. If the last day of such period is a
non-Business Day, the period in question shall end on the next succeeding
Business Day. The words such as “herein,” “hereinafter,” “hereof’ and
“hereunder” refer to this Agreement as a whole and not merely to a subdivision
in which such words appear unless the context otherwise requires. The provision
of a Table of Contents, the division of this Agreement into Articles, Sections
and other subdivisions and the insertion of headings are for convenience of
reference only and shall not affect or be utilized in construing or interpreting
this Agreement.

 

[Remainder of Page Left Intentionally Blank]

[Form of Registration Rights Agreement]

 

25

--------------------------------------------------------------------------------

 

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

 

 

PHILLIPS 66 PARTNERS LP

 

 

 

 

By:

Phillips 66 Partners GP LLC, its general partner

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

[Signature page to Registration Rights Agreement]

[Form of Registration Rights Agreement]

 

--------------------------------------------------------------------------------

 

 

STONEPEAK SCREWDRIVER SPV LLC

 

 

 

 

 

 

 

By:

 

 

Name:

[—]

 

Title:

[—]

 

 

 

 

 

 

 

FR XIII PANTHEON HOLDINGS, L.L.C.

 

 

 

 

 

By:

 

 

Name:

[—]

 

Title:

[—]

 

 

 

 

 

 

 

TORTOISE DIRECT OPPORTUNITIES FUND, LP

 

 

 

 

 

By:

 

 

Name:

[—]

 

Title:

[—]

 

 

 

 

 

 

 

TORTOISE MLP & PIPELINE FUND

 

 

 

 

 

By:

 

 

Name:

[—]

 

Title:

[—]

 

 

 

 

TORTOISE VIP MLP & PIPELINE PORTFOLIO

 

 

 

 

 

By:

 

 

Name:

[—]

 

Title:

[—]

 

[Signature page to Registration Rights Agreement]

[Form of Registration Rights Agreement]

 

--------------------------------------------------------------------------------

 

 

TORTOISE ENERGY INFRASTRUCTURE CORPORATION

 

 

 

 

 

By:

 

 

Name:

[—]

 

Title:

[—]

 

 

 

 

 

 

 

TORTOISE MLP FUND, INC.

 

 

 

By:

 

 

Name:

[—]

 

Title:

[—]

 

 

 

 

 

 

 

TORTOISE POWER AND ENERGY INFRASTRUCTURE FUND, INC.

 

 

 

By:

 

 

Name:

[—]

 

Title:

[—]

 

 

 

 

 

 

 

TORTOISE PIPELINE & ENERGY FUND, INC.

 

 

 

 

 

By:

 

 

Name:

[—]

 

Title:

[—]

 

 

 

 

 

 

 

TORTOISE ENERGY INDEPENDENCE FUND, INC.

 

 

 

 

 

By:

 

 

Name:

[—]

 

Title:

[—]

 

[Signature page to Registration Rights Agreement]

[Form of Registration Rights Agreement]

 

--------------------------------------------------------------------------------

 

 

TEXAS MUTUAL INSURANCE COMPANY

 

 

 

By:

 

 

Name:

[—]

 

Title:

[—]

 

[Signature page to Registration Rights Agreement]

[Form of Registration Rights Agreement]

 

--------------------------------------------------------------------------------

 

SCHEDULE A

 

PURCHASER NAME; NOTICE AND CONTACT INFORMATION

 

Purchaser

 

Contact Information

 

 

 

Stonepeak Screwdriver SPV LLC

 

717 5th Avenue, 25th Floor
New York, NY  10022
Attn: Jack Howell
howell@stonepeakpartners.com
Fax: (212) 907-5101

With a copy to (which shall not constitute notice):

Sidley Austin LLP
1000 Louisiana Street, Suite 6000
Houston, TX 77002
Attn: Cliff W. Vrielink
cvrielink@sidley.com
Fax: (713) 495-7799

 

 

 

FR XIII Pantheon Holdings, L.L.C.

 

c/o First Reserve Corporation
One Lafayette Place
Greenwich, CT 06830
Attention: Gary Reaves;

David McFarland

Facsimile: (832) 667-9505
Email: greaves@firstreserve.com;

dmcfarland@firstreserve.com

 

With a copy to (which shall not constitute notice):

Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
Attn: William E. Curbow
Fax: (212) 455-2502
Email: wcurbow@stblaw.com

 

 

 

Tortoise Direct Opportunities Fund, LP

 

11550 Ash Street, Suite 300
Leawood, KS 66211
spang@tortoiseadvisors.com
Fax: (913) 981-1021

 

[Form of Registration Rights Agreement]

 

A-1

--------------------------------------------------------------------------------

 

Tortoise MLP & Pipeline Fund

 

11550 Ash Street, Suite 300
Leawood, KS 66211
spang@tortoiseadvisors.com
Fax: (913) 981-1021

 

 

 

Tortoise VIP MLP & Pipeline Portfolio

 

11550 Ash Street, Suite 300
Leawood, KS 66211
spang@tortoiseadvisors.com
Fax: (913) 981-1021

 

 

 

Tortoise Energy Infrastructure Corporation

 

11550 Ash Street, Suite 300
Leawood, KS 66211
spang@tortoiseadvisors.com
Fax: (913) 981-1021

 

 

 

Tortoise MLP Fund, Inc.

 

11550 Ash Street, Suite 300
Leawood, KS 66211
spang@tortoiseadvisors.com
Fax: (913) 981-1021

 

 

 

Tortoise Power and Energy Infrastructure Fund, Inc.

 

11550 Ash Street, Suite 300
Leawood, KS 66211
spang@tortoiseadvisors.com
Fax: (913) 981-1021

 

 

 

Tortoise Pipeline & Energy Fund, Inc.

 

11550 Ash Street, Suite 300
Leawood, KS 66211
spang@tortoiseadvisors.com
Fax: (913) 981-1021

 

 

 

Tortoise Energy Independence Fund, Inc.

 

11550 Ash Street, Suite 300
Leawood, KS 66211
spang@tortoiseadvisors.com
Fax: (913) 981-1021

 

 

 

Texas Mutual Insurance Company

 

c/o Tortoise Capital Advisors, L.L.C.
11550 Ash Street, Suite 300
Leawood, KS 66211
spang@tortoiseadvisors.com
Fax: (913) 981-1021

 

[Form of Registration Rights Agreement]

 

--------------------------------------------------------------------------------

 

SCHEDULE B

 

PURCHASERS DEEMED TO HAVE DELIVERED THE PIGGYBACK OPT-OUT NOTICE

 

[—]

 

[Form of Registration Rights Agreement]

 

--------------------------------------------------------------------------------

 

Exhibit C

 

Form of Second Amended and Restated Agreement of Limited Partnership

 

[See Attached.]

 

--------------------------------------------------------------------------------

 

SECOND AMENDED AND RESTATED

 

AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

PHILLIPS 66 PARTNERS LP

 

A Delaware Limited Partnership

 

Dated as of

 

[              ], 2017

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

Article I DEFINITIONS

1

 

 

 

Section 1.1

Definitions

1

 

 

 

Section 1.2

Construction

30

 

 

 

Article II ORGANIZATION

30

 

 

 

Section 2.1

Formation

30

 

 

 

Section 2.2

Name

31

 

 

 

Section 2.3

Registered Office; Registered Agent; Principal Office; Other Offices

31

 

 

 

Section 2.4

Purpose and Business

31

 

 

 

Section 2.5

Powers

32

 

 

 

Section 2.6

Term

32

 

 

 

Section 2.7

Title to Partnership Assets

32

 

 

 

Article III RIGHTS OF LIMITED PARTNERS

32

 

 

 

Section 3.1

Limitation of Liability

32

 

 

 

Section 3.2

Management of Business

33

 

 

 

Section 3.3

Rights of Limited Partners

33

 

 

 

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

34

 

 

 

Section 4.1

Certificates

34

 

 

 

Section 4.2

Mutilated, Destroyed, Lost or Stolen Certificates

35

 

 

 

Section 4.3

Record Holders

35

 

 

 

Section 4.4

Transfer Generally

36

 

 

 

Section 4.5

Registration and Transfer of Limited Partner Interests

36

 

 

 

Section 4.6

Transfer of the General Partner’s General Partner Interest

37

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

--------------------------------------------------------------------------------

 

Section 4.7

Transfer of Incentive Distribution Rights

38

 

 

 

Section 4.8

Restrictions on Transfers

38

 

 

 

Section 4.9

Eligibility Certificates; Ineligible Holders

40

 

 

 

Section 4.10

Redemption of Partnership Interests of Ineligible Holders

41

 

 

 

Article V CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS

42

 

 

 

Section 5.1

Organizational Contributions

42

 

 

 

Section 5.2

Contributions by the General Partner

42

 

 

 

Section 5.3

Contributions by Limited Partners

43

 

 

 

Section 5.4

Interest and Withdrawal

44

 

 

 

Section 5.5

Capital Accounts

44

 

 

 

Section 5.6

Issuances of Additional Partnership Interests

48

 

 

 

Section 5.7

Limited Preemptive Right

49

 

 

 

Section 5.8

Splits and Combinations

49

 

 

 

Section 5.9

Fully Paid and Non-Assessable Nature of Limited Partner Interests

50

 

 

 

Section 5.10

Issuance of Common Units in Connection with Reset of Incentive Distribution
Rights

50

 

 

 

Section 5.11

Establishment of Series A Preferred Units.

52

 

 

 

Article VI ALLOCATIONS AND DISTRIBUTIONS

74

 

 

 

Section 6.1

Allocations for Capital Account Purposes

74

 

 

 

Section 6.2

Allocations for Tax Purposes

83

 

 

 

Section 6.3

Requirement and Characterization of Distributions; Distributions to Record
Holders

85

 

 

 

Section 6.4

Distributions of Available Cash from Operating Surplus

86

 

 

 

Section 6.5

Distributions of Available Cash from Capital Surplus

86

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

ii

--------------------------------------------------------------------------------

 

Section 6.6

Adjustment of Minimum Quarterly Distribution and Target Distribution Levels

87

 

 

 

Section 6.7

Special Provisions Relating to the Holders of Incentive Distribution Rights

87

 

 

 

Section 6.8

Special Provisions Relating to Series A Preferred Units.

88

 

 

 

Section 6.9

Entity-Level Taxation

88

 

 

 

Article VII MANAGEMENT AND OPERATION OF BUSINESS

89

 

 

 

Section 7.1

Management

89

 

 

 

Section 7.2

Certificate of Limited Partnership

91

 

 

 

Section 7.3

Restrictions on the General Partner’s Authority to Sell Assets of the
Partnership Group

92

 

 

 

Section 7.4

Reimbursement of and Other Payments to the General Partner

92

 

 

 

Section 7.5

Outside Activities

93

 

 

 

Section 7.6

Loans from the General Partner; Loans or Contributions from the Partnership or
Group Members

95

 

 

 

Section 7.7

Indemnification

95

 

 

 

Section 7.8

Liability of Indemnitees

97

 

 

 

Section 7.9

Resolution of Conflicts of Interest; Standards of Conduct and Modification of
Duties

98

 

 

 

Section 7.10

Other Matters Concerning the General Partner and Other Indemnitees

100

 

 

 

Section 7.11

Purchase or Sale of Partnership Interests

101

 

 

 

Section 7.12

Registration Rights of the General Partner and its Affiliates

101

 

 

 

Section 7.13

Reliance by Third Parties

105

 

 

 

Article VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS

106

 

 

 

Section 8.1

Records and Accounting

106

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

iii

--------------------------------------------------------------------------------

 

Section 8.2

Fiscal Year

106

 

 

 

Section 8.3

Reports

106

 

 

 

Article IX TAX MATTERS

107

 

 

 

Section 9.1

Tax Returns and Information

107

 

 

 

Section 9.2

Tax Elections

107

 

 

 

Section 9.3

Tax Controversies

107

 

 

 

Section 9.4

Withholding

108

 

 

 

Article X ADMISSION OF PARTNERS

108

 

 

 

Section 10.1

Admission of Limited Partners

108

 

 

 

Section 10.2

Admission of Successor General Partner

109

 

 

 

Section 10.3

Amendment of Agreement and Certificate of Limited Partnership

110

 

 

 

Article XI WITHDRAWAL OR REMOVAL OF PARTNERS

110

 

 

 

Section 11.1

Withdrawal of the General Partner

110

 

 

 

Section 11.2

Removal of the General Partner

112

 

 

 

Section 11.3

Interest of Departing General Partner and Successor General Partner

112

 

 

 

Section 11.4

Withdrawal of Limited Partners

114

 

 

 

Article XII DISSOLUTION AND LIQUIDATION

114

 

 

 

Section 12.1

Dissolution

114

 

 

 

Section 12.2

Continuation of the Business of the Partnership After Dissolution

114

 

 

 

Section 12.3

Liquidator

115

 

 

 

Section 12.4

Liquidation

116

 

 

 

Section 12.5

Cancellation of Certificate of Limited Partnership

116

 

 

 

Section 12.6

Return of Contributions

117

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

iv

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Section 12.7

Waiver of Partition

117

 

 

 

Section 12.8

Capital Account Restoration

117

 

 

 

Article XIII AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE

117

 

 

 

Section 13.1

Amendments to be Adopted Solely by the General Partner

117

 

 

 

Section 13.2

Amendment Procedures

118

 

 

 

Section 13.3

Amendment Requirements

119

 

 

 

Section 13.4

Special Meetings

120

 

 

 

Section 13.5

Notice of a Meeting

120

 

 

 

Section 13.6

Record Date

120

 

 

 

Section 13.7

Postponement and Adjournment

121

 

 

 

Section 13.8

Waiver of Notice; Approval of Meeting

121

 

 

 

Section 13.9

Quorum and Voting

121

 

 

 

Section 13.10

Conduct of a Meeting

122

 

 

 

Section 13.11

Action Without a Meeting

122

 

 

 

Section 13.12

Right to Vote and Related Matters

123

 

 

 

Article XIV MERGER, CONSOLIDATION OR CONVERSION

123

 

 

 

Section 14.1

Authority

123

 

 

 

Section 14.2

Procedure for Merger, Consolidation or Conversion

123

 

 

 

Section 14.3

Approval by Limited Partners

125

 

 

 

Section 14.4

Certificate of Merger or Certificate of Conversion

127

 

 

 

Section 14.5

Effect of Merger, Consolidation or Conversion

127

 

 

 

Article XV RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS

128

 

 

 

Section 15.1

Right to Acquire Limited Partner Interests

128

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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Article XVI GENERAL PROVISIONS

130

 

 

 

Section 16.1

Addresses and Notices; Written Communications

130

 

 

 

Section 16.2

Further Action

130

 

 

 

Section 16.3

Binding Effect

131

 

 

 

Section 16.4

Integration

131

 

 

 

Section 16.5

Creditors

131

 

 

 

Section 16.6

Waiver

131

 

 

 

Section 16.7

Third-Party Beneficiaries

131

 

 

 

Section 16.8

Counterparts

131

 

 

 

Section 16.9

Applicable Law; Forum; Venue and Jurisdiction; Waiver of Trial by Jury

131

 

 

 

Section 16.10

Invalidity of Provisions

132

 

 

 

Section 16.11

Consent of Partners

132

 

 

 

Section 16.12

Facsimile and Email Signatures

132

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

vi

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SECOND AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF PHILLIPS 66 PARTNERS LP

 

THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF PHILLIPS 66
PARTNERS LP, dated as of [September] [  ], 2017, is entered into by and among
PHILLIPS 66 PARTNERS GP LLC, a Delaware limited liability company, as the
General Partner, together with any other Persons who are or become Partners in
the Partnership or parties hereto as provided herein.

 

WHEREAS, the General Partner and the other parties thereto entered into that
certain First Amended and Restated Agreement of Limited Partnership of the
Partnership dated as of July 26, 2013 (the “Prior Agreement”); and

 

WHEREAS, the General Partner desires to amend and restate the Prior Agreement in
its entirety to provide for a new class of convertible preferred securities and
to provide for such other changes as the General Partner has determined are
necessary and appropriate in connection with the issuance of such securities
and/or do not adversely affect the Limited Partners (as a whole or any
particular class of Partnership Interests as compared to other classes of
Partnership Interests) in any material respect.

 

NOW, THEREFORE, the General Partner does hereby amend and restate the Prior
Agreement, pursuant to its authority under Section 13.1 of the Prior Agreement,
to provide, in its entirety, as follows:

 

ARTICLE XII.
DEFINITIONS

 

Section 12.01                     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, stock acquisition, merger 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, over the long-term, the operating capacity
or operating income of the Partnership Group from the operating capacity or
operating income of the Partnership Group existing immediately prior to such
transaction.  For purposes of this definition, “long-term” generally refers to a
period of not less than twelve months.

 

“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

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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that is attributable to any prior positive adjustments made thereto pursuant to
a Book-Up Event or Book-Down Event; and

 

(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 pursuant hereto as a result of such Book-Down Event shall
not exceed the amount by which the Aggregate Remaining Net Positive Adjustments
after such Book-Down Event exceeds the remaining Additional Book Basis
attributable to all of the Partnership’s Adjusted Property after such Book-Down
Event (determined without regard to the application of this clause (b) to such
Book-Down Event).

 

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

 

“Adjusted Capital Account” means the Capital Account maintained for each Partner
as of the end of each taxable period of the Partnership, (a) increased by any
amounts that such Partner is obligated to restore under the standards set by
Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to
restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and
(b) decreased by (i) the amount of all losses and deductions that, as of the end
of such taxable period, are reasonably expected to be allocated to such Partner
in subsequent taxable periods under Sections 704(e)(2) and 706(d) of the Code
and Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all
distributions that, as of the end of such taxable period, are reasonably
expected to be made to such Partner in subsequent taxable periods 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 taxable period 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
Section 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 any Partnership
Interest shall be the amount that such Adjusted Capital Account would be if such
Partnership Interest were the only interest in the Partnership held by such
Partner from and after the date on which such Partnership Interest was first
issued.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

2

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“Adjusted Operating Surplus” means, with respect to any period, (a) Operating
Surplus generated with respect to such period less (b) (i) the amount of any net
increase in Working Capital Borrowings (or the Partnership’s proportionate share
of any net increase in Working Capital Borrowings in the case of Subsidiaries
that are not wholly owned) with respect to such period and (ii) the amount of
any net decrease in cash reserves (or the Partnership’s proportionate share of
any net decrease in cash reserves in the case of Subsidiaries that are not
wholly owned) for Operating Expenditures with respect to such period not
relating to an Operating Expenditure made with respect to such period, and plus
(c) (i) the amount of any net decrease in Working Capital Borrowings (or the
Partnership’s proportionate share of any net decrease in Working Capital
Borrowings in the case of Subsidiaries that are not wholly owned) with respect
to such period, (ii) 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 and
(iii) the amount of any net increase in cash reserves (or the Partnership’s
proportionate share of any net increase in cash reserves in the case of
Subsidiaries that are not wholly owned) for Operating Expenditures with respect
to such period required by any debt instrument for the repayment of principal,
interest or premium.  Adjusted Operating Surplus does not include that portion
of Operating Surplus included in clause (a)(i) of the definition of “Operating
Surplus.”

 

“Adjusted Property” means any property the Carrying Value of which has been
adjusted pursuant to Section 5.5(d).

 

“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 given such term
in Section 5.10(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 asset 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 5.5(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.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

3

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“Agreement” means this Second Amended and Restated Agreement of Limited
Partnership of Phillips 66 Partners LP, 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, 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:

 

(c)                                  the sum of:

 

(i)                                     all cash and cash equivalents of the
Partnership Group (or the Partnership’s proportionate share of cash and cash
equivalents in the case of Subsidiaries that are not wholly owned) on hand at
the end of such Quarter; and

 

(ii)                                  if the General Partner so determines, all
or any portion of additional cash and cash equivalents of the Partnership Group
(or the Partnership’s proportionate share of cash and cash equivalents in the
case of Subsidiaries that are not wholly owned) on hand on the date of
determination of Available Cash with respect to such Quarter resulting from
Working Capital Borrowings made subsequent to the end of such Quarter; less

 

(d)                                 the amount of any cash reserves established
by the General Partner (or the Partnership’s proportionate share of cash
reserves in the case of Subsidiaries that are not wholly owned) to:

 

(i)                                     provide for the proper conduct of the
business of the Partnership Group (including reserves for future capital
expenditures and for anticipated future credit needs of the Partnership Group)
subsequent to such Quarter;

 

(ii)                                  comply with applicable law or any loan
agreement, security agreement, mortgage, debt instrument or other agreement or
obligation to which any Group Member is a party or by which it is bound or its
assets are subject; or

 

(iii)                               provide funds for distributions under
Section 6.4 or Section 6.5 in respect of any one or more of the next four
Quarters;

 

provided, however, that the General Partner may not establish cash reserves
pursuant to 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; provided further, that disbursements made by a Group Member or
cash reserves established, increased or

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

4

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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.

 

“Average VWAP” means, with respect to a specified period, the arithmetic average
of the VWAP per Common Unit for each Trading Day in such period.

 

“Board of Directors” means, with respect to the General Partner, its board of
directors or board of managers, if the General Partner is a corporation or
limited liability company, or the board of directors or board of managers of the
general partner of the General Partner, if the General Partner is a limited
partnership, as applicable.

 

“Book Basis Derivative Items” means any item of income, deduction, gain or 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 5.5(d).

 

“Book-Tax Disparity” means with respect to any item of Contributed Property or
Adjusted Property, as of the date of any determination, the difference between
the Carrying Value of such Contributed Property or Adjusted Property and the
adjusted basis thereof for federal income tax purposes as of such date.  A
Partner’s share of the Partnership’s Book-Tax Disparities in all of its
Contributed Property and Adjusted Property will be reflected by the difference
between such Partner’s Capital Account balance as maintained pursuant to
Section 5.5 and the hypothetical balance of such Partner’s Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.

 

“Book-Up Event” means an event that triggers a positive adjustment to the
Capital Accounts of the Partners pursuant to Section 5.5(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 State of Texas shall not be regarded as a Business Day.

 

“Capital Account” means the capital account maintained for a Partner pursuant to
Section 5.5.  The “Capital Account” of a Partner in respect of any Partnership
Interest shall be the amount that such Capital Account would be if such
Partnership Interest were the only interest in the Partnership held by such
Partner from and after the date on which such Partnership Interest was first
issued.

 

“Capital Contribution” means (a) any cash, cash equivalents or the Net Agreed
Value of Contributed Property that a Partner contributes to the Partnership or
that is contributed or

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

5

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deemed contributed to the Partnership on behalf of a Partner (including, in the
case of an underwritten offering of Units, the amount of any underwriting
discounts or commissions) or (b) current distributions that a Partner is
entitled to receive but otherwise waives.

 

“Capital Improvement” means (a) the construction of new capital assets by a
Group Member, (b) the replacement, improvement or expansion of existing capital
assets by a Group Member or (c) a capital contribution by a Group Member to a
Person that is not a Subsidiary in which a Group Member has, or after such
capital contribution will have, directly or indirectly, an equity interest, to
fund such Group Member’s pro rata share of the cost of the construction of new,
or the replacement, improvement or expansion of existing, capital assets by such
Person, in each case if and to the extent such construction, replacement,
improvement or expansion is made to increase, over the long-term, the operating
capacity or operating income of the Partnership Group, in the case of
clauses (a) and (b), or such Person, in the case of clause (c), from the
operating capacity or operating income of the Partnership Group or such Person,
as the case may be, existing immediately prior to such construction,
replacement, improvement, expansion or  capital contribution.  For purposes of
this definition, “long-term” generally refers to a period of not less than
twelve months.

 

“Capital Stock” means: (a) in the case of a corporation, corporate stock; (b) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock; (c) in the case of a partnership or limited liability company,
partnership interests (whether general or limited), limited liability company
interests or membership interests; and (d) any other equity interest or
participation in an entity that confers on a Person the right to receive a share
of the profits and losses of, or distributions of assets of, the issuing Person.

 

“Capital Surplus” means Available Cash distributed by the Partnership in excess
of Operating Surplus, as described 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, 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 federal income tax
purposes, all as of the time of determination; provided that the Carrying Value
of any property shall be adjusted from time to time in accordance with
Section 5.5(d) to reflect changes, additions or other adjustments to the
Carrying Value for dispositions and acquisitions of Partnership properties, as
deemed appropriate by the General Partner.

 

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

 

“Certificate” means a certificate, in such form (including global form if
permitted by applicable rules and regulations of the Depository Trust Company
and its permitted successors and assigns) as may be adopted by the General
Partner, issued by the Partnership evidencing ownership of

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

6

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one or more classes of Partnership Interests.  The form of certificate approved
as of the date of this Agreement by the General Partner for Common Units is
attached as Exhibit A to this Agreement.

 

“Certificate of Limited Partnership” means the Certificate of Limited
Partnership of the Partnership filed with the Secretary of State of the State of
Delaware as referenced in Section 7.2, as such Certificate of Limited
Partnership may be amended, supplemented or restated from time to time.

 

“Citizenship Eligible Holder” means a Limited Partner whose nationality,
citizenship or other related status the General Partner determines, upon receipt
of an Eligibility Certificate or other requested information, does not or would
not create, under any federal, state or local law or regulation to which a Group
Member is subject, a substantial risk of cancellation or forfeiture of any
property, including any governmental permit, endorsement or other authorization,
in which a Group Member has an interest.

 

“claim” (as used in Section 7.12(g)) has the meaning given such term in
Section 7.12(g).

 

“Closing Date” means the first date on which Common Units were sold by the
Partnership to the IPO Underwriters pursuant to the provisions of the IPO
Underwriting Agreement.

 

“Closing Price” for any day, with respect to Limited Partner Interests of a
particular class, 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 last closing bid and
ask prices on such day, regular way, in either case as reported on the principal
National Securities Exchange on which such Limited Partner Interests are listed
or admitted to trading or, if such Limited Partner Interests of such class are
not listed or admitted to trading on any National Securities Exchange, the
average of the high bid and low ask prices on such day in the over-the-counter
market, as reported by such other system then in use, or, if on any such day
such Limited Partner Interests of such class are not quoted by any such
organization, the average of the closing bid and ask 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.

 

“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 given such term in Section 11.3(a).

 

“Commences Commercial Service” means the date upon which a Capital Improvement
is first put into or commences commercial service by a Group Member following
completion of construction, replacement, improvement or expansion and testing,
as applicable.

 

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

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

7

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“Common Unit” means a Limited Partner Interest having the rights and obligations
specified with respect to Common Units in this Agreement.  The term “Common
Unit” does not include a Series A Preferred Unit prior to its conversion into a
Common Unit pursuant to the terms hereof.

 

“Conflicts Committee” means a committee of the Board of Directors composed of
two 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 (other than Group Members), (c) is not a holder of any
ownership interest in the General Partner or its Affiliates or the Partnership
Group other than (i) Common Units and (ii) awards that are granted to such
director in his or her capacity as a director under any long-term incentive
plan, equity compensation plan or similar plan implemented by the General
Partner or the Partnership and (d) is determined by the Board of Directors to be
independent under the independence standards for directors who serve on an audit
committee of a board of directors established by the 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 to trading
(or if no such National Securities Exchange, the New York Stock Exchange).

 

“Construction Debt” means debt incurred to fund (a) all or a portion of a
Capital Improvement, (b) interest payments (including periodic net payments
under related interest rate swap agreements) and related fees on other
Construction Debt or (c) distributions (including incremental Incentive
Distributions) on Construction Equity.

 

“Construction Equity” means equity issued to fund (a) all or a portion of a
Capital Improvement, (b) interest payments (including periodic net payments
under related interest rate swap agreements) and related fees on Construction
Debt or (c) distributions (including incremental Incentive Distributions) on
other Construction Equity.  Construction Equity does not include equity issued
in the Initial Public Offering.

 

“Construction Period” means the period beginning on the date that a Group Member
enters into a binding obligation to commence a Capital Improvement and ending on
the earlier to occur of the date that such Capital Improvement Commences
Commercial Service and the date that the Group Member abandons or disposes of
such Capital Improvement.

 

“Contributed Property” means each property or other asset, in such form as may
be permitted by the Delaware Act, but excluding cash, contributed to the
Partnership.  Once the Carrying Value of a Contributed Property is adjusted
pursuant to Section 5.5(d), such property or other asset shall no longer
constitute a Contributed Property, but shall be deemed an Adjusted Property.

 

“Contribution Agreement” means that certain Contribution, Conveyance and
Assumption Agreement, dated as of July 26, 2013, among the Partnership, the
General Partner, the Operating Company, 66 Pipeline LLC, a Delaware limited
liability company, Phillips 66 Company, Phillips Texas Pipeline Company Ltd., a
Texas limited partnership, Phillips 66 Carrier and Phillips 66 Pipeline,
together with the additional conveyance documents and instruments contemplated
or referenced thereunder, as such may be amended, supplemented or restated from
time to time.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

8

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“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” means, as of any date for any class of Limited Partner
Interests, the average of the daily Closing Prices per Limited Partner Interest
of such class for the 20 consecutive Trading Days immediately prior to such
date.

 

“Deferred Issuance” means the issuance by the Partnership of a number of
additional Common Units that is equal to the excess, if any, of (a) 2,463,750
over (b) the aggregate number, if any, of Common Units actually purchased by and
issued to the IPO Underwriters pursuant to the Over-Allotment Option on the
Option Closing Date(s).

 

“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 from and after the
effective date of any withdrawal or removal of such former General Partner
pursuant to Section 11.1 or Section 11.2.

 

“Derivative Partnership Interests” means any options, rights, warrants,
appreciation rights, tracking, profit and phantom interests and other derivative
securities relating to, convertible into or exchangeable for Partnership
Interests.

 

“Disposed of Adjusted Property” has the meaning given such term in
Section 6.1(d)(xiii)(B).

 

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

 

“Eligibility Certificate” means a certificate the General Partner may request a
Limited Partner to execute as to such Limited Partner’s (or such Limited
Partner’s beneficial owners’) federal income tax status or nationality,
citizenship or other related status for the purpose of determining whether such
Limited Partner is an Ineligible Holder.

 

“Estimated Incremental Quarterly Tax Amount” has the meaning assigned to such
term in Section 6.9.

 

“Event of Withdrawal” has the meaning given such term in Section 11.1(a).

 

“Excess Additional Book Basis” has the meaning given such term in the definition
of “Additional Book Basis Derivative Items.”

 

“Excess Distribution” has the meaning given such term in Section 6.1(d)(iii)(A).

 

“Excess Distribution Unit” has the meaning given such term in
Section 6.1(d)(iii)(A).

 

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

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

9

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“Expansion Capital Expenditures” means cash expenditures for Acquisitions or
Capital Improvements.  Expansion Capital Expenditures shall include interest
(including periodic net payments under related interest rate swap agreements)
and related fees paid during the Construction Period on Construction Debt. 
Where cash 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.

 

“FERC” means the Federal Energy Regulatory Commission, or any successor to the
powers thereof.

 

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

 

“First Reserve” means FR XIII Pantheon Holdings, L.L.C., a Delaware limited
liability company.

 

“First Target Distribution” means $0.244375 per Unit per Quarter, subject to
adjustment in accordance with Sections 5.10, 6.6 and 6.9.

 

“General Partner” means Phillips 66 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 equity interest of the General Partner in
the Partnership (in its capacity as a general partner without reference to any
Limited Partner Interest held by it), which is evidenced by General Partner
Units, and includes any and all rights, powers and benefits to which the General
Partner is entitled as provided in this Agreement, together with all obligations
of the General Partner to comply with the terms and provisions of this
Agreement.

 

“General Partner Unit” means a fractional part of the General Partner Interest
having the rights and obligations specified with respect to the General Partner
Interest.  A General Partner Unit shall not constitute a “Unit” for any purpose
under this Agreement.

 

“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 two or more Persons that, with or through any of their respective
Affiliates or Associates, have any contract, 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 over or disposing of any Partnership Interests.

 

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

 

“Group Member Agreement” means the partnership agreement of any Group Member,
other than the Partnership, that is a limited or general partnership, the
limited liability company

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

10

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agreement of any Group Member that is a limited liability company, the
certificate of incorporation and bylaws or similar organizational documents of
any Group Member that is a corporation, the joint venture agreement or similar
governing document of any Group Member that is a joint venture and the governing
or organizational or similar documents of any other Group Member that is a
Person other than a limited or general partnership, limited liability company,
corporation or joint venture, in each case, as such may be amended, supplemented
or restated from time to time.

 

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

 

“Holder” means any of the following:

 

the General Partner who is the Record Holder of Registrable Securities;

 

any Affiliate of the General Partner who is the Record Holder of Registrable
Securities (other than natural persons who are Affiliates of the General Partner
by virtue of being officers, directors or employees of the General Partner or
any of its Affiliates);

 

any Person who has been the General Partner within the prior two years and who
is the Record Holder of Registrable Securities;

 

any Person who has been an Affiliate of the General Partner within the prior two
years and who is the Record Holder of Registrable Securities (other than natural
persons who were Affiliates of the General Partner by virtue of being officers,
directors or employees of the General Partner or any of its Affiliates); and

 

a transferee and current Record Holder of Registrable Securities to whom the
transferor of such Registrable Securities, who was a Holder pursuant to any of
the foregoing clauses (a) through (d) above (or any transferee of such Holder)
at the time of such transfer, assigns its rights and obligations under this
Agreement; provided such transferee agrees in writing to be bound by the terms
of this Agreement and provides its name and address to the Partnership promptly
upon such transfer.

 

“IDR Reset Common Units” has the meaning given such term in Section 5.10(a).

 

“IDR Reset Election” has the meaning given such term in Section 5.10(a).

 

“Incentive Distribution Right” means a Limited Partner Interest having the
rights and obligations specified with respect to Incentive Distribution Rights
in this Agreement (and no other rights otherwise available to or other
obligations of a holder of a Partnership Interest).

 

“Incentive Distributions” means any amount of cash distributed to the holders of
the Incentive Distribution Rights pursuant to Sections 6.4(c), (d) and (e).

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

11

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“Incremental Income Taxes” has the meaning given such term in Section 6.9.

 

“Indemnified Persons” has the meaning given such term in Section 7.12(g)(i).

 

“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, general partner, director, officer, fiduciary or trustee of (i) any
Group Member, the General Partner or any Departing General Partner or (ii) 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, general partner,
director, officer, fiduciary or trustee of another Person owing a fiduciary duty
to any Group Member; 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 the General Partner designates as an “Indemnitee”
for purposes of this Agreement because such Person’s status, service or
relationship exposes such Person to potential claims, demands, suits or
proceedings relating to the Partnership Group’s business and affairs.

 

“Ineligible Holder” means a Limited Partner who is not a Citizenship Eligible
Holder or a Rate Eligible Holder.

 

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

 

“Initial Limited Partners” means Phillips 66 Company (with respect to its
Limited Partner Interest as the Organizational Limited Partner and the
Partnership Interests received by it pursuant to Section 5.3(a)), the General
Partner (with respect to the Incentive Distribution Rights received by it
pursuant to Section 5.2(a)) and the IPO Underwriters upon the issuance by the
Partnership of Common Units as described in Section 5.3(b) in connection with
the Initial Public Offering.

 

“Initial Public Offering” means the initial offering and sale of Common Units to
the public (including the offer and sale of Common Units pursuant to the
Over-Allotment Option), as described in the IPO Registration Statement.

 

“Initial Series A Purchaser” means each of (a) the Series A Lead Purchaser and
its Affiliates, (b) Tortoise and its Affiliates and (c) First Reserve and its
Affiliates.

 

“Initial Unit Price” means (a) with respect to the Common Units, the initial
public offering price per Common Unit at which the Common Units were first
offered to the public for sale as set forth on the cover page of the IPO
Prospectus or (b) with respect to any other class or series of Units, the price
per Unit at which such class or series of Units is initially sold by the
Partnership, as determined by the General Partner, in each case adjusted as the
General Partner determines to be appropriate to give effect to any distribution,
subdivision or combination of Units.

 

“Interim Capital Transactions” means the following transactions if they occur
prior to the Liquidation Date:  (a) borrowings, refinancings or refundings of
indebtedness (other than

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

12

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Working Capital Borrowings and other than for items purchased on open account or
for a deferred purchase price 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 (including the Common Units sold to the IPO
Underwriters in the Initial Public Offering) to anyone other than the
Partnership Group; (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; and (d) capital contributions received by a Group
Member.

 

“IPO Prospectus” means the final prospectus relating to the Initial Public
Offering dated July 22, 2013 and filed by the Partnership with the Commission
pursuant to Rule 424 of the Securities Act on July 24, 2013.

 

“IPO Registration Statement” means the Registration Statement on Form S-1 (File
No. 333-187582), as it has been amended or supplemented from time to time, filed
by the Partnership with the Commission under the Securities Act to register the
offering and sale of the Common Units in the Initial Public Offering.

 

“IPO Underwriter” means each Person named as an underwriter in Schedule I to the
IPO Underwriting Agreement who purchased Common Units pursuant thereto.

 

“IPO Underwriting Agreement” means that certain Underwriting Agreement dated as
of July 22, 2013 among the IPO Underwriters, Phillips 66 Company, Phillips 66
Pipeline, the Partnership, the General Partner and the Operating Company,
providing for the purchase of Common Units by the IPO Underwriters.

 

“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 prior to its withdrawal from the Partnership,
each Initial Limited Partner, each additional Person that becomes a Limited
Partner pursuant to the terms of this Agreement and any Departing General
Partner upon the change of its status from General Partner to Limited Partner
pursuant to Section 11.3, in each case, in such Person’s capacity as a limited
partner of the Partnership.

 

“Limited Partner Interest” means an equity interest of a Limited Partner in the
Partnership, which may be evidenced by Series A Preferred Units, Common
Units, Incentive Distribution Rights or other Partnership Interests or a
combination thereof (but excluding Derivative Partnership Interests), 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 pursuant to the terms and provisions of this Agreement.

 

“Liquidation Date” means (a) in the case of an event giving rise to the
dissolution of the Partnership of the type described in clauses (a) and (d) of
the third sentence of Section 12.1, the date on which the applicable time period
during which the holders of Outstanding Units have the

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

13

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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 pursuant to Section 12.3 to
perform the functions described in Section 12.4 as liquidating trustee of the
Partnership within the meaning of the Delaware Act.

 

“Maintenance Capital Expenditure” means cash expenditures (including
expenditures for the construction of new capital assets or the replacement,
improvement or expansion of existing capital assets) by a Group Member made to
maintain, over the long term, the operating capacity or operating income of the
Partnership Group.  For purposes of this definition, “long term” generally
refers to a period of not less than twelve months.

 

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

 

“Minimum Quarterly Distribution” means $0.2125 per Unit per Quarter, subject to
adjustment in accordance with Sections 5.10, 6.6 and 6.9.

 

“National Securities Exchange” means an exchange registered with the Commission
under Section 6(a) of the Exchange Act (or any successor to such Section).

 

“Net Agreed Value” means, (a) in the case of any Contributed Property, the
Agreed Value of such property or other asset reduced by any Liabilities either
assumed by the Partnership upon such contribution or to which such property or
other asset 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 5.5(d)(ii)) at the time such
property is distributed, reduced by any Liabilities 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 5.5(b) and shall not include any items specially allocated under
Section 6.1(d); provided, however, that the determination of the items that have
been specially allocated under Section 6.1(d) shall be made without regard to
any reversal of such items under Section 6.1(d)(xiii).

 

“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 5.5(b) and shall not include any items

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

14

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specially allocated under Section 6.1(d); provided, however, that the
determination of the items that have been specially allocated under
Section 6.1(d) shall be made without regard to any reversal of such items under
Section 6.1(d)(xiii).

 

“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 (determined in accordance with
Section 5.5(b)) that are (a) recognized by the Partnership (i) after the
Liquidation Date or (ii) upon the sale, exchange or other disposition 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 (excluding any
disposition to a member of the Partnership Group), or (b) deemed recognized by
the Partnership pursuant to Section 5.5(d); provided, however, that the items
included in the determination of Net Termination Gain shall not include any
items of income, gain or loss specially allocated under Section 6.1(d).

 

“Net Termination Loss” means, for any taxable period, the sum, if negative, of
all items of income, gain, loss or deduction (determined in accordance with
Section 5.5(b)) that are (a) recognized by the Partnership (i) after the
Liquidation Date or (ii) upon the sale, exchange or other disposition 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 (excluding any
disposition to a member of the Partnership Group), or (b) deemed recognized by
the Partnership pursuant to Section 5.5(b); provided, however, that the items
included in the determination of Net Termination Loss shall not include any
items of income, gain or loss specially allocated under Section 6.1(d).

 

“Non-Affiliate Transfer Period” has the meaning set forth in
Section 5.11(b)(vii)(D).

 

“Nonrecourse Built-in Gain” means with respect to any Contributed Properties or
Adjusted Properties that are subject to a mortgage or pledge securing a
Nonrecourse Liability, the amount of any taxable gain that would be allocated to
the Partners pursuant to Section 6.2(b) 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) that, in accordance with the principles of Treasury Regulation
Section 1.704-2(b), are attributable to a Nonrecourse Liability.

 

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

 

“Notice” means a written request from a Holder pursuant to Section 7.12 which
shall (a) specify the Registrable Securities intended to be registered, offered
and sold by such Holder, (b) describe the nature or method of the proposed offer
and sale of Registrable Securities, and (c) contain the undertaking of such
Holder to provide all such information and materials and take all action as may
be required or appropriate in order to permit the Partnership to comply with all
applicable

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

15

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requirements and obligations in connection with the registration and disposition
of such Registrable Securities pursuant to Section 7.12.

 

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

 

“Omnibus Agreement” means that certain Omnibus Agreement, dated as of July 26,
2013, among Phillips 66 Company, Phillips 66 Pipeline, the Partnership, the
Operating Company, Phillips 66 Carrier and the General Partner, as such
agreement may be amended, supplemented or restated from time to time.

 

“Operating Company” means Phillips 66 Partners Holdings LLC, a Delaware limited
liability company, and any successors thereto.

 

“Operational Services Agreement” means that certain Operational Services
Agreement, dated as of July 26, 2013, among Phillips 66 Carrier, the Operating
Company and Phillips 66 Pipeline, as such agreement may be amended, supplemented
or restated from time to time.

 

“Operating Expenditures” means all Partnership Group cash expenditures (or the
Partnership’s proportionate share of expenditures in the case of Subsidiaries
that are not wholly owned), including taxes, compensation of employees, officers
and directors of the General Partner, reimbursement of expenses of the General
Partner and its Affiliates, debt service payments, Maintenance Capital
Expenditures, repayment of Working Capital Borrowings and payments made in the
ordinary course of business under any Hedge Contracts, subject to the following:

 

(a)                                 repayments of Working Capital Borrowings
deducted from Operating Surplus pursuant to clause (b)(iii) of the definition of
“Operating Surplus” shall not constitute Operating Expenditures when actually
repaid;

 

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

 

(c)                                  Operating Expenditures shall not include
(i) Expansion Capital Expenditures, (ii) payment of transaction expenses
(including taxes) relating to Interim Capital Transactions, (iii) distributions
to Partners, (iv) repurchases of Partnership Interests, other than repurchases
of Partnership Interests by the Partnership to satisfy obligations under
employee benefit plans or reimbursement of expenses of the General Partner for
purchases of Partnership Interests by the General Partner to satisfy obligations
under employee benefit plans, or (v) any other expenditures or payments using
the proceeds of the Initial Public Offering as described under “Use of Proceeds”
in the IPO Registration Statement; and

 

(d)                                 (i) amounts paid in connection with the
initial purchase of a Hedge Contract shall be amortized over the life of such
Hedge Contract and (ii) payments made in connection with the termination of any
Hedge Contract prior to the expiration of its scheduled settlement or
termination date shall be included in equal quarterly installments over the
remaining scheduled life of such Hedge Contract.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

16

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“Operating Surplus” means, with respect to any period ending prior to the
Liquidation Date, on a cumulative basis and without duplication,

 

(e)                                  the sum of (i) $60.0 million, (ii) all cash
receipts of the Partnership Group (or the Partnership’s proportionate share of
cash receipts in the case of Subsidiaries that are not wholly owned) for the
period beginning on the Closing Date and ending on the last day of such period,
but excluding cash receipts from Interim Capital Transactions and the
termination of Hedge Contracts (provided that cash receipts from the termination
of a Hedge Contract prior to its scheduled settlement or termination date shall
be included in Operating Surplus in equal quarterly installments over the
remaining scheduled life of such Hedge Contract), (iii) all cash receipts of the
Partnership Group (or the Partnership’s proportionate share of cash receipts in
the case of Subsidiaries that are not wholly owned) 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 from Operating Surplus paid during the Construction Period
(including incremental Incentive Distributions) on Construction Equity, less

 

(f)                                   the sum of (i) Operating Expenditures for
the period beginning on the Closing Date and ending on the last day of such
period, (ii) the amount of cash reserves (or the Partnership’s proportionate
share of cash reserves in the case of Subsidiaries that are not wholly owned)
established by the General Partner to provide funds for future Operating
Expenditures, and (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; 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 or to such other person selecting such counsel
or obtaining such opinion.

 

“Option Closing Date” means the date or dates on which any Common Units were
sold by the Partnership to the IPO Underwriters upon exercise of the
Over-Allotment Option.

 

“Organizational Limited Partner” means Phillips 66 Company in its capacity as
the organizational limited partner of the Partnership.

 

“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

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

17

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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 Partnership Interests of any class, all
Partnership Interests owned by or for the benefit of such Person or Group 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 Partnership Interests so owned shall be considered to be
Outstanding for purposes of Section 11.1(b)(iv) (such Partnership Interests
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 Partnership Interests of any class directly from the
General Partner or its Affiliates (other than the Partnership), (ii) any Person
or Group who acquired 20% or more of the Outstanding Partnership Interests of
any class then Outstanding 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, (iii) any Person or Group who acquired 20% or more
of any Partnership Interests issued by the Partnership with the prior approval
of the Board of Directors, (iv) the Series A Purchasers with respect to their
ownership (beneficial or record) of the Series A Preferred Units or Series A
Conversion Units or (v) any Series A Preferred Unitholder in connection with any
vote, consent or approval of the Series A Preferred Unitholders as a separate
class.

 

“Over-Allotment Option” means the over-allotment option granted to the IPO
Underwriters by the Partnership pursuant to the IPO Underwriting Agreement.

 

“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) that, in accordance with the principles of Treasury Regulation
Section 1.704-2(i), are attributable to a Partner Nonrecourse Debt.

 

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

 

“Partnership” means Phillips 66 Partners LP, a Delaware limited partnership.

 

“Partnership Group” means, collectively, the Partnership and its Subsidiaries.

 

“Partnership Interest” means any equity interest, including any class or series
of equity interest, in the Partnership, which shall include any Limited Partner
Interests and the General Partner Interest but shall exclude any Derivative
Partnership Interests.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

18

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

 

“Partnership Register” means a register maintained on behalf of the Partnership
by the General Partner, or, if the General Partner so determines, by the
Transfer Agent as part of the Transfer Agent’s books and transfer records, with
respect to each class of Partnership Interests in which all Record Holders and
transfers of such class of Partnership Interests are registered or otherwise
recorded.

 

“Partnership Representative” has the meaning given such term in Section 9.3.

 

“Partnership Restructuring Event” means any of the following:

 

(g)                                  any merger, consolidation or other business
combination of the Partnership with another partnership or other entity, so long
as, immediately following the consummation of such merger, consolidation or
other business combination, (i) Phillips 66 Company or one or more of its
Affiliates beneficially owns, directly or indirectly, (A) more than 50% of the
Voting Securities of the general partner or managing member of the surviving
Person or (B) has the right to designate (whether by ownership of Voting
Securities, by contract or otherwise) more than 50% of the surviving Person’s
(or such Person’s general partner’s or managing member’s, as applicable)
managers, directors, trustees or other Persons serving in a similar capacity and
the common equity of such surviving Person remains listed or admitted to trading
on a National Securities Exchange following such transaction and (ii) either
(A) the Series A Preferred Units remain Outstanding or (B) each Record Holder of
Series A Preferred Units has received a Series A Substantially Equivalent Unit
in respect of each of its Series A Preferred Units;

 

(h)                                 any restructuring, simplification or similar
transaction or series of transactions that modifies, eliminates or otherwise
restructures the General Partner Interest, the Incentive Distribution Rights or
the equity interests of the General Partner or any of its Affiliates, provided
that (i) the principal parties to such transaction or series of transactions are
the Partnership or any of its Affiliates, on the one hand, and Phillips 66
Company or any of its Affiliates, on the other hand, (ii) the common equity
interests of the Partnership or its successor remains listed or admitted to
trading on a National Securities Exchange immediately following the consummation
of such transaction or series of transactions and (iii) such transaction or
series of transactions would not otherwise result in a Series A Change of
Control; and

 

(i)                                     any initial public offering directly or
indirectly involving any of the equity interests of the General Partner or any
of its Affiliates, the General Partner Units (or the General Partner Interest
represented thereby) or the Incentive Distribution Rights, so long as, in each
case, immediately following the consummation of such initial public offering,
Phillips 66 Company or one or more of its Affiliates beneficially owns, directly
or indirectly, (i) greater than 50% of the Voting Securities of the General
Partner or (B) sufficient voting power (whether by ownership of Voting
Securities, by contract or

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

19

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otherwise) to elect a majority of the General Partner’s managers, directors,
trustees or other Persons serving in a similar capacity.

 

“Partnership Rollup Event” means any transaction or series of related
transactions pursuant to which Phillips 66 Company or any of its Affiliates
(other than the Partnership or any of its Subsidiaries) would acquire (a) all or
substantially all of the Partnership’s assets or (b) all of the Partnership’s
outstanding Common Units.

 

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

 

“Percentage Interest” means, as of any date of determination, (a) as to the
General Partner with respect to General Partner Units and as to any Unitholder
with respect to Units (other than with respect to the Series A Preferred Units),
as the case may be, the product obtained by multiplying (i) 100% less the
percentage applicable to clause (b) below by (ii) the quotient obtained by
dividing (A) the number of General Partner Units held by the General Partner or
the number of Units held by such Unitholder (excluding Series A Preferred
Units), as the case may be, by (B) the total number of Outstanding Units
(excluding Series A Preferred Units) and General Partner Units, and (b) as to
the holders of other Partnership Interests issued by the Partnership in
accordance with Section 5.6, the percentage established as a part of such
issuance.  The Percentage Interest with respect to an Incentive Distribution
Right and a Series A Preferred Unit shall at all times be zero.

 

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

 

“Phillips 66 Carrier” means Phillips 66 Carrier LLC, a Delaware limited
liability company.

 

“Phillips 66 Company” means Phillips 66 Company, a Delaware corporation.

 

“Phillips 66 Pipeline” means Phillips 66 Pipeline LLC, a Delaware limited
liability company.

 

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

 

“Potential Additional Transfer Period” has the meaning set forth in
Section 5.11(b)(vii)(D).

 

“Prior Agreement” has the meaning given such term in the recitals to this
Agreement.

 

“Privately Placed Units” means any Common Units issued for cash or property
other than pursuant to a public offering.

 

“Pro Rata” means (a) when used with respect to Units or any class thereof (other
than Series A Preferred Units), apportioned among all designated Units in
accordance with their relative Percentage Interests, (b) when used with respect
to Partners or Record Holders, apportioned among all Partners or Record Holders
in accordance with their relative Percentage Interests,

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

20

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(c) when used with respect to holders of Incentive Distribution Rights,
apportioned among all holders of Incentive Distribution Rights in accordance
with the relative number or percentage of Incentive Distribution Rights held by
each such holder, (d) when used with respect to Holders who have requested to
include Registrable Securities in a Registration Statement pursuant to
Section 7.12(a) or Section 7.12(b), apportioned among all such Holders in
accordance with the relative number of Registrable Securities held by each such
holder and included in the Notice relating to such request and (e) when used
with respect to Series A Preferred Units, apportioned among all Series A
Preferred Unitholders in accordance with the relative number or percentage of
Series A Preferred Units held by each such Series A Preferred Unitholder.

 

“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.

 

“Rate Eligible Holder” means a Limited Partner subject to United States federal
income taxation on the income generated by the Partnership.  A Limited Partner
that is an entity not subject to United States federal income taxation on the
income generated by the Partnership shall be deemed a Rate Eligible Holder so
long as all of the entity’s beneficial owners are subject to such taxation.

 

“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 receive notice of, or entitled to exercise rights in respect
of, any lawful action of Limited Partners (including voting) 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 any class of Partnership Interests 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 Partnership’s close of business on a 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 Partnership’s close of business
on a particular 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.

 

“Registrable Security” means any Partnership Interest other than the General
Partner Interest and General Partner Units; provided, however, that any
Registrable Security shall cease to be a Registrable Security:  (a) at the time
a Registration Statement covering such Registrable Security

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

21

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is declared effective by the Commission or otherwise becomes effective under the
Securities Act, and such Registrable Security has been sold or disposed of
pursuant to such Registration Statement; (b) at the time such Registrable
Security may be disposed of pursuant to Rule 144 (or any successor or similar
rule or regulation under the Securities Act); (c) when such Registrable Security
is held by a Group Member; and (d) at the time such Registrable Security has
been sold in a private transaction in which the transferor’s rights under
Section 7.12 of this Agreement have not been assigned to the transferee of such
securities.

 

“Registration Statement” has the meaning given such term in Section 7.12(a) of
this Agreement.

 

“Remaining Net Positive Adjustments” means, as of the end of any taxable period,
(a) with respect to the Unitholders holding Common Units or Series A Preferred
Units, the excess of (i) the Net Positive Adjustments of the Unitholders holding
Common Units or Series A Preferred Units as of the end of such period over
(ii) the sum of those Partners’ Share of Additional Book Basis Derivative Items
for each prior taxable period, (b) with respect to the General Partner (as
holder of the General Partner Units), the excess of (i) the Net Positive
Adjustments of the General Partner as of the end of such period over (ii) the
sum of the General Partner’s Share of Additional Book Basis Derivative Items
with respect to the General Partner Units for each prior taxable period, and
(c) with respect to the holders of Incentive Distribution Rights, the excess of
(i) the Net Positive Adjustments of the holders of Incentive Distribution Rights
as of the end of such period over (ii) 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 or
deduction pursuant to Section 6.1(d)(i), Section 6.1(d)(ii), Section 6.1(d)(iv),
Section 6.1(d)(v), Section 6.1(d)(vi), Section 6.1(d)(vii) or
Section 6.1(d)(ix).

 

“Reset MQD” has the meaning given such term in Section 5.10(e).

 

“Reset Notice” has the meaning given such term in Section 5.10(b).

 

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

 

“Second Target Distribution” means $0.265625 per Unit per Quarter, subject to
adjustment in accordance with Section 5.10, Section 6.6 and Section 6.9.

 

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

 

“Selling Holder” means a Holder who is selling Registrable Securities pursuant
to the procedures in Section 7.12 of this Agreement.

 

“Series A Accrued Amount” means, with respect to a Series A Preferred Unit as of
any date of determination, an amount equal to (a) the Series A Issue Price plus
(b) all Series A Unpaid Distributions on such Series A Preferred Unit as of such
date.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

22

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“Series A Cash Change of Control” means a Series A Change of Control that
involves the payment of consideration (more than 90% of which consideration is
in the form of cash) directly to the holders of Common Units.

 

“Series A Change of Control” means the occurrence of any of the following:

 

(j)            any transaction or series of related transactions (including,
without limitation, any merger, consolidation or business combination), the
result of which is that any Person or “group” (within the meaning of
Section 13(d)(3) of the Exchange Act), excluding Phillips 66 Company or any
Person that is an Affiliate of Phillips 66 Company as of the Series A Issuance
Date, becomes the beneficial owner, directly or indirectly, of more than 50% of
the Voting Securities of the General Partner (measured by voting power rather
than number of shares, units or the like) and such Voting Securities provide
such Person or “group” the right to designate at least 50% of the members of the
Board of Directors;

 

(k)           any sale, lease, transfer, conveyance or other disposition, in a
single transaction or series of related transactions, of all or substantially
all of the assets of the Partnership and its Subsidiaries, taken as a whole,
that is not a Partnership Rollup Event;

 

(l)            the Common Units are no longer listed or admitted to trading on a
National Securities Exchange;

 

(m)          the General Partner is removed pursuant to Section 11.2, unless
Phillips 66 Company or one of its Affiliates is elected as a successor General
Partner in accordance with Section 11.2; or

 

(n)           any Partnership Rollup Event;

 

provided, however, that notwithstanding anything in this Agreement to the
contrary, a Partnership Restructuring Event shall not constitute a Series A
Change of Control.

 

“Series A COC Conversion Premium” means, with respect to the consummation of any
Series A Change of Control or Series A Cash Change of Control, as applicable,
that occurs (a) on or prior to the first anniversary of the Series A Issuance
Date, 115%, (b) after the first anniversary of the Series A Issuance Date but on
or prior to the second anniversary of the Series A Issuance Date, 110%,
(c) after the second anniversary of the Series A Issuance Date but on or prior
to the third anniversary of the Series A Issuance Date, 105%, or (d) after the
third anniversary of the Series A Issuance Date, 101%.

 

“Series A COC Conversion Rate” means the number of Common Units issuable upon
the conversion of each Series A Preferred Unit pursuant to
Section 5.11(b)(vi)(A), which shall be equal to the greater of:

 

(o)           the applicable Series A Conversion Rate as of the date of such
conversion (regardless of whether the Series A Preferred Units are then
otherwise convertible); and

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

23

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(p)           (i) the sum of (A) the Series A Accrued Amount multiplied by the
applicable Series A COC Conversion Premium with respect to such Series A Cash
Change of Control plus (B) any Series A Partial Period Distributions on such
Series A Preferred Unit as of the date of conversion, divided by (ii) the
Average VWAP for the 30 consecutive Trading Days ending immediately prior to the
date of execution of definitive documentation relating to such Series A Cash
Change of Control.

 

“Series A Conversion Date” has the meaning assigned to such term in
Section 5.11(b)(v)(D).

 

“Series A Conversion Notice” has the meaning assigned to such term in
Section 5.11(b)(v)(C)(1).

 

“Series A Conversion Notice Date” has the meaning assigned to such term in
Section 5.11(b)(v)(C)(1).

 

“Series A Conversion Rate” means the number of Common Units issuable upon the
conversion of each Series A Preferred Unit, which shall be equal to (a) the
Series A Accrued Amount with respect to such Series A Preferred Unit (plus,
solely for purposes of clause (a) in the definition of “Series A COC Conversion
Rate” or with respect to any conversion pursuant to Section 5.11(b)(vi)(B)(1) in
the event of a Series A Change of Control, any Series A Partial Period
Distributions on such Series A Preferred Unit) divided by (b) the Series A Issue
Price, as such number of Common Units may be adjusted as set forth in
Section 5.11(b)(v)(E).

 

“Series A Conversion Unit” means a Common Unit issued upon conversion of a
Series A Preferred Unit pursuant to Section 5.11(b)(v). Immediately upon such
issuance, each Series A Conversion Unit shall be considered a Common Unit for
all purposes hereunder.

 

“Series A Converting Unitholder” means a Series A Preferred Unitholder (a) who
has delivered a Series A Conversion Notice to the Partnership in accordance with
Section 5.11(b)(v)(C)(1) or (b) to whom the Partnership has delivered a Series A
Mandatory Conversion Notice in accordance with Section 5.11(b)(v)(C)(2).

 

“Series A Distribution Amount” means, (a) with respect to any Quarter ending on
or before [     ], 2020(1), an amount per Series A Preferred Unit equal to $[  ]
for such Quarter, and (b) with respect to any Quarter ending after [     ],
2020, an amount per Quarter per Series A Preferred Unit equal to the greater of
(i) the amount set forth in clause (a) and (ii) the amount of distributions for
such Quarter that would have been payable with respect to a Series A Preferred
Unit if such Series A Preferred Unit had converted immediately prior to the
Record Date for such Quarter in respect of which such distributions are being
paid into the number of Common Units into which such Series A Preferred Unit
would be convertible at the then-applicable Series A Conversion Rate (regardless
of whether the Series A Preferred Units are then convertible); provided,
however, that the Series A Distribution Amount for the Quarter ending [     ],
2017

 

--------------------------------------------------------------------------------

(1)  NTD: The last day of the twelfth quarter after the Closing Date (including,
as the first such quarter, the quarter in which the Closing Date occurs).

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

24

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shall be prorated for such period, commencing on the Series A Issuance Date and
ending on, and including, the last day of such Quarter.

 

“Series A Distribution Payment Date” has the meaning assigned to such term in
Section 5.11(b)(i)(A).

 

“Series A Issuance Date” means [   ], 2017.

 

“Series A Issue Price” means $54.27 per Series A Preferred Unit.

 

“Series A Junior Securities” means any class or series of Partnership Interests
that, with respect to distributions on such Partnership Interests and
distributions upon the liquidation, dissolution and winding up of the
Partnership, ranks junior to the Series A Preferred Units, and shall include
Common Units and Incentive Distribution Rights, but shall not include any
Series A Parity Securities, Series A Senior Securities or General Partner Units
(or the General Partner Interest represented thereby).

 

“Series A Lead Purchaser” means Stonepeak Screwdriver SPV LLC, a Delaware
limited liability company.

 

“Series A Mandatory Conversion Notice” has the meaning assigned to such term in
Section 5.11(b)(v)(C)(2).

 

“Series A Mandatory Conversion Notice Date” has the meaning assigned to such
term in Section 5.11(b)(v)(C)(2).

 

“Series A Mandatory Conversion Rate” means the number of Common Units issuable
upon the conversion of each Series A Preferred Unit pursuant to
Section 5.11(b)(v)(B), which shall be equal to the following:

 

(a)           if the Average VWAP for the 20 Trading Day period immediately
preceding the Series A Mandatory Conversion Notice Date is less than
$[74.62125](2), one Common Unit multiplied by a fraction, (i) the numerator of
which is the Series A Accrued Amount plus the Series A Partial Period
Distributions, if any, with respect to such Series A Preferred Unit and (ii) the
denominator of which is $[52.91325](3) (as such number of Common Units may be
adjusted as set forth in Section 5.11(b)(v)(E)); and

 

(b)           if the Average VWAP for the 20 Trading Day period immediately
preceding the Series A Mandatory Conversion Notice Date is equal to or greater
than $[74.62125](4), one Common Unit multiplied by a fraction, (i) the numerator
of which is the Series A Accrued Amount plus the Series A Partial Period
Distributions, if any, with respect to such Series A Preferred Unit and (ii) the
denominator of which is the Series A

 

--------------------------------------------------------------------------------

(2)  NTD: 137.5% of the Series A Issue Price

 

(3)  NTD: 97.5% of the Series A Issue Price

 

(4)  NTD: 137.5% of the Series A Issue Price

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

25

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Issue Price (as such number of Common Units may be adjusted as set forth in
Section 5.11(b)(v)(E)).

 

“Series A Parity Equivalent Units” has the meaning assigned to such term in
Section 5.11(b)(iii)(2).

 

“Series A Parity Securities” means any class or series of Partnership Interests
that, with respect to distributions on such Partnership Interests or
distributions upon the liquidation, dissolution and winding up of the
Partnership, ranks pari passu with (but not senior to) the Series A Preferred
Units, but shall not include General Partner Units (or the General Partner
Interest represented thereby).

 

“Series A Partial Period Distributions” means, with respect to a conversion or
redemption of a Series A Preferred Unit, an amount equal to the Series A
Distribution Amount multiplied by a fraction, the numerator of which is the
number of days elapsed in the Quarter in which such conversion or redemption
occurs and the denominator of which is the total number of days in such Quarter.

 

“Series A PIK Distribution Period” has the meaning assigned to such term in
Section 5.11(b)(i)(A).

 

“Series A PIK Payment Date” has the meaning assigned to such term in
Section 5.11(b)(i)(F).

 

“Series A PIK Units” has the meaning assigned to such term in
Section 5.11(b)(i)(A).

 

“Series A Preferred Unitholder” means a Record Holder of Series A Preferred
Units.

 

“Series A Preferred Units” has the meaning assigned to such term in
Section 5.11(a).

 

“Series A Purchase Agreement” means the Series A Preferred Unit and Common Unit
Purchase Agreement, dated as of September [  ], 2017, by and among the
Partnership, the General Partner and the Series A Purchasers, as may be amended
from time to time.

 

“Series A Purchaser” means (a) any of those Persons set forth on Schedule A to
the Series A Purchase Agreement and (b) any other Person who acquires Series A
Preferred Units from the Series A Lead Purchaser or any of its Affiliates during
the Non-Affiliate Transfer Period or the Potential Additional Transfer Period
pursuant to Section 5.04(a) of the Series A Purchase Agreement.

 

“Series A Quarterly Distribution” has the meaning assigned to such term in
Section 5.11(b)(i)(A).

 

“Series A Redemption Date” has the meaning assigned to such term in
Section 5.11(b)(viii)(B).

 

“Series A Redemption Notice” has the meaning assigned to such term in
Section 5.11(b)(viii)(A).

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

26

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“Series A Redemption Notice Date” means the date of the notice of any redemption
described in Section 5.11(b)(viii) sent by the Partnership to the applicable
Series A Preferred Unitholders.

 

“Series A Redemption Price” means an amount equal to the Average VWAP for the 20
Trading Day period ending on the date immediately preceding the Series A
Redemption Notice Date.

 

“Series A Required Voting Percentage” means at least 66 2/3% of the Outstanding
Series A Preferred Units, voting separately as a single class.

 

“Series A Senior Securities” means any class or series of Partnership Interests
that, with respect to distributions on such Partnership Interests or
distributions upon the liquidation, dissolution and winding up of the
Partnership, ranks senior to the Series A Preferred Units, but shall not include
General Partner Units (or the General Partner Interest represented thereby).

 

“Series A Substantially Equivalent Unit” has the meaning assigned to such term
in Section 5.11(b)(vi)(B)(2).

 

“Series A Unpaid Distributions” has the meaning assigned to such term in
Section 5.11(b)(i)(B).

 

“Share of Additional Book Basis Derivative Items” means in connection with any
allocation of Additional Book Basis Derivative Items for any taxable period,
(a) with respect to the Unitholders holding Common Units or Series A Preferred
Units, the amount that bears the same ratio to such Additional Book Basis
Derivative Items as the Unitholders’ Remaining Net Positive Adjustments as of
the end of such taxable period bear to the Aggregate Remaining Net Positive
Adjustments as of that time, (b) with respect to the General Partner (as holder
of the General Partner 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 bear to the Aggregate
Remaining Net Positive Adjustment as of that time, and (c) 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 bear to the Aggregate Remaining Net
Positive Adjustments as of that time.

 

“Special Approval” means approval by a majority of the members of the Conflicts
Committee acting in good faith.

 

“Subordinated Unit” means a Limited Partner Interest having the rights and
obligations specified with respect to Subordinated Units in the Prior Agreement.

 

“Subsidiary” means, with respect to any Person, (a) a corporation of which more
than 50% of the voting power of shares entitled (without regard to the
occurrence of any contingency) to vote in the election of directors or other
governing body of such corporation is owned, directly or indirectly, at the date
of determination, by such Person, by one or more Subsidiaries of such Person or
a combination thereof, (b) a partnership (whether general or limited) in which
such Person or a Subsidiary of such Person is, at the date of determination, a
general or limited partner of such partnership, but only if more than 50% of the
partnership interests or more than 50% of the general partner interests of such
partnership is owned, directly or indirectly, at the date of

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

27

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determination, by such Person, by one or more Subsidiaries of such Person or a
combination thereof or (c) any other Person (other than a corporation or a
partnership) in which such Person, one or more Subsidiaries of such Person, or a
combination thereof, directly or indirectly, at the date of determination, has
(i) at least a majority ownership interest or (ii) the power to elect or direct
the election of a majority of the directors or other governing body of such
Person.

 

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

 

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

 

“Tax Matters Partner” has the meaning given such term in Section 9.3.

 

“Tax Sharing Agreement” means that certain Tax Sharing Agreement, dated as of
July 26, 2013, between Phillips 66, a Delaware corporation, and the Partnership,
as such agreement may be amended, supplemented or restated from time to time.

 

“Third Target Distribution” means $0.318750 per Unit per Quarter, subject to
adjustment in accordance with Sections 5.10, 6.6 and 6.9.

 

“Tortoise” means each of Tortoise Direct Opportunities Fund, LP, a Delaware
limited partnership; Tortoise MLP & Pipeline Fund, a series of Managed Portfolio
Series, a Delaware statutory trust; Tortoise VIP MLP & Pipeline Portfolio, a
series of Managed Portfolio Series, a Delaware statutory trust; Tortoise Energy
Infrastructure Corporation, a Maryland corporation; Tortoise MLP Fund, Inc., a
Maryland corporation; Tortoise Power and Energy Infrastructure Fund, Inc., a
Maryland corporation; Tortoise Pipeline & Energy Fund, Inc., a Maryland
corporation; Tortoise Energy Infrastructure Fund, Inc., a Maryland corporation;
and Texas Mutual Insurance Company, a Texas insurance company.

 

“Trading Day” means a day on which the principal National Securities Exchange on
which the referenced Partnership Interests of any class are listed or admitted
for trading is open for the transaction of business or, if such Partnership
Interests are not listed or admitted for trading on any National Securities
Exchange, a day on which banking institutions in New York City are not legally
required to be closed.

 

“Transaction Documents” has the meaning given such term in Section 7.1(b).

 

“transfer” has the meaning given 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 may be appointed from time to time
by the General Partner to act as registrar and transfer agent for any class of
Partnership Interests in accordance with the Exchange Act and the rules of the
National Securities Exchange on which such Partnership Interests are listed (if
any); provided, however, that, if no such Person is appointed as registrar and
transfer agent for any class of Partnership Interests, the General Partner shall
act as registrar and transfer agent for such class of Partnership Interests.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

28

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“Treasury Regulation” means the United States Treasury regulations promulgated
under the Code.

 

“Underwritten Offering” means (a) an offering pursuant to a Registration
Statement in which Partnership Interests are sold to an underwriter on a firm
commitment basis for reoffering to the public (other than the Initial Public
Offering), (b) an offering of Partnership Interests pursuant to a Registration
Statement that is a “bought deal” with one or more investment banks, and (c) an
“at-the-market” offering pursuant to a Registration Statement in which
Partnership Interests are sold to the public through one or more investment
banks or managers on a best efforts basis.

 

“Unit” means a Partnership Interest that is designated by the General Partner as
a “Unit” and shall include Common Units and Series A Preferred Units but shall
not include (a) General Partner 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 and
the Outstanding Series A Preferred Units (with such Series A Preferred Units to
be treated on an as-converted basis as described in Section 5.11(b)(ii)(A)),
voting together as a single class.

 

“Unitholders” means the Record Holders of Units.

 

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

 

“Unrealized Gain” attributable to any item of Partnership property means, as of
any date of determination, the excess, if any, of (a) the fair market value of
such property as of such date (as determined under Section 5.5(d)) over (b) the
Carrying Value of such property as of such date (prior to any adjustment to be
made pursuant to Section 5.5(d) as of such date).

 

“Unrealized Loss” attributable to any item of Partnership property means, as of
any date of determination, the excess, if any, of (a) the Carrying Value of such
property as of such date (prior to any adjustment to be made pursuant to
Section 5.5(d) as of such date) over (b) the fair market value of such property
as of such date (as determined under Section 5.5(d)).

 

“Unrecovered Initial Unit Price” 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 from time to time.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

29

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

 

“Voting Securities” means, with respect to a specified Person as of any date of
determination, the Capital Stock of such Person that is at such date entitled
(without reference to the occurrence of any contingency) to vote in the election
of the managers, directors, trustees or other Persons serving in a similar
capacity with respect to such Person.

 

“VWAP” means, with respect to a Common Unit on any Trading Day, the
volume-weighted average trading price of the Common Units on the National
Securities Exchange on which the Common Units are listed or admitted to trading
on such Trading Day (or if such volume-weighted average trading price is
unavailable, the Closing Price of one Common Unit on such Trading Day). If the
VWAP of the Common Units cannot be calculated for a particular Trading Day on
any of the foregoing bases, the VWAP of a Common Unit for such Trading Day shall
be the fair market value of such Common Unit on such Trading Day as determined
in good faith by the General Partner.

 

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

 

“Working Capital Borrowings” means borrowings incurred pursuant to a credit
facility, commercial paper facility or 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 other than from additional Working Capital Borrowings.

 

Section 12.02       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,” “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.  The General Partner has the
power to construe and interpret this Agreement and to act upon any such
construction or interpretation.  To the fullest extent permitted by law, any
construction or interpretation of this Agreement by the General Partner and any
action taken pursuant thereto and any determination made by the General Partner
in good faith shall, in each case, be conclusive and binding on all Record
Holders, each other Person or Group who acquires an interest in a Partnership
Interest and all other Persons for all purposes.

 

ARTICLE XIII.
ORGANIZATION

 

Section 13.01       Formation.  The General Partner and the Organizational
Limited Partner have previously formed the Partnership as a limited partnership
pursuant to the provisions of the

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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Delaware Act. The General Partner and the Limited Partners have previously
entered into the Prior Agreement. The purpose of this Second Amended and
Restated Agreement of Limited Partnership is to (a) establish the rights and
obligations of Series A Preferred Units in connection with the issuance of such
Partnership Interests, (b) delete certain provisions of the Prior Agreement that
are no longer applicable to the Partnership and (c) make other miscellaneous
revisions. This amendment and restatement shall become effective on the date of
this Agreement.  Except as expressly provided to the contrary in this Agreement,
the rights, duties, 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 13.02       Name.  The name of the Partnership shall be “Phillips 66
Partners LP.”  Subject to applicable law, 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 13.03       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 Corporation
Service Company, 2711 Centerville Road, Suite 400, Wilmington, New Castle
County, Delaware 19808, and the registered agent for service of process on the
Partnership in the State of Delaware at such registered office shall be
Corporation Service Company.  The principal office of the Partnership shall be
located at 2331 CityWest Blvd., Houston, Texas 77042, or such other place as the
General Partner may from time to time designate by notice to the Limited
Partners. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner determines to be
necessary or appropriate.  The address of the General Partner shall be 2331
CityWest Blvd., Houston, Texas 77042, or such other place as the General Partner
may from time to time designate by notice to the Limited Partners.

 

Section 13.04       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 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 be reasonably likely to cause the Partnership to be
treated as an association taxable as a corporation or otherwise taxable as an
entity for federal income tax purposes.  To the fullest extent permitted by law,
the General Partner shall have no duty or obligation to propose or

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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approve the conduct by the Partnership of any business 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 so propose or approve, shall not be
required to act in good faith or pursuant to any other standard imposed by this
Agreement, any Group Member Agreement, any other agreement contemplated hereby
or under the Delaware Act or any other law, rule or regulation or at equity and
the General Partner in determining whether to propose or approve the conduct by
the Partnership of any business shall be permitted to do so in its sole and
absolute discretion.

 

Section 13.05       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 13.06       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 13.07       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 of the General Partner or its Affiliates, 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
of the General Partner or its Affiliates shall be held by the General Partner or
such Affiliate or nominee for the use and benefit of the Partnership in
accordance with the provisions of this Agreement; provided, however, that the
General Partner shall use reasonable efforts to cause record title to such
assets (other than those assets in respect of which the General Partner
determines that the expense and difficulty of conveyancing makes transfer of
record title to the Partnership impracticable) to be vested in the Partnership
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 any successor 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 XIV.
RIGHTS OF LIMITED PARTNERS

 

Section 14.01       Limitation of Liability.  The Limited Partners shall have no
liability under this Agreement except as expressly provided in this Agreement or
the Delaware Act.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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Section 14.02                     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.  No 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 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) nor shall any such action affect, impair or eliminate the
limitations on the liability of the Limited Partners under this Agreement.

 

Section 14.03                     Rights of Limited Partners.

 

(a)                                 Each Limited Partner shall have the right,
for a purpose reasonably related to such Limited Partner’s interest as a Limited
Partner in the Partnership, upon reasonable written demand stating the purpose
of such demand, and at such Limited Partner’s own expense:

 

(i)                                     to obtain from the General Partner
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 (provided that the foregoing materials
shall be deemed to be available to a Limited Partner in satisfaction of the
requirements of this Section 3.3(a)(i) if posted on or accessible through the
Partnership’s or the Commission’s website);

 

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

 

(iii)                               to obtain a copy of this Agreement and the
Certificate of Limited Partnership and all amendments thereto.

 

(b)                                 To the fullest extent permitted by law, the
rights to information granted the Limited Partners pursuant to
Section 3.3(a) replace in their entirety any rights to information provided for
in Section 17-305(a) of the Delaware Act and each of the Partners and each other
Person or Group who acquires an interest in the Partnership hereby agrees to the
fullest extent permitted by law that they do not have any rights as Partners or
interest holders to receive any information either pursuant to
Section 17-305(a) of the Delaware Act or otherwise except for the information
identified in Section 3.3(a).

 

(c)                                  The General Partner may keep confidential
from the Limited Partners, for such period of time as the General Partner deems
reasonable, (i) any information that the General Partner reasonably believes to
be in the nature of trade secrets or (ii) other information the disclosure of
which the General Partner in good faith believes (A) is not in the best
interests of the Partnership Group, (B) could damage the Partnership Group or
its business or (C) that any

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

33

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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 3.3).

 

(d)                                 Notwithstanding any other provision of this
Agreement or Section 17-305 of the Delaware Act, each of the Record Holders,
each other Person or Group who acquires an interest in a Partnership Interest
and each other Person bound by this Agreement hereby agrees to the fullest
extent permitted by law that they do not have rights to receive information from
the Partnership or any Indemnitee for the purpose of determining whether to
pursue litigation or assist in pending litigation against the Partnership or any
Indemnitee relating to the affairs of the Partnership except pursuant to the
applicable rules of discovery relating to litigation commenced by such Person or
Group.

 

ARTICLE XV.
CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP
INTERESTS; REDEMPTION OF PARTNERSHIP INTERESTS

 

Section 15.01                     Certificates.  Record Holders of Partnership
Interests and, where appropriate, Derivative Partnership Interests, shall be
recorded in the Partnership Register and ownership of such interests shall be
evidenced by a physical certificate or book entry notation in the Partnership
Register.  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, if any, shall be executed on
behalf of the Partnership by the Chief Executive Officer, President, Chief
Financial Officer or any Senior Vice President or Vice President and the
Secretary, any Assistant Secretary, or other authorized officer of the General
Partner, and shall bear the legend set forth in Section 4.8(f), or in the case
of Series A Preferred Units, Section 5.11(b)(iv); provided, however, that, in
the event the Series A Preferred Units are not represented by certificates, upon
any transfer of Series A Preferred Units, the transferor of such Series A
Preferred Units shall notify the registered owner of any applicable restrictions
on the transfer of the Series A Preferred Units.  The signatures of such
officers upon a Certificate may, to the extent permitted by law, be facsimiles. 
In case any officer who has signed or whose signature has been placed upon such
Certificate shall have ceased to be such officer before such Certificate is
issued, it may be issued by the Partnership with the same effect as if he or she
were such officer at the date of its issuance.  If a Transfer Agent has been
appointed for a class of Partnership Interests, no Certificate for such class of
Partnership Interests shall be valid for any purpose until it has been
countersigned by the Transfer Agent; provided, however, that, if the General
Partner elects to cause the Partnership to issue Partnership Interests of such
class in global form, the Certificate 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. 
With respect to any Partnership Interests that are represented by physical
certificates, the General Partner may determine that such Partnership Interests
will no longer be represented by physical certificates and may, upon written
notice to the holders of such Partnership Interests and subject to applicable
law, take whatever actions it deems necessary or appropriate to cause such
Partnership Interests to be registered in book entry or global form and may
cause such physical certificates to be cancelled or deemed cancelled.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

34

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Section 15.02                     Mutilated, Destroyed, Lost or Stolen
Certificates.

 

(a)                                 If any mutilated Certificate is surrendered
to the Transfer Agent, the appropriate officers of the General Partner on behalf
of the Partnership shall execute, and the Transfer Agent shall countersign and
deliver in exchange therefor, a new Certificate evidencing the same number and
type of Partnership 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

 

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

 

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.

 

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

 

Section 15.03                     Record Holders. The names and addresses of
Unitholders as they appear in the Partnership Register shall be the official
list of Record Holders of the Partnership Interests for all purposes.  The
Partnership and the General Partner 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 or Group, regardless
of whether the Partnership or the General Partner shall have actual or other
notice thereof, except as otherwise provided by law or any

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

35

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applicable rule, regulation, guideline or requirement of any National Securities
Exchange on which such Partnership Interests are listed or admitted to trading. 
Without limiting the foregoing, when a Person (such as a broker, dealer, bank,
trust company or clearing corporation or an agent of any of the foregoing) is
acting as nominee, agent or in some other representative capacity for another
Person or Group in acquiring and/or holding Partnership Interests, as between
the Partnership on the one hand, and such other Person on the other, such
representative Person shall be the Limited Partner with respect to such
Partnership Interest upon becoming the Record Holder in accordance with
Section 10.1(b) and have the rights and obligations of a Partner hereunder as,
and to the extent provided herein, including Section 10.1(c).

 

Section 15.04                     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 all or any part of its
General Partner Interest (represented by General Partner Units) to another
Person and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or otherwise
or (ii) by which the holder of a Limited Partner Interest assigns all or a part
of such Limited Partner Interest to another Person who is or becomes a Limited
Partner as a result thereof, and includes a sale, assignment, gift, exchange or
any other disposition by law or otherwise, excluding a pledge, encumbrance,
hypothecation or mortgage but including any transfer 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, and the Partnership shall have no obligation to effect any such
transfer or purported transfer.

 

(c)                                  Nothing contained in this Agreement shall
be construed to prevent or limit a disposition by any stockholder, member,
partner or other owner of the General Partner or any Limited Partner of any or
all of such Person’s shares of stock, membership interests, partnership
interests or other ownership interests in the General Partner or such Limited
Partner and the term “transfer” shall not include any such disposition.

 

Section 15.05                     Registration and Transfer of Limited Partner
Interests.

 

(a)                                 The General Partner shall maintain, or cause
to be maintained by the Transfer Agent in whole or in part, the Partnership
Register on behalf of the Partnership.

 

(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 duly endorsed and
surrendered for registration of transfer.  No charge shall be imposed by the
General Partner for such transfer; provided, however, 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

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

36

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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.  Upon the proper surrender of a
Certificate, such transfer shall be recorded in the Partnership Register.

 

(c)                                  Upon the receipt of proper transfer
instructions from the Record Holder of uncertificated Partnership Interests,
such transfer shall be recorded in the Partnership Register.

 

(d)                                 Except as provided in Section 4.9, by
acceptance of any Limited Partner Interests pursuant to a transfer in accordance
with this Article IV, each transferee of a Limited Partner Interest (including
any nominee, or agent or representative acquiring such Limited Partner Interests
for the account of another Person or Group) (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 Partnership Register and such Person becomes the Record Holder of the
Limited Partner 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, (iv) makes the consents, acknowledgements and waivers
contained in this Agreement, all with or without execution of this Agreement by
such Person and (v) shall be deemed to certify that the transferee is not an
Ineligible Holder.  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 an 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 their Common Units to one or more
Persons.

 

Section 15.06                     Transfer of the General Partner’s General
Partner Interest.

 

(a)                                 Subject to Section 4.6(c) below, prior to
September 30, 2023, the General Partner shall not transfer all or any part of
its General Partner Interest (represented by General Partner Units) to a Person
unless such transfer (i) has been approved by the prior written consent or vote
of the holders of at least a Unit Majority (excluding Common Units owned 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

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

37

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(other than an individual) in connection with the merger or consolidation of the
General Partner with or into such other Person or the transfer by the General
Partner of all or substantially all of its assets to such other Person.

 

(b)                                 Subject to Section 4.6(c), on or after
September 30, 2023, the General Partner may transfer all or any part of its
General Partner Interest without the approval of any Limited Partner or any
other Person.

 

(c)                                  Notwithstanding anything herein to the
contrary, no transfer by the General Partner of all or any part of its General
Partner Interest to another Person shall be permitted unless (i) the transferee
agrees to assume the rights and duties of the General Partner under this
Agreement and to be bound by the provisions of this Agreement, (ii) the
Partnership receives an Opinion of Counsel that such transfer would not result
in the loss of limited liability of any Limited Partner 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 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 owned by 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.

 

Section 15.07                     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 without the approval of
any Limited Partner or any other Person.

 

Section 15.08                     Restrictions on Transfers.

 

(a)                                 Except as provided in Section 4.8(e),
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 federal
income tax purposes (to the extent not already so treated or taxed).  The
Partnership may issue stop transfer instructions to any Transfer Agent in order
to implement any restriction on transfer contemplated by this Agreement.

 

(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 to (i) avoid a significant risk of the
Partnership becoming taxable as a corporation or otherwise becoming taxable as
an entity for federal income tax purposes (to the extent not already so treated
or taxed) or (ii) preserve the uniformity of the Limited Partner Interests (or
any class or classes thereof).

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

38

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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 to 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)                                  The transfer of an IDR Reset Common Unit
that was issued in connection with an IDR Reset Election pursuant to
Section 5.10 shall be subject to the restrictions imposed by Section 6.7(b) and
6.7(c).

 

(d)                                 In addition to any other restrictions on
transfer set forth in this Agreement, the transfer of a Series A Preferred Unit
or a Series A Conversion Unit shall be subject to the restrictions imposed by
Section 5.11(b)(vii) and Section 6.8, respectively.

 

(e)                                  Except for Section 4.9, nothing in this
Agreement shall preclude the settlement of any transactions involving
Partnership Interests entered into through the facilities of any National
Securities Exchange on which such Partnership Interests are listed or admitted
to trading.

 

(f)                                   Each certificate or book entry evidencing
Partnership Interests (other than the Series A Preferred Units) shall bear a
conspicuous legend in substantially the following form:

 

THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF PHILLIPS 66 PARTNERS
LP THAT THIS SECURITY MAY NOT BE TRANSFERRED IF SUCH TRANSFER (AS DEFINED IN THE
PARTNERSHIP AGREEMENT) 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 AUTHORITY
WITH JURISDICTION OVER SUCH TRANSFER, (B) TERMINATE THE EXISTENCE OR
QUALIFICATION OF PHILLIPS 66 PARTNERS LP UNDER THE LAWS OF THE STATE OF
DELAWARE, OR (C) CAUSE PHILLIPS 66 PARTNERS LP TO BE TREATED AS AN ASSOCIATION
TAXABLE AS A CORPORATION OR OTHERWISE TO BE TAXED AS AN ENTITY FOR FEDERAL
INCOME TAX PURPOSES (TO THE EXTENT NOT ALREADY SO TREATED OR TAXED).  THE
GENERAL PARTNER OF PHILLIPS 66 PARTNERS LP MAY IMPOSE ADDITIONAL RESTRICTIONS ON
THE TRANSFER OF THIS SECURITY IF IT RECEIVES AN OPINION OF COUNSEL THAT SUCH
RESTRICTIONS ARE NECESSARY TO AVOID A SIGNIFICANT RISK OF PHILLIPS 66 PARTNERS
LP BECOMING TAXABLE AS A CORPORATION OR OTHERWISE BECOMING TAXABLE AS AN ENTITY
FOR FEDERAL INCOME TAX PURPOSES.  THIS SECURITY MAY BE SUBJECT TO ADDITIONAL
RESTRICTIONS ON ITS TRANSFER PROVIDED IN THE PARTNERSHIP AGREEMENT.  COPIES OF
SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER
OF RECORD OF THIS SECURITY TO THE SECRETARY

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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OF THE GENERAL PARTNER AT THE PRINCIPAL EXECUTIVE OFFICES OF THE PARTNERSHIP. 
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 TO
TRADING.

 

Section 15.09                     Eligibility Certificates; Ineligible Holders.

 

(a)                                 The General Partner may upon demand or on a
regular basis require Limited Partners, and transferees of Limited Partner
Interests in connection with a transfer, to execute an Eligibility Certificate
or provide other information as is necessary for the General Partner to
determine if any such Limited Partners or transferees are Ineligible Holders.

 

(b)                                 If any Limited Partner (or its beneficial
owners) fails to furnish to the General Partner within 30 days of its request an
Eligibility Certificate and other information related thereto, or if upon
receipt of such Eligibility Certificate or other requested information the
General Partner determines that a Limited Partner or a transferee of a Limited
Partner is 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 or the General Partner may refuse to effect the transfer of the
Limited Partner Interests to such transferee.  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.

 

(c)                                  The General Partner shall, in exercising
voting rights in respect of Limited Partner 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.

 

(d)                                 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).

 

(e)                                  At any time after an Ineligible Holder can
and does certify that it no longer is an Ineligible Holder, it 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 Limited Partner
Interests.

 

(f)                                   If at any time a transferee of a
Partnership Interest fails to furnish an Eligibility Certificate or any other
information requested by the General Partner pursuant to

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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Section 4.9 within 30 days of such request, or if upon receipt of such
Eligibility Certificate or other information the General Partner determines,
with the advice of counsel, that such transferee is an Ineligible Holder, the
Partnership may, unless the transferee establishes to the satisfaction of the
General Partner that such transferee is not an Ineligible Holder, prohibit and
void the transfer, including by placing a stop order with the Transfer Agent.

 

Section 15.10                     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 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 an Ineligible Holder, the Partnership may,
unless the Limited Partner establishes to the satisfaction of the General
Partner that such Limited Partner is not an Ineligible Holder or has transferred
his Limited Partner Interests to a Person who is not an Ineligible 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 such Limited Partner’s last address
designated on the records of the Partnership or the Transfer Agent, by
registered or certified mail, postage prepaid.  The notice shall be deemed to
have been given when so mailed.  The notice shall specify the Redeemable
Interests, the date fixed for redemption, the place of payment, that 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 such 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
Limited Partner Interests of the class to be so redeemed multiplied by the
number of Limited Partner Interests of each such class included among the
Redeemable Interests.  The redemption price shall be paid, 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 such Limited
Partner’s 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 or transferee at the place specified in the notice of

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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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 Limited Partner
Interests.

 

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

 

(c)                                  Nothing in this Section 4.10 shall prevent
the recipient of a notice of redemption from transferring his Limited Partner
Interest before the redemption date if such transfer is otherwise permitted
under this Agreement and the transferor provides notice of such transfer to the
General Partner.  Upon receipt of notice of such a transfer, the General Partner
shall withdraw the notice of redemption, provided the transferee of such Limited
Partner Interest certifies to the satisfaction of the General Partner that such
transferee is not an Ineligible Holder.  If the transferee fails to make such
certification within 30 days after the request and, in any event, before the
redemption date, such redemption shall be effected from the transferee on the
original redemption date.

 

ARTICLE XVI.
CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS

 

Section 16.01                     Organizational Contributions.  In connection
with the formation of the Partnership under the Delaware Act, the General
Partner made an initial Capital Contribution to the Partnership in the amount of
$20.00, for a 2% General Partner Interest in the Partnership and has been
admitted as the General Partner of the Partnership, and the Organizational
Limited Partner made an initial Capital Contribution to the Partnership in the
amount of $980.00 for a 98% Limited Partner Interest in the Partnership and was
admitted as a Limited Partner of the Partnership.  As of the Closing Date,
pursuant to the Contribution Agreement, the interest of the Organizational
Limited Partner was partially redeemed in exchange for the return of the initial
Capital Contribution of the Organizational Limited Partner, and 98% of any
interest or other profit that may have resulted from the investment or other use
of such initial Capital Contributions was allocated and distributed to the
Organizational Limited Partner, and the balance thereof was allocated and
distributed to the General Partner.  On the Closing Date, the Organizational
Limited Partner continued as a limited partner of the Partnership with respect
to the portion of its interest that was not partially redeemed.

 

Section 16.02                     Contributions by the General Partner.

 

(a)                                 On the Closing Date and pursuant to the
Contribution Agreement, the General Partner contributed to the Partnership, as a
Capital Contribution, the Holdings Interest (as defined in the Contribution
Agreement) in exchange for (i) 1,437,433 General Partner Units representing a
continuation of its 2% General Partner Interest (after giving effect to any
exercise of the Over-Allotment Option and the Deferred Issuance), subject to all
of the rights, privileges

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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and duties of the General Partner under this Agreement, and (ii) the Incentive
Distribution Rights.

 

(b)                                 Upon the issuance of any additional Limited
Partner Interests by the Partnership (other than (i) any Common Units issued
pursuant to Section 5.10, (ii) any Common Units issued pursuant to
Section 5.3(c) and (iii) any Common Units issued upon the conversion of any
Partnership Interests), the General Partner may, in order to maintain the
Percentage Interest with respect to its General Partner Interest, make
additional Capital Contributions in an amount equal to the product obtained by
multiplying (A) the quotient determined by dividing (x) the Percentage Interest
with respect to the General Partner Interest immediately prior to the issuance
of such additional Limited Partner Interests by the Partnership by (y) 100% less
the Percentage Interest with respect to the General Partner Interest immediately
prior to the issuance of such additional Limited Partner Interests by the
Partnership times (B) the gross amount contributed to the Partnership by the
Limited Partners (before deduction of underwriters’ discounts and commissions)
in exchange for such additional Limited Partner Interests.  Any Capital
Contribution pursuant to this Section 5.2(b) shall be evidenced by the issuance
to the General Partner of a proportionate number of additional General Partner
Units.

 

Section 16.03                     Contributions by Limited Partners.

 

(a)                                 On the Closing Date, pursuant to and as
described in the Contribution Agreement, Phillips 66 Company contributed to the
Partnership, as a Capital Contribution, all of its limited liability company
interests in the Operating Company in exchange for (i) 18,792,112 Common Units,
(ii) 35,217,112 Subordinated Units and (iii) the right to receive the Deferred
Issuance upon the earlier to occur of (A) the expiration of the Over-Allotment
Option and (B) the exercise in full of the Over-Allotment Option.

 

(b)                                 On the Closing Date and pursuant to the IPO
Underwriting Agreement, each IPO Underwriter contributed cash to the Partnership
in exchange for the issuance by the Partnership of Common Units to each IPO
Underwriter, all as set forth in the IPO Underwriting Agreement.

 

(c)                                  Upon the exercise of the Over-Allotment
Option, each IPO Underwriter contributed cash to the Partnership on the Option
Closing Date in exchange for the issuance by the Partnership of Common Units to
each IPO Underwriter, all as set forth in the IPO Underwriting Agreement.

 

(d)                                 No Limited Partner Interests were issued or
issuable as of or at the Closing Date other than (i) the Common Units and
Subordinated Units issued to Phillips 66 Company pursuant to subparagraph (a) of
this Section 5.3, (ii) the Common Units issued to the IPO Underwriters as
described in subparagraphs (b) and (c) of this Section 5.3 and (iii) the
Incentive Distribution Rights issued to the General Partner.

 

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

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

43

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Section 16.04                     Interest and Withdrawal. No interest shall be
paid by the Partnership on Capital Contributions.  No Partner shall be entitled
to the withdrawal or return of its Capital Contribution, except to the extent,
if any, that distributions made pursuant to this Agreement or upon termination
of the Partnership may be considered 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.

 

Section 16.05                     Capital Accounts.

 

(a)                                 The Partnership shall maintain for each
Partner (or a beneficial owner of Partnership Interests held by a nominee, agent
or representative in any case in which such nominee, agent or representative 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).  The initial Capital Account balance attributable to
the General Partner Units issued to the General Partner pursuant to
Section 5.2(a) shall equal the Net Agreed Value of the Capital Contribution
specified in Section 5.2(a), which shall be deemed to equal the product of the
number of General Partner Units issued to the General Partner pursuant to
Section 5.2(a) and the Initial Unit Price for each Common Unit (and the initial
Capital Account balance attributable to each General Partner Unit shall equal
the Initial Unit Price for each Common Unit).  The initial Capital Account
balance attributable to the Common Units and Subordinated Units issued to
Phillips 66 Company pursuant to Section 5.3(a) shall equal the respective Net
Agreed Value of the Capital Contributions specified in Section 5.3(a), which
shall be deemed to equal the product of the number of Common Units and
Subordinated Units issued to Phillips 66 Company pursuant to Section 5.3(a) and
the Initial Unit Price for each such Common Unit and Subordinated Unit (and the
initial Capital Account balance attributable to each such Common Unit and
Subordinated Unit shall equal its Initial Unit Price).  The initial Capital
Account balance attributable to the Common Units issued to the IPO Underwriters
pursuant to Section 5.3(b) shall equal the product of the number of Common Units
so issued to the IPO Underwriters and the Initial Unit Price for each Common
Unit (and the initial Capital Account balance attributable to each such Common
Unit shall equal its Initial Unit Price).  The initial Capital Account
attributable to the Incentive Distribution Rights shall be zero.  Thereafter,
the Capital Account shall in respect of each such Partnership Interest 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 income and gain exempt from tax) computed in
accordance with Section 5.5(b) and allocated with respect to such Partnership
Interest pursuant to Section 6.1, and decreased by (x) the amount of cash or Net
Agreed Value of all actual and deemed distributions of cash or property (other
than Series A PIK Units) made with respect to such Partnership Interest and
(y) all items of Partnership deduction and loss computed in accordance with
Section 5.5(b) and allocated with respect to such Partnership Interest pursuant
to Section 6.1. For the avoidance of doubt, each Series A Preferred Unit will be
treated as a partnership interest in the Partnership that is “convertible
equity” within the meaning of Treasury Regulation Section 1.721-2(g)(3), and,
therefore, each holder of a Series A Preferred Unit will be

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

44

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treated as a partner in the Partnership. The initial Capital Account balance in
respect of each Series A Preferred Unit issued on the Series A Issuance Date
shall be the Series A Issue Price.  The Capital Account balance of each holder
of Series A Preferred Units in respect of its Series A Preferred Units shall not
be increased or decreased as a result of the accrual and accumulation of an
unpaid distribution pursuant to Section 5.11(b)(i)(B) or
Section 5.11(b)(i)(C) in respect of such Series A Preferred Units except as
otherwise provided in this Agreement.

 

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

 

(i)                                     Solely for purposes of this Section 5.5,
the Partnership shall be treated as owning directly its proportionate share (as
determined by the General Partner based upon the provisions of the applicable
Group Member Agreement or governing, organizational or similar documents) of all
property owned by (x) any other Group Member that is classified as a partnership
or disregarded entity for federal income tax purposes and (y) any other
partnership, limited liability company, unincorporated business or other entity
classified as a partnership or disregarded entity for 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 and deduction shall be made without regard to any election under
Section 754 of the Code that may be made by the Partnership.  To the extent an
adjustment to the adjusted tax basis of any Partnership asset pursuant to
Section 734(b) or 743(b) of the Code is required, pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining
Capital Accounts, the amount of such adjustment in the Capital Accounts shall be
treated as an item of gain or loss.

 

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

 

(v)                                 An 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 5.5(b), and an item of expense of the Partnership that is
described in Section 705(a)(2)(B) of the Code (with respect to

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

45

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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 5.5(b).

 

(vi)                              In accordance with the requirements of
Section 704(b) of the Code, any deductions for depreciation, cost recovery or
amortization attributable to any Contributed Property shall be determined as if
the adjusted basis of such property on the date it was acquired by the
Partnership were equal to the Agreed Value of such property.  Upon an adjustment
pursuant to Section 5.5(d) to the Carrying Value of any Partnership property
subject to depreciation, cost recovery or amortization, any further deductions
for such depreciation, cost recovery or amortization attributable to such
property shall be determined under the rules prescribed by Treasury Regulation
Section 1.704-3(d)(2) as if the adjusted basis of such property were equal to
the Carrying Value of such property immediately following such adjustment.

 

(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).

 

(c)                                  (i)                                    
Except as otherwise provided in this Section 5.5(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.

 

(ii)                                  Subject to Section 6.7(b), immediately
prior to the transfer of an IDR Reset Common Unit by a holder thereof (other
than a transfer to an Affiliate unless the General Partner elects to have this
subparagraph 5.5(c)(iii) apply), the Capital Account maintained for such Person
with respect to its IDR Reset Common Units will (A) first, be allocated to the
IDR Reset Common Units to be transferred in an amount equal to the product of
(x) the number of such IDR Reset Common Units to be transferred and (y) the Per
Unit Capital Amount for a Common Unit, and (B) second, any remaining balance in
such Capital Account will be retained by the transferor, regardless of whether
it has retained any IDR Reset Common Units. Following any such allocation, the
transferor’s Capital Account, if any, maintained with respect to the retained
IDR Reset Common Units, if any, will have a balance equal to the amount
allocated under clause (B) hereinabove, and the transferee’s Capital Account
established with respect to the transferred IDR Reset Common Units will have a
balance equal to the amount allocated under clause (A) above.

 

(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 each Partner 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, and any such
Unrealized Gain or Unrealized Loss shall be treated, for purposes of maintaining
Capital

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

46

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Accounts, as if it 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(c) and Section 6.1(d) in the same manner as any item of gain or loss
actually recognized following an event giving rise to the dissolution of the
Partnership 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, 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.  In making its determination of
the fair market values of individual properties, the General Partner 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, and then allocate such aggregate value among the
individual properties of the Partnership (in such manner as it determines
appropriate).

 

(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, and any such
Unrealized Gain or Unrealized Loss shall be treated, for purposes of maintaining
Capital Accounts, as if it had been recognized on an actual sale of each 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(c) and Section 6.1(d) in the same manner as any item of gain or
loss actually recognized following an event giving rise to the dissolution of
the Partnership would have been allocated.  In determining such Unrealized Gain
or Unrealized Loss the aggregate fair market value of all Partnership property
(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 5.5(d)(i) or (B) in the case of a liquidating
distribution pursuant to Section 12.4, be determined by the Liquidator using
such method of valuation as it may adopt.

 

(iii)                               In accordance with Treasury Regulation
Section 1.704-1(b)(2)(iv)(s), immediately after the conversion of a Series A
Preferred Unit into a Common Unit in accordance with Section 5.11(b)(v), the
Capital Account of each Partner and the Carrying Value of each Partnership
property shall be adjusted 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 after such conversion and
(A) first, all Unrealized Gain (if the Capital Account of each such Series A
Conversion Unit is less than the Per Unit Capital Account for a then Outstanding
Initial Common Unit) or Unrealized Loss (if the Capital Account of each such
Series A Conversion Unit is greater  than the Per Unit Capital Account for a
then Outstanding

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

47

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Initial Common Unit) had been allocated Pro Rata to each Partner holding
Series A Conversion Units received upon such conversion until the Capital
Account of each such Series A Conversion Unit is equal to the Per Unit Capital
Amount for a then Outstanding Initial Common Unit; and (B) second, any remaining
Unrealized Gain or Unrealized Loss had been allocated to the Partners at such
time pursuant to Section 6.1(c) and Section 6.1(d). In determining such
Unrealized Gain or Unrealized Loss, the aggregate cash amount and fair market
value of all Partnership assets immediately after the conversion of a Series A
Preferred Unit shall be determined by the General Partner using such method of
valuation as it may adopt (taking into account Section 7701(g) of the Code);
provided, however, that the General Partner, in arriving at such valuation, must
take fully into account the fair market value of the Partnership Interests of
all Partners at such time and must make such adjustments to such valuation as
required by Treasury Regulation Section 1.704-1(b)(2)(iv)(h)(2). The General
Partner shall allocate such aggregate value among the assets of the Partnership
in such manner as it determines in its discretion. If, after making the
allocations of Unrealized Gain and Unrealized Loss as set forth above in this
Section 5.5(d)(iii), the Capital Account of each Partner with respect to each
Series A Conversion Unit received upon such conversion of the Series A Preferred
Unit is less than the Per Unit Capital Amount for a then Outstanding Initial
Common Unit, then Capital Account balances shall be reallocated between the
Partners holding Common Units (other than Series A Conversion Units) and
Partners holding Series A Conversion Units so as to cause the Capital Account of
each Partner holding a Series A Conversion Unit to equal, on a per Unit basis
with respect to each such Series A Conversion Unit, the Per Unit Capital Amount
for a then Outstanding Initial Common Unit.

 

Section 16.06                     Issuances of Additional Partnership Interests.

 

(a)                                 Subject to Section 5.7 and
Section 5.11(b)(iii), the Partnership may issue additional Partnership Interests
and Derivative 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 5.6(a) may be
issued in one or more classes, or one or more series of any such classes, with
such designations, preferences, rights, powers and duties (which may be senior
to existing classes and series of Partnership 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; (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 rights, preferences and privileges of such
Partnership Interest.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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(c)                                  The General Partner shall take all actions
that it determines to be necessary or appropriate in connection with (i) each
issuance of Partnership Interests and Derivative Partnership Interests pursuant
to this Section 5.6, including Common Units issued in connection with the
Deferred Issuance, (ii) the conversion of the Combined Interest into Units
pursuant to the terms of this Agreement, (iii) the issuance of Common Units
pursuant to Section 5.10, (iv) reflecting admission of such additional Limited
Partners in the Partnership Register as the Record Holders of such Limited
Partner Interests and (v) all additional issuances of Partnership Interests and
Derivative Partnership Interests.  The General Partner shall determine the
relative rights, powers and duties of the holders of the Units or other
Partnership Interests or Derivative 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 Derivative Partnership Interests or in connection with the
conversion of the Combined Interest into Units pursuant to the terms of this
Agreement, including compliance with any statute, rule, regulation or guideline
of any federal, state or other governmental agency or any National Securities
Exchange on which the Units or other Partnership Interests are listed or
admitted to trading.

 

(d)                                 No fractional Units shall be issued by the
Partnership.

 

Section 16.07                     Limited Preemptive Right.  Except as provided
in this Section 5.7 and in Section 5.2 and 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.  Other than with respect to the issuance of Partnership Interests in
connection with the Initial Public Offering, the General Partner shall have the
right, which it may from time to time assign in whole or in part to any of its
Affiliates, to purchase Partnership Interests from the Partnership whenever, and
on the same terms that, the Partnership issues Partnership Interests to Persons
other than the General Partner and its Affiliates, to the extent necessary to
maintain the Percentage Interests of the General Partner and its Affiliates
equal to that which existed immediately prior to the issuance of such
Partnership Interests. The determination by the General Partner to exercise (or
refrain from exercising) its right pursuant to the immediately preceding
sentence shall be a determination made in its individual capacity.

 

Section 16.08                     Splits and Combinations.

 

(a)                                 Subject to Section 5.8(e),
Section 5.11(b)(v)(E), Section 6.6 and Section 6.9 (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 Unit basis or stated as a number
of Units 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

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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to such Record Date to each Record Holder as of a date not less than 10 days
prior to the date of such notice (or such shorter periods as required by
applicable law).  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)                                  If a Pro Rata distribution of Partnership
Interests, or a subdivision or combination of Partnership Interests, is made as
contemplated in this Section 5.8, the number of General Partner Units
constituting the Percentage Interest of the General Partner (as determined
immediately prior to the Record Date for such distribution, subdivision or
combination) shall be appropriately adjusted as of the date of payment of such
distribution, or the effective date of such subdivision or combination, to
maintain such Percentage Interest of the General Partner.

 

(d)                                 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
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, the Partnership shall require, as a
condition to the delivery to a Record Holder of Partnership Interests
represented by Certificates, the surrender of any Certificate held by such
Record Holder immediately prior to such Record Date.

 

(e)                                  The Partnership shall not issue fractional
Units or fractional General Partner Units upon any distribution, subdivision or
combination of Units.  If a distribution, subdivision or combination of Units
would result in the issuance of fractional Units and General Partner Units but
for the provisions of Section 5.6(d) and this Section 5.8(e), each fractional
Unit and General Partner Unit shall be rounded to the nearest whole Unit or
General Partner Unit (with fractional Units or General Partner Units equal to or
greater than a 0.5 Unit or General Partner Unit being rounded to the next higher
Unit or General Partner Unit).

 

Section 16.09                     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 Sections 17-303, 17-607 or 17-804 of the
Delaware Act.

 

Section 16.10                     Issuance of Common Units in Connection with
Reset of Incentive Distribution Rights.

 

(a)                                 Subject to the provisions of this
Section 5.10, 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(e) for each of the four most recently completed Quarters and the
amount of each such distribution did not exceed

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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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 5.10(e) and, in connection therewith, the holder or holders of the
Incentive Distribution Rights will become entitled to receive their respective
proportionate share of a number of Common Units (the “IDR Reset Common Units”)
derived by dividing (i) the average amount of the aggregate cash distributions
made by the Partnership for the two full Quarters immediately preceding the
giving of the Reset Notice 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 (the number of Common Units determined by such quotient is
referred to herein as the “Aggregate Quantity of IDR Reset Common Units”).  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 preceding
sentence have been satisfied.  Upon the issuance of such IDR Reset Common Units,
the Partnership will issue to the General Partner that number of additional
General Partner Units equal to the product of (x) the quotient obtained by
dividing (A) the Percentage Interest of the General Partner immediately prior to
such issuance by (B) a percentage equal to 100% less such Percentage Interest by
(y) the number of such IDR Reset Common Units, and the General Partner shall not
be obligated to make any additional Capital Contribution to the Partnership in
exchange for such issuance.  The making of the IDR Reset Election in the manner
specified in this Section 5.10 shall cause the Minimum Quarterly Distribution
and the Target Distributions to be reset in accordance with the provisions of
Section 5.10(e) and, in connection therewith, the holder or holders of the
Incentive Distribution Rights will become entitled to receive IDR Reset Common
Units and the General Partner will become entitled to receive General Partner
Units on the basis specified above, without any further approval required by the
General Partner or the Unitholders other than as set forth in this
Section 5.10(a), at the time specified in Section 5.10(c) unless the IDR Reset
Election is rescinded pursuant to Section 5.10(d).

 

(b)                                 To exercise the right specified in
Section 5.10(a), 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 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 Quantity of IDR Reset
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 General Partner Units on the fifteenth 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

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

51

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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 5.10 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, with the approval of the Conflicts
Committee, 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 IDR Reset
Common Units or other Partnership Interests pursuant to this Section 5.10 such
that (i) the Minimum Quarterly Distribution shall be reset to equal the average
cash distribution amount per Common Unit for the two Quarters immediately prior
to the Partnership’s receipt of the Reset Notice (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 5.10(a), the Capital Account maintained with respect
to the Incentive Distribution Rights will (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, as to any remaining balance in such Capital Account, be
retained by the holder of the Incentive Distribution Rights.  If there is not
sufficient capital 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 5.10(f), the IDR
Reset Common Units shall be subject to Sections 6.1(d)(x)(A) and (B).

 

Section 16.11                     Establishment of Series A Preferred Units.

 

(q)                                 General. There is hereby created a class of
Units designated as “Series A Perpetual Convertible Preferred Units” (such
Series A Perpetual Convertible Preferred Units, together with any Series A PIK
Units, the “Series A Preferred Units”), with the designations,

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

52

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preferences and relative, participating, optional or other special rights,
privileges, powers, duties and obligations as set forth in this Section 5.11 and
elsewhere in this Agreement. A total of [    ] Series A Perpetual Convertible
Preferred Units shall be issued by the Partnership on the Series A Issuance Date
pursuant to the terms and conditions of the Series A Purchase Agreement, and the
Partnership may issue additional Series A Preferred Units in the form of
Series A PIK Units from time to time in accordance with this Agreement. Each
Series A Preferred Unit shall constitute a “security” within the meaning of, and
governed by, (i) Article 8 of the Uniform Commercial Code (including
Section 8-102(a)(15) thereof) as in effect from time to time in the State of
Delaware, and (ii) the corresponding provisions of the Uniform Commercial Code
of any other applicable jurisdiction that now or hereafter substantially
includes the 1994 revisions to Article 8 thereof as adopted by the American Law
Institute and the National Conference of Commissioners on Uniform State Laws and
approved by the American Bar Association on February 14, 1995.

 

(r)                                    Rights of Series A Preferred Units. The
Series A Preferred Units shall have the following rights, preferences and
privileges and the Series A Preferred Unitholders shall be subject to the
following duties and obligations:

 

(i)                                     Distributions.

 

(A)                               Commencing with the Quarter ending on
December 31, 2017 and continuing through the applicable Series A Conversion
Date, subject to Section 5.11(b)(i)(D), each Record Holder of Series A Preferred
Units as of an applicable Record Date for each Quarter shall be entitled to
receive, in respect of each Series A Preferred Unit held by such Record Holder,
cumulative distributions in respect of such Quarter equal to the sum of (1) the
Series A Distribution Amount for such Quarter and (2) any Series A Unpaid
Distributions with respect to such Series A Preferred Unit (collectively, the
“Series A Quarterly Distribution”). With respect to any Quarter (or portion
thereof for which a Series A Quarterly Distribution is due) ending on or prior
to [     ], 2019(5) (the “Series A PIK Distribution Period”), such Series A
Quarterly Distribution shall be paid, as determined by the General Partner, in
cash, in-kind in the form of additional Series A Perpetual Convertible Preferred
Units (“Series A PIK Units”) or in a combination thereof, in an amount equal to
the Series A Distribution Amount on all Outstanding Series A Preferred Units.
For any Quarter ending after the Series A PIK Distribution Period, all Series A
Quarterly Distributions shall be paid in cash. If, during the Series A PIK
Distribution Period, the General Partner elects to pay all or any portion of a
Series A Quarterly Distribution in Series A PIK Units, the number of Series A
PIK Units to be issued in connection with such Series A Quarterly Distribution
shall equal (x) the applicable Series A Distribution Amount (or portion thereof
to be paid in Series A PIK Units) divided by (y) the Series A Issue Price;
provided, however, that fractional Series A PIK Units shall not be issued to any
Person (each fractional Series A PIK Unit shall be rounded to the

 

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(5)  NTD: The last day of the eighth quarter after the Closing Date (including,
as the first such quarter, the quarter in which the Closing Date occurs).

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

53

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nearest whole Series A PIK Unit (and a 0.5 Series A PIK Unit shall be rounded to
the next higher Series A PIK Unit)). Each Series A Quarterly Distribution shall
be payable quarterly by no later than the earlier of 60 days after the end of
the applicable Quarter and the payment date of distributions, if any, on any
Series A Parity Securities and Series A Junior Securities (each such payment
date, a “Series A Distribution Payment Date”). If the General Partner
establishes an earlier Record Date for any distribution to be made by the
Partnership on other Partnership Interests in respect of any Quarter, then the
Record Date established pursuant to this Section 5.11(b)(i) for a Series A
Quarterly Distribution in respect of such Quarter shall be the same Record Date.
For the avoidance of doubt, (aa) the Series A Preferred Units shall not be
entitled to any distributions made pursuant to Section 6.4 and (bb) unless
otherwise expressly provided herein, all references in this Agreement to
Series A Preferred Units shall include all Series A PIK Units Outstanding as of
the date of such determination.

 

(B)                               If the Partnership fails to pay in full the
Series A Distribution Amount of any Series A Quarterly Distribution (in cash,
Series A PIK Units or a combination thereof) when due for any Quarter (or
portion thereof for which a Series A Quarterly Distribution is due) during the
Series A PIK Distribution Period, then the Series A Preferred Unitholders
entitled to such unpaid Series A Quarterly Distribution shall be deemed to have
nonetheless received such Series A Quarterly Distribution in the form of
Series A PIK Units and, accordingly, shall have all other rights under this
Agreement as if such Series A PIK Units had, in fact, been issued on the
applicable Series A Distribution Payment Date. If the Partnership fails to pay
in full the Series A Distribution Amount of any Series A Quarterly Distribution
in accordance with Section 5.11(b)(i)(A) when due for any Quarter following the
Series A PIK Distribution Period, then from and after the first date of such
failure and continuing until such failure is cured by payment in full in cash of
all such arrearages, (1) the amount of such unpaid cash distributions (on a per
Series A Preferred Unit basis, “Series A Unpaid Distributions”) unless and until
paid will accrue and accumulate from and including the first day of the Quarter
immediately following the Quarter in respect of which the first such payment is
due until all such Series A Unpaid Distributions are paid in full and (2) the
Partnership shall not be permitted to, and shall not, declare or make, any
distributions, redemptions or repurchases in respect of any Series A Junior
Securities or Series A Parity Securities (including, for the avoidance of doubt,
with respect to the Quarter for which the Partnership first failed to pay in
full the Series A Distribution Amount of any Series A Quarterly Distribution in
cash when due); provided, however, that distributions may be declared and paid
on the Series A Preferred Units and the Series A Parity Securities so long as
such distributions are declared and paid Pro Rata so that amounts of
distributions declared per Series A Preferred Unit and Series A Parity Security
shall in all cases bear to each other the same ratio that accrued and
accumulated distributions per Series A Preferred Unit and Series A Parity
Security bear to each other.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

54

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(C)                               The aggregate Series A Distribution Amount
(excluding any portion paid in Series A PIK Units) shall be paid out of cash and
cash equivalents that is deemed to be Operating Surplus for the applicable
Quarter. To the extent that any portion of a Series A Quarterly Distribution to
be paid in cash with respect to any Quarter exceeds the amount of cash and cash
equivalents that is deemed to be Operating Surplus for such Quarter, the amount
of cash equal to the cash and cash equivalents that is deemed to be Operating
Surplus for such Quarter will be paid to the Series A Preferred Unitholders, Pro
Rata, and the balance of such Series A Quarterly Distribution shall be unpaid
and shall constitute an arrearage and shall accrue and accumulate as set forth
in Section 5.11(b)(i)(B).

 

(D)                               Notwithstanding anything in this
Section 5.11(b)(i) to the contrary, with respect to any Series A Preferred Unit
that is converted into a Common Unit, (1) with respect to a distribution to be
made to Record Holders as of the Record Date immediately preceding such
conversion, the Record Holder of such Series A Preferred Unit as of such Record
Date shall be entitled to receive such distribution in respect of such Series A
Preferred Unit on the corresponding Series A Distribution Payment Date, but
shall not be entitled to receive such distribution in respect of the Common
Units into which such Series A Preferred Unit was converted on the payment date
thereof, and (2) with respect to a distribution to be made to Record Holders as
of any Record Date following such conversion, the Record Holder of the Series A
Conversion Units into which such Series A Preferred Unit was converted as of
such Record Date shall be entitled to receive such distribution in respect of
such Series A Conversion Units on the payment date thereof, but shall not be
entitled to receive such distribution in respect of such Series A Preferred Unit
on the corresponding Series A Distribution Payment Date. For the avoidance of
doubt, if a Series A Preferred Unit is converted into Series A Conversion Units
pursuant to the terms hereof following a Record Date but prior to the
corresponding Series A Distribution Payment Date, then the Record Holder of such
Series A Preferred Unit as of such Record Date shall nonetheless remain entitled
to receive on the Series A Distribution Payment Date a distribution in respect
of such Series A Preferred Unit pursuant to Section 5.11(b)(i)(A) and, until
such distribution is received, Section 5.11(b)(i)(B) shall continue to apply.

 

(E)                                Notwithstanding anything in Article VI to the
contrary, the holders of the Incentive Distribution Rights shall not be entitled
to receive distributions or allocations of income or gain that correspond or
relate to amounts distributed or allocated to Unitholders in respect of Series A
Preferred Units.

 

(F)                                 When any Series A PIK Units are payable to a
Series A Preferred Unitholder pursuant to this Section 5.11 the Partnership
shall issue the Series A PIK Units to such holder in accordance with
Section 5.11(b)(i)(A) (the date of issuance of such Series A PIK Units, the
“Series A PIK Payment Date”). On the Series A PIK Payment Date, the Partnership
shall have the option to (1)

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

55

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issue to such Series A Preferred Unitholder a certificate or certificates for
the number of Series A PIK Units to which such Series A Preferred Unitholder
shall be entitled, or (2) cause the Transfer Agent to make a notation in book
entry form in the books of the Partnership, and all such Series A PIK Units
shall, when so issued, be duly authorized, validly issued, fully paid and
non-assessable Limited Partner Interests, except as such non-assessability may
be affected by Sections 17-303, 17-607 or 17-804, of the Delaware Act, and shall
be free from preemptive rights and free of any lien, claim, rights or
encumbrances, other than those arising under the Delaware Act or this Agreement
or created by the holders thereof.

 

(G)                               For purposes of maintaining Capital Accounts,
if the Partnership issues one or more Series A PIK Units with respect to a
Series A Preferred Unit, (1) the Partnership shall be treated as distributing
cash with respect to such Series A Preferred Unit in an amount equal to the
Series A Issue Price of the Series A PIK Unit issued in payment of the Series A
Quarterly Distribution and (2) the holder of such Series A Preferred Unit shall
be treated as having contributed to the Partnership in exchange for such newly
issued Series A PIK Unit an amount of cash equal to the Series A Issue Price.

 

(ii)           Voting Rights.

 

(A)                               Except as provided in Section 5.11(b)(ii)(B),
the Outstanding Series A Preferred Units shall have voting rights that are
identical to the voting rights of the Common Units into which such Series A
Preferred Units would be converted at the then-applicable Series A Conversion
Rate (regardless of whether the Series A Preferred Units are then convertible),
and shall vote with the Common Units as a single class (including for purposes
of Section 7.9(a) and Section 11.1(b)), so that the Record Holder of each
Outstanding Series A Preferred Unit will be entitled to one vote for each Common
Unit into which such Series A Preferred Unit would be converted at the
then-applicable Series A Conversion Rate (regardless of whether the Series A
Preferred Units are then convertible) on each matter with respect to which each
Record Holder of a Common Unit is entitled to vote. Each reference in this
Agreement to a vote of Record Holders of Common Units shall be deemed to be a
reference to the Record Holders of Common Units and Series A Preferred Units,
voting together as a single class during any period in which any Series A
Preferred Units are Outstanding.

 

(B)                               Except as provided in Section 5.11(b)(ii)(C),
notwithstanding any other provision of this Agreement, in addition to all other
requirements imposed by Delaware law, and all other voting rights granted under
this Agreement, the affirmative vote of the Record Holders of the Series A
Required Voting Percentage shall be required for any amendment to this Agreement
or the Certificate of Limited Partnership (including by merger or otherwise or
any amendment contemplated by and made in accordance with Section 5.11(b)(iii))
that is adverse (other than in a de minimis manner) to any of

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

56

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the rights, preferences and privileges of the Series A Preferred Units. Without
limiting the generality of the preceding sentence, any amendment shall be deemed
to have such an adverse impact that is not de minimis if such amendment would:

 

(1)                                 reduce the Series A Distribution Amount,
change the form of payment of distributions on the Series A Preferred Units,
defer the date from which distributions on the Series A Preferred Units will
accrue, cancel any accrued and unpaid distributions on the Series A Preferred
Units or any interest accrued thereon (including any Series A Unpaid
Distributions, Series A Partial Period Distributions or Series A PIK Units), or
change the seniority rights of the Series A Preferred Unitholders as to the
payment of distributions in relation to the holders of any other class or series
of Partnership Interests;

 

(2)                                 reduce the amount payable or change the form
of payment to the Record Holders of the Series A Preferred Units upon the
voluntary or involuntary liquidation, dissolution or winding up, or sale of all
or substantially all of the assets, of the Partnership, or change the seniority
of the liquidation preferences of the Record Holders of the Series A Preferred
Units in relation to the rights of the holders of any other class or series of
Partnership Interests upon the liquidation, dissolution and winding up of the
Partnership; or

 

(3)                                 make the Series A Preferred Units redeemable
or convertible at the option of the Partnership other than as set forth herein.

 

(C)                               Notwithstanding anything to the contrary in
this Section 5.11(b)(ii), in no event shall the consent of the Series A
Preferred Unitholders, as a separate class, be required in connection with any
Series A Change of Control or Partnership Restructuring Event; provided,
however, that nothing in the foregoing shall limit the voting rights of any
Series A Preferred Unitholder in connection with any vote of Record Holders of
Common Units and Series A Preferred Units together as a single class that may be
required.

 

(D)                               Notwithstanding any other provision of this
Agreement, in addition to all other voting rights granted under this Agreement,
the Partnership shall not declare or pay any distribution from Capital Surplus
without the affirmative vote of the Record Holders of the Series A Required
Voting Percentage.

 

(iii)                               Issuances of Series A Senior Securities and
Series A Parity Securities. Other than issuances of Series A PIK Units, the
Partnership shall not, without the affirmative vote of the Record Holders of the
Series A Required Voting Percentage, issue any (A) Series A Senior Securities
(or amend the provisions of any class of Partnership Interests to make such
class of Partnership Interests a class of Series A Senior Securities),
(B) Series A Parity Securities (or amend the provisions of any class of

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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Partnership Interests to make such class of Partnership Interests a class of
Series A Parity Securities) or (C) Series A Preferred Units; provided, however,
that, without the consent of any holder of Outstanding Series A Preferred Units
(but without prejudice to their rights to vote on an as-converted basis to the
extent that the Common Units are entitled to vote on any such matter), the
Partnership may issue additional Series A Parity Securities at any time in an
amount not to exceed the greater of:

 

(1)                                 a number of Series A Parity Securities with
an aggregate purchase price of $300 million;

 

(2)                                 a number of Series A Parity Securities such
that, as of the date of issuance of such Series A Parity Securities, the
aggregate number of all Series A Parity Securities, together with the Series A
Preferred Units, in each case on an as-converted basis (or, if the Series A
Parity Securities are not convertible, assuming that such Series A Parity
Securities are convertible into a number of Common Units equal to (aa) the
aggregate purchase price of such Series A Parity Securities, divided by (bb) the
Average VWAP for the 30 Trading Day period ending on the date immediately
preceding the date of issuance of such Series A Parity Securities (such Common
Units, the “Series A Parity Equivalent Units”)), equals no more than 15% of all
Outstanding Common Units, (including as Outstanding for such purposes, (I) any
Common Units issuable in respect of the Series A Preferred Units at the
then-applicable Series A Conversion Rate (regardless of whether the Series A
Preferred Units are then convertible), (II) any Common Units issuable in respect
of any Series A Parity Securities (including any warrants issued in connection
with Series A Parity Securities) at the initial or then-applicable conversion
rate (regardless of whether such Series A Parity Securities are then
convertible), as applicable, (III) any Common Units issuable in respect of any
outstanding warrants or options issued by the Partnership, (IV) any Series A
Parity Equivalent Units and (V) any Common Units that would otherwise be
excluded by operation of the definition of the term “Outstanding”); and

 

(3)                                 if the number of Series A Preferred Units
then Outstanding has an aggregate Series A Issue Price of less than $100
million, such number of Series A Parity Securities as determined by the General
Partner.

 

Notwithstanding anything in the foregoing to the contrary, subject to
Section 5.11(b)(v)(E), the Partnership may, without any vote of the holders of
Outstanding Series A Preferred Units (but without prejudice to their rights to
vote on an as-converted basis to the extent that the Common Units are entitled
to vote on any such matter), create (by reclassification or otherwise) and issue
Series A Junior Securities in an unlimited amount.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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(iv)                              Legends. Unless otherwise directed by the
General Partner, each book entry or Certificate evidencing a Series A Preferred
Unit shall bear a restrictive notation in substantially the following form:

 

THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF PHILLIPS 66 PARTNERS
LP 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 AUTHORITY
WITH JURISDICTION OVER SUCH TRANSFER, (B) TERMINATE THE EXISTENCE OR
QUALIFICATION OF PHILLIPS 66 PARTNERS LP UNDER THE LAWS OF THE STATE OF
DELAWARE, OR (C) CAUSE PHILLIPS 66 PARTNERS LP TO BE TREATED AS AN ASSOCIATION
TAXABLE AS A CORPORATION OR OTHERWISE TO BE TAXED AS AN ENTITY FOR FEDERAL
INCOME TAX PURPOSES (TO THE EXTENT NOT ALREADY SO TREATED OR TAXED).

 

THE GENERAL PARTNER OF PHILLIPS 66 PARTNERS LP MAY IMPOSE RESTRICTIONS ON THE
TRANSFER OF THIS SECURITY IF IT DETERMINES, WITH THE ADVICE OF COUNSEL, THAT
SUCH RESTRICTIONS ARE NECESSARY OR ADVISABLE TO (I) AVOID A SIGNIFICANT RISK OF
PHILLIPS 66 PARTNERS LP 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 OF PHILLIPS 66 PARTNERS LP (OR ANY
CLASS OR CLASSES OR SERIES THEREOF).

 

THIS SECURITY IS SUBJECT TO ADDITIONAL RESTRICTIONS ON ITS TRANSFER PROVIDED IN
THE SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF PHILLIPS 66
PARTNERS LP, AS AMENDED, SUPPLEMENTED OR RESTATED FROM TIME TO TIME. COPIES OF
SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER
OF RECORD OF THIS SECURITY TO THE SECRETARY OF THE GENERAL PARTNER AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE PARTNERSHIP. 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 TO TRADING.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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(v)                                 Conversion.

 

(A)                               At the Option of the Series A Preferred
Unitholders. Beginning with the earlier of (1) [   ](6), 2019 and
(2) immediately prior to the liquidation of the Partnership under Section 12.4,
the Series A Preferred Units owned by any Series A Preferred Unitholder shall be
convertible, in whole or in part, at any time and from time to time upon the
request of such Series A Preferred Unitholder, but not more than once per
Quarter by such Series A Preferred Unitholder (inclusive of any conversion by
such Series A Preferred Unitholder’s Affiliates, with each Series A Preferred
Unitholder and its Affiliates being entitled to a single conversion right per
Quarter), into a number of Common Units determined by multiplying the number of
Series A Preferred Units to be converted by (aa) in the case of clause
(1) above, the Series A Conversion Rate at such time and (bb) in the case of
clause (2) above, the Series A COC Conversion Rate; provided, however, that the
Partnership shall not be obligated to honor any such conversion request unless
such conversion will involve an aggregate number of Series A Preferred Units
with an underlying value of Common Units equal to or greater than $50 million
(taking into account and including any concurrent conversion requests by any
Affiliates of such Series A Preferred Unitholder) based on the Series A Issue
Price (or a lesser underlying value if such conversion will result in the
conversion of all of the Series A Preferred Units held by such Series A
Preferred Unitholder and its Affiliates). Immediately upon the issuance of
Series A Conversion Units as a result of any conversion of Series A Preferred
Units hereunder, subject to Section 5.11(b)(i)(D), all rights of the Series A
Converting Unitholder with respect to such Series A Preferred Units shall cease,
including any further accrual of distributions, and such Series A Converting
Unitholder thereafter shall be treated for all purposes as the owner of Common
Units. Fractional Common Units shall not be issued to any Person pursuant to
this Section 5.11(b)(v)(A) (each fractional Common Unit shall be rounded to the
nearest whole Common Unit (and a 0.5 Common Unit shall be rounded to the next
higher Common Unit)).

 

(B)                               At the Option of the Partnership. At any time
after [   ](7), 2020, the Partnership shall have the option, at any time and
from time to time, but not more than once per Quarter, to convert all or any
portion of the Series A Preferred Units then Outstanding into a number of Common
Units determined by multiplying the number of Series A Preferred Units to be
converted by the Series A Mandatory Conversion Rate at such time. Fractional
Common Units shall not be issued to any Person pursuant to this
Section 5.11(b)(v)(B) (each fractional Common Unit shall be rounded to the
nearest whole Common Unit (and a 0.5 Common Unit shall be rounded to the next
higher Common Unit)). Notwithstanding the foregoing, in order for the
Partnership to exercise such option:

 

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(6)  NTD: Second anniversary of the Closing Date

 

(7)  NTD: Third anniversary of the Closing Date

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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(1)                                 the Common Units must be listed or admitted
for trading on a National Securities Exchange;

 

(2)                                 the Average VWAP for the 20 Trading Day
period immediately preceding the Series A Mandatory Conversion Notice Date must
be greater than $[73.2645](8);

 

(3)                                 the average daily trading volume of the
Common Units on the principal National Securities Exchange on which the Common
Units are then listed or admitted to trading must exceed 100,000 Common Units
(as such amount may be adjusted to reflect any Unit split, combination or
similar event) for the 20 Trading Day period immediately preceding the Series A
Mandatory Conversion Notice Date; and

 

(4)                                 the Partnership must have an effective
registration statement on file with the Commission covering resales of the
underlying Common Units to be received by the applicable Series A Preferred
Unitholders upon any such conversion;

 

provided, however, that the Partnership shall not be entitled to exercise such
option unless such conversion will involve an aggregate number of Series A
Preferred Units with an underlying value of Common Units equal to or greater
than $50 million based on the Series A Issue Price (or a lesser underlying value
if such conversion will result in the conversion of all of the then Outstanding
Series A Preferred Units).  Any such conversion shall be allocated among the
Series A Preferred Unitholders on a Pro Rata basis or on such other basis as may
be agreed upon by all Series A Preferred Unitholders.

 

Nothing in this Section 5.11(b)(v)(B), however, is intended to limit or prevent
a Series A Preferred Unitholder from electing to convert its Series A Preferred
Units into Common Units in accordance with Section 5.11(b)(v)(A), and the
Partnership shall not have any right to convert Series A Preferred Units from a
Series A Preferred Unitholder to the extent such Series A Preferred Unitholder
delivers a valid Series A Conversion Notice covering all of the Series A
Preferred Units that are the subject of the applicable Series A Mandatory
Conversion Notice to the Partnership prior to the Series A Conversion Date in
respect of the applicable Series A Mandatory Conversion Notice.

 

(C)                               Conversion Notice.

 

(1)                                 To convert Series A Preferred Units into
Common Units pursuant to Section 5.11(b)(v)(A), a Series A Converting Unitholder
shall give written notice (a “Series A

 

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(8)  NTD: 135% of the Series A Issue Price

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

61

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Conversion Notice,” and the date such notice is received, a “Series A Conversion
Notice Date”) to the Partnership stating that such Series A Preferred Unitholder
elects to so convert Series A Preferred Units pursuant to Section 5.11(b)(v)(A),
the number of Series A Preferred Units to be converted and the Person to whom
the applicable Series A Conversion Units should be issued.

 

(2)                                 To convert Series A Preferred Units into
Common Units pursuant to Section 5.11(b)(v)(B), the Partnership shall give
written notice (a “Series A Mandatory Conversion Notice,” and the date such
notice is sent by the Partnership, a “Series A Mandatory Conversion Notice
Date”) to each Record Holder of Series A Preferred Units stating that the
Partnership elects to so convert Series A Preferred Units pursuant to
Section 5.11(b)(v)(B) and the number of Series A Preferred Units to be so
converted. The applicable Series A Conversion Units shall be issued in the name
of the Record Holder of such Series A Preferred Units.

 

(D)                               Timing. If a Series A Conversion Notice is
delivered by a Series A Preferred Unitholder to the Partnership or a Series A
Mandatory Conversion Notice is delivered by the Partnership to a Series A
Preferred Unitholder, each in accordance with Section 5.11(b)(v)(C), the
Partnership shall issue the applicable Series A Conversion Units no later than
five Business Days after the Series A Conversion Notice Date or 10 Business Days
after the Series A Mandatory Conversion Notice Date, as the case may be, occurs
(any date of issuance of Common Units upon conversion of Series A Preferred
Units pursuant to this Section 5.11(b)(v) or Section 5.11(b)(vi), a “Series A
Conversion Date”); provided, that the Series A Conversion Date in the case of a
Series A Mandatory Conversion shall in no event be prior to the tenth Business
Day following the Series A Mandatory Conversion Notice Date. On the Series A
Conversion Date, the Partnership shall instruct, and shall use its commercially
reasonable efforts to cause, its Transfer Agent to electronically transmit the
Series A Conversion Units issuable upon conversion to such Series A Preferred
Unitholder (or designated recipient(s)), by crediting the account of the
Series A Preferred Unitholder (or designated recipient(s)) through its Deposit
Withdrawal Agent Commission system. The parties agree to coordinate with the
Transfer Agent to accomplish this objective. Subject to Section 5.11(b)(i)(D),
upon issuance of Series A Conversion Units to the Series A Converting Unitholder
(or its designated recipient(s)), all rights of such Series A Converting
Unitholder with respect to the converted Series A Preferred Units shall cease,
and such Series A Converting Unitholder shall be treated for all purposes as the
Record Holder of such Series A Conversion Units.

 

(E)                                Distributions, Combinations, Subdivisions and
Reclassifications by the Partnership. If, after the Series A Issuance Date, the

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

62

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Partnership (1) makes a distribution on the Common Units payable in Common Units
or other Partnership Interests, (2) subdivides or splits its outstanding Common
Units into a greater number of Common Units, (3) combines or reclassifies the
Common Units into a lesser number of Common Units, (4) issues by
reclassification of its Common Units any Partnership Interests (including any
reclassification in connection with a merger, consolidation or business
combination in which the Partnership is the surviving Person), (5) effects a Pro
Rata repurchase of Common Units, in each case other than in connection with a
Series A Change of Control (which shall be governed by Section 5.11(b)(vi)),
(6) issues to holders of Common Units, in their capacity as holders of Common
Units, rights, options or warrants entitling them to subscribe for or purchase
Common Units at less than the market value thereof, (7) distributes to holders
of Common Units evidences of indebtedness, Partnership Interests (other than
Common Units) or other assets (including securities, but excluding any
distribution referred to in clause (1) above, any rights or warrants referred to
in clause (6) above, any consideration payable in connection with a tender or
exchange offer made by the Partnership or any of its Subsidiaries and any
distribution of Units or any class or series, or similar Partnership Interest,
of or relating to a Subsidiary or other business unit of the Partnership in the
case of certain spin-off transactions described below), or (8) consummates a
spin-off, where the Partnership makes a distribution to all holders of Common
Units consisting of Units of any class or series, or similar equity interests
of, or relating to, a Subsidiary or other business unit of the Partnership, then
the Series A Conversion Rate, the Series A Mandatory Conversion Rate, the
Series A Redemption Price and the dollar amount set forth in
Section 5.11(b)(v)(B)(2), in each case, in effect at the time of the Record Date
for such distribution or the effective date of any such other transaction shall
be proportionately adjusted: (aa) in respect of clauses (1) through (4) above,
so that the conversion of the Series A Preferred Units after such time shall
entitle each Series A Preferred Unitholder to receive the aggregate number of
Common Units (or any Partnership Interests into which such Common Units would
have been combined, consolidated, merged or reclassified, as applicable) that
such Series A Preferred Unitholder would have been entitled to receive if the
Series A Preferred Units had been converted into Common Units immediately prior
to such Record Date or effective date, as the case may be, (bb) in respect of
clauses (5) through (8) above, in the reasonable discretion of the General
Partner to appropriately ensure that the Series A Preferred Units are
convertible into an economically equivalent number of Common Units after taking
into account the event described in clauses (5) through (8) above, and (cc) in
addition to the foregoing, in the case of a merger, consolidation or business
combination in which the Partnership is the surviving Person, the Partnership
shall provide effective provisions to ensure that the provisions in this
Section 5.11 relating to the Series A Preferred Units shall not be abridged or
amended and that the Series A Preferred Units shall thereafter retain the same
powers, economic rights, preferences and relative participating, optional and
other special rights, and the qualifications, limitations and restrictions
thereon, that the Series A Preferred Units had immediately prior to such

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

63

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transaction or event and the Series A Conversion Rate, the Series A Mandatory
Conversion Rate, the Series A Redemption Price and the dollar amount set forth
in Section 5.11(b)(v)(B)(2), and any other terms of the Series A Preferred Units
that the General Partner in its reasonable discretion determines require
adjustment to achieve the economic equivalence described below, shall be
proportionately adjusted to take into account any such subdivision, split,
combination or reclassification. An adjustment made pursuant to this
Section 5.11(b)(v)(E) shall become effective immediately after the Record Date,
in the case of a distribution, and shall become effective immediately after the
applicable effective date, in the case of a subdivision, combination,
reclassification (including any reclassification in connection with a merger,
consolidation or business combination in which the Partnership is the surviving
Person) or split. Such adjustment shall be made successively whenever any event
described above shall occur.

 

(F)                                 No Adjustments for Certain Items.
Notwithstanding any of the other provisions of this Section 5.11(b)(v), no
adjustment shall be made to the Series A Conversion Rate or the Series A Issue
Price pursuant to Section 5.11(b)(v)(E) as a result of any of the following:

 

(1)                                 any cash distributions made to holders of
the Common Units (unless made in breach of Section 5.11(b)(i)(B));

 

(2)                                 any issuance of Partnership Interests in
exchange for cash;

 

(3)                                 any grant of Common Units or options,
warrants or rights to purchase or receive Common Units or the issuance of Common
Units upon the exercise or vesting of any such options, warrants or rights in
respect of services provided to or for the benefit of the Partnership or its
Subsidiaries, under compensation plans and agreements approved by the General
Partner (including any long-term incentive plan);

 

(4)                                 any issuance of Common Units as all or part
of the consideration to effect (aa) the closing of any acquisition by the
Partnership of assets or equity interests of a third party in an arm’s-length
transaction, (bb) the closing of any acquisition by the Partnership of assets or
equity interests of Phillips 66 Company or any of its Affiliates or (cc) the
consummation of a merger, consolidation or other business combination of the
Partnership with another entity in which the Partnership survives and the Common
Units remain Outstanding to the extent any such transaction set forth in clause
(aa), (bb) or (ccc) above is approved by the General Partner; or

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

64

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(5)                                 the issuance of Common Units upon conversion
of the Series A Preferred Units or any Series A Parity Securities.

 

Notwithstanding anything in this Agreement to the contrary, (x) whenever the
issuance of a Partnership Interest or other event would require an adjustment to
the Series A Conversion Rate under one or more provisions of this Agreement,
only one adjustment shall be made to the Series A Conversion Rate in respect of
such issuance or event and (y) unless otherwise determined by the General
Partner, no adjustment to the Series A Conversion Rate or the Series A Issue
Price shall be made with respect to any distribution or other transaction
described in Section 5.11(b)(v)(E) if the Series A Preferred Unitholders are
entitled to participate in such distribution or transaction as if they held a
number of Common Units issuable upon conversion of the Series A Preferred Units
immediately prior to such event at the then applicable Series A Conversion Rate,
without having to convert their Series A Preferred Units.

 

(vi)                              Series A Change of Control.

 

(A)                               Subject to Section 5.11(b)(v)(B), in the event
of a Series A Cash Change of Control, the Outstanding Series A Preferred Units
shall be automatically converted, without requirement of any action of the
Series A Preferred Unitholders, into Common Units at the Series A COC Conversion
Rate immediately prior to the closing of the applicable Series A Change of
Control.

 

(B)                               Subject to Section 5.11(b)(v)(B), at least 10
Business Days prior to consummating a Series A Change of Control (other than a
Series A Cash Change of Control), the Partnership shall provide written notice
thereof to the Series A Preferred Unitholders. Subject to Section 5.11(b)(v)(B),
if a Series A Change of Control (other than a Series A Cash Change of Control)
occurs, then each Series A Preferred Unitholder, with respect to all but not
less than all of its Series A Preferred Units, by notice given to the
Partnership within 10 Business Days of the date the Partnership provides written
notice of the execution of definitive agreements that provide for such Series A
Change of Control, shall be entitled to elect one of the following (with the
understanding that any Series A Preferred Unitholder who fails to timely provide
notice of its election to the Partnership shall be deemed to have elected the
option set forth in clause (1) below):

 

(1)                                 convert all, but not less than all, of such
Series A Preferred Unitholder’s Outstanding Series A Preferred Units into Common
Units at the then-applicable Series A Conversion Rate;

 

(2)                                 except as described below, if the
Partnership will not be the surviving Person upon the consummation of such

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

65

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Series A Change of Control or the Partnership will be the surviving Person but
its Common Units will no longer be listed or admitted to trading on a National
Securities Exchange, require the Partnership to use its commercially reasonable
efforts to deliver or to cause to be delivered to the Series A Preferred
Unitholders, in exchange for their Series A Preferred Units upon the
consummation of such Series A Change of Control, a security in the surviving
Person or the parent of the surviving Person that has rights, preferences and
privileges substantially similar to the Series A Preferred Units, including, for
the avoidance of doubt, the right to distributions equal in amount and timing to
those provided in Section 5.11(b)(i) and a conversion rate proportionately
adjusted such that the conversion of such security in the surviving Person or
parent of the surviving Person immediately following the consummation of such
Series A Change of Control would entitle the Record Holder to the number of
common securities of such Person (together with a number of common securities of
equivalent value to any other assets received by holders of Common Units in such
Series A Change of Control) which, if a Series A Preferred Unit had been
converted into Common Units immediately prior to such Series A Change of
Control, such Record Holder would have been entitled to receive immediately
following such Series A Change of Control (such security in the surviving
Person, a “Series A Substantially Equivalent Unit”); provided, however, that, if
the Partnership is unable to deliver or cause to be delivered Series A
Substantially Equivalent Units to any Series A Preferred Unitholder in
connection with such Series A Change of Control or if a Series A Change of
Control constitutes a Partnership Rollup Event, each Series A Preferred
Unitholder shall be entitled to (aa) require conversion or redemption of such
Series A Preferred Units in the manner contemplated by clause (1) or (4) of this
Section 5.11(b)(vi)(B) (at such holder’s election) or (bb) convert the Series A
Preferred Units held by such Series A Preferred Unitholder immediately prior to
such Series A Change of Control into a number of Common Units at a conversion
ratio equal to: the quotient of (I) (a) the product of (i) 160% multiplied by
(ii) the Series A Issue Price less (b) such Series A Preferred Unitholder’s Pro
Rata portion of the sum of (i) the aggregate cash distributions paid on all
Series A Preferred Units on or prior to the date of such Series A Change of
Control and (ii) an amount in cash equal to the aggregate Series A Quarterly
Distributions paid in Series A PIK Units (based on the value of such Series A
PIK Units on the applicable Series A PIK Payment Date) on or prior to the date
of such Series A Change of Control, divided by (II) an amount equal to 95% of
the Average VWAP for the 30 Trading Day period immediately preceding the
consummation of such Series A Change

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

66

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of Control; provided, however, that such ratio shall in no event exceed a value
per Series A Preferred Unit that exceeds (x) 120% of the Series A Issue Price,
in the case of a Series A Change of Control occurring prior to [     ], 2018(9);
(2) 130% of the Series A Issue Price, in the case of a Series A Change of
Control occurring on or after [     ], 2018(10) but prior to [     ], 2019(11);
and (3) 140% of the Series A Issue Price, in the case of a Series A Change of
Control occurring on or after [     ], 2019(12) but prior to [     ], 2020(13);

 

(3)                                 if the Partnership is the surviving Person
upon the consummation of such Series A Change of Control, continue to hold such
Series A Preferred Unitholder’s respective Series A Preferred Units; or

 

(4)                                 require the Partnership to redeem all (but
not less than all) of such Series A Preferred Unitholder’s respective Series A
Preferred Units at a price per Series A Preferred Unit equal to 101% of the sum
of (aa) the Series A Accrued Amount of such Series A Preferred Unit plus (bb)
any Series A Partial Period Distributions on such Series A Preferred Unit. Any
redemption pursuant to this clause (4) shall, as determined by the General
Partner, be paid in cash, in Common Units or in a combination thereof. If all or
any portion of such redemption is to be paid in Common Units, the Common Units
to be issued shall be valued at 95% of the Average VWAP for the 30 Trading Day
period ending on the fifth Trading Day immediately preceding the consummation of
such Series A Change of Control. No later than three Trading Days prior to the
consummation of such Series A Change of Control, the Partnership shall deliver a
written notice to the Record Holders of the Series A Preferred Units stating the
date on which the Series A Preferred Units will be redeemed and the
Partnership’s computation of the amount of cash or Common Units to be received
by the Record Holder upon redemption of such Series A Preferred Units. If the
Partnership shall be the surviving Person upon the consummation of such Series A
Change of Control, then no later than 10 Business Days following the
consummation of such Series A Change of Control, the Partnership

 

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(9)  NTD: First anniversary of the Closing Date.

 

(10)  NTD: First anniversary of the Closing Date.

 

(11)  NTD: Second anniversary of the Closing Date.

 

(12)  NTD: Second anniversary of the Closing Date.

 

(13)  NTD: Third anniversary of the Closing Date.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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shall remit the applicable cash or Common Unit consideration to each Record
Holder of then Outstanding Series A Preferred Units entitled to receive such
cash or Common Unit consideration pursuant to this clause (4). If the
Partnership will not be the surviving Person upon the consummation of such
Series A Change of Control, then the Partnership shall remit the applicable cash
or Common Unit consideration to such Record Holders immediately prior to the
consummation of such Series A Change of Control. The Record Holders shall
deliver to the Partnership Certificates representing the Series A Preferred
Units, if any, as soon as practicable following such redemption. Record Holders
of the Series A Preferred Units shall retain all of the rights and privileges
thereof unless and until the consideration due to such Record Holders as a
result of such redemption is paid in full in cash, Common Units or a combination
of the foregoing, as applicable. After any such redemption, any such redeemed
Series A Preferred Unit shall no longer constitute an issued and Outstanding
Limited Partner Interest.

 

Notwithstanding the foregoing but subject to the proviso below and
Section 5.11(b)(v)(B), each Series A Preferred Unitholder shall be entitled to
elect any of the options set forth in clauses (1) through (4) above with respect
to any Partnership Rollup Event; provided, however, that no such Series A
Preferred Unitholder shall be entitled to require the Partnership to deliver to
such Series A Preferred Unitholder a Series A Substantially Equivalent Unit
pursuant to clause (2) above.

 

(vii)                           Restrictions on Transfers of Series A Preferred
Units.

 

(A)                               Notwithstanding any other provision of this
Section 5.11(b)(vii) (other than the restriction on transfers to a Person that
is not a U.S. resident individual or an entity that is not treated as a U.S.
corporation or partnership set forth in Section 5.11(b)(vii)(B)), subject to
Section 4.8, each Series A Preferred Unitholder shall be permitted to transfer
any Series A Preferred Units owned by such Series A Preferred Unitholder to any
of its respective Affiliates or to any Series A Preferred Unitholder.

 

(B)                               Without the prior written consent of the
General Partner, except as specifically provided in the Series A Purchase
Agreement or this Agreement, each Series A Preferred Unitholder shall not:
(1) prior to [   ], 2018(14), offer, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any of its

 

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(14)  NTD: First anniversary of the Closing Date.

 

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Series A Preferred Units; (2) prior to [   ], 2019(15), directly or indirectly
engage in any short sales or other derivative or hedging transactions with
respect to the Series A Preferred Units or Common Units that are designed to, or
that might reasonably be expected to, result in the transfer to another Person,
in whole or in part, any of the economic consequences of ownership of any
Series A Preferred Units; (3) transfer any Series A Preferred Units to any
non-U.S. resident individual, non-U.S. corporation or partnership, or any other
non-U.S. entity, including any foreign governmental entity, including by means
of any swap or other transaction or arrangement that transfers or that is
designed to, or that might reasonably be expected to, result in the transfer to
another, in whole or in part, any of the economic consequences of ownership of
any Series A Preferred Units, regardless of whether any transaction described
above is to be settled by delivery of Series A Preferred Units, Common Units or
other securities, in cash or otherwise (provided, however, that the foregoing
clause (3) shall not apply if, prior to any such transfer or arrangement, such
individual, corporation, partnership or other entity establishes, to the
satisfaction of the Partnership, that it is entitled to a complete exemption
from tax withholding, including under Code Sections 1441, 1442, 1445 and 1471
through 1474, and the Treasury regulations thereunder); or (4) effect any
transfer of Series A Preferred Units or Series A Conversion Units in a manner
that violates the terms of this Agreement; provided, however, that any Series A
Preferred Unitholder may at any time on and after the Series A Issuance Date,
pledge all or any portion of its Series A Preferred Units to any holders of
obligations owed by such Series A Preferred Unitholder, including to the trustee
for, or agent or representative of, such Series A Preferred Unitholder, and, in
each case, as applicable, subject to clauses (3) and (4) above, any such pledge
and any foreclosure, sale or other remedy exercised pursuant to the pledge
thereon and/or subsequent transfer by any such pledgee on any such pledged
Series A Preferred Units shall not be considered a violation or breach of this
Section 5.11(b)(vii)(B). Notwithstanding the foregoing, any transferee (which,
for the avoidance of doubt, shall not include any pledgee of Series A Preferred
Units) receiving any Series A Preferred Units pursuant to this
Section 5.11(b)(vii)(B) (including upon any foreclosure upon pledged Series A
Preferred Units) shall be obligated to agree to the restrictions set forth in
this Section 5.11(b)(vii)(B) as a condition to such transfer. For the avoidance
of doubt, in no way shall this Section 5.11(b)(vii)(B) be deemed to restrict or
prohibit changes in the composition of any Series A Preferred Unitholder or its
partners or members so long as such changes in composition only relate to
changes in direct or indirect ownership of the Capital Stock of such Series A
Preferred Unitholder among such Series A Preferred Unitholder, its Affiliates
and the members or limited partners of any private equity fund vehicles that
indirectly own such Series A Preferred Unitholder.

 

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(15)  NTD: Second anniversary of the Closing Date.

 

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(C)                               Subject to Section 4.8 and compliance with any
applicable securities laws or other provisions of this Agreement, at any time
after [   ], 2018(16), the Series A Preferred Unitholders may freely transfer
their Series A Preferred Units, provided that each such transfer involves an
aggregate number of Series A Preferred Units with an underlying value of Common
Units equal to or greater than $50 million (taking into account and including
any concurrent transfers by any Affiliates of such Series A Preferred
Unitholder) based on the Series A Issue Price (or a lesser underlying value if
such transfer (1) will result in the transfer of all of the Series A Preferred
Units held by such holder and its Affiliates or (2) has been approved by the
General Partner); provided, however, that this Section 5.11(b)(vii)(C) shall not
eliminate, modify or reduce the obligations set forth in clauses (2), (3) or
(4) of Section 5.11(b)(vii)(B).

 

(D)                         Notwithstanding anything to the contrary in
Section 5.11(b)(vii)(B)(1), but subject to compliance with applicable securities
laws and this Agreement, including clauses (2), (3) and (4) of
Section 5.11(b)(vii)(B), (1) during the period beginning on the Series A
Issuance Date and ending on the date that is 60 days after the Series A Issuance
Date (the “Non-Affiliate Transfer Period”), the Series A Lead Purchaser and its
Affiliates may transfer Series A Preferred Units to one or more non-Affiliates
of the Series A Lead Purchaser and (2) during the period beginning on the
Series A Issuance Date and ending on the one year anniversary of the Series A
Issuance Date (the “Potential Additional Transfer Period”), any Initial Series A
Purchaser may transfer Series A Preferred Units to any current or future limited
partner of any investment entity managed or controlled by such Initial Series A
Purchaser’s current general partner or a general partner or manager that is (aa)
an Affiliate of such Initial Series A Purchaser and (bb) an endowment, pension
or insurance investment entity, in either case of clause (1) or (2), subject to
the consent of the General Partner as to the identity of the transferee (which
consent shall not be unreasonably withheld, conditioned or delayed); provided,
however, that (1) any transfer made pursuant to this
Section 5.11(b)(vii)(D) must consist of Series A Preferred Units in an amount
not less than $25 million based on the Series A Issue Price, (2) the aggregate
amount of Series A Preferred Units and rights to purchase Series A Preferred
Units transferred pursuant to this Section 5.11(b)(vii)(D) and Section 8.10 of
the Series A Purchase Agreement shall not be greater than $100 million based on
the Series A Issue Price and (3) a maximum of two transfers may be made pursuant
to this Section 5.11(b)(vii)(D) and Section 8.10 of the Series A Purchase
Agreement.

 

(viii)                        Optional Redemption.

 

(A)                               On and after [   ], 2020(17), the Partnership
shall have the option, at any time and from time to time, upon not less than 10
Business Days’

 

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(16)  NTD: First anniversary of the Closing Date.

 

(17)  NTD: Third anniversary of the Closing Date.

 

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written notice (each, a “Series A Redemption Notice”) to the Series A Preferred
Unitholders, to redeem all or any portion of the Series A Preferred Units then
Outstanding for a redemption price in cash equal to the Series A Redemption
Price per Series A Preferred Unit plus all Series A Unpaid Distributions with
respect thereto plus Series A Partial Period Distributions with respect thereto;
provided, however, that the Partnership shall not be entitled to exercise such
option unless (1) all of the conditions set forth in clauses (1) through (4) of
Section 5.11(b)(v)(B) have been satisfied and (2) such redemption will involve
an aggregate number of Series A Preferred Units with an underlying value of
Common Units equal to or greater than $50 million based on the Series A Issue
Price, or a lesser underlying value if such redemption will result in the
redemption of all of the then Outstanding Series A Preferred Units. If fewer
than all of the outstanding Series A Preferred Units are to be redeemed, any
such redemption shall be allocated among the Series A Preferred Unitholders on a
Pro Rata basis (as nearly as practicable without creating fractional Units) or
on such other basis as may be agreed upon by the Series A Preferred Unitholders.

 

(B)                               Each date fixed for redemption pursuant to
this Section 5.11(b)(viii) is referred to as a “Series A Redemption Date.”
Notice of any redemption will be irrevocable and will be provided by the
Partnership not less than 10 Business Days prior to the Series A Redemption
Date, addressed to the respective Record Holders of the Series A Preferred Units
to be redeemed at their respective addresses as they appear on the books and
records of the Partnership. No failure to give such notice or any defect therein
shall affect the validity of the proceedings for the redemption of any Series A
Preferred Units except as to any Series A Preferred Unitholder to whom the
Partnership has failed to give notice or except as to any Series A Preferred
Unitholder to whom notice was defective. In addition to any information required
by applicable law, such notice shall state: (1) the Series A Redemption Date;
(2) the Series A Redemption Price; and (3) whether all or less than all the
outstanding Series A Preferred Units are to be redeemed, the aggregate amount of
Series A Preferred Units to be redeemed and, if less than all Series A Preferred
Units held by such Series A Preferred Unitholder are to be redeemed, the
percentage of Series A Preferred Units that will be redeemed. The notice may
also require delivery of Certificates representing the Series A Preferred Units
to be redeemed, if any, together with certification as to the ownership of such
Series A Preferred Units.  Upon the redemption of Series A Preferred Units
pursuant to this Section 5.11(b)(viii), all rights of a Series A Preferred
Unitholder with respect to the redeemed Series A Preferred Units shall cease,
and such redeemed Series A Preferred Units shall cease to be Outstanding for all
purposes of this Agreement.

 

(C)                               Upon any redemption of Series A Preferred
Units pursuant to this Section 5.11(b)(viii), the Partnership shall pay the
Series A Redemption Price to the applicable Series A Preferred Unitholders by
wire transfer of immediately available funds to an account specified by each
such Series A

 

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Preferred Unitholder in writing to the General Partner as requested in the
notice of redemption.

 

(D)                               Except as provided in
Section 5.11(b)(vi)(B)(4), no Series A Preferred Unitholder shall have the right
to require the Partnership to redeem any Series A Preferred Units. Nothing in
this Section 5.11(b)(viii), however, is intended to limit or prevent a Series A
Preferred Unitholder from electing to convert its Series A Preferred Units into
Common Units in accordance with Section 5.11(b)(v), and the Partnership shall
not have any right to redeem Series A Preferred Units from a Series A Preferred
Unitholder to the extent such Series A Preferred Unitholder delivers a valid
Series A Conversion Notice covering all of the Series A Preferred Units that are
the subject of the applicable Series A Redemption Notice to the Partnership
prior to the Series A Redemption Date in respect of the applicable Series A
Redemption Notice.

 

(ix)                              Allocations.

 

(A)                               Notwithstanding anything to the contrary in
this Agreement, following any allocation made pursuant to Section 6.1(d) but
prior to making any allocation pursuant to another portion of Section 6.1, all
or any portion of any items of Partnership gross income or gain for the taxable
period shall be allocated to all Unitholders in respect of Series A Preferred
Units, Pro Rata, until the aggregate of such items allocated to such Unitholders
pursuant to this Section 5.11(b)(ix)(A) for the current and all previous taxable
periods since issuance of the Series A Preferred Units is equal to the sum of
(1) the aggregate amount of cash (but, for the avoidance of doubt, not Series A
PIK Units) distributed with respect to such Series A Preferred Units for the
current and previous taxable periods and (2) the aggregate Net Loss allocated to
the Unitholders in respect of Series A Preferred Units pursuant to
Section 5.11(b)(ix)(B) for the current and all previous taxable periods.
Notwithstanding anything to the contrary in Section 6.1(a), in no event shall
any Net Income be allocated pursuant to Section 6.1(a) to Unitholders in respect
of Series A Preferred Units.

 

(B)                               Notwithstanding anything to the contrary in
Section 6.1(b), (1) Unitholders holding Series A Preferred Units shall not
receive any allocation pursuant to Section 6.1(b)(i) with respect to their
Series A Preferred Units and (2) following any allocation made pursuant to
Section 6.1(b)(i) and prior to any allocation made pursuant to
Section 6.1(b)(ii), Net Loss shall be allocated to all Unitholders holding
Series A Preferred Units, Pro Rata, until the Adjusted Capital Account of each
such Unitholder in respect of each Outstanding Series A Preferred Unit has been
reduced to zero.

 

(C)                               Notwithstanding anything to the contrary in
Section 6.1(c), (1) Unitholders holding Series A Preferred Units shall not be
allocated Net Termination Gain in accordance with Section 6.1(c)(i) or
Section 6.1(c)(iv) and

 

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(2) following any allocation made pursuant to Section 6.1(c)(i)(A) or
Section 6.1(c)(iv)(A), respectively, and prior to any allocation made pursuant
to Section 6.1(c)(i)(B) or Section 6.1(c)(iv)(B), respectively, any remaining
Net Termination Gain shall be allocated to all Unitholders holding Series A
Preferred Units, Pro Rata, until the Capital Account in respect of each
Outstanding Series A Preferred Unit is equal to the Series A Accrued Amount or,
if greater, the product of the Per Unit Capital Amount (determined after taking
into account projected allocations of such Net Termination Gain to Unitholders
holding Common Units) for a then Outstanding Initial Common Unit and the
Series A Conversion Rate.

 

(D)                               Notwithstanding anything to the contrary in
Section 6.1(c), (1) Unitholders holding Series A Preferred Units shall not be
allocated Net Termination Loss in accordance with Section 6.1(c)(ii) or
Section 6.1(c)(iii) and (2) following any allocation made pursuant to
Section 6.1(c)(ii)(B) or Section 6.1(c)(iii)(A), respectively, and prior to any
allocation made pursuant to Section 6.1(c)(ii)(C) or Section 6.1(c)(iii)(B),
respectively, any remaining Net Termination Loss shall be allocated to all
Unitholders holding Series A Preferred Units, Pro Rata, until the Capital
Account in respect of each Outstanding Series A Preferred Unit has been reduced
to zero.

 

(x)                                 Liquidation Value. In the event of any
liquidation, dissolution and winding up of the Partnership under Section 12.4,
either voluntary or involuntary, the Record Holders of the Series A Preferred
Units shall be entitled to receive, out of the assets of the Partnership
available for distribution to the Partners or any Assignees, prior and in
preference to any distribution of any assets of the Partnership to the Record
Holders of any other class or series of Partnership Interests, the positive
value in each such holder’s Capital Account in respect of such Series A
Preferred Units. At least 10 days prior to any liquidation or winding up of the
Partnership under Section 12.4, the Partnership shall provide to the Record
Holders of the Series A Preferred Units an estimate of the Capital Account in
respect of each Series A Preferred Unit after giving effect to the allocations
described in this Section 5.11(b)(x). If in the year of such liquidation and
winding up, any such Record Holder’s Capital Account in respect of such Series A
Preferred Units is less than the aggregate Series A Accrued Amount of such
Series A Preferred Units, then notwithstanding anything to the contrary
contained in this Agreement, and prior to any other allocation pursuant to this
Agreement for such year and prior to any distribution pursuant to the preceding
sentence, items of gross income and gain shall be allocated to all Unitholders
then holding Series A Preferred Units, Pro Rata, until the Capital Account in
respect of each Outstanding Series A Preferred Unit is equal to the Series A
Accrued Amount (and no other allocation pursuant to this Agreement shall reverse
the effect of such allocation). If in the year of such liquidation, dissolution
or winding up any such Record Holder’s Capital Account in respect of such
Series A Preferred Units is less than the aggregate Series A Accrued Amount of
such Series A Preferred Units after the application of the preceding sentence,
then to the extent permitted by applicable law and notwithstanding anything to
the contrary contained in this Agreement, items of gross income and gain for any
preceding taxable period(s) with respect to which IRS Form 1065 Schedules K-1
have not been filed by the Partnership

 

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shall be reallocated to all Unitholders then holding Series A Preferred Units,
Pro Rata, until the Capital Account in respect of each such Outstanding Series A
Preferred Unit after making allocations pursuant to this and the immediately
preceding sentence is equal to the Series A Accrued Amount (and no other
allocation pursuant to this Agreement shall reverse the effect of such
allocation). After such allocations have been made to the Outstanding Series A
Preferred Units, any remaining Net Termination Gain or Net Termination Loss
shall be allocated to the Partners pursuant to Section 6.1(c) or Section 6.1(d),
as the case may be. At the time of the dissolution of the Partnership, subject
to Section 17-804 of the Delaware Act, the Record Holders of the Series A
Preferred Units shall become entitled to receive any Series A Unpaid
Distributions in respect of the Series A Preferred Units as of the date of such
dissolution, and shall have the status of, and shall be entitled to all remedies
available to, a creditor of the Partnership with respect to such Series A Unpaid
Distributions, and such entitlement of the Record Holders of the Series A
Preferred Units to such Series A Unpaid Distributions shall have priority over
any entitlement of any other Partners or Assignees with respect to any
distributions by the Partnership to such other Partners or Assignees; provided,
however, that the General Partner, as such, will have no liability for any
obligations with respect to such  Series A Unpaid Distributions to any Record
Holder(s) of Series A Preferred Units.

 

(xi)                              Fully Paid and Non-Assessable. Any Series A
Conversion Unit(s) delivered pursuant to this Section 5.11 shall be validly
issued, fully paid and non-assessable (except as such non-assessability may be
affected by Sections 17-303, 17-607 and 17-804 of the Delaware Act), and shall
be free and clear of any liens, claims, rights or encumbrances other than those
arising under the Delaware Act or this Agreement or created by the holders
thereof.

 

(xii)                           Notices. For the avoidance of doubt, the
Partnership shall distribute to the Record Holders of Series A Preferred Units
copies of all notices, materials, annual and quarterly reports, proxy
statements, information statements and any other documents distributed generally
to the Record Holders of Common Units of the Partnership, at such times and by
such method as such documents are distributed to such Record Holders of such
Common Units.

 

ARTICLE XVII.
ALLOCATIONS AND DISTRIBUTIONS

 

Section 17.01                     Allocations for Capital Account Purposes. 
Except as provided in Section 5.11, for purposes of maintaining the Capital
Accounts and in determining the rights of the Partners among themselves, the
Partnership’s items of income, gain, loss and deduction (computed in accordance
with Section 5.5(b)) for each taxable period shall be allocated among the
Partners as provided herein below.

 

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

 

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(i)            First, to the General Partner until the aggregate of the Net
Income allocated to the General Partner pursuant to this Section 6.1(a)(i) and
the Net Termination Gain allocated to the General Partner pursuant to
Section 6.1(c)(i)(A) or Section 6.1(c)(iv)(A) for the current and all previous
taxable periods is equal to the aggregate of the Net Loss allocated to the
General Partner pursuant to Section 6.1(b)(ii) for all previous taxable periods
and the Net Termination Loss allocated to the General Partner pursuant to
Section 6.1(c)(ii)(C) or Section 6.1(c)(iii)(B) for the current and all previous
taxable periods; and

 

(ii)           The balance, if any, (x) to the General Partner in accordance
with its Percentage Interest, and (y) to all Unitholders, Pro Rata, a percentage
equal to 100% less the General Partner’s Percentage Interest.

 

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

 

(i)            First, to the General Partner and the Unitholders, Pro Rata;
provided, however, that 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 period (or increase any existing deficit balance in its Adjusted Capital
Account); and

 

(ii)           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), Net Termination Gain or Net
Termination Loss (including a pro rata part of each item of income, gain, loss
and deduction taken into account in computing Net Termination Gain or Net
Termination Loss) for such taxable period shall be allocated in the manner set
forth in this Section 6.1(c).  All allocations under this Section 6.1(c) shall
be made after Capital Account balances have been adjusted by all other
allocations provided under this Section 6.1 and after all distributions of
Available Cash provided under Section 6.4 and Section 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)            Except as provided in Section 6.1(c)(iv), Net Termination Gain
(including a pro rata part of each item of income, gain, loss, and deduction
taken into account in computing Net Termination Gain) shall be allocated:

 

(a)           First, to the General Partner until the aggregate of the Net
Termination Gain allocated to the General Partner pursuant to this
Section 6.1(c)(i)(A) or Section 6.1(c)(iv)(A) and the Net Income allocated to
the General Partner pursuant to Section 6.1(a)(i) for the current and all
previous taxable periods is equal to the aggregate of the Net Loss allocated to
the General Partner pursuant to Section 6.1(b)(ii) for all previous taxable
periods and the Net Termination Loss allocated to the General Partner pursuant
to Section 6.1(c)(ii)(C) or Section 6.1(c)(iii)(B) for all previous taxable
periods;

 

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(b)           Second, (x) to the General Partner in accordance with its
Percentage Interest and (y) to all Unitholders holding Common Units, Pro Rata, a
percentage equal to 100% less the General Partner’s Percentage Interest, until
the Capital Account in respect of each Common Unit then Outstanding is equal to
the sum of (1) its Unrecovered Initial Unit Price and (2) the Minimum Quarterly
Distribution for the Quarter during which the Liquidation Date occurs, reduced
by any distribution pursuant to Section 6.4(a) with respect to such Common Unit
for such Quarter (the amount determined pursuant to this clause (2) is
hereinafter referred to as the “Unpaid MQD”);

 

(c)           Third, 100% to the General Partner and all Unitholders, Pro Rata,
until the Capital Account in respect of each Common Unit then Outstanding is
equal to the sum of (1) its Unrecovered Initial Unit Price, (2) the Unpaid MQD
and (3) the excess of (aa) the First Target Distribution less the Minimum
Quarterly Distribution for each Quarter of the Partnership’s existence over
(bb) the cumulative per Unit amount of any distributions of Available Cash that
is deemed to be Operating Surplus made pursuant to Section 6.4(b) (the sum of
subclauses (1), (2), and (3) is hereinafter referred to as the “First
Liquidation Target Amount”);

 

(d)           Fourth, (x) to the General Partner in accordance with its
Percentage Interest, (y) 13% to the holders of the Incentive Distribution
Rights, Pro Rata, and (z) to all Unitholders, Pro Rata, a percentage equal to
100% less the sum of the percentages applicable to subclauses (x) and (y) of
this clause (E), 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 of (aa) the Second Target Distribution less the First Target
Distribution for each Quarter of the Partnership’s existence over (bb) the
cumulative per Unit amount of any distributions of Available Cash that is deemed
to be Operating Surplus made pursuant to Section 6.4(c) (the sum of subclauses
(1) and (2) is hereinafter referred to as the “Second Liquidation Target
Amount”);

 

(e)           Fifth, (x) to the General Partner in accordance with its
Percentage Interest, (y) 23% to the holders of the Incentive Distribution
Rights, Pro Rata, and (z) to all Unitholders, Pro Rata, a percentage equal to
100% less the sum of the percentages applicable to subclauses (x) and (y) of
this clause (E), 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 of (aa) the Third Target Distribution less the Second Target
Distribution for each Quarter of the Partnership’s existence over (bb) the
cumulative per Unit amount of any distributions of Available Cash that is deemed
to be Operating Surplus made pursuant to Section 6.4(d); and

 

(f)            Finally, (x) to the General Partner in accordance with its
Percentage Interest, (y) 48% to the holders of the Incentive Distribution
Rights, Pro Rata, and (z) to all Unitholders, Pro Rata, a percentage equal to
100% less the sum of the percentages applicable to subclauses (x) and (y) of
this clause (F).

 

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(ii)           Except as otherwise provided by Section 6.1(c)(iii), Net
Termination Loss (including a pro rata part of each item of income, gain, loss,
and deduction taken into account in computing Net Termination Loss) shall be
allocated:

 

(a)           First (x) to the General Partner in accordance with its Percentage
Interest and (y) to all Unitholders holding Common Units, Pro Rata, a percentage
equal to 100% less the General Partner’s Percentage Interest, until the Capital
Account in respect of each Common Unit then Outstanding has been reduced to
zero;

 

(b)           Second, to the General Partner and the Unitholders, Pro Rata;
provided that Net Termination Loss shall not be allocated pursuant to this
Section 6.1(c)(ii)(B) to the extent such allocation would cause any Unitholder
to have a deficit balance in its Adjusted Capital Account (or increase any
existing deficit in its Adjusted Capital Account); and

 

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

 

(iii)          Any Net Termination Loss deemed recognized pursuant to
Section 5.5(d) prior to the Liquidation Date shall be allocated:

 

(a)           First, to the General Partner and the Unitholders, Pro Rata;
provided that Net Termination Loss shall not be allocated pursuant to this
Section 6.1(c)(iii)(A) to the extent such allocation would cause any Unitholder
to have a deficit balance in its Adjusted Capital Account at the end of such
taxable period (or increase any existing deficit in its Adjusted Capital
Account); and

 

(b)           The balance, if any, to the General Partner.

 

(iv)          If a Net Termination Loss has been allocated pursuant to
Section 6.1(c)(iii), subsequent Net Termination Gain deemed recognized pursuant
to Section 5.5(d) prior to the Liquidation Date shall be allocated:

 

(a)           First, to the General Partner until the aggregate Net Termination
Gain allocated to the General Partner pursuant to this Section 6.1(c)(iv)(A) is
equal to the aggregate Net Termination Loss previously allocated pursuant to
Section 6.1(c)(iii)(B);

 

(b)           Second, to the General Partner and the Unitholders, Pro Rata,
until the aggregate Net Termination Gain allocated pursuant to this
Section 6.1(c)(iv)(B) is equal to the aggregate Net Termination Loss previously
allocated pursuant to Section 6.1(c)(iii)(A); and

 

(c)           The balance, if any, pursuant to the provisions of
Section 6.1(c)(i).

 

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

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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(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 gross 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 gross income or gain
required hereunder shall be effected, prior to the application of any other
allocations pursuant to this Section 6.1(d) with respect to such taxable period
(other than an allocation pursuant to Section 6.1(d)(vi) or
Section 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 gross income and gain for such period
(and, if necessary, subsequent periods) in the manner and amounts provided in
Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any
successor provisions.  For purposes of this Section 6.1(d), each Partner’s
Adjusted Capital Account balance shall be determined, and the allocation of
gross income or gain required hereunder shall be effected, prior to the
application of any other allocations pursuant to this Section 6.1(d) and other
than an allocation pursuant to Section 6.1(d)(i), Section 6.1(d)(vi) or
Section 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 gross
income and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and
shall be interpreted consistently therewith.

 

(iii)          Priority Allocations.

 

(a)           If the amount of cash or the Net Agreed Value of any property
distributed (except cash or property distributed pursuant to Section 12.4 or
with respect to Series A Preferred Units) with respect to a Unit exceeds the
amount of cash or the Net Agreed Value of property distributed with respect to
another Unit (the amount of the excess, an “Excess Distribution” and the Unit
with respect to which the greater distribution is paid, an “Excess Distribution
Unit”), then (1) there shall be allocated gross income and gain to each
Unitholder receiving an Excess Distribution with respect to the Excess
Distribution Unit until the aggregate amount of such items allocated with
respect to such Excess Distribution Unit pursuant to this
Section 6.1(d)(iii)(A) for the current taxable period and all previous taxable
periods is equal to the amount of the Excess Distribution; and (2) the General
Partner shall be allocated gross income and gain with respect to each such
Excess Distribution in an amount equal to the product obtained by multiplying
(aa) the quotient determined by dividing (x) the General Partner’s Percentage
Interest at the time when the Excess Distribution occurs by (y) a percentage
equal to 100% less the General Partner’s Percentage Interest at the time when
the Excess

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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Distribution occurs, times (bb) the total amount allocated in clause (1) above
with respect to such Excess 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 (1) 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 period and all previous taxable
periods 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 period; and (2) to the General
Partner an amount equal to the product of (aa) an amount equal to the quotient
determined by dividing (x) the General Partner’s Percentage Interest by (y) the
sum of 100 less the General Partner’s Percentage Interest times (bb) the sum of
the amounts allocated in clause (1) above.

 

(iv)          Qualified Income Offset.  In the event any Partner unexpectedly
receives any adjustments, allocations or distributions described in Treasury
Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), items of Partnership gross 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; provided, however, that an allocation pursuant to this
Section 6.1(d)(iv) shall be made only if and to the extent that such Partner
would have a deficit balance in its Adjusted Capital Account as adjusted after
all other allocations provided for in this Section 6.1 have been tentatively
made as if this Section 6.1(d)(iv) were not in this Agreement.

 

(v)           Gross Income Allocation.  In the event any Partner has a deficit
balance in its Capital Account at the end of any taxable period in excess of the
sum of (A) the amount such Partner is required to restore pursuant to the
provisions of this Agreement and (B) the amount such Partner is deemed obligated
to restore pursuant to Treasury Regulation Sections 1.704-2(g) and
1.704-2(i)(5), such Partner shall be specially allocated items of Partnership
gross income and gain in the amount of such excess as quickly as possible;
provided, however, 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 Section 6.1(d)(iv) and this
Section 6.1(d)(v) were not in this Agreement.

 

(vi)          Nonrecourse Deductions.  Nonrecourse Deductions for any taxable
period shall be allocated to the Partners Pro Rata.  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 satisfies such requirements.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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(vii)         Partner Nonrecourse Deductions.  Partner Nonrecourse Deductions
for any taxable period shall be allocated 100% to the Partner that bears the
Economic Risk of Loss with respect to the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable in accordance with Treasury
Regulation Section 1.704-2(i).  If more than one Partner bears the Economic Risk
of Loss with respect to a Partner Nonrecourse Debt, the 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 in
accordance with and under any method approved by the applicable regulations
under Section 752 of the Code as chosen by the General Partner.

 

(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 (if the adjustment increases the basis of the asset) or loss
(if the adjustment decreases such basis), and such item of gain or loss shall be
specially allocated to the Partners in a manner consistent with the manner in
which their Capital Accounts are required to be adjusted pursuant to such
Section of the Treasury Regulations.

 

(x)           Economic Uniformity; Changes in Law.

 

(a)           With respect to an event triggering an adjustment to the Carrying
Value of Partnership property pursuant to Section 5.5(d) during any taxable
period of the Partnership ending upon, or after, the issuance of IDR Reset
Common Units pursuant to Section 5.10, 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 5.10 equaling the product of
(1) the Aggregate Quantity of IDR Reset Common Units and (2) the Per Unit
Capital Amount for an Initial Common Unit.

 

(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.

 

(c)           For the proper administration of the Partnership and for the
preservation of uniformity of the Limited Partner Interests (or any class or
classes thereof), the General Partner shall (1) adopt such conventions as it
deems appropriate in

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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determining the amount of depreciation, amortization and cost recovery
deductions; (2) make special allocations of income, gain, loss, deduction,
Unrealized Gain or Unrealized Loss; and (3) amend the provisions of this
Agreement as appropriate (x) to reflect the proposal or promulgation of Treasury
Regulations under Section 704(b) or Section 704(c) of the Code or (y) otherwise
to preserve or achieve uniformity of the Limited Partner Interests (or any class
or classes thereof).  The General Partner may adopt such conventions, make such
allocations and make such amendments to this Agreement as provided in this
Section 6.1(d)(x)(C) only if such conventions, allocations or amendments would
not have a material adverse effect on the Partners, the holders of any class or
classes of Limited Partner Interests issued and Outstanding or the Partnership,
and if such allocations are consistent with the principles of Section 704 of the
Code.

 

(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 gross income, gain, loss and deduction allocated to each
Partner pursuant to the Required Allocations and the Agreed Allocations,
together, shall be equal to the net amount of such items that would have been
allocated to each such Partner under the Agreed Allocations had the Required
Allocations and the related Curative Allocation not otherwise been provided in
this Section 6.1.  Notwithstanding the preceding sentence, Required Allocations
relating to (1) Nonrecourse Deductions shall not be taken into account except to
the extent that there has been a decrease in Partnership Minimum Gain and
(2) Partner Nonrecourse Deductions shall not be taken into account except to the
extent that there has been a decrease in Partner Nonrecourse Debt Minimum Gain. 
In exercising its discretion under this Section 6.1(d)(xi)(A), the General
Partner may take into account future Required Allocations that, although not yet
made, are likely to offset other Required Allocations previously made. 
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.

 

(xii)         Equalization of Capital Accounts With Respect to Privately Placed
Units. Net Termination Gain or Net Termination Loss deemed recognized as a
result of an event that results in adjustment of the Carrying Value of each
Partnership property pursuant to Section

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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5.5(d) shall first be allocated to the (A) Unitholders holding Privately Placed
Units or (B) Unitholders holding Common Units, Pro Rata, as applicable, to the
extent necessary to cause the Capital Account in respect of each Privately
Placed Unit then Outstanding to equal the Capital Account in respect of each
Common Unit (other than Privately Placed Units) then Outstanding.

 

(xiii)        Corrective and Other 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)           Except as provided in Section 6.1(d)(xiii)(B), in the case of any
allocation of Additional Book Basis Derivative Items (other than an allocation
of Unrealized Gain or Unrealized Loss under Section 5.5(d) hereof), the General
Partner shall allocate such Additional Book Basis Derivative Items to (1) the
holders of Incentive Distribution Rights and the General Partner to the same
extent that the Unrealized Gain or Unrealized Loss giving rise to such
Additional Book Basis Derivative Items was allocated to them pursuant to
Section 5.5(d) and (2) all Unitholders, Pro Rata, to the extent that the
Unrealized Gain or Unrealized Loss giving rise to such Additional Book Basis
Derivative Items was allocated to any Unitholders pursuant to Section 5.5(d).

 

(b)           In the case of any allocation of Additional Book Basis Derivative
Items (other than an allocation of Unrealized Gain or Unrealized Loss under
Section 5.5(d) hereof or an allocation of Net Termination Gain or Net
Termination Loss pursuant to Section 6.1(c) hereof) as a result of a sale or
other taxable disposition of any Partnership asset that is an Adjusted Property
(“Disposed of Adjusted Property”), the General Partner shall allocate
(1) additional items of gross income and gain (aa) away from the holders of
Incentive Distribution Rights and (bb) to the Unitholders, or (2) additional
items of deduction and loss (aa) away from the Unitholders and (bb) 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 with respect to such Disposed of Adjusted
Property.  Any allocation made pursuant to this Section 6.1(d)(xiii)(B) shall be
made after all of the other Agreed Allocations have been made as if this
Section 6.1(d)(xiii) 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.

 

(c)           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 balances 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.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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(d)           For purposes of this Section 6.1(d)(xiii), 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.  In making the allocations required under this Section 6.1(d)(xiii),
the General Partner may apply whatever conventions or other methodology it
determines will satisfy the purpose of this Section 6.1(d)(xiii).  Without
limiting the foregoing, if an Adjusted Property is contributed by the
Partnership to another entity classified as a partnership for federal income tax
purposes (the “lower tier partnership”), the General Partner may make
allocations similar to those described in Sections 6.1(d)(xiii)(A) through
(C) to the extent the General Partner determines such allocations are necessary
to account for the Partnership’s allocable share of income, gain, loss and
deduction of the lower tier partnership that relate to the contributed Adjusted
Property in a manner that is consistent with the purpose of this
Section 6.1(d)(xiii).

 

Section 17.02       Allocations for Tax Purposes.

 

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

 

(b)           In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss,
depreciation, amortization and cost recovery deductions shall be allocated for
federal income tax purposes among the Partners in the manner provided under
Section 704(c) of the Code, and the Treasury Regulations promulgated under
Section 704(b) and 704(c) of the Code, as determined to be appropriate by the
General Partner (taking into account the General Partner’s discretion under
Section 6.1(d)(x)(C)); provided, however, that the General Partner shall apply
the principles of Treasury Regulation Section 1.704-3(d) in all events.

 

(c)           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 unamortized
Book-Tax Disparity of such property, despite any inconsistency of such approach
with Treasury Regulation Section 1.167(c)-l(a)(6) or any successor regulations
thereto.  If the General Partner determines that such reporting position cannot
reasonably be taken, the General Partner may adopt depreciation and amortization
conventions under which all purchasers acquiring Limited Partner Interests in
the same month would receive depreciation and amortization deductions, based
upon the same applicable rate as if they had purchased a direct interest in the
Partnership’s property.  If the General Partner chooses not to utilize such
aggregate method, the General Partner may use any other 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.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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(d)           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.

 

(e)           All items of income, gain, loss, deduction and credit recognized
by the Partnership for federal income tax purposes and allocated to the Partners
in accordance with the provisions hereof shall be determined without regard to
any election under Section 754 of the Code that may be made by the Partnership;
provided, however, that such allocations, once made, shall be adjusted (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.

 

(f)            Each item of Partnership income, gain, loss and deduction, for
federal income tax purposes, shall be determined for each taxable period 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 to trading on the first Business Day of each month;
provided, however, that such items for the period beginning on the Closing Date
and ending on the last day of the month in which the last Option Closing Date or
the expiration of the Over-Allotment Option occurs shall be allocated to the
Partners as of the opening of the National Securities Exchange on which the
Partnership Interests are listed or admitted to trading on the first Business
Day of the next succeeding month; provided further, that gain or loss on a sale
or other disposition of any assets of the Partnership or any other extraordinary
item of income or loss realized and recognized other than in the ordinary course
of business, as determined by the General Partner, shall be allocated to the
Partners as of the opening of the National Securities Exchange on which the
Partnership Interests are listed or admitted to trading on the first Business
Day of the month in which such gain or loss is recognized for federal income tax
purposes.  The General Partner may revise, alter or otherwise modify such
methods of allocation to the extent permitted or required by Section 706 of the
Code and the regulations or rulings promulgated thereunder.

 

(g)           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, agent or representative in
any case in which such nominee, agent or representative 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.

 

(h)           If, as a result of the conversion of a Series A Preferred Unit
into Common Units and the adjustments pursuant to Section 5.5(d)(iii), a Capital
Account reallocation is required consistent with the principles of Treasury
Regulation Section 1.704-1(b)(2)(iv)(s)(3), the General Partner shall make
corrective allocations pursuant to Treasury Regulation Section 1.704-1(b)(4)(x).

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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Section 17.03       Requirement and Characterization of Distributions;
Distributions to Record Holders.

 

(a)           Within 45 days following the end of each Quarter commencing with
the Quarter ending on September 30, 2013, an amount equal to 100% of Available
Cash with respect to such Quarter shall be distributed in accordance with this
Article VI by the Partnership to the Partners as of the Record Date selected by
the General Partner.  The Record Date for the first distribution of Available
Cash shall not be prior to the final closing of the Over-Allotment Option or the
Deferred Issuance.  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 Sections 17-607 and 17-804 of the Delaware Act and other
applicable law, notwithstanding any other provision of this Agreement.

 

(b)           Notwithstanding Section 6.3(a) (but subject to the last sentence
of 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 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
appropriate under the circumstances 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

 

(e)           Notwithstanding Section 6.3(b), but subject to Sections 17-607 and
17-804 of the Delaware Act, the General Partner may cause the Partnership to
make special distributions of cash or cash equivalents in connection with
contributions of assets by Partners or by Persons who shall become Partners by
virtue of such contribution. Such distributions shall not be subject to, or
considered as distributions under, Section 5.11(b)(i)(B),
Section 6.1(d)(iii)(A), the third and fourth sentences of Section 6.3(a),
Section 6.4 or Section 6.5. Notwithstanding anything to the contrary set forth
in this Agreement (including Section 6.1(d)(iii)(A)), no Partner shall receive
an allocation of income (including gross income) or gain as a result of
receiving a distribution provided for in this Section 6.3(e).

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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Section 17.04       Distributions of Available Cash from Operating Surplus.
Subject to Section 5.11(b)(i), Available Cash that is deemed to be Operating
Surplus pursuant to the provisions of Section 6.3 or Section 6.5 shall be
distributed as follows, except as otherwise required in respect of additional
Partnership Interests or Derivative Partnership Interests issued pursuant to
Section 5.6(b):

 

(a)           First, to the General Partner and the holders of Common Units, Pro
Rata, until there has been distributed in respect of each Common Unit then
Outstanding an amount equal to the Minimum Quarterly Distribution for such
Quarter;

 

(b)           Second, to the General Partner and the holders of Common Units,
Pro Rata, until there has been distributed in respect of each Common Unit then
Outstanding an amount equal to the excess of the First Target Distribution over
the Minimum Quarterly Distribution for such Quarter;

 

(c)           Third, (i) to the General Partner in accordance with its
Percentage Interest, (ii) 13% to the holders of the Incentive Distribution
Rights, Pro Rata, and (iii) to the holders of Common Units, Pro Rata, a
percentage equal to 100% less the sum of the percentages applicable to
subclauses (i) and (ii) of this clause (c), until there has been distributed in
respect of each Common Unit then Outstanding an amount equal to the excess of
the Second Target Distribution over the First Target Distribution for such
Quarter;

 

(d)           Fourth, (i) to the General Partner in accordance with its
Percentage Interest, (ii) 23% to the holders of the Incentive Distribution
Rights, Pro Rata, and (iii) to the holders of Common Units, Pro Rata, a
percentage equal to 100% less the sum of the percentages applicable to
subclauses (i) and (ii) of this clause (d), until there has been distributed in
respect of each Common Unit then Outstanding an amount equal to the excess of
the Third Target Distribution over the Second Target Distribution for such
Quarter; and

 

(e)           Thereafter, (i) to the General Partner in accordance with its
Percentage Interest, (ii) 48% to the holders of the Incentive Distribution
Rights, Pro Rata, and (iii) to the holders of Common Units, Pro Rata, a
percentage equal to 100% less the sum of the percentages applicable to
subclauses (i) and (ii) of this clause (e);

 

provided, however, that if the Minimum Quarterly Distribution, the First Target
Distribution, the Second Target Distribution and the Third Target Distribution
have been reduced to zero pursuant to the second sentence of Section 6.6(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(e).

 

Section 17.05       Distributions of Available Cash from Capital Surplus. 
Subject to Section 5.11(b)(i), Available Cash that is deemed to be Capital
Surplus pursuant to the provisions of Section 6.3(a) shall be distributed,
unless the provisions of Section 6.3 require otherwise, to the General Partner
and 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 distributions of Available Cash that are deemed to be Capital
Surplus in an aggregate amount

 

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equal to the Initial Unit Price.  Thereafter, all Available Cash shall be
distributed as if it were Operating Surplus and shall be distributed in
accordance with Section 6.4.

 

Section 17.06       Adjustment of Minimum Quarterly Distribution and Target
Distribution Levels.

 

(a)           The Minimum Quarterly Distribution and Target Distributions shall
be proportionately adjusted in the event of any distribution, combination or
subdivision (whether effected by a distribution payable in Units or otherwise)
of Units or other Partnership Interests in accordance with Section 5.8.  In the
event of a distribution of Available Cash that is deemed to be from Capital
Surplus, the then applicable Minimum Quarterly Distribution and Target
Distributions shall be adjusted proportionately downward to equal the product
obtained by multiplying the otherwise applicable Minimum Quarterly Distribution,
First Target Distribution, Second Target Distribution and Third Target
Distribution, as the case may be, by a fraction, the numerator of which is the
Unrecovered Initial Unit Price of the Common Units immediately after giving
effect to such distribution and the denominator of which is the Unrecovered
Initial Unit Price 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 5.10 and Section 6.9.

 

Section 17.07       Special Provisions Relating to the Holders of Incentive
Distribution Rights.

 

(a)           Notwithstanding anything to the contrary set forth in this
Agreement, the holders of the Incentive Distribution Rights (1) shall
(x) possess the rights and obligations provided in this Agreement with respect
to a Limited Partner pursuant to Article III and Article VII and (y) have a
Capital Account as a Partner pursuant to Section 5.5 and all other provisions
related thereto and (2) shall not (x) be entitled to vote on any matters
requiring the approval or vote of the holders of Outstanding Units, except as
provided by law, (y) be entitled to any distributions other than as provided in
Sections 6.4(c), (d) and (e), and Section 12.4 or (z) be allocated items of
income, gain, loss or deduction other than as specified in this Article VI;
provided, however, that for the avoidance of doubt, the foregoing shall not
preclude the Partnership from making any other payments or distributions in
connection with other actions permitted by this Agreement.

 

(b)           A Unitholder shall not be permitted to transfer an IDR Reset
Common Unit (other than a transfer to an Affiliate) if the remaining balance in
the transferring Unitholder’s Capital Account with respect to the retained IDR
Reset Common Units would be negative after giving effect to the allocation under
Section 5.5(c)(ii).

 

(c)           A holder of an IDR Reset Common Unit that was issued in connection
with an IDR Reset Election pursuant to Section 5.10 shall not be issued a Common
Unit Certificate pursuant to Section 4.1 (if the Common Units are evidenced by
Certificates) or evidence of the issuance of uncertificated Common Units, and
shall not be permitted to transfer

 

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such Common Unit to a Person that is not an Affiliate of such holder, until such
time as the General Partner determines, based on advice of counsel, that each
such IDR Reset Common Unit should have, as a substantive matter, like intrinsic
economic and federal income tax characteristics, in all material respects, to
the intrinsic economic and federal income tax characteristics of an Initial
Common Unit. In connection with the condition imposed by this Section 6.7(c),
the General Partner may take whatever steps are required to provide economic
uniformity to such IDR Reset Common Units in preparation for a transfer of such
IDR Reset Common Units, including the application of Section 5.5(c)(ii),
Section 6.1(d)(x)(A) or Section 6.1(d)(x)(B); provided, however, that no such
steps may be taken that would have a material adverse effect on the Unitholders
holding Common Units or the Series A Preferred Unitholders.

 

Section 17.08       Special Provisions Relating to Series A Preferred Units.

 

(a)           Subject to any applicable transfer restrictions in Section 4.8 or
Section 5.11(b)(vii), the holder of a Series A Preferred Unit or a Series A
Conversion Unit shall provide notice to the Partnership of the transfer of any
such Series A Preferred Unit or Series A Conversion Unit, as applicable, by the
earlier of (i) 30 days following such transfer and (ii) the last Business Day of
the calendar year during which such transfer occurred, unless, with respect to a
transfer of a Series A Conversion Unit, by virtue of the application of
Section 5.5(d)(iii), the Partnership has previously determined, based on the
advice of counsel, that the transferred Series A Conversion Unit should have, as
a substantive matter, like intrinsic economic and federal income tax
characteristics of an Initial Common Unit. In connection with the condition
imposed by this Section 6.8, the Partnership shall take whatever steps are
required to provide economic uniformity to the Series A Conversion Unit in
preparation for a transfer of such Unit; provided, however, that no such steps
may be taken that would have a material adverse effect on the Unitholders
holding Common Units (for this purpose the allocations of income, gain, loss and
deductions, and the making of any guaranteed payments or any reallocation of
Capital Account balances, among the Partners in accordance with
Section 5.5(d)(iii) and Treasury Regulation Section 1.704-1(b)(2)(iv)(s)(4) with
respect to Series A Preferred Units or Series A Conversion Units will be deemed
not to have a material adverse effect on the Unitholders holding Common Units).

 

(b)           Notwithstanding anything to the contrary set forth in this
Agreement, the holders of the Series A Preferred Units (i) shall (A) possess the
rights and obligations provided in this Agreement with respect to a Limited
Partner pursuant to Article III and Article VII and (B) have a Capital Account
as a Partner pursuant to Section 5.5 and all other provisions related thereto
and (ii) shall not (A) be entitled to vote on any matters requiring the approval
or vote of the holders of Outstanding Units, except as provided in Section 5.11
or (B) be entitled to any distributions other than as provided in Section 5.11
and Article VI.

 

Section 17.09       Entity-Level Taxation.  If legislation is enacted or the
official interpretation of existing legislation is modified by a governmental
authority, which, after giving effect to such enactment or modification, results
in a 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 the Group
Member prior to such enactment or modification (including, for the avoidance of
doubt, any increase in the rate of such taxation applicable to the Group
Member),

 

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then the General Partner may, at its option, reduce the Minimum Quarterly
Distribution and the Target Distributions 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 6.9.  If the General Partner
elects to reduce the Minimum Quarterly Distribution and the Target Distributions
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 the product obtained by
multiplying (a) the amounts therefor that are set out herein prior to the
application of this Section 6.9 times (b) the quotient obtained by dividing
(i) Available Cash with respect to such Quarter by (ii) the sum of Available
Cash with respect to such Quarter and the Estimated Incremental Quarterly Tax
Amount for such Quarter, as determined by the 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 XVIII.
MANAGEMENT AND OPERATION OF BUSINESS

 

Section 18.01       Management.

 

(a)           The General Partner shall conduct, direct and manage all
activities of the Partnership.  Except as otherwise expressly provided in this
Agreement, all management powers over the business and affairs of the
Partnership shall be exclusively vested in the General Partner, and no Limited
Partner shall have any management power over the business and affairs of the
Partnership.  In addition to the powers now or hereafter granted a general
partner of a limited partnership under applicable law or that are granted to the
General Partner under any other provision of this Agreement, the General
Partner, subject to Section 7.3, shall have full power and authority to do all
things and on such terms as it determines to be necessary or appropriate to
conduct the business of the Partnership, to exercise all powers set forth in
Section 2.5 and to effectuate the purposes set forth in Section 2.4, including
the following:

 

(i)            the making of any expenditures, the lending or borrowing of
money, the assumption or guarantee of, or other contracting for, indebtedness
and other liabilities, the issuance of evidences of indebtedness, including
indebtedness that is convertible into or exchangeable for Partnership Interests
(subject to any approval that may be required by Section 5.11(b)(iii) with
respect to Series A Senior Securities and Series A Parity Securities), and the
incurring of any other obligations;

 

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

 

(iii)          the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or exchange of any or all of the assets of the Partnership or the
merger or other combination of the Partnership with or into another Person (the
matters described in this clause (iii) being subject, however, to any prior
approval that may be required by Section 7.3 and Article XIV);

 

(iv)          the use of the assets of the Partnership (including cash on hand)
for any purpose consistent with the terms of this Agreement, including the
financing of the conduct of the operations of the Partnership Group; subject to
Section 7.6(a), the lending of funds to other Persons (including other Group
Members); the repayment or guarantee of obligations of any Group Member; and the
making of capital contributions to any Group Member;

 

(v)           the negotiation, execution and performance of any contracts,
conveyances or other instruments (including instruments that limit the liability
of the Partnership under contractual arrangements to all or particular assets of
the Partnership, with the other party to the contract to have no recourse
against the General Partner or its assets other than its interest in the
Partnership, even if 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 and dismissal of officers, employees, agents,
internal and outside attorneys, accountants, consultants and contractors and the
determination of their compensation and other terms of employment or hiring;

 

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

 

(ix)          the formation of, or acquisition of an interest in, and the
contribution of property and the making of loans to, any further limited or
general partnerships, joint ventures, corporations, limited liability companies
or other Persons (including the acquisition of interests in, and the
contributions of property to, any Group Member from time to time) subject to the
restrictions set forth in Section 2.4;

 

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

 

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

 

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(xii)         the entering into of listing agreements with any National
Securities Exchange and the delisting of some or all of the Limited Partner
Interests from, or requesting that trading be suspended on, any such exchange
(subject to any prior approval that may be required under Section 4.8);

 

(xiii)        the purchase, sale or other acquisition or disposition of
Partnership Interests, or the issuance of Derivative Partnership Interests
(subject to any approval that may be required by Section 5.11(b));

 

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

 

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

 

(b)           Notwithstanding any other provision of this Agreement, any Group
Member Agreement, the Delaware Act or any applicable law, rule or regulation,
each Record Holder and each other Person who may acquire an interest in a
Partnership Interest or that 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 Group Member Agreement of each
other Group Member, the IPO Underwriting Agreement, the Omnibus Agreement, the
Contribution Agreement, the Operational Services Agreement, the Tax Sharing
Agreement and the other agreements described in or filed as exhibits to the IPO
Registration Statement that are related to the transactions contemplated by the
IPO Registration Statement (collectively, the “Transaction Documents”) (in each
case other than this Agreement, without giving effect to any amendments,
supplements or restatements thereof entered into after the date such Person
becomes bound by the provisions of this Agreement); (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 IPO 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 are 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 18.02       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

 

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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 3.3(a), the General Partner shall not be required, before or
after filing, to deliver or mail a copy of the Certificate of Limited
Partnership, any qualification document or any amendment thereto to any Limited
Partner.

 

Section 18.03       Restrictions on the General Partner’s Authority to Sell
Assets of the Partnership Group.

 

Except as provided in Article XII and Article XIV, the General Partner may not
sell, exchange or otherwise dispose of all or substantially all of the assets of
the Partnership Group, taken as a whole, in a single transaction or a series of
related transactions (including by way of merger, consolidation or other
combination or sale of ownership interests of the Partnership’s Subsidiaries)
without the approval of holders of a Unit Majority; provided, however, that this
provision shall not preclude or limit the General Partner’s ability to mortgage,
pledge, hypothecate or grant a security interest in all or substantially all of
the assets of the Partnership Group and shall not apply to any forced sale of
any or all of the assets of the Partnership Group pursuant to the foreclosure
of, or other realization upon, any such encumbrance.

 

Section 18.04       Reimbursement of and Other Payments to the General Partner.

 

(a)           Except as provided in this Section 7.4, and elsewhere in this
Agreement or in the Omnibus Agreement, the Operational Services Agreement, or
the Tax Sharing Agreement, the General Partner shall not be compensated for its
services as a general partner or managing member of any Group Member.

 

(b)           Except as may be otherwise provided in the Omnibus Agreement, the
Operational Services Agreement, or the Tax Sharing Agreement, the General
Partner shall be reimbursed on a monthly basis, or such other basis as the
General Partner may determine, for (i) all direct and indirect expenses it
incurs or payments it makes on behalf of the Partnership Group (including
salary, bonus, incentive compensation and other amounts paid to any Person,
including Affiliates of the General Partner, to perform services for the
Partnership 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 or its Affiliates 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 7.4
shall be in addition to any reimbursement to the General Partner as a result of
indemnification pursuant to Section 7.7.  Any allocation of expenses to the
Partnership by the General Partner in a manner consistent with its or its
Affiliates’ past business practices and, in the case of assets regulated by
FERC, then applicable

 

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accounting and allocation methodologies generally permitted by FERC for
rate-making purposes (or in the absence of then-applicable methodologies
permitted by FERC, consistent with the most-recently applicable methodologies),
shall be deemed to have been made in good faith.

 

(c)           The General Partner, without the approval of the Limited Partners
(who shall have no right to vote in respect thereof), may propose and adopt on
behalf of the Partnership employee benefit plans, employee programs and employee
practices (including plans, programs and practices involving the issuance of
Partnership Interests or Derivative Partnership Interests), or cause the
Partnership to issue Partnership Interests or Derivative Partnership Interests
in connection with, or pursuant to, any employee benefit plan, employee program
or employee practice maintained or sponsored by the General Partner or any of
its Affiliates in each case for the benefit of officers, 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 Affiliates
are obligated to provide to any officers, employees, consultants and directors
pursuant to any such employee benefit plans, employee programs or employee
practices.  Expenses incurred by the General Partner in connection with any such
plans, programs and practices (including the net cost to the General Partner or
such Affiliates of Partnership Interests purchased by the General Partner or
such Affiliates from the Partnership to fulfill options or awards under such
plans, programs and practices) shall be reimbursed in accordance with
Section 7.4(b).  Any and all obligations of the General Partner under any
employee benefit plans, employee programs or employee practices adopted by the
General Partner as permitted by this Section 7.4(c) shall constitute obligations
of the General Partner hereunder and shall be assumed by any successor General
Partner approved pursuant to Section 11.1 or Section 11.2 or the transferee of
or successor to all of the General Partner’s General Partner Interest pursuant
to Section 4.6.

 

(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.

 

(e)           The General Partner and its Affiliates may enter into an agreement
to provide services to any Group Member for a fee or otherwise than for cost.

 

Section 18.05       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 IPO

 

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Registration Statement, (B) the acquiring, owning or disposing of debt
securities or equity interests in any Group Member, (C) the guarantee of, and
mortgage, pledge, or encumbrance of any or all of its assets in connection with,
any indebtedness of any Group Member or (D) the performance of its obligations
under the Omnibus Agreement.

 

(b)           Subject to the terms of Section 7.5(c), 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, and none of the same shall constitute a breach of this Agreement or any
duty otherwise existing at law, in equity or otherwise, to any Group Member or
any Partner.  None of any Group Member, any Limited Partner or any other Person
shall have any rights by virtue of this Agreement, any Group Member Agreement,
or the partnership relationship established hereby in any business ventures of
any Unrestricted Person.

 

(c)           Subject to the terms of Section 7.5(a) and  Section 7.5(b), but
otherwise notwithstanding anything to the contrary in this Agreement, (i) the
engaging in competitive activities by any Unrestricted Person (other than the
General Partner) in accordance with the provisions of this Section 7.5 is hereby
approved by the Partnership and all Partners, (ii) it shall be deemed not to be
a breach of any duty or any other obligation of any type whatsoever of the
General Partner or any other Unrestricted Person 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 and (iii) the
Unrestricted Persons shall have no obligation hereunder or as a result of any
duty otherwise existing at law, in equity or otherwise, to present business
opportunities to the Partnership.  Notwithstanding anything to the contrary in
this Agreement or any duty otherwise existing at law or in equity, 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, to any Limited Partner
or any other Person bound by this Agreement for breach of any duty 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, provided that
such Unrestricted Person does not engage in such business or activity using
confidential or proprietary information provided by or on behalf of the
Partnership to such Unrestricted Person.

 

(d)           The General Partner and each of its Affiliates may acquire Units
or other Partnership Interests in addition to those acquired on the Closing Date
and, except as otherwise provided in this Agreement, shall be entitled to
exercise, at their option, all rights relating to all Units and/or other
Partnership Interests acquired by them.  The term “Affiliates” when used in this
Section 7.5(d) with respect to the General Partner shall not include any Group
Member.

 

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Section 18.06       Loans from the General Partner; Loans or Contributions from
the Partnership or Group Members.

 

(a)           The General Partner or any of its Affiliates may lend to any Group
Member, and any Group Member may borrow from the General Partner or any of its
Affiliates, funds needed or desired by the Group Member for such periods of time
and in such amounts as the General Partner may determine; provided, however,
that in any such case the lending party may not charge the borrowing party
interest at a rate greater than the rate that would be charged the borrowing
party or impose terms less favorable to the borrowing party than would be
charged or imposed on the borrowing party by unrelated lenders on comparable
loans made on an arm’s-length basis (without reference to the lending party’s
financial abilities or guarantees), all as determined by the General Partner. 
The borrowing party shall reimburse the lending party for any costs (other than
any additional interest costs) incurred by the lending party in connection with
the borrowing of such funds.  For purposes of this Section 7.6(a) and
Section 7.6(b), the term “Group Member” shall include any Affiliate of a Group
Member that is controlled by the Group Member.

 

(b)           The Partnership may lend or contribute to any Group Member, and
any Group Member may borrow from the Partnership, funds on terms and conditions
determined by the General Partner.  No Group Member may lend funds to the
General Partner or any of its Affiliates (other than another Group Member).

 

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

 

Section 18.07       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 intentional fraud,
willful misconduct or, in the case of a criminal matter, acted with

 

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knowledge that the Indemnitee’s conduct was unlawful; provided, further, no
indemnification pursuant to this Section 7.7 shall be available to any Affiliate
of the General Partner (other than a Group Member), or to any other Indemnitee,
with respect to any such Affiliate’s obligations pursuant to the Transaction
Documents.  Any indemnification pursuant to this Section 7.7 shall be made only
out of the assets of the Partnership, it being agreed that the General Partner
shall not be personally liable for such indemnification and shall have no
obligation to contribute or loan any monies or property to the Partnership to
enable it to effectuate such indemnification.

 

(b)           To the fullest extent permitted by law, expenses (including legal
fees and expenses) incurred by an Indemnitee who is indemnified pursuant to
Section 7.7(a) in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Partnership prior to a final and
non-appealable judgment entered by a court of competent jurisdiction determining
that, in respect of the matter for which the Indemnitee is seeking
indemnification pursuant to this Section 7.7, the Indemnitee 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 7.7.

 

(c)           The indemnification provided by this Section 7.7 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, pursuant to any vote of the holders of Outstanding Limited Partner
Interests, as a matter of law, in equity or otherwise, both as to actions in the
Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity
(including any capacity under the IPO Underwriting Agreement), and shall
continue as to an Indemnitee who has ceased to serve in such capacity and shall
inure to the benefit of the heirs, successors, assigns and administrators of the
Indemnitee.

 

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

 

(e)           For purposes of this Section 7.7, the Partnership shall be deemed
to have requested an Indemnitee to serve as fiduciary of an employee benefit
plan whenever the performance by it of its duties to the Partnership also
imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute “fines” within the meaning of Section 7.7(a); and action taken
or omitted by it with respect to any employee benefit plan in the performance of
its duties for a purpose reasonably believed by it to be in the best interest of
the participants and beneficiaries of the plan shall be deemed to be for a
purpose that is in the best interests of the Partnership.

 

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

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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(g)           An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.

 

(h)           The provisions of this Section 7.7 are for the benefit of the
Indemnitees 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 7.7 or any
provision hereof shall in any manner terminate, reduce or impair the right of
any past, present or future Indemnitee to be indemnified by the Partnership, nor
the obligations of the Partnership to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 7.7 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.

 

Section 18.08       Liability of Indemnitees.

 

(a)           Notwithstanding anything to the contrary set forth in this
Agreement, no Indemnitee shall be liable for monetary damages to the
Partnership, the Limited Partners, or any other Persons who are 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 intentional fraud, willful misconduct or, in the case of a criminal matter,
acted with knowledge that the Indemnitee’s conduct was unlawful.

 

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

 

(c)           To the extent that, at law or in equity, an Indemnitee has duties
(including fiduciary duties) and liabilities relating thereto to the Partnership
or to the Partners, the General Partner and any other Indemnitee acting in
connection with the Partnership’s business or affairs shall not be liable to the
Partnership or to any Partner or to any other Persons who are bound by this
Agreement for its good faith reliance on the provisions of this Agreement.

 

(d)           Any amendment, modification or repeal of this Section 7.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the liability of the Indemnitees under this Section 7.8 as in
effect immediately prior to such amendment, modification or repeal with respect
to claims arising from or relating to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of when such claims
may arise or be asserted.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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Section 18.09       Resolution of Conflicts of Interest; Standards of Conduct
and Modification of Duties.

 

(a)           Unless otherwise expressly provided in this Agreement or any Group
Member Agreement, whenever a potential conflict of interest exists or arises
between the General Partner or any of its Affiliates, on the one hand, and the
Partnership, any Group Member or any Partner, on the other, any resolution or
course of action by the General Partner or its Affiliates in respect of such
conflict of interest shall be permitted and deemed approved by all Partners, and
shall not constitute a breach of this Agreement, of any Group Member Agreement,
of any agreement contemplated herein or therein, or of any duty stated or
implied by law or equity, if the resolution or course of action in respect of
such conflict of interest is (i) approved by Special Approval, (ii) approved by
a Unit Majority (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.  Whenever the General Partner makes a determination to refer or not
refer any potential conflict of interest to the Conflicts Committee for Special
Approval or to seek or not to seek Unitholder approval, then the General Partner
shall be entitled, to the fullest extent permitted by law, to make such
determination free of any duty or obligation whatsoever to the Partnership or
any Limited Partner, and the General Partner shall not, to the fullest extent
permitted by law, be required to act in good faith or pursuant to any other
standard or duty imposed by this Agreement, any Group Member Agreement, any
other agreement contemplated hereby or under the Delaware Act or any other law,
rule or regulation or at equity, and the General Partner in making such
determination shall be permitted to do so at its option.  If Special Approval is
sought, then it shall be presumed that, in making its decision, the Conflicts
Committee acted in good faith, and if 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 or
that a director satisfies the eligibility requirements to be a member of the
Conflicts Committee, then it shall be presumed that, in making its decision, the
Board of Directors acted in good faith.  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 any action by the Conflicts Committee
with respect to any matter referred to the Conflicts Committee for Special
Approval by the General Partner, any determination by the Board of Directors
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 or any determination by the Board of Directors that a director
satisfies the eligibility requirements to be a member of the Conflicts
Committee, the Person bringing or prosecuting such proceeding shall have the
burden of overcoming the presumption that the Conflicts Committee or the Board
of Directors, as applicable, acted in good faith.  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 IPO Registration
Statement are hereby approved by all Partners and shall not constitute a breach
of this Agreement or any such duty.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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(b)           Whenever the General Partner or the Board of Directors, or any
committee thereof (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, any Group Member Agreement or any other agreement
contemplated hereby or otherwise, then, unless another express standard is
provided for in this Agreement, the General Partner, the Board of Directors or
such committee or such Affiliates causing the General Partner 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 duties or standards
(including fiduciary duties or standards) imposed by this Agreement, any Group
Member Agreement, any other agreement contemplated hereby or under the Delaware
Act or any other law, rule or regulation or at equity.  A determination or other
action or inaction will conclusively be deemed to be in “good faith” for all
purposes of this Agreement if the Person or Persons making such determination or
taking or declining to take such other action subjectively believe that the
determination or other action or inaction is in the best interests of the
Partnership Group.  In making such determination or taking or declining to take
such other action, such Person or Persons may take into account the totality of
the circumstances or the totality of the relationships between the parties
involved, including other relationships or transactions that may be particularly
favorable or advantageous to the Partnership.

 

(c)           Whenever the General Partner makes a determination or takes or
declines to take any other action, or any of its Affiliates causes it to do so,
in its individual capacity as opposed to in its capacity as the general partner
of the Partnership, whether under this Agreement, any Group Member Agreement or
any other agreement contemplated hereby or otherwise, then the General Partner,
or such Affiliates causing it to do so, are entitled, to the fullest extent
permitted by law, to make such determination or to take or decline to take such
other action free of any duty or obligation whatsoever to the Partnership or any
Limited Partner, and the General Partner, or such Affiliates causing it to do
so, shall not, 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
Group Member Agreement, any other agreement contemplated hereby or under the
Delaware Act or any other law, rule or regulation or at equity, and the Person
or Persons making such determination or taking or declining to take such other
action shall be permitted to do so in their sole and absolute discretion.  By
way of illustration and not of limitation, whenever the phrase, “the General
Partner at its option,” or some variation of that phrase, is used in this
Agreement, it indicates that the General Partner is acting in its individual
capacity.  For the avoidance of doubt, whenever the General Partner votes or
transfers its Partnership Interests, or refrains from voting or transferring its
Partnership Interests, it shall be acting in its individual capacity.

 

(d)           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.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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(e)           Notwithstanding anything to the contrary in this Agreement, the
General Partner and its Affiliates shall have no duty or obligation, express or
implied, to (i) sell or otherwise dispose of any asset of the Partnership Group
other than in the ordinary course of business or (ii) permit any Group Member to
use any facilities or assets of the General Partner and its Affiliates, except
as may be provided in contracts entered into from time to time specifically
dealing with such use.  Any determination by the General Partner or any of its
Affiliates to enter into such contracts shall be at its option.

 

(f)            Except as expressly set forth in this Agreement or expressly
required by the Delaware Act, neither the General Partner nor any other
Indemnitee shall have any duties or liabilities, including fiduciary duties, to
the Partnership or any Limited Partner, and the provisions of this Agreement, to
the extent that they restrict, 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, are agreed by the Partners to
replace such other duties and liabilities of the General Partner or such other
Indemnitee. Notwithstanding anything to the contrary in this Agreement, to the
fullest extent permitted by law, neither the General Partner nor any other
Indemnitee shall owe any duties or liabilities, including fiduciary duties, to
Series A Preferred Unitholders.

 

(g)           The Unitholders 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 7.9.

 

Section 18.10       Other Matters Concerning the General Partner and Other
Indemnitees.

 

(a)           The General Partner and any other Indemnitee may rely and shall be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order, bond,
debenture or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties.

 

(b)           The General Partner and any other Indemnitee 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 or such
Indemnitee, respectively, reasonably believes to be within such Person’s
professional or expert competence shall be conclusively presumed to have been
done or omitted in good faith and in accordance with such opinion.

 

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

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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Section 18.11       Purchase or Sale of Partnership Interests.  The General
Partner may cause the Partnership to purchase or otherwise acquire Partnership
Interests or Derivative 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 18.12       Registration Rights of the General Partner and its
Affiliates.

 

(a)           Demand Registration.  Upon receipt of a Notice from any Holder at
any time after the 180th day after the Closing Date, the Partnership shall file
with the Commission as promptly as reasonably practicable a registration
statement under the Securities Act (each, a “Registration Statement”) providing
for the resale of the Registrable Securities, which may, at the option of the
Holder giving such Notice, be a Registration Statement that provides for the
resale of the Registrable Securities from time to time pursuant to Rule 415
under the Securities Act.  The Partnership shall use commercially reasonable
efforts to cause such Registration Statement to become effective as soon as
reasonably practicable after the initial filing of the Registration Statement
and to remain effective and available for the resale of the Registrable
Securities by the Selling Holders named therein until the earlier of (i) six
months following such Registration Statement’s effective date and (ii) the date
on which all Registrable Securities covered by such Registration Statement have
been sold.  In the event one or more Holders request in a Notice to dispose of a
number of Registrable Securities that such Holder or Holders reasonably
anticipates will result in gross proceeds of at least $30 million in the
aggregate pursuant to a Registration Statement in an Underwritten Offering, the
Partnership shall retain underwriters that are reasonably acceptable to such
Selling Holders in order to permit such Selling Holders to effect such
disposition through an Underwritten Offering; provided, however, that the
Partnership shall have the exclusive right to select the bookrunning managers. 
The Partnership and such Selling Holders shall enter into an underwriting
agreement in customary form that is reasonably acceptable to the Partnership and
take all reasonable actions as are requested by the managing underwriters to
facilitate the Underwritten Offering and sale of Registrable Securities
therein.  No Holder may participate in the Underwritten Offering unless it
agrees to sell its Registrable Securities covered by the Registration Statement
on the terms and conditions of the underwriting agreement and completes and
delivers all necessary documents and information reasonably required under the
terms of such underwriting agreement.  In the event that the managing
underwriter of such Underwritten Offering advises the Partnership and the Holder
in writing that in its opinion the inclusion of all or some Registrable
Securities would adversely and materially affect the timing or success of the
Underwritten Offering, the amount of Registrable Securities that each Selling
Holder requested be included in such Underwritten Offering shall be reduced on a
Pro Rata basis to the aggregate amount that the managing underwriter deems will
not have such material and adverse effect.  Any Holder may withdraw from such
Underwritten Offering by notice to the Partnership and the managing underwriter;
provided such notice is delivered prior to the launch of such Underwritten
Offering.

 

(b)           Piggyback Registration.  At any time after the 180th day after the
Closing Date, if the Partnership shall propose to file a Registration Statement
(other than pursuant to a

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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demand made pursuant to Section 7.12(a)) for an offering of Partnership
Interests for cash (other than an offering relating solely to an employee
benefit plan, an offering relating to a transaction on Form S-4 or an offering
on any registration statement that does not permit secondary sales), the
Partnership shall notify all Holders of such proposal at least five Business
Days before the proposed filing date.  The Partnership shall use commercially
reasonable efforts to include such number of Registrable Securities held by any
Holder in such Registration Statement as each Holder shall request in a Notice
received by the Partnership within two Business Days of such Holder’s receipt of
the notice from the Partnership.  If the Registration Statement about which the
Partnership gives notice under this Section 7.12(b) is for an Underwritten
Offering, then any Holder’s ability to include its desired amount of Registrable
Securities in such Registration Statement shall be conditioned on such Holder’s
inclusion of all such Registrable Securities in the Underwritten Offering;
provided that, in the event that the managing underwriter of such Underwritten
Offering advises the Partnership and the Holder in writing that in its opinion
the inclusion of all or some Registrable Securities would adversely and
materially affect the timing or success of the Underwritten Offering, the amount
of Registrable Securities that each Selling Holder requested be included in such
Underwritten Offering shall be reduced on a Pro Rata basis to the aggregate
amount that the managing underwriter deems will not have such material and
adverse effect.  In connection with any such Underwritten Offering, the
Partnership and the Selling Holders involved shall enter into an underwriting
agreement in customary form that is reasonably acceptable to the Partnership and
take all reasonable actions as are requested by the managing underwriters to
facilitate the Underwritten Offering and sale of Registrable Securities
therein.  No Holder may participate in the Underwritten Offering unless it
agrees to sells its Registrable Securities covered by the Registration Statement
on the terms and conditions of the underwriting agreement and completes and
delivers all necessary documents and information reasonably required under the
terms of such underwriting agreement.  Any Holder may withdraw from such
Underwritten Offering by notice to the Partnership and the managing underwriter;
provided such notice is delivered prior to the launch of such Underwritten
Offering.  The Partnership shall have the right to terminate or withdraw any
Registration Statement or Underwritten Offering initiated by it under this
Section 7.12(b) prior to the effective date of the Registration Statement or the
pricing date of the Underwritten Offering, as applicable.

 

(c)           Sale Procedures.  In connection with its obligations under this
Section 7.12, the Partnership shall:

 

(i)            furnish to each Selling Holder (A) as far in advance as
reasonably practicable before filing a Registration Statement or any supplement
or amendment thereto, upon request, copies of reasonably complete drafts of all
such documents proposed to be filed (including exhibits and each document
incorporated by reference therein to the extent then required by the rules and
regulations of the Commission), and provide each such Selling Holder the
opportunity to object to any information pertaining to such Selling Holder and
its plan of distribution that is contained therein and make the corrections
reasonably requested by such Selling Holder with respect to such information
prior to filing a Registration Statement or supplement or amendment thereto, and
(B) such number of copies of such Registration Statement and the prospectus
included therein and any supplements and amendments thereto as such Persons may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities covered by such Registration Statement; provided,
however, that the

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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Partnership will not have any obligation to provide any document pursuant to
clause (B) hereof that is available on the Commission’s website;

 

(ii)           if applicable, use its commercially reasonable efforts to
register or qualify the Registrable Securities covered by a Registration
Statement under the securities or blue sky laws of such jurisdictions as the
Selling Holders or, in the case of an Underwritten Offering, the managing
underwriter, shall reasonably request; provided, however, that the Partnership
will not be required to qualify generally to transact business in any
jurisdiction where it is not then required to so qualify or to take any action
that would subject it to general service of process in any jurisdiction where it
is not then so subject;

 

(iii)          promptly notify each Selling Holder and each underwriter, at any
time when a prospectus is required to be delivered under the Securities Act, of
(A) the filing of a Registration Statement or any prospectus or prospectus
supplement to be used in connection therewith, or any amendment or supplement
thereto, and, with respect to such Registration Statement or any post-effective
amendment thereto, when the same has become effective; and (B) any written
comments from the Commission with respect to any Registration Statement or any
document incorporated by reference therein and any written request by the
Commission for amendments or supplements to a Registration Statement or any
prospectus or prospectus supplement thereto;

 

(iv)          immediately notify each Selling Holder and each underwriter, at
any time when a prospectus is required to be delivered under the Securities Act,
of (A) the occurrence of any event or existence of any fact (but not a
description of such event or fact) as a result of which the prospectus or
prospectus supplement contained in a Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading (in the case of the prospectus contained therein, in the light of
the circumstances under which a statement is made); (B) the issuance or threat
of issuance by the Commission of any stop order suspending the effectiveness of
a Registration Statement, or the initiation of any proceedings for that purpose;
or (C) the receipt by the Partnership of any notification with respect to the
suspension of the qualification of any Registrable Securities for sale under the
applicable securities or blue sky laws of any jurisdiction.  Following the
provision of such notice, subject to Section 7.12(f), the Partnership agrees to,
as promptly as practicable, amend or supplement the prospectus or prospectus
supplement or take other appropriate action so that the prospectus or prospectus
supplement does not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing and to take such other reasonable action as is necessary to remove a
stop order, suspension, threat thereof or proceedings related thereto; and

 

(v)           enter into customary agreements and take such other actions as are
reasonably requested by the Selling Holders or the underwriters, if any, in
order to expedite or facilitate the disposition of the Registrable Securities,
including the provision of comfort letters and legal opinions as are customary
in such securities offerings.

 

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(d)                                 Suspension.  Each Selling Holder, upon
receipt of notice from the Partnership of the happening of any event of the kind
described in Section 7.12(c)(iv), shall forthwith discontinue disposition of the
Registrable Securities by means of a prospectus or prospectus supplement until
such Selling Holder’s receipt of the copies of the supplemented or amended
prospectus contemplated by such subsection or until it is advised in writing by
the Partnership that the use of the prospectus may be resumed, and has received
copies of any additional or supplemental filings incorporated by reference in
the prospectus.

 

(e)                                  Expenses.  Except as set forth in an
underwriting agreement for the applicable Underwritten Offering or as otherwise
agreed between a Selling Holder and the Partnership, all costs and expenses of a
Registration Statement filed or an Underwritten Offering that includes
Registrable Securities pursuant to this Section 7.12 (other than underwriting
discounts and commissions on Registrable Securities and fees and expenses of
counsel and advisors to Selling Holders) shall be paid by the Partnership.

 

(f)                                   Delay Right.  Notwithstanding anything to
the contrary herein, if the General Partner determines that the Partnership’s
compliance with its obligations in this Section 7.12 would be detrimental to the
Partnership because such registration would (x) materially interfere with a
significant acquisition, reorganization or other similar transaction involving
the Partnership, (y) require premature disclosure of material information that
the Partnership has a bona fide business purpose for preserving as confidential
or (z) render the Partnership unable to comply with requirements under
applicable securities laws, then the Partnership shall have the right to
postpone compliance with such obligations for a period of not more than six
months; provided, however, that such right may not be exercised more than twice
in any 24-month period.

 

(g)                                  Indemnification.

 

(i)                                     In addition to and not in limitation of
the Partnership’s obligation under Section 7.7, the Partnership shall, to the
fullest extent permitted by law, indemnify and hold harmless each Selling
Holder, its officers, directors and each Person who controls the Holder (within
the meaning of the Securities Act) and any agent thereof (collectively,
“Indemnified Persons”) from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including legal fees and expenses),
judgments, fines, penalties, interest, settlements or other amounts arising from
any and all claims, demands, actions, suits or proceedings, whether civil,
criminal, administrative or investigative, in which any 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 7.12(g) 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, preliminary prospectus, final
prospectus or issuer free writing prospectus under which any Registrable
Securities were registered or sold under the Securities Act, 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
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,
preliminary prospectus,

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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final prospectus or issuer free writing prospectus 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.

 

(ii)                                  Each Selling Holder shall, to the fullest
extent permitted by law, indemnify and hold harmless the Partnership, the
General Partner, the General Partner’s officers and directors and each Person
who controls the Partnership or the General Partner (within the meaning of the
Securities Act) and any agent thereof to the same extent as the foregoing
indemnity from the Partnership to the Selling Holders, but only with respect to
information regarding such Selling Holder furnished in writing by or on behalf
of such Selling Holder expressly for inclusion in a Registration Statement,
prospectus or free writing prospectus relating to the Registrable Securities
held by such Selling Holder.

 

(iii)                               The provisions of this Section 7.12(g) shall
be in addition to any other rights to indemnification or contribution that a
Person entitled to indemnification under this Section 7.12(g) may have pursuant
to law, equity, contract or otherwise.

 

(h)                                 Specific Performance.  Damages in the event
of breach of Section 7.12 by a party hereto may be difficult, if not impossible,
to ascertain, and it is therefore agreed that each party, in addition to and
without limiting any other remedy or right it may have, will have the right to
seek an injunction or other equitable relief in any court of competent
jurisdiction, enjoining any such breach, and enforcing specifically the terms
and provisions hereof, and each of the parties hereto hereby waives, to the
fullest extent permitted by law, any and all defenses it may have on the ground
of lack of jurisdiction or competence of the court to grant such an injunction
or other equitable relief.  The existence of this right will not preclude any
such party from pursuing any other rights and remedies at law or in equity that
such party may have.

 

Section 18.13                     Reliance by Third Parties.  Notwithstanding
anything to the contrary in this Agreement, any Person dealing with the
Partnership shall be entitled to assume that the General Partner and any officer
of the General Partner authorized by the General Partner to act on behalf of and
in the name of the Partnership has full power and authority to encumber, sell or
otherwise use in any manner any and all assets of the Partnership and to enter
into any authorized contracts on behalf of the Partnership, and such Person
shall be entitled to deal with the General Partner or any such officer as if it
were the Partnership’s sole party in interest, both legally and beneficially. 
Each Limited Partner hereby waives, 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 any such officer or its representatives.  Each and every
certificate, document or other instrument executed on behalf of the Partnership
by the General Partner or its representatives shall be conclusive evidence in
favor of any and every Person relying thereon or claiming thereunder that (a) at
the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect, (b) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the

 

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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 XIX.
BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

Section 19.01                     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 3.3(a).  Any books and
records maintained by or on behalf of the Partnership in the regular course of
its business, including the register 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 Partner shall
be permitted to 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 19.02                     Fiscal Year.  The fiscal year of the
Partnership shall be a fiscal year ending December 31.

 

Section 19.03                     Reports.

 

(a)                                 Whether or not the Partnership is subject to
the requirement to file reports with the Commission, as soon as practicable, but
in no event later than 105 days after the close of each fiscal year of the
Partnership (or such shorter period as required by the Commission), the General
Partner shall cause to be mailed or made available, by any reasonable means
(including posting on or accessible through the Partnership’s or the
Commission’s website) to each Record Holder of a Unit as of a date selected by
the General Partner, an annual report containing financial statements of the
Partnership for such fiscal year of the Partnership, presented in accordance
with U.S. GAAP, including a balance sheet and statements of operations,
Partnership equity and cash flows, such statements to be audited by a firm of
independent public accountants selected by the General Partner, and such other
information as may be required by applicable law, regulation or rule of the
Commission or any National Securities Exchange on which the Units are listed or
admitted to trading, or as the General Partner determines to be necessary or
appropriate.

 

(b)                                 Whether or not the Partnership is subject to
the requirement to file reports with the Commission, as soon as practicable, but
in no event later than 50 days after the close of each Quarter (or such shorter
period as required by the Commission) except the last Quarter of each fiscal
year, the General Partner shall cause to be mailed or made available, by any

 

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reasonable means (including posting on or accessible through the Partnership’s
or the Commission’s website) to each Record Holder of a Unit, as of a date
selected by the General Partner, a report containing unaudited financial
statements of the Partnership and such other information as may be required by
applicable law, regulation or rule of the Commission or any National Securities
Exchange on which the Units are listed or admitted to trading, or as the General
Partner determines to be necessary or appropriate.

 

ARTICLE XX.
TAX MATTERS

 

Section 20.01                     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 period or 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 period other than a year ending on December 31, the General
Partner shall use reasonable efforts to change the taxable period of the
Partnership to a year ending on December 31.  The tax information reasonably
required by Record Holders for federal, state and local income tax reporting
purposes with respect to a taxable period shall be furnished to them within
90 days of the close of the calendar year in which the Partnership’s taxable
period ends.  The classification, realization and recognition of income, gain,
losses and deductions and other items shall be on the accrual method of
accounting for federal income tax purposes.

 

Section 20.02                     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 to trading during the calendar
month in which such transfer is deemed to occur pursuant to
Section 6.2(f) 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 20.03                     Tax Controversies.  Subject to the provisions
hereof, the General Partner is designated as the “tax matters partner” (as
defined in Section 6231(a)(7) of the Code) (the “Tax Matters Partner”) 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

 

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required by the General Partner to conduct such proceedings.  Each Partner
agrees that notice of or updates regarding tax controversies shall be deemed
conclusively to have been given or made by the Tax Matters Partner if the
Partnership has either (a) filed the information for which notice is required
with the Commission via its Electronic Data Gathering, Analysis and Retrieval
system and such information is publicly available on such system or (b) made the
information for which notice is required available on any publicly available
website maintained by the Partnership, whether or not such Partner remains a
Partner in the Partnership at the time such information is made publicly
available.

 

With respect to tax returns filed for taxable years beginning on or after
December 31, 2017, the General Partner (or its designee) will be designated as
the “partnership representative” in accordance with the rules prescribed
pursuant to Section 6223 of the Code (the “Partnership Representative”) and
shall have the sole authority to act on behalf of the Partnership 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. The General
Partner (or its designee) shall exercise, in its sole discretion, any and all
authority of the Partnership Representative under the Code, including, without
limitation, (i) binding the Partnership and its Partners with respect to tax
matters and (ii) determining whether to make any available election under
Section 6226 of the Code. The General Partner shall amend the provisions of this
Agreement as appropriate to reflect the proposal or promulgation of Treasury
Regulations implementing the partnership audit, assessment and collection
rules adopted by the Bipartisan Budget Act of 2015, including any amendments to
those rules.

 

Section 20.04                     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 Section 12.4(c) in the amount of such withholding from such
Partner.

 

ARTICLE XXI.
ADMISSION OF PARTNERS

 

Section 21.01                     Admission of Limited Partners.

 

(a)                                 Upon the issuance by the Partnership of
Common Units, Subordinated Units and Incentive Distribution Rights to the
General Partner, the Organizational Limited Partner and the IPO Underwriters in
connection with the Initial Public Offering as described in Article V, such
Persons, by acceptance of such Partnership Interests, and upon becoming the
Record Holders of such Partnership Interests, were admitted to the Partnership
as Initial Limited Partners in respect of the Common Units, Subordinated Units
or Incentive Distribution Rights

 

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issued to them and were bound by this Agreement, all with or without execution
of this Agreement by such Persons.

 

(b)                                 By acceptance of any Limited Partner
Interests transferred in accordance with Article IV or acceptance of any Limited
Partner Interests issued pursuant to Article V 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 such Person acquiring, a Limited
Partner Interest (including any nominee, agent or representative acquiring such
Limited Partner Interests for the account of another Person or Group, who shall
be subject to Section 10.1(c)) (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 such Person becomes the Record Holder of the Limited
Partner Interests so transferred or acquired, (ii) shall become bound, and shall
be deemed to have agreed to be bound, by the terms of this Agreement,
(iii) shall be deemed to represent that the transferee or acquirer has the
capacity, power and authority to enter into this Agreement and (iv) shall be
deemed to make any consents, acknowledgements or waivers contained in this
Agreement, all with or without execution of this Agreement by such Person.  The
transfer of any Limited Partner Interests and the admission of any new Limited
Partner shall not constitute an amendment to this Agreement.  A Person may
become a Limited Partner 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 becoming 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.

 

(c)                                  With respect to any Limited Partner that
holds Units representing Limited Partner Interests for another Person’s account
(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
Limited Partner shall, in exercising the rights of a Limited Partner in respect
of such Units on any matter, and unless the arrangement between such Persons
provides otherwise, take all action as a Limited Partner by virtue of being the
Record Holder of such Units at the direction of the Person who is the beneficial
owner, and the Partnership shall be entitled to assume such Limited Partner is
so acting without further inquiry.

 

(d)                                 The name and mailing address of each Record
Holder shall be listed on the books of the Partnership maintained for such
purpose by the Partnership or the Transfer Agent.  The General Partner shall
update the books 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).

 

(e)                                  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(b).

 

Section 21.02                     Admission of Successor General Partner.  A
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 Interest pursuant
to Section 4.6 who is proposed to be admitted as a successor

 

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General Partner shall be admitted to the Partnership as the General Partner,
effective immediately prior to (a) the withdrawal or removal of the predecessor
or transferring General Partner pursuant to Section 11.1 or Section 11.2 or
(b) the transfer of the General Partner Interest pursuant to Section 4.6;
provided, however, that no such successor shall be admitted to the Partnership
until compliance with the terms of Section 4.6 has occurred and such successor
has executed and delivered such other documents or instruments as may be
required to effect such admission.  Any such successor is hereby authorized to
and shall, subject to the terms hereof, carry on the business of the members of
the Partnership Group without dissolution.

 

Section 21.03                     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 XXII.
WITHDRAWAL OR REMOVAL OF PARTNERS

 

Section 22.01                     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
General Partner Interest 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) through (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

 

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(vi)                              (A) if 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) if the General Partner is a partnership or a limited
liability company, the dissolution and commencement of winding up of the General
Partner; (C) if the General Partner is acting in such capacity by virtue of
being a trustee of a trust, the termination of the trust; (D) if the General
Partner is a natural person, his death or adjudication of incompetency; and
(E) otherwise upon the termination of the General Partner.

 

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

 

(b)                                 Withdrawal of the General Partner from the
Partnership upon the occurrence of an Event of Withdrawal shall not constitute a
breach of this Agreement under the following circumstances:  (i) at any time
during the period beginning on the Closing Date and ending at 12:00 midnight,
Eastern Time, on September 30, 2023 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 a Unit Majority (excluding Common Units owned 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 federal
income tax purposes (to the extent not already so treated or taxed); (ii) at any
time after 12:00 midnight, Eastern Time, on September 30, 2023 the General
Partner voluntarily withdraws by giving at least 90 days’ advance notice to the
Unitholders, such withdrawal to take effect on the date specified in such
notice; (iii) at any time that the General Partner ceases to be the General
Partner pursuant to Section 11.1(a)(ii) or is removed pursuant to Section 11.2;
or (iv) notwithstanding clause (i) of this sentence, at any time that the
General Partner voluntarily withdraws by giving at least 90 days’ advance notice
of its intention to withdraw to the Limited Partners, such withdrawal to take
effect on the date specified in the notice, if at the time such notice is given
one Person and its Affiliates (other than the General Partner and its
Affiliates) own beneficially or of record or control at least 50% of the
Outstanding Units.  The withdrawal of the General Partner from the Partnership
upon the occurrence of an Event of Withdrawal shall also constitute the
withdrawal of the General Partner as general partner or managing member, if any,
to the extent applicable, of the other Group Members.  If the General Partner
gives a notice of withdrawal pursuant to Section 11.1(a)(i), the holders of a
Unit Majority may, prior to the effective date of such withdrawal, elect a
successor General Partner.  The Person so elected as successor General Partner
shall automatically become the successor general partner or managing member, to
the extent applicable, of the other Group Members of which the General Partner
is a general partner or a managing member.  If, prior to the effective date of
the General Partner’s withdrawal, a successor is not elected 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

 

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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.

 

Section 22.02                     Removal of the General Partner.  The General
Partner may be removed if such removal is approved by the Unitholders holding at
least 66 2/3% of the Outstanding Units (including, for the avoidance of doubt,
Units held by the General Partner and its Affiliates) voting as a single class. 
Any such action by such holders for removal of the General Partner must also
provide for the election of a successor General Partner by the Unitholders
holding a Unit Majority (including, for the avoidance of doubt, 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 22.03                     Interest of Departing General Partner and
Successor General Partner.

 

(a)                                 In the event of (i) withdrawal of the
General Partner under circumstances where such withdrawal does not violate this
Agreement or (ii) removal of the General Partner by the holders of Outstanding
Units under circumstances where Cause does not exist, if the successor General
Partner is elected in accordance with the terms of Section 11.1 or Section 11.2,
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 its General Partner Interest and its or its
Affiliates’ general partner interest (or equivalent interest), if any, in the
other Group Members and all of its or its Affiliates’ Incentive Distribution
Rights (collectively, the “Combined Interest”) in exchange for an amount in cash
equal to the fair market value of such Combined Interest, such amount to be
determined and payable as of the effective date of its withdrawal or removal. 
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 Section 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 the Combined Interest for such fair market value of
such Combined Interest.  In either event, the Departing General Partner shall be
entitled

 

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to receive all reimbursements due such Departing General Partner pursuant to
Section 7.4, including any employee-related liabilities (including severance
liabilities), incurred in connection with the termination of any employees
employed by the Departing General Partner or its Affiliates (other than any
Group Member) for the benefit of the Partnership or the other Group Members.

 

For purposes of this Section 11.3(a), the fair market value of the 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.  In making its determination,
such third independent investment banking firm or other independent expert may
consider the then current trading price of Units on any National Securities
Exchange on which Units are then listed or admitted to trading, the value of the
Partnership’s assets, the rights and obligations of the Departing General
Partner, the value of the Incentive Distribution Rights and the General Partner
Interest and other factors it may deem relevant.

 

(b)                                 If the Combined Interest is not purchased in
the manner set forth in Section 11.3(a), the Departing General Partner (or its
transferee) shall become a Limited Partner and its Combined Interest shall be
converted into Common Units pursuant to a valuation made by an investment
banking firm or other independent expert selected pursuant to Section 11.3(a),
without reduction in such Partnership Interest (but subject to proportionate
dilution by reason of the admission of its successor).  Any successor General
Partner shall indemnify the Departing General Partner (or its transferee) as to
all debts and liabilities of the Partnership arising on or after the date on
which the Departing General Partner (or its transferee) becomes a Limited
Partner.  For purposes of this Agreement, conversion of the Combined Interest of
the Departing General Partner to Common Units will be characterized as if the
Departing General Partner (or its transferee) contributed its Combined Interest
to the Partnership in exchange for the newly issued Common Units.

 

(c)                                  If a successor General Partner is elected
in accordance with the terms of Section 11.1 or Section 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 the party entitled to do so, the successor
General Partner shall, at the effective date of its admission to the
Partnership, contribute to the Partnership cash in the amount equal to the
product of (x) the quotient obtained by dividing (A) the Percentage Interest of
the General Partner Interest of the Departing General Partner by

 

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(B) a percentage equal to 100% less the Percentage Interest of the General
Partner Interest of the Departing General Partner and (y) 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 22.04                     Withdrawal of Limited Partners.  No Limited
Partner shall have any right to withdraw from the Partnership; provided,
however, that when a transferee of a Limited Partner’s Limited Partner Interest
becomes a Record Holder of the Limited Partner Interest so transferred, such
transferring Limited Partner shall cease to be a Limited Partner with respect to
the Limited Partner Interest so transferred.

 

ARTICLE XXIII.
DISSOLUTION AND LIQUIDATION

 

Section 23.01                     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, Section 11.2 or Section 12.2, to
the fullest extent permitted by law, 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 a Withdrawal Opinion of Counsel is received as
provided in Section 11.1(b) or Section 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.

 

Section 23.02                     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 Section 11.2, then, to the maximum extent permitted by law,
within 90 days thereafter, or (b) dissolution of the Partnership upon an event
constituting an Event of Withdrawal as defined in Section 11.1(a)(iv), (v) or
(vi), then, to the maximum extent permitted by law, within 180 days

 

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thereafter, the holders of a Unit Majority may elect to continue the business of
the Partnership on the same terms and conditions set forth in this Agreement by
appointing as a successor General Partner a Person approved by the holders of a
Unit Majority.  Unless such an election is made within the applicable time
period as set forth above, the Partnership shall conduct only activities
necessary to wind up its affairs.  If such an election is so made, then:

 

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

 

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

 

(iii)                               the successor General Partner shall be
admitted to the Partnership as General Partner, effective as of the Event of
Withdrawal, by agreeing in writing to be bound by this Agreement;

 

provided, however, that the right of the holders of a Unit Majority to approve a
successor General Partner and to 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) neither the Partnership nor any Group Member would be treated as an
association taxable as a corporation or otherwise be taxable as an entity for
federal income tax purposes upon the exercise of such right to continue (to the
extent not already so treated or taxed).

 

Section 23.03                     Liquidator.  Upon dissolution of the
Partnership, unless the business of the Partnership is continued pursuant to
Section 12.2, the General Partner shall select one or more Persons to act as
Liquidator.  The Liquidator (if other than the General Partner) shall be
entitled to receive such compensation for its services as may be approved by
holders of at least a Unit Majority.  The Liquidator (if other than the General
Partner) shall agree not to resign at any time without 15 days’ prior notice and
may be removed at any time, with or without cause, by notice of removal approved
by holders of at least a Unit Majority.  Upon dissolution, removal or
resignation of the Liquidator, a successor and substitute Liquidator (who shall
have and succeed to all rights, powers and duties of the original Liquidator)
shall within 30 days thereafter be approved by holders of at least a Unit
Majority. The right to approve a successor or substitute Liquidator in the
manner provided herein shall be deemed to refer also to any such successor or
substitute Liquidator approved in the manner herein provided.  Except as
expressly provided in this Article XII, the Liquidator approved in the manner
provided herein shall have and may exercise, without further authorization or
consent of any of the parties hereto, all of the powers conferred upon the
General Partner under the terms of this Agreement (but subject to all of the
applicable limitations, contractual and otherwise, upon the exercise of such
powers, other than the limitation on sale set forth in Section 7.3) 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.

 

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Section 23.04                     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)                                 The assets may be disposed of by public or
private sale or by distribution in kind to one or more Partners on such terms as
the Liquidator and such Partner or Partners may agree.  If any property is
distributed in kind, the Partner receiving the property shall be deemed for
purposes of Section 12.4(c) to have received cash equal to its fair market
value; and contemporaneously therewith, appropriate cash distributions must be
made to the other Partners.  The Liquidator may defer liquidation or
distribution of the Partnership’s assets for a reasonable time if it determines
that an immediate sale or distribution of all or some of the Partnership’s
assets would be impractical or would cause undue loss to the Partners.  The
Liquidator may distribute the Partnership’s assets, in whole or in part, in kind
if it determines that a sale would be impractical or would cause undue loss to
the Partners.

 

(b)                                 Liabilities of the Partnership include
amounts owed to the Liquidator as compensation for serving in such capacity
(subject to the terms of Section 12.3) and amounts to Partners otherwise than in
respect of their distribution rights under Article VI.  With respect to any
liability that is contingent, conditional or unmatured or is otherwise not yet
due and payable, the Liquidator shall either settle such claim for such amount
as it thinks appropriate or establish a reserve of cash or other assets to
provide for its payment.  When paid, any unused portion of the reserve shall be
distributed as additional liquidation proceeds.

 

(c)                                  All property and all cash (including cash
equivalents) in excess of that required to satisfy liabilities as provided in
Section 12.4(b) and that required to satisfy liquidation preferences of the
Series A Preferred Units provided for under Section 5.11(b)(x) 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 period
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 period (or, if later, within 90 days after said date of such
occurrence); provided that any  property or cash (including cash equivalents)
available for distribution under this Section 12.4(c) shall be distributed with
respect to the Series A Preferred Units, Series A Parity Securities and Series A
Senior Securities (up to the positive balances in the associated Capital
Accounts) prior to any distribution of property or cash (including cash
equivalents) with respect to the Series A Junior Securities.

 

Section 23.05                     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.

 

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Section 23.06                     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 23.07                     Waiver of Partition.  To the maximum extent
permitted by law, each Partner hereby waives any right to partition of the
Partnership property.

 

Section 23.08                     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 XXIV.
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE

 

Section 24.01                     Amendments to be Adopted Solely by the General
Partner.  Each Partner agrees that the General Partner, without the approval of
any Partner, subject to Section 5.11(b)(ii)(B), may amend any provision of this
Agreement and execute, swear to, acknowledge, deliver, file and record whatever
documents may be required in connection therewith, to reflect:

 

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

 

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

 

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

 

(d)                                 a change that the General Partner determines
(i) does not adversely affect the Limited Partners considered as a whole or any
particular class of Partnership Interests as compared to other classes of
Partnership Interests in any material respect (except as permitted by subsection
(g) of this Section 13.1), (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 Units (including the division of any class or
classes of Outstanding Units into different classes to facilitate uniformity of
tax consequences within such classes of Units) or comply with any rule,
regulation, guideline or requirement of any National Securities Exchange on
which the Units are or will be listed or

 

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admitted to trading, (iii) to be necessary or appropriate in connection with
action taken by the General Partner pursuant to Section 5.8 or (iv) is required
to effect the intent expressed in the IPO 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 Derivative
Partnership Interests pursuant to Section 5.6;

 

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

 

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

 

(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 or Section 7.1(a);

 

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

 

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

 

Section 24.02                     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 free
of any duty or obligation whatsoever to the Partnership, any Limited Partner or
any other Person bound by this Agreement, and, in declining to propose or
approve an amendment to this Agreement, 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

 

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Group Member Agreement, any other agreement contemplated hereby or under the
Delaware Act or any other law, rule or regulation or at equity, and the General
Partner in determining whether to propose or approve any amendment to this
Agreement shall be permitted to do so in its sole and absolute discretion.  An
amendment to this Agreement shall be effective upon its approval by the General
Partner and, except as otherwise provided by Section 13.1 or Section 13.3, the
holders of a Unit Majority, unless a greater or different percentage of
Outstanding Units is required under this Agreement.  Each proposed amendment
that requires the approval of the holders of a specified percentage of
Outstanding Units or class 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 class of Outstanding Units, as applicable, 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 amendments.  The General Partner shall be deemed to have
notified all Record Holders as required by this Section 13.2 if it has posted or
made accessible such amendment through the Partnership’s or the Commission’s
website.

 

Section 24.03                     Amendment Requirements.

 

(a)                                 Notwithstanding the provisions of
Section 13.1 and Section 13.2, no provision of this Agreement that establishes a
percentage of Outstanding Units or percentage of a particular class of
Outstanding Units 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
Section 13.4, reducing such percentage or (ii) in the case of Section 11.2 or
Section 13.4, increasing such percentages, unless such amendment is approved by
the written consent or the affirmative vote of holders of Outstanding Units (or
holders of Outstanding Units of such applicable class, as the case may be) whose
aggregate Outstanding Units (generally or of such applicable class, as the case
may be) constitute (x) in the case of a reduction as described in
subclause (a)(i) hereof, not less than the voting requirement sought to be
reduced, (y) in the case of an increase in the percentage in Section 11.2, not
less than 90% of the Outstanding Units, or (z) in the case of an increase in the
percentage in Section 13.4, not less than a majority of the Outstanding Units.

 

(b)                                 Notwithstanding the provisions of
Section 13.1 and Section 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.

 

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(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(f), no amendments shall become effective
without the approval of the holders of at least 90% of the Outstanding Units
voting as a single class unless the Partnership obtains an Opinion of Counsel to
the effect that such amendment will not affect the limited liability of any
Limited Partner under applicable partnership law of the state under whose laws
the Partnership is organized.

 

(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 24.04                     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 specific purposes for
which the special meeting is to be called and the class or classes of Units for
which the meeting is proposed.  No business may be brought by any Limited
Partner before such special meeting except the business listed in the related
request.  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 or cause to be sent a
notice of the meeting to the Limited Partners.  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 notice of the meeting is given as provided
in Section 16.1.  Limited Partners shall not be permitted to 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.  If
any such vote were to take place, to the fullest extent permitted by law, it
shall be deemed null and void to the extent necessary so as not to jeopardize
the Limited Partners’ limited liability under the Delaware Act or the law of any
other state in which the Partnership is qualified to do business.

 

Section 24.05                     Notice of a Meeting.  Notice of a meeting
called pursuant to Section 13.4 shall be given to the Record Holders of the
class or classes of Units for which a meeting is proposed in writing by mail or
other means of written communication in accordance with Section 16.1.

 

Section 24.06                     Record Date.  For purposes of determining the
Limited Partners who are Record Holders of the class or classes of Limited
Partner Interests 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 shall set a Record Date, which shall not be less than 10 nor
more than 60 days before (a) the date of the meeting (unless such requirement
conflicts with any rule, regulation, guideline or requirement of any National
Securities Exchange on which the Units are listed or admitted to trading or U.S.
federal securities laws, in which case the rule,

 

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regulation, guideline or requirement of such National Securities Exchange or
U.S. federal securities laws shall govern) or (b) in the event that approvals
are sought without a meeting, the date by which such Limited Partners are
requested in writing by the General Partner to give such approvals.

 

Section 24.07                     Postponement and Adjournment.  Prior to the
date upon which any meeting of Limited Partners is to be held, the General
Partner may postpone such meeting one or more times for any reason by giving
notice to each Limited Partner entitled to vote at the meeting so postponed of
the place, date and hour at which such meeting would be held.  Such notice shall
be given not fewer than two days before the date of such meeting and otherwise
in accordance with this Article XIII.  When a meeting is postponed, a new Record
Date need not be fixed unless such postponement shall be for more than 45 days. 
Any meeting of Limited Partners may be adjourned by the General Partner one or
more times for any reason, including the failure of a quorum to be present at
the meeting with respect to any proposal or the failure of any proposal to
receive sufficient votes for approval.  No Limited Partner vote shall be
required for any adjournment.  A meeting of Limited Partners may be adjourned by
the General Partner as to one or more proposals regardless of whether action has
been taken on other matters.  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 24.08                     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 objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened; and except that attendance at a meeting is not a waiver of any right
to disapprove of any matters submitted for consideration or to object to the
failure to submit for consideration any matters required to be included in the
notice of the meeting, but not so included, if such objection is expressly made
at the beginning of the meeting.

 

Section 24.09                     Quorum and Voting.  The presence, in person or
by proxy, of holders of a majority of the Outstanding Units of the class or
classes for which a meeting has been called (including Outstanding Units deemed
owned by the General Partner) 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 at
such meeting shall be deemed to constitute the act of all Limited Partners,
unless a different percentage or class vote is required with respect to such
action under the

 

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provisions of this Agreement, in which case the act of the Limited Partners
holding Outstanding Units that in the aggregate represent at least such
different percentage or the act of the Limited Partners holding the requisite
percentage of the necessary class, as applicable, 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
exit 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 or the required percentage of Outstanding Units of the applicable class,
as the case may be, specified in this Agreement.

 

Section 24.10                     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 submission and revocation of approvals in writing.

 

Section 24.11                     Action Without a Meeting.  If authorized by
the General Partner, any action that may be taken at a meeting of the Limited
Partners may be taken without a meeting if an approval in writing setting forth
the action so taken is signed by Limited Partners owning not less than the
minimum percentage of the Outstanding Units that would be necessary to authorize
or take such action at a meeting at which all the Limited Partners were present
and voted (unless such provision conflicts with any rule, regulation, guideline
or requirement of any National Securities Exchange on which the Units are listed
or admitted to trading, in which case the rule, regulation, guideline or
requirement of such National Securities Exchange shall govern).  Prompt notice
of the taking of action without a meeting shall be given to the Limited Partners
who have not approved 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 Outstanding
Units held by such Limited Partners, the Partnership shall be deemed to have
failed to receive a ballot for the Outstanding Units that were not voted.  If
approval of the taking of any permitted 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) approvals
sufficient to take the action proposed 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 first 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

 

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Partners to be deemed to be taking part in the management and control of the
business and affairs of the Partnership so as to jeopardize the Limited
Partners’ limited liability, and (ii) is otherwise permissible under the state
statutes then governing the rights, duties and liabilities of the Partnership
and the Partners.

 

Section 24.12                     Right to Vote and Related Matters.

 

(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 that is the Record Holder (such as a broker,
dealer, bank, trust company or clearing corporation, or an agent of any of the
foregoing), such Record Holder 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 such Record Holder 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.

 

(c)                                  Notwithstanding anything in this Agreement
to the contrary, the Record Holder of an Incentive Distribution Right shall not
be entitled to vote such Incentive Distribution Right on any Partnership matter.

 

ARTICLE XXV.
MERGER, CONSOLIDATION OR CONVERSION

 

Section 25.01                     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 or any other country, pursuant
to a written 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.

 

Section 25.02                     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 fullest 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 duty or obligation whatsoever to the Partnership or any Limited
Partner and, in declining to

 

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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, and the General Partner in determining whether
to consent to any merger, consolidation or conversion of the Partnership shall
be permitted to do so in its sole and absolute discretion.

 

(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)                                     name and state or country of domicile of
each of the business entities proposing to merge or consolidate;

 

(ii)                                  the name and state of domicile 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 (A) 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 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 (B) 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, however, 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

 

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(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 shall approve the Plan of
Conversion, which shall set forth:

 

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

 

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

 

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

 

(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
converted entity;

 

(v)                                 in an attachment or exhibit, the certificate
of limited partnership of the Partnership;

 

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

 

(vii)                           the effective time of the conversion, which may
be the date of the filing of the certificate of conversion or a later date
specified in or determinable in accordance with the Plan of Conversion
(provided, that if the effective time of the conversion is to be later than the
date of the filing of such articles of conversion, 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 conversion and stated therein); and

 

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

 

Section 25.03                     Approval by Limited Partners.

 

(a)                                 Except as provided in Section 14.3(d) and
Section 14.3(e), 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 the case may be, shall be
included in or enclosed with the notice of a special meeting or the written
consent and, subject to any applicable requirements of Regulation 14A pursuant
to the Exchange Act or successor provision, no other disclosure regarding the
proposed merger, consolidation or conversion shall be required.

 

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(b)                                 Except as provided in Section 14.3(d) and
Section 14.3(e), the Merger Agreement or Plan of Conversion, as the case may be,
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.

 

(c)                                  Except as provided in Section 14.3(d) and
Section 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 articles 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 Plan of Conversion, as the case may be.

 

(d)                                 Notwithstanding anything else contained in
this Article XIV or in this Agreement, but subject to Section 5.11(b)(vi), 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 limited liability under the laws of the jurisdiction governing the other
limited liability entity (if that jurisdiction is not Delaware) 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 federal income tax purposes (to the
extent not previously treated as such), (ii) the sole purpose of such
conversion, merger, or conveyance is to effect a mere change in the legal form
of the Partnership into another limited liability entity and (iii) the 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, but subject to
Section 5.11(b)(vi), the General Partner is permitted, without Limited Partner
approval, to merge or consolidate the Partnership with or into another limited
liability 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 under the laws of the
jurisdiction governing the other limited liability entity (if that jurisdiction
is not Delaware) 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 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

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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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.

 

(f)                                   Pursuant to Section 17-211(g) of the
Delaware Act, an agreement of merger or consolidation approved in accordance
with this Article XIV may (i) effect any amendment to this Agreement or
(ii) effect the adoption of a new partnership agreement for the Partnership if
it is the Surviving Business Entity.  Any such amendment or adoption made
pursuant to this Section 14.3 shall be effective at the effective time or date
of the merger or consolidation.

 

Section 25.04                     Certificate of Merger or Certificate of
Conversion.  Upon the required approval by the General Partner and the
Unitholders of a Merger Agreement or the Plan of Conversion, as the case may be,
a certificate of merger or certificate of conversion or other filing, as
applicable, shall be executed and filed with the Secretary of State of the State
of Delaware or the appropriate filing office of any other jurisdiction, as
applicable, in conformity with the requirements of the Delaware Act or other
applicable law.

 

Section 25.05                     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;

 

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(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

 

(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 shall
be so converted, and Partners shall be entitled only to the rights provided in
the Plan of Conversion.

 

ARTICLE XXVI.
RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS

 

Section 26.01                     Right to Acquire Limited Partner Interests.

 

(a)                                 Notwithstanding any other provision of this
Agreement except Section 5.11(b)(vi), if at any time the General Partner and its
Affiliates hold more than 80% of the total Limited Partner Interests of any
class then Outstanding, the General Partner shall then have the right, which
right it may assign and transfer in whole or in part to the Partnership or any
Affiliate of the General Partner, exercisable at its option, to purchase all,
but not less than all, of such Limited Partner Interests (but excluding the
Series A Preferred Units, which are subject to Section 5.11(b)(vi)) 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
Business Days prior to the date that the notice described in Section 15.1(b) is
mailed and (y) the highest price paid by the General Partner or any of its
Affiliates for any such Limited Partner Interest of such class purchased during
the 90-day period preceding the date that the notice described in
Section 15.1(b) is mailed.

 

(b)                                 If the General Partner, any Affiliate of the
General Partner or the Partnership elects to exercise the right to purchase
Limited Partner Interests granted pursuant to Section 15.1(a), the General
Partner shall deliver to the applicable Transfer Agent or exchange agent notice
of such election to purchase (the “Notice of Election to Purchase”) and shall
cause

 

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the Transfer Agent or exchange 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), together with such
information as may be required by law, rule or regulation, at least 10, but not
more than 60, days prior to the Purchase Date.  Such Notice of Election to
Purchase shall also be filed and distributed as may be required by the
Commission or any National Securities Exchange on which such Limited Partner
Interests are listed.  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, or instructions agreeing to such redemption
in exchange for payment, at such office or offices of the Transfer Agent or
exchange agent as the Transfer Agent or exchange agent may specify, or as may be
required by any National Securities Exchange on which such Limited Partner
Interests are listed.  Any such Notice of Election to Purchase mailed to a
Record Holder of Limited Partner Interests at his address as reflected in the
Partnership Register 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 or exchange 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 or
redemption instructions shall not have been surrendered for purchase or
provided, respectively, all rights of the holders of such Limited Partner
Interests (including any rights pursuant to Article IV, Article V, Article VI,
and Article XII) shall thereupon cease, except the right to receive the purchase
price (determined in accordance with Section 15.1(a)) for Limited Partner
Interests therefor, without interest, upon surrender to the Transfer Agent or
exchange agent of the Certificates representing such Limited Partner Interests,
in the case of Limited Partner Interests evidenced by Certificates, or
instructions agreeing to such redemption, 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 Partnership Register,
and the General Partner or any Affiliate of the General Partner, or the
Partnership, as the case may be, shall be deemed to be the Record Holder of all
such Limited Partner Interests from and after the Purchase Date and shall have
all rights as the Record Holder of such Limited Partner Interests (including all
rights as owner of such Limited Partner Interests pursuant to Article IV,
Article V, Article VI and Article 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 or exchange agent in exchange for
payment of the amount described in Section 15.1(a) therefor, without interest
thereon, in accordance with procedures set forth by the General Partner.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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ARTICLE XXVII.
GENERAL PROVISIONS

 

Section 27.01                     Addresses and Notices; Written Communications.

 

(a)                                 Any notice, demand, request, report or proxy
materials required or permitted to be given or made to a Partner under this
Agreement shall be in writing and shall be deemed given or made when delivered
in person or when sent by first class United States mail or by other means of
written communication to the Partner at the address described below.  Except as
otherwise provided herein, 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 in the Partnership Register, 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 in the Partnership Register 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.

 

(b)                                 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.

 

Section 27.02                     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.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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Section 27.03                     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 27.04                     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 27.05                     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 27.06                     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 27.07                     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 27.08                     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) or (b) without execution hereof.

 

Section 27.09                     Applicable Law; Forum; Venue and Jurisdiction;
Waiver of Trial by Jury.

 

(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 or
Group 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 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 owed by the General Partner, to the Partnership or the
Partners, (D) asserting a claim arising pursuant to any provision of the

 

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131

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Delaware Act or (E) asserting a claim governed by the internal affairs doctrine
shall be exclusively brought in the Court of Chancery of the State of Delaware,
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,
however, that any claims, suits, actions or proceedings over which the Court of
Chancery of the State of Delaware does not have jurisdiction shall be brought in
any other court in the State of Delaware having jurisdiction;

 

(ii)                                  irrevocably submits to the exclusive
jurisdiction of the courts of the State of Delaware in connection with any such
claim, suit, action or proceeding;

 

(iii)                               agrees not to, and 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 courts of the State of Delaware or
of any other court to which proceedings in the courts of the State of Delaware
may be appealed, (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, however, that nothing in this
clause (v) shall affect or limit any right to serve process in any other manner
permitted by law.

 

Section 27.10                     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 27.11                     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 27.12                     Facsimile and Email 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.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

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

 

 

 

GENERAL PARTNER:

 

 

 

PHILLIPS 66 PARTNERS GP LLC

 

 

 

By:

 

 

 

[Name]

 

 

[Title]

 

SIGNATURE PAGE TO SECOND AMENDED AND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP OF PHILLIPS 66 PARTNERS LP

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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EXHIBIT A
to the Second Amended and Restated
Agreement of Limited Partnership of
Phillips 66 Partners LP

 

Certificate Evidencing Common Units
Representing Limited Partner Interests in
Phillips 66 Partners LP

 

No.             

 

             Common Units

 

In accordance with Section 4.1 of the Second Amended and Restated Agreement of
Limited Partnership of Phillips 66 Partners LP, as amended, supplemented or
restated from time to time (the “Partnership Agreement”), Phillips 66 Partners
LP, a Delaware limited partnership (the “Partnership”), hereby certifies
that               (the “Holder”) is the registered owner of Common Units
representing limited partner interests in the Partnership (the “Common Units”)
transferable on the books of the Partnership, in person or by duly authorized
attorney, upon surrender of this Certificate properly endorsed.  The rights,
preferences and limitations of the Common Units are set forth in, and this
Certificate and the Common Units represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Partnership Agreement. 
Copies of the Partnership Agreement are on file at, and will be furnished
without charge on delivery of written request to the Partnership at, the
principal office of the Partnership located at 2331 CityWest Blvd., Houston,
Texas 77042.  Capitalized terms used herein but not defined shall have the
meanings given them in the Partnership Agreement.

 

THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF PHILLIPS 66 PARTNERS
LP THAT THIS SECURITY MAY NOT BE TRANSFERRED IF SUCH TRANSFER (AS DEFINED IN THE
PARTNERSHIP AGREEMENT) 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 AUTHORITY
WITH JURISDICTION OVER SUCH TRANSFER, (B) TERMINATE THE EXISTENCE OR
QUALIFICATION OF PHILLIPS 66 PARTNERS LP UNDER THE LAWS OF THE STATE OF
DELAWARE, OR (C) CAUSE PHILLIPS 66 PARTNERS LP TO BE TREATED AS AN ASSOCIATION
TAXABLE AS A CORPORATION OR OTHERWISE TO BE TAXED AS AN ENTITY FOR FEDERAL
INCOME TAX PURPOSES (TO THE EXTENT NOT ALREADY SO TREATED OR TAXED).  THE
GENERAL PARTNER OF PHILLIPS 66 PARTNERS LP MAY IMPOSE ADDITIONAL RESTRICTIONS ON
THE TRANSFER OF THIS SECURITY IF IT RECEIVES AN OPINION OF COUNSEL THAT SUCH
RESTRICTIONS ARE NECESSARY TO AVOID A SIGNIFICANT RISK OF PHILLIPS 66 PARTNERS
LP BECOMING TAXABLE AS A CORPORATION OR OTHERWISE BECOMING TAXABLE AS AN ENTITY
FOR FEDERAL INCOME TAX PURPOSES.  THIS SECURITY MAY BE SUBJECT TO ADDITIONAL
RESTRICTIONS ON ITS TRANSFER PROVIDED IN THE PARTNERSHIP AGREEMENT.  COPIES OF
SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

A-1

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OF RECORD OF THIS SECURITY TO THE SECRETARY OF THE GENERAL PARTNER AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE PARTNERSHIP.  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 TO TRADING.

 

The Holder, by accepting this Certificate, is deemed to have (i) requested
admission as, and agreed to become, a Limited Partner and to have agreed to
comply with and be bound by and to have executed the Partnership Agreement,
(ii) represented and warranted that the Holder has all right, power and
authority and, if an individual, the capacity necessary to enter into the
Partnership Agreement, and (iii) made the waivers and given the consents and
approvals contained in the Partnership Agreement.

 

This Certificate shall not be valid for any purpose unless it has been
countersigned and registered by the Transfer Agent.  This Certificate shall be
governed by and construed in accordance with the laws of the State of Delaware.

 

Dated:

 

 

PHILLIPS 66 PARTNERS LP

 

 

 

 

 

 

 

 

 

 

 

By:

PHILLIPS 66 PARTNERS GP LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Countersigned and Registered by:

 

[                                                ]

as Transfer Agent and Registrar

 

By:

 

 

 

Authorized Signature

 

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

A-2

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[Reverse of Certificate]

 

ABBREVIATIONS

 

The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as follows according to applicable laws or
regulations:

 

TEN COM — as tenants in common

 

UNIF GIFT TRANSFERS MIN ACT

 

 

 

TEN ENT — as tenants by the entireties

 

Custodian

 

 

(Cust)

(Minor)

 

 

 

 

JT TEN — as joint tenants with right of survivorship and not as tenants in
common

 

under Uniform Gifts/Transfers to CD Minors Act (State)

 

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

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

A-3

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ASSIGNMENT OF COMMON UNITS OF
PHILLIPS 66 PARTNERS LP

 

FOR VALUE RECEIVED,

 

hereby assigns, conveys, sells and transfers unto

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Please print or typewrite name and address of assignee)

 

(Please insert Social Security or other identifying number of assignee)

 

Common Units representing limited partner interests evidenced by this
Certificate, subject to the Partnership Agreement, and does hereby irrevocably
constitute and appoint                          as its attorney-in-fact with
full power of substitution to transfer the same on the books of Phillips 66
Partners LP.

 

Date:

 

 

NOTE: The signature to any endorsement hereon must correspond with the name as
written upon the face of this Certificate in every particular, without
alteration, enlargement or change.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Signature)

 

 

 

 

 

 

 

 

 

 

 

(Signature)

 

THE SIGNATURE(S) MUST BE
GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS
WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION
PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15

 

 

 

No transfer of the Common Units evidenced hereby will be registered on the books
of the Partnership, unless the Certificate evidencing the Common Units to be
transferred is surrendered for registration or transfer.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

A-4

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Exhibit D

 

Form of General Partner Waiver

 

[·], 2017

 

Reference is hereby made to that certain Series A Preferred Unit and Common Unit
Purchase Agreement, dated as of [·], 2017, by and among Phillips 66 Partners LP
(the “Partnership”) and each of the Purchasers set forth in Schedule A thereto
(the “Purchase Agreement”), pursuant to which the Partnership has agreed to
issue and sell (a) an aggregate of [·] Series A Preferred Units representing
limited partner interests of the Partnership, for a cash purchase price of $[·]
per Series A Preferred Unit and (b) an aggregate of [·] Common Units
representing limited partner interests of the Partnership, for a cash purchase
price of $[·] per Common Unit. Capitalized terms used but not defined herein
shall have the meaning given such terms in the Purchase Agreement.

 

The General Partner, in its own capacity and in its capacity as the general
partner of the Partnership, hereby waives any preemptive rights it or its
Affiliates may hold pursuant to Section 5.7 of the Second Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of [·], 2017, with
respect to the offering, issuance and sale of the Purchased Units pursuant to
the Purchase Agreement.

 

IN WITNESS WHEREOF, the undersigned executes this General Partner Waiver,
effective as of the date first written above.

 

 

 

 

PHILLIPS 66 PARTNERS GP LLC

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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Exhibit E-1

 

Form of Opinion of Latham & Watkins LLP

 

1.                                      The Partnership is a limited partnership
under the Delaware Revised Uniform Limited Partnership Act (the “Delaware LP
Act”), with limited partnership power and authority to own its properties and to
conduct its business in all material respects as described in the Partnership
SEC Documents. With your consent, based solely on certificates from public
officials, we confirm that the Partnership is validly existing and in good
standing under the laws of the State of Delaware.

 

2.                                      The General Partner is a limited
liability company under the Delaware LLC Act, with limited liability company
power and authority to own its properties, conduct its business and act as the
general partner of the Partnership in all material respects as described in the
Partnership SEC Documents. With your consent, based solely on certificates from
public officials, we confirm that the General Partner is validly existing and in
good standing under the laws of the State of Delaware.

 

3.                                      Each of the subsidiaries of the
Partnership listed on Annex A hereto (the “Material Subsidiaries”) is a
corporation or limited liability company, as applicable, under the Delaware
General Corporation Law (the “DGCL”) or the Delaware Limited Liability Company
Act (the “Delaware LLC Act” and, together with the Delaware LP Act and the DGCL,
the “Delaware Laws”), as applicable, with corporate or limited liability
company, as applicable, power and authority to own its properties and to conduct
its business in all material respects as described in the Partnership SEC
Documents. With your consent, based solely on certificates from public
officials, we confirm that each of the Material Subsidiaries is validly existing
and in good standing under the laws of the State of Delaware.

 

4.                                      The Purchased Units to be issued and
sold to the Purchasers by the Partnership pursuant to the Purchase Agreement and
the limited partner interests represented thereby have been duly authorized by
all necessary limited partnership action of the Partnership and, when issued and
delivered to the Purchasers against payment therefor in accordance with the
terms of the Purchase Agreement, will be validly issued and free of preemptive
rights arising from the Partnership’s Organizational Documents as currently in
effect, except for the rights granted to the General Partner under Section 5.2
and Section 5.7 of the Second A&R LPA.  Under the Delaware LP Act, purchasers of
the Purchased Units will have no obligation to make further payments for their
purchase of the Purchased Units or contributions to the Partnership solely by
reason of their ownership of the Purchased Units or their status as a limited
partner of the Partnership and no personal liability for the debts, obligations
and liabilities of the Partnership, whether arising in contract, tort or
otherwise, solely by reason of being a limited partner of the Partnership.

 

5.                                      The PIK Units, if any, and the limited
partner interests represented thereby have been duly authorized by all necessary
limited partnership action of the Partnership and, when issued and delivered to
the recipients thereof in accordance with the terms of the Second A&R LPA, such
PIK Units and the limited partner interests represented thereby will be validly
issued and free of preemptive rights arising from the Partnership’s
Organizational Documents as

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

--------------------------------------------------------------------------------

 

currently in effect, except for the rights granted to the General Partner under
Section 5.2 and Section 5.7 of the Second A&R LPA.  Under the Delaware LP Act,
holders of the PIK Units will have no obligation to make further payments or
contributions to the Partnership solely by reason of their ownership of PIK
Units or their status as a limited partner of the Partnership and no personal
liability for the debts, obligations and liabilities of the Partnership, whether
arising in contract, tort or otherwise, solely by reason of being a limited
partner of the Partnership.

 

6.                                      The Conversion Units and the limited
partner interests represented thereby have been duly authorized by all necessary
limited partnership action of the Partnership and, when issued and delivered to
the recipients thereof upon conversion of the Purchased Preferred Units in
accordance with the terms of the Second A&R LPA, will be validly issued and free
of preemptive rights arising from the Partnership’s Organizational Documents as
currently in effect, except for the rights granted to the General Partner under
Section 5.2 and Section 5.7 of the Second A&R LPA. Under the Delaware LP Act,
holders of the Conversion Units will have no obligation to make further payments
or contributions to the Partnership solely by reason of their ownership of the
Conversion Units or their status as a limited partner of the Partnership and no
personal liability for the debts, obligations and liabilities of the
Partnership, whether arising in contract, tort or otherwise, solely by reason of
being a limited partner of the Partnership.

 

7.                                      The execution, delivery and performance
of the Purchase Agreement, the Second A&R LPA, the Registration Rights Agreement
(collectively, the “Transaction Documents”) by the Partnership or the General
Partner, as applicable, have been duly authorized by all necessary limited
partnership action of the Partnership and limited liability company action of
the General Partner, and each of the Transaction Documents have been duly
executed by the Partnership or the General Partner, as applicable.

 

8.                                      The execution and delivery by the
Partnership and the General Partner, as applicable, of the Transaction Documents
and the issuance and sale by the Partnership of the Purchased Units to you do
not on the date hereof:

 

(i) violate the provisions of the Partnership’s or General Partner’s
Organizational Documents;

 

(ii) result in the breach of or a default under any of the Specified
Agreements(18);

 

(iii) violate any federal, New York or Texas statute, rule or regulation
applicable to the Partnership or the Delaware Laws; or

 

(iv) require any consents, approvals or authorizations to be obtained by the
Partnership from, or any registrations, declarations or filings to be made by
the Partnership with, any governmental authority under any federal, New York or
Texas statute, rule or regulation applicable to the Partnership or the Delaware
Laws on or prior to the date hereof that have not been obtained or made.

 

--------------------------------------------------------------------------------

(18)  NTD: Defined as the material agreements filed as exhibits to the
Partnership’s Annual Report on Form 10-K and any Quarterly Report or Current
Report filed by the Partnership since such filing.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

--------------------------------------------------------------------------------

 

9.                                      The Partnership is not, and immediately
after giving effect to the issuance and sale of the Purchased Units in
accordance with the Purchase Agreement and after giving effect to the use of
proceeds from the sale of the Purchased Units to partially fund the transactions
contemplated by the Contribution Agreement, will not be required to be,
registered as an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

 

10.                               Assuming the accuracy of the representations
and warranties of the Purchasers and the Partnership contained in the Purchase
Agreement, the offer, issuance and sale of the Purchased Units by the
Partnership to the Purchasers solely in the manner contemplated by the Purchase
Agreement, are exempt from the registration requirements of the Securities Act.
We express no opinion, however, as to when or under what circumstances the
Purchasers may reoffer or resell any Purchased Units.

 

11.                               Except as otherwise described in the Second
A&R LPA or the Transaction Documents, there are no restrictions upon the voting
or transfer of any Purchased Units, PIK Units or Conversion Units pursuant to
the Organizational Documents of the Partnership or any Specified Agreement.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

--------------------------------------------------------------------------------

 

Exhibit E-2

 

Form of Opinion of Richards, Layton & Finger, P.A.

 

1.                                      The Second A&R LPA constitutes a valid
and binding agreement of the General Partner, and is enforceable against the
General Partner, in its capacity as general partner of the Partnership, in
accordance with its terms.

 

2.                                      The Purchase Agreement constitutes a
valid and binding agreement of the Partnership, and is enforceable against the
Partnership, in accordance with its terms.

 

3.                                      The Registration Rights Agreement
constitutes a valid and binding agreement of the Partnership, and is enforceable
against the Partnership, in accordance with its terms.

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

--------------------------------------------------------------------------------

 

Exhibit F

 

Form of Joinder Agreement

 

This Joinder Agreement is executed by the undersigned pursuant to the Series A
Preferred Unit Purchase Agreement, dated as of [·], 2017 (the “Agreement”) among
Phillips 66 Partners LP, a Delaware limited partnership (the “Partnership”), and
the purchasers party thereto (the “Purchasers”), which is incorporated herein by
reference. Capitalized terms used but not defined herein shall have the meaning
given to such terms in the Agreement. By the execution of this Joinder
Agreement, the undersigned agrees as follows:

 

1.                  The undersigned acknowledges that the undersigned is
acquiring [·] Series A Preferred Units, subject to the terms and conditions of
the Agreement (including the Exhibits thereto).

 

2.                  The undersigned hereby joins in, and agrees to be bound by
and subject to, the Agreement, with the same force and effect as if the
undersigned were originally a Purchaser party thereto.

 

3.                  Any notice required or permitted by the Agreement shall be
given to the undersigned at the address listed below.

 

4.                  The Partnership hereby acknowledges and agrees that the
undersigned shall be deemed a Purchaser under the Agreement with respect to the
number of Series A Preferred Units set forth above and that such Purchaser shall
be entitled to all of the rights and benefits, and subject to all of the
obligations, of a Purchaser under the Agreement.

 

EXECUTED AND DATED as of this [·] day of [·], 2017.

 

 

 

PHILLIPS 66 PARTNERS LP

 

 

 

 

 

By: Phillips 66 Partners GP LLC, its general partner

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

[JOINING PARTY]

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

Notice Address:

 

 

 

 

 

 

 

 

 

 

 

[Form of Second Amended and Restated Agreement of Limited Partnership]

 

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