Exhibit 10.1

Execution Version

SERIES A PREFERRED UNIT

PURCHASE AGREEMENT

between

SUNOCO LP

and

ENERGY TRANSFER EQUITY, L.P.

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Table of Contents

 

ARTICLE I DEFINITIONS

     1  

Section 1.01

 

Definitions

     1  

Section 1.02

 

Accounting Procedures and Interpretation

     4  

ARTICLE II AGREEMENT TO SELL AND PURCHASE

     4  

Section 2.01

 

Sale and Purchase

     4  

Section 2.02

 

Closing

     4  

Section 2.03

 

SUN Deliveries

     5  

Section 2.04

 

Purchaser’s Deliveries

     5  

ARTICLE III REPRESENTATIONS AND WARRANTIES AND COVENANTS OF SUN

     6  

Section 3.01

 

Partnership Existence

     6  

Section 3.02

 

Capitalization and Valid Issuance of Purchased Units

     6  

Section 3.03

 

SUN SEC Documents

     8  

Section 3.04

 

No Material Adverse Change

     8  

Section 3.05

 

Litigation

     9  

Section 3.06

 

No Violations; Compliance with Laws

     9  

Section 3.07

 

Authority, Enforceability

     9  

Section 3.08

 

Approvals

     10  

Section 3.09

 

MLP Status

     10  

Section 3.10

 

Valid Private Placement

     10  

Section 3.11

 

Investment Company Status

     10  

Section 3.12

 

Certain Fees

     10  

Section 3.13

 

Insurance

     10  

Section 3.14

 

Internal Accounting Controls

     11  

Section 3.15

 

Purchased Units

     11  

Section 3.16

 

No Integration

     11  

ARTICLE IV REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE PURCHASER

     12  

Section 4.01

 

Existence

     12  

Section 4.02

 

Authorization, Enforceability

     12  

Section 4.03

 

No Breach

     12  

Section 4.04

 

Certain Fees

     12  

Section 4.05

 

Investment

     12  

Section 4.06

 

Nature of Purchaser

     13  

Section 4.07

 

Restricted Securities

     13  

Section 4.08

 

Receipt of Information

     13  

Section 4.09

 

Legend

     13  

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ARTICLE V COVENANTS

     14  

Section 5.01

 

Taking of Necessary Actions

     14  

ARTICLE VI INDEMNIFICATION, COSTS AND EXPENSES

     14  

Section 6.01

 

Indemnification by SUN

     14  

Section 6.02

 

Indemnification by the Purchaser

     15  

Section 6.03

 

Indemnification Procedure

     15  

ARTICLE VII MISCELLANEOUS

     16  

Section 7.01

 

Interpretation and Survival of Provisions

     16  

Section 7.02

 

Survival of Provisions

     16  

Section 7.03

 

No Waiver; Modifications in Writing

     17  

Section 7.04

 

Binding Effect; Assignment

     17  

Section 7.05

 

Communications

     17  

Section 7.06

 

Entire Agreement

     18  

Section 7.07

 

Governing Law

     18  

Section 7.08

 

Waiver of Jury Trial

     19  

Section 7.09

 

Execution in Counterparts

     19  

Section 7.10

 

Costs and Expenses

     19  

Section 7.11

 

Removal of Legends

     19  

Exhibit A – Form of Amendment No. 5 to First Amended and Restated Agreement of
Limited Partnership of Sunoco LP

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SERIES A PREFERRED UNIT PURCHASE AGREEMENT

This SERIES A PREFERRED UNIT PURCHASE AGREEMENT, dated as of March 30, 2017
(this “Agreement”), is by and between SUNOCO LP, a Delaware limited partnership
(“SUN”), and ENERGY TRANSFER EQUITY, L.P., a Delaware limited partnership (the
“Purchaser”). SUN and the Purchaser are sometimes referred to herein as a
“Party” and, collectively, as the “Parties.”

WHEREAS, in order to fund the repayment of borrowings under the SUN Credit
Facility (as defined below) and for other general partnership purposes of SUN,
SUN desires to sell to the Purchaser, and the Purchaser desires to purchase from
SUN, certain Series A Preferred Units (as defined below), in accordance with the
provisions of this 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 I

DEFINITIONS

Section 1.01    Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:

“Affiliate” means, with respect to a specified Person, any other Person,
directly or indirectly controlling, controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
“control” (including, with correlative meanings, “controlling,” “controlled by,”
and “under common control with”) means the power to direct or cause the
direction of the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise.

“Basic Documents” means, collectively, this Agreement, the Partnership Agreement
Amendment and any and all other agreements or instruments executed and delivered
by the Parties to evidence the execution, delivery and performance of any of the
Basic Documents, and any amendments, supplements, continuations or modifications
thereto.

“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.

“Class C Unit” shall have the meaning given to such term in the Partnership
Agreement.

“Closing” shall have the meaning specified in Section 2.02.

“Closing Date” shall have the meaning specified in Section 2.02.

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

 

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“Common Units” shall have the meaning given to such term in the Partnership
Agreement.

“Delaware LLC Act” shall have the meaning specified in Section 3.02.

“Delaware LP Act” shall have the meaning specified in Section 3.02.

“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.

“GAAP” means generally accepted accounting principles in the United States of
America in effect from time to time.

“General Partner” means Sunoco GP LLC, a Delaware limited liability company and
the general partner of SUN.

“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 that exercises valid jurisdiction over any such Person or such
Person’s Property. Unless otherwise specified, all references to Governmental
Authority herein with respect to SUN means a Governmental Authority having
jurisdiction over SUN, its Subsidiaries or any of their respective Properties.

“Incentive Distribution Rights” shall have the meaning given to such term in the
Partnership Agreement.

“Indemnified Party” shall have the meaning specified in Section 6.03.

“Indemnifying Party” shall have the meaning specified in Section 6.03.

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

“Lien” means any mortgage, claim, encumbrance, pledge, lien (statutory or
otherwise), security agreement, conditional sale or trust receipt or a lease,
consignment or bailment, preference or priority or other encumbrance upon or
with respect to any property of any kind.

“NYSE” means the New York Stock Exchange.

“Partnership Agreement” means the First Amended and Restated Agreement of
Limited Partnership of SUN, dated as of September 25, 2012, as amended as of the
date hereof and from time to time.

“Partnership Agreement Amendment” means Amendment No. 5 to the Partnership
Agreement, substantially in the form attached as Exhibit A hereto.

 

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“Party” or “Parties” has the meaning set forth in the introductory paragraph.

“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.

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.

“Purchased Units” means 12,000,000 Series A Preferred Units.

“Purchased Unit Price” means $25.00.

“Purchase Price” means $300,000,000.

“Purchaser Related Parties” shall have the meaning specified in Section 6.01.

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

“Representatives” means, with respect to any Person, the officers, directors,
managers, employees, agents, counsel, accountants, investment bankers and other
representatives of such Person.

“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” shall have the meaning given to such term in the
Partnership Agreement Amendment.

“Subsidiary” means, as to any Person, any corporation or other entity of which:
(i) such Person or a Subsidiary of such Person is a general partner or manager;
(ii) at least a majority of the outstanding equity interest having by the terms
thereof ordinary voting power to elect a majority of the board of directors or
similar governing body of such corporation or other entity (irrespective of
whether or not at the time any equity interest of any other class or classes of
such corporation or other entity shall have or might have voting power by reason
of the happening of any contingency) is at the time directly or indirectly owned
or controlled by such Person or one or more of its Subsidiaries; or (iii) any
corporation or other entity as to which such Person consolidates for accounting
purposes.

“SUN” shall have the meaning set forth in the introductory paragraph.

“SUN Credit Facility” means the Credit Agreement, dated as of September 25,
2014, by and among SUN and Bank of America, N.A., as administrative agent, and
the other agents and lenders party thereto, as amended as of the date hereof and
from time to time.

“SUN Financial Statements” shall have the meaning specified in Section 3.03.

 

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“SUN Material Adverse Effect” means any material and adverse effect on (a) the
assets, liabilities, financial condition, business, operations, affairs or
prospects of SUN and its Subsidiaries taken as a whole; (b) the ability of SUN
and its Subsidiaries taken as a whole to carry on their business as such
business is conducted as of the date hereof or to meet their obligations under
the Basic Documents on a timely basis; or (c) the ability of SUN to consummate
the transactions contemplated hereby; provided, however, that a SUN Material
Adverse Effect shall not include any material and adverse effect on the
foregoing to the extent such material and adverse effect results from, arises
out of, or relates to (x) a general deterioration in the economy or changes in
the general state of the industries in which the SUN Parties operate, except to
the extent that the SUN Parties, taken as a whole, are adversely affected in a
disproportionate manner as compared to other industry participants, (y) the
outbreak or escalation of hostilities involving the United States, the
declaration by the United States of a national emergency or war or the
occurrence of any other calamity or crisis, including acts of terrorism, or
(z) any change in accounting requirements or principles imposed upon SUN and its
Subsidiaries or their respective businesses or any change in applicable Law, or
the interpretation thereof.

“SUN Parties” means SUN, the General Partner and all of SUN’s Subsidiaries.

“SUN Related Parties” shall have the meaning specified in Section 6.02.

“SUN SEC Documents” shall have the meaning specified in Section 3.03.

Section 1.02    Accounting Procedures and Interpretation. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all SUN Financial Statements and certificates and reports as to financial
matters required to be furnished to the Purchaser 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. Subject to the terms and conditions hereof,
SUN hereby agrees to issue and sell to the Purchaser, free and clear of any and
all Liens, and the Purchaser hereby agrees to purchase from SUN, all of the
Purchased Units, and the Purchaser agrees to pay SUN the Purchase Price. Upon
payment of the Purchase Price at the Closing, the Purchased Units shall be fully
paid for.

Section 2.02    Closing. Subject to the terms and conditions hereof, the
consummation of the purchase and sale of the Purchased Units hereunder (the
“Closing”) shall take place simultaneously with the execution of this Agreement
(the “Closing Date”) at the offices of SUN. The Parties agree that the Closing
may occur via delivery of facsimiles or e-mailed PDF scans of this Agreement and
the other closing deliveries contemplated hereby. Unless otherwise provided

 

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herein, all proceedings to be taken and all documents to be executed and
delivered by the Parties at the Closing will be deemed to have been taken and
executed simultaneously, and no proceedings will be deemed to have been taken or
documents executed or delivered until all have been taken, executed or
delivered.

Section 2.03    SUN Deliveries. At the Closing, subject to the terms and
conditions hereof, SUN will deliver, or cause to be delivered, to the Purchaser:

(a)    The Purchased Units (in book entry form), free and clear of all Liens
(other than transfer restrictions under the Partnership Agreement and applicable
federal and state securities Laws), registered in such name(s) as the Purchaser
has designated, including evidence that such Purchased Units have been credited
to book-entry accounts maintained by the transfer agent of SUN;

(b)    Copies of (i) the Certificate of Limited Partnership of SUN and (ii) the
Certificate of Formation of the General Partner, each certified by the Secretary
of State of the State of Delaware;

(c)    A certificate of the Secretary of State of the State of Delaware, dated a
recent date, that SUN is in good standing;

(d)    A cross-receipt executed by SUN and delivered to the Purchaser certifying
that it has received the Purchase Price;

(e)    The Partnership Agreement Amendment, as duly adopted and in full force
and effect; and

(f)    A certificate of the Secretary or Assistant Secretary of the General
Partner, on behalf of SUN, certifying as to and attaching (i) the Partnership
Agreement, (ii) board and special committee resolutions authorizing the
execution and delivery of the Basic Documents and the consummation of the
transactions contemplated thereby and (iii) its incumbent officers authorized to
execute the Basic Documents to which it is a party, setting forth the name and
title and bearing the signatures of such officers.

Section 2.04    Purchaser’s Deliveries. At the Closing, subject to the terms and
conditions hereof, the Purchaser will deliver, or cause to be delivered, to SUN:

(a)    Payment to SUN of the Purchase Price by wire transfer of immediately
available funds to an account designated by SUN in writing at least one Business
Day prior to the Closing Date;

(b)    A certificate of the Secretary or Assistant Secretary of the general
partner of the Purchaser, on behalf of the Purchaser, certifying as to and
attaching (i) board resolutions and conflicts committee resolutions authorizing
the execution and delivery of the Basic Documents and the consummation of the
transactions contemplated thereby and (ii) its incumbent officers authorized to
execute the Basic Documents to which it is a party, setting forth the name and
title and bearing the signatures of such officers; and

 

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(c)    A cross-receipt executed by the Purchaser and delivered to SUN certifying
that, assuming the validity of the evidence described in Section 2.03(a) above,
it has received the Purchased Units as of the Closing Date.

ARTICLE III

REPRESENTATIONS AND WARRANTIES AND COVENANTS

OF SUN

SUN represents and warrants to and covenants with the Purchaser as follows:

Section 3.01    Partnership Existence. SUN (a) is a limited partnership duly
formed, validly existing and in good standing under the laws of the State of
Delaware; and (b) has all requisite limited partnership power and authority, and
has all licenses, authorizations, consents and approvals issued by Governmental
Authorities necessary, to own, lease, use and operate its Properties and carry
on its business as its business is now being conducted, except where the failure
to obtain such licenses, authorizations, consents and approvals would not,
individually or in the aggregate, be reasonably likely to have a SUN Material
Adverse Effect. Each of SUN’s Subsidiaries has been duly formed and is validly
existing and in good standing under the laws of the State or other jurisdiction
of its organization, and has all requisite power and authority, and has all
licenses, authorizations, consents and approvals issued by Governmental
Authorities necessary, to own, lease, use or operate its respective Properties
and carry on its business as now being conducted, except where the failure to
obtain such licenses, authorizations, consents and approvals would not,
individually or in the aggregate, be reasonably likely to have a SUN Material
Adverse Effect. None of SUN nor any of its Subsidiaries are in default in the
performance, observance or fulfillment of any provision of, in the case of SUN,
the Partnership Agreement or its Certificate of Limited Partnership or, in the
case of any Subsidiary of SUN, its respective certificate of incorporation,
certification of formation, bylaws, limited liability company agreement or other
similar organizational documents. Each of SUN and its Subsidiaries is duly
qualified or licensed and in good standing as a foreign limited partnership,
limited liability company or corporation, as applicable, and is authorized to do
business in each jurisdiction in which the ownership or leasing of its
respective Properties or the character of its respective operations makes such
qualification necessary, except where the failure to obtain such qualification,
license, authorization or good standing would not, individually or in the
aggregate, be reasonably likely to have a SUN Material Adverse Effect.

Section 3.02    Capitalization and Valid Issuance of Purchased Units.

(a)    As of the date of this Agreement, prior to the issuance and sale of the
Purchased Units, as contemplated hereby, the issued and outstanding limited
partner interests of SUN consist of 99,451,043 Common Units, 16,410,780 Class C
Units and the Incentive Distribution Rights. The only issued and outstanding
general partner interests of SUN are the interests of the General Partner
described in the Partnership Agreement. All outstanding Common Units, Class C
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 are fully paid (to the extent required under
the Partnership Agreement) and nonassessable (except as such nonassessability
may be affected by matters described in Sections 17-303, 17-607 and 17-804 of
the Delaware Revised Uniform Limited Partnership Act (the “Delaware LP Act”)).

 

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(b)    Other than the Sunoco LP 2012 Long-Term Incentive Plan, as amended, SUN
has no equity compensation plans that contemplate the issuance of partnership
interests of SUN (or securities convertible into or exchangeable for partnership
interests of SUN). No indebtedness having the right to vote (or convertible into
or exchangeable for securities having the right to vote) on any matters on which
SUN unitholders may vote are issued or outstanding. Except as set forth in the
first sentence of this Section 3.02(b), as contemplated by this Agreement or as
are provided in the Partnership Agreement, there are no outstanding or
authorized (i) options, warrants, preemptive rights, subscriptions, calls, or
other rights, convertible or exchangeable securities, agreements, claims or
commitments of any character obligating SUN or any of its Subsidiaries to issue,
transfer or sell any partnership interests or other equity interest in, SUN or
any of its Subsidiaries or securities convertible into or exchangeable for such
partnership interests, (ii) obligations of SUN or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any partnership interests or equity
interests of SUN or any of its Subsidiaries or any such securities or agreements
listed in clause (i) of this sentence or (iii) voting trusts or similar
agreements to which SUN or any of its Subsidiaries is a party with respect to
the voting of the equity interests of SUN or any of its Subsidiaries.

(c)    (i) All of the issued and outstanding equity interests of each of SUN’s
Subsidiaries are owned, directly or indirectly, by SUN free and clear of any
Liens (except for such restrictions as may exist under applicable federal or
state securities Law and for such Liens as may be imposed under the SUN Credit
Facility and the indentures governing senior notes of SUN), and all such
ownership interests have been duly authorized, validly issued and are fully paid
(to the extent required in the organizational documents of SUN’s Subsidiaries,
as applicable) and non-assessable (except as such nonassessability may be
affected by matters described in Sections 17-303, 17-607 and 17-804 of the
Delaware LP Act, Sections 18-607 and 18-804 of the Delaware Limited Liability
Company Act (the “Delaware LLC Act”), and Sections 101.114 and 101.206 of the
Texas Business Organizations Code) and free of preemptive rights and (ii) except
as disclosed in the SUN SEC Documents, neither SUN nor any of its Subsidiaries
owns any shares of capital stock or other securities of, or interest in, any
other Person, or is obligated to make any capital contribution to or other
investment in any other Person.

(d)    None of SUN’s Subsidiaries is prohibited, directly or indirectly, under
any agreement or other instrument to which it is a party or is subject, from
paying any dividends to SUN, from making any other distribution on such
Subsidiary’s equity securities held directly or indirectly by SUN, from repaying
to SUN any loans or advances to such Subsidiary from SUN or from transferring
any of such Subsidiary’s properties or assets to SUN or any other Subsidiary of
SUN, except as set forth in the SUN Credit Facility and the indentures governing
senior notes of SUN.

(e)    The Purchased Units have been duly authorized by SUN pursuant to the
Partnership Agreement and, when issued and delivered to the Purchaser against
payment therefor in accordance with the terms of this Agreement, will be validly
issued, fully paid (to the extent required by the Partnership Agreement) and
nonassessable (except as such nonassessability may be affected by matters
described in Sections 17-303, 17-607 and 17-804 of the Delaware LP Act)

 

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and will be free of any and all Liens and restrictions on transfer, other than
(i) restrictions on transfer under the Partnership Agreement or this Agreement
and under applicable state and federal securities laws and (ii) such Liens as
are created by the Purchaser.

(f)     The Common Units are listed on the NYSE, and SUN has not received any
notice of delisting from the NYSE.

Section 3.03    SUN SEC Documents. SUN has timely filed with the Commission all
forms, registration statements, reports, schedules and statements required to be
filed by it under the Exchange Act or the Securities Act (all such documents,
collectively the “SUN SEC Documents”). The SUN SEC Documents, including any
audited or unaudited financial statements and any notes thereto or schedules
included therein (the “SUN Financial Statements”), at the time filed (in the
case of registration statements, solely on the dates of effectiveness) (except
to the extent corrected by a subsequently filed SUN SEC Document filed prior to
the date hereof) (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 prospectus) not misleading, (b) complied in
all material respects with the applicable requirements of the Exchange Act and
the Securities Act, as applicable, (c) complied as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the Commission with respect thereto, (d) in the case of the
SUN Financial Statements, were 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 the
Commission with respect to interim financial statements), and (e) in the case of
the SUN Financial Statements, fairly present (subject in the case of unaudited
statements to normal, recurring and year-end audit adjustments) in all material
respects the consolidated financial position of SUN and its Subsidiaries as of
the dates thereof and the consolidated results of its operations and cash flows
for the periods then ended. All disclosures contained in the SUN Financial
Statements regarding “non-GAAP financial measures” (as such term is defined by
the rules and regulations of the Commission) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K of the Securities Act, to the extent
applicable. Each of the forward-looking statements made by SUN included in the
SUN SEC Documents was made with a reasonable basis and in good faith. Grant
Thornton LLP is an independent, registered public accounting firm with respect
to SUN and has not resigned or been dismissed as independent public accountants
of SUN as a result of or in connection with any disagreement with SUN on a
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure.

Section 3.04    No Material Adverse Change. Except as set forth in or
contemplated by the SUN SEC Documents filed with the Commission on or prior to
the date hereof, since the date of SUN’s most recent Form 10-K filing with the
Commission, SUN and its Subsidiaries have conducted their respective businesses
in the ordinary course, consistent with past practice, and there has been no
(a) change, event, occurrence, effect, fact, circumstance or condition that,
individually or in the aggregate, has had or would be reasonably likely to have
a SUN Material Adverse Effect, (b) acquisition or disposition of any material
asset by SUN or any of its Subsidiaries or any contract or arrangement therefor,
otherwise than for fair value in the ordinary course of business or as disclosed
in the SUN SEC Documents, (c) material change in SUN’s accounting principles,
practices or methods, or (d) liabilities or obligations, direct or contingent,
incurred by SUN or its Subsidiaries that are material to SUN and its
Subsidiaries, taken as a whole.

 

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Section 3.05    Litigation. Except as set forth in the SUN SEC Documents, there
is no action, suit, or proceeding pending (including any investigation,
litigation or inquiry) or, to SUN’s knowledge, contemplated or threatened
against or affecting any of the SUN Parties or any of their respective officers,
directors, properties or assets, which (a) questions the validity of the Basic
Documents to which SUN or the General Partner is a party or the right of SUN or
the General Partner to enter into any Basic Documents to which it is a party or
to consummate the transactions contemplated hereby or (b) (individually or in
the aggregate) would be reasonably likely to result in a SUN Material Adverse
Effect.

Section 3.06    No Violations; Compliance with Laws. The execution, delivery and
performance by SUN and the General Partner of the Basic Documents to which it is
a party and compliance by SUN and the General Partner with the terms and
provisions thereof, and the consummation of the transactions contemplated hereby
and thereby (including the issuance, sale and delivery by SUN of the Purchased
Units to the Purchaser and the execution and delivery of the Partnership
Agreement Amendment), do not and will not (a) violate any provision of any Law
or Permit having applicability to SUN or any of its Subsidiaries or any of their
respective Properties, (b) assuming the accuracy of the representations and
warranties of the Purchaser contained herein and their compliance with the
covenants contained herein, violate any provision of any federal or state
securities Law (c) result in a violation or breach of any provision of the
certificate of limited partnership or other organizational documents of SUN, or
the Partnership Agreement, or any organizational documents of any of SUN’s
Subsidiaries, (d) require any consent, approval or notice (other than those
previously obtained or given) under or result in a violation or breach of or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under any
contract, agreement, instrument, obligation, note, bond, mortgage, license, loan
or credit agreement to which SUN or any of its Subsidiaries is a party or by
which SUN or any of its Subsidiaries or any of their respective Properties may
be bound, or (e) result in or require the creation or imposition of any Lien
upon or with respect to any of the Properties now owned or hereafter acquired by
SUN or any of its Subsidiaries, except in the case of clause (d) where any such
violation, default, breach, termination, cancellation, failure to receive
consent, approval or notice, or acceleration with respect to the foregoing
provisions of this Section 3.06 would not be, individually or in the aggregate,
reasonably likely to result in a SUN Material Adverse Effect.

Section 3.07    Authority, Enforceability. Each of SUN and the General Partner
has all necessary limited partnership or limited liability company, as
applicable, power and authority to execute, deliver and perform its obligations
under the Basic Documents (including the issuance, sale and delivery of the
Purchased Units to the Purchaser and the execution and delivery of the
Partnership Agreement Amendment), and the execution, delivery and performance by
SUN or the General Partner of the Basic Documents (including the issuance, sale
and delivery of the Purchased Units to the Purchaser and the execution and
delivery of the Partnership Agreement Amendment), to which it is a party have
been duly authorized by all necessary action on the part of the General Partner;
and the Basic Documents to which it is a party constitute the legal, valid and
binding obligations of SUN or the General Partner, as applicable, enforceable in
accordance

 

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with their terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent transfer, moratorium and similar laws relating to or
affecting creditors’ rights generally or by general principles of equity and
except as the rights to indemnification may be limited by applicable Law
(regardless of whether such enforceability is considered in a proceeding in law
or in equity). No approval from the holders of the Common Units, Class C Units
or Incentive Distribution Rights is required in connection with SUN’s issuance
and sale of the Purchased Units to the Purchaser.

Section 3.08    Approvals. Except for the approvals that have already been
obtained, no authorization, consent, approval, waiver, license, qualification or
written exemption from, nor any filing, declaration, qualification or
registration with, any Governmental Authority or any other Person is required in
connection with the execution, delivery or performance by SUN or the General
Partner of any of the Basic Documents to which it is a party, except where the
failure to receive such authorization, consent, approval, waiver, license,
qualification or written exemption from, or to make such filing, declaration,
qualification or registration would not, individually or in the aggregate, be
reasonably likely to have a SUN Material Adverse Effect.

Section 3.09    MLP Status. SUN is properly treated as a partnership for United
States federal income tax purposes and more than 90% of SUN’s current gross
income is qualifying income under Section 7704(d) of the Internal Revenue Code
of 1986, as amended.

Section 3.10    Valid Private Placement. Assuming the accuracy of the
representations and warranties of the Purchaser contained in Sections 4.05 and
4.06 of this Agreement, the offer, sale and issuance of the Purchased Units to
the Purchaser pursuant to this Agreement is exempt from the registration
requirements of the Securities Act, and neither SUN nor, to the knowledge of
SUN, any authorized agent acting on its behalf has taken or will take any action
hereafter that would cause the loss of such exemption.

Section 3.11    Investment Company Status. After giving effect to the offer,
sale and delivery of the Purchased Units to the Purchaser and the application of
the proceeds therefrom, SUN is not and will not be an “investment company” or a
company controlled by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

Section 3.12    Certain Fees. Except as otherwise disclosed to the Purchaser, no
fees or commissions are or will be payable by SUN to brokers, finders, or
investment bankers with respect to the sale of any of the Purchased Units or the
consummation of the transactions contemplated by the Basic Documents. SUN agrees
that it will indemnify and hold harmless the Purchaser from and against any and
all claims, demands, or liabilities for broker’s, finder’s, placement, or other
similar fees or commissions incurred by SUN or alleged to have been incurred by
SUN in connection with the sale of the Purchased Units or the consummation of
the transactions contemplated by the Basic Documents.

Section 3.13    Insurance. SUN and its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged. SUN does not have any reason to believe that it or any of its
Subsidiaries will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business.

 

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Section 3.14    Internal Accounting Controls. SUN and its Subsidiaries maintain
effective internal control over financial reporting (as defined under Rule
13a-15 and 15d-15 under the Exchange Act) and a system of internal accounting
controls sufficient to provide reasonable assurance that (a) transactions are
executed in accordance with management’s general or specific authorizations,
(b) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability,
(c) access to assets is permitted only in accordance with management’s general
or specific authorization, (d) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences and (e) the interactive data in
eXtensible Business Reporting Language included or incorporated by reference in
the SUN SEC Documents is accurate. SUN is not aware of any material weaknesses
with respect to its internal accounting controls. As of the date hereof,
(1) since the end of SUN’s most recent audited fiscal year, there has been
(i) no material weakness in SUN’s internal control over financial reporting
(whether or not remediated) and (ii) no change in SUN’s internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, SUN’s internal control over financial reporting, and (2) SUN
is not aware of any fraud, whether or not material, that involves management or
other employees who have a significant role in SUN’s internal control over
financial reporting. SUN maintains an effective system of disclosure controls
and procedures (as defined in Rule 13a-15 and Rule 15d-15 under the Exchange
Act) that are designed to ensure that information required to be disclosed by
SUN in the reports that it files or submits, or will file or submit, under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Commission’s rules and forms, and that all such
information is accumulated and communicated to SUN’s management, including its
principal executive officer or officers and principal financial officer or
officers, or persons performing similar functions, as appropriate, to allow
timely decisions regarding disclosure. Such disclosure controls and procedures
are effective in all material respects to perform the functions for which they
are established to the extent required by Rule 13a-15 of the Exchange Act. There
is and has been no failure on the part of SUN or, to the knowledge of SUN, any
of the General Partner’s directors or officers, in their capacities as such, to
comply in all material respects with any provision of the Sarbanes-Oxley Act of
2002 or the rules and regulations promulgated in connection therewith or the
rules of the NYSE, in each case that are effective and applicable to SUN

Section 3.15    Purchased Units. As of Closing, the Purchased Units shall have
those rights, preferences, privileges and restrictions as set forth in the
Partnership Agreement (including as amended by the Partnership Agreement
Amendment).

Section 3.16    No Integration. SUN has not sold or issued any securities that
would be integrated with the offering and sale of the Purchased Units
contemplated by this Agreement pursuant to the Securities Act or the
interpretations thereof by the Commission.

 

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ARTICLE IV

REPRESENTATIONS AND WARRANTIES AND COVENANTS

OF THE PURCHASER

The Purchaser hereby represents and warrants and covenants to SUN that:

Section 4.01    Existence. The Purchaser is a limited liability partnership duly
formed, validly existing and in good standing under the laws of the State of
Delaware, with all necessary limited partnership power and authority to own
properties and to conduct its business as currently conducted except as would
not prevent the consummation of the transactions contemplated by this Agreement.

Section 4.02    Authorization, Enforceability. The Purchaser has all necessary
limited partnership power and authority to enter into, deliver and perform its
obligations under the Basic Documents to which it is a party. The execution,
delivery and performance by the Purchaser of the Basic Documents to which it is
a party have been duly and validly authorized by all necessary action, and no
further consent or authorization of the Purchaser is required. The Basic
Documents to which it is a party have been duly executed and delivered by the
Purchaser and constitute legal, valid and binding obligations of the Purchaser;
provided that, the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws
relating to or affecting creditors’ rights generally and by general principles
of equity and except as the rights to indemnification may be limited by
applicable Law (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

Section 4.03    No Breach. The execution, delivery and performance by the
Purchaser of the Basic Documents to which it is a party and the consummation by
the 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 the Purchaser is a
party or by which the Purchaser is bound or to which any of the properties or
assets of the Purchaser is subject, (b) conflict with or result in any violation
of the provisions of the organizational documents of the Purchaser, or
(c) violate any statute, order, rule or regulation of any Governmental Authority
having jurisdiction over the Purchaser or the properties or assets of the
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 this Agreement.

Section 4.04    Certain Fees. No fees or commissions are or will be payable by
the Purchaser to brokers, finders, or investment bankers with respect to the
purchase of the Purchased Units or the consummation of the transactions
contemplated by the Basic Documents. The Purchaser agrees that it will indemnify
and hold harmless SUN from and against any and all claims, demands or
liabilities for broker’s, finder’s, placement, or other similar fees or
commissions incurred by the Purchaser or alleged to have been incurred by the
Purchaser in connection with the purchase of the Purchased Units or the
consummation of the transactions contemplated by the Basic Documents.

Section 4.05    Investment. The Purchased Units are being acquired for the
Purchaser’s own account, not as a nominee or agent, and with no present
intention of distributing the

 

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Purchased Units. The Purchaser understands and acknowledges that there is no
public trading market for the Purchased Units and that none is expected to
develop. Notwithstanding the foregoing, the Purchaser may at any time transfer
Purchased Units to an Affiliate of the Purchaser provided that any such
transaction is exempt from registration under the Securities Act and that such
Affiliate agrees to be bound by the terms and conditions of this Agreement.

Section 4.06    Nature of Purchaser. The Purchaser (a) is an “accredited
investor” within the meaning of Rule 501 of Regulation D under the Securities
Act and (b) by reason of its business and financial experience it has such
knowledge, sophistication and experience in making similar investments and in
business and financial matters generally so as to be capable of evaluating the
merits and risks of the prospective investment in the Purchased Units, is able
to bear the economic risk of such investment and, at the present time, would be
able to afford a complete loss of such investment.

Section 4.07    Restricted Securities. The Purchaser understands that the
Purchased Units are characterized as “restricted securities” under the federal
securities Laws inasmuch as they are being acquired from SUN in a transaction
not involving a public offering and that under such Laws such securities may be
resold without registration under the Securities Act only in certain limited
circumstances. In this connection, the Purchaser represents that it is
knowledgeable with respect to Rule 144 under the Securities Act.

Section 4.08    Receipt of Information. The Purchaser has (a) had access to
SUN’s periodic filings with the Commission and (b) been provided a reasonable
opportunity to ask questions of and receive answers from Representatives of SUN
regarding such matters.

Section 4.09    Legend. It is understood that the book-entry evidencing the
Purchased Units will bear the following legend:

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND IS
SUBJECT TO THE TERMS OF THE FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP, AS AMENDED, OF SUNOCO LP. THE HOLDER OF THIS SECURITY ACKNOWLEDGES
FOR THE BENEFIT OF SUNOCO 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 SUNOCO LP UNDER THE LAWS OF THE STATE OF DELAWARE,
OR (C) CAUSE SUNOCO 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

 

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ALREADY SO TREATED OR TAXED). SUNOCO GP LLC, THE GENERAL PARTNER OF SUNOCO 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 SUNOCO LP BECOMING TAXABLE AS A CORPORATION OR OTHERWISE
BECOMING TAXABLE AS AN ENTITY FOR FEDERAL INCOME TAX PURPOSES. 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.

ARTICLE V

COVENANTS

Section 5.01    Taking of Necessary Actions. Each of the Parties shall use its
commercially reasonable efforts promptly to take or cause to be taken all action
and promptly to do or cause to be done all things necessary, proper or advisable
under applicable Law and regulations to consummate and make effective the
transactions contemplated by this Agreement. Without limiting the foregoing,
each of the Parties shall use its commercially reasonable efforts to assist the
other Party in making all filings and obtaining all consents of Governmental
Authorities that may be necessary or, in the reasonable opinion of the other
Party, advisable for the consummation of the transactions contemplated by the
Basic Documents. SUN shall use its commercially reasonable efforts to cause its
transfer agent to reasonably cooperate with the Purchaser to ensure that the
Purchased Units are validly and effectively issued to the Purchaser and that the
Purchaser’s ownership of the Purchased Units following the Closing is accurately
reflected on the appropriate books and records of SUN’s transfer agent. SUN
shall use the net proceeds from the sale of the Purchased Units (after the
payment of all related fees and expenses) to fund the repayment of borrowings
under the SUN Credit Facility.

ARTICLE VI

INDEMNIFICATION, COSTS AND EXPENSES

Section 6.01    Indemnification by SUN. SUN agrees to indemnify the Purchaser,
LE GP, LLC and their respective Representatives (collectively, “Purchaser
Related Parties”) from, and hold each of them harmless against, any and all
losses, actions, suits, proceedings (including any investigations, litigation or
inquiries), demands, and causes of action, and, in connection therewith, and
promptly upon demand, pay or reimburse each of them for all costs, losses,
liabilities, damages, or expenses of any kind or nature whatsoever, including
the reasonable fees and disbursements of counsel and all other reasonable
expenses incurred in connection with investigating, defending or preparing to
defend any such matter that may be incurred by them or asserted against or
involve any of them as a result of, arising out of, or in any way related to the
breach of any of the representations, warranties or covenants of SUN contained
herein; provided, that such claim for indemnification relating to a breach of
any representation or warranty is made prior to the expiration of the survival
period for such representation or warranty; provided further, however, that no
Purchaser Related Party shall be entitled to recover special,

 

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consequential or punitive damages with respect to claims pursuant to this
Section 6.01. Notwithstanding anything to the contrary, consequential damages
shall not be deemed to include diminution in value of the Purchased Units, which
is specifically included in damages covered by Purchaser Related Parties’
indemnification.

Section 6.02    Indemnification by the Purchaser. The Purchaser agrees to
indemnify SUN, the General Partner, and their respective Representatives
(collectively, “SUN Related Parties”) from, and hold each of them harmless
against, any and all losses, actions, suits, proceedings (including any
investigations, litigation or inquiries), demands, and causes of action, and, in
connection therewith, and promptly upon demand, pay or reimburse each of them
for all reasonable costs, losses, liabilities, damages, or expenses of any kind
or nature whatsoever, including the reasonable fees and disbursements of counsel
and all other reasonable expenses incurred in connection with investigating,
defending or preparing to defend any such matter that may be incurred by them or
asserted against or involve any of them as a result of, arising out of, or in
any way related to the breach of any of the representations, warranties or
covenants of the Purchaser contained herein; provided, that such claim for
indemnification relating to a breach of any representation or warranty is made
prior to the expiration of the survival period for such representation or
warranty, provided further, however, that the liability of the Purchaser shall
not be greater in amount than the Purchase Price.

Section 6.03    Indemnification Procedure. Promptly after any SUN Related Party
or Purchaser Related 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, the Indemnified Party
shall give the indemnitor hereunder (the “Indemnifying Party”) written notice of
such claim or the commencement of such action, suit or proceeding, 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 (through the
forfeiture of substantive rights and defenses) by such failure; provided, that,
the failure to notify the Indemnifying Party shall not relieve the Indemnifying
Party from any liability which it may have to an Indemnified Party otherwise
than under this Article VI. Such notice shall state the nature and the basis of
such 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, 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
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

 

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negotiations of the settlement thereof and (ii) if (A) the Indemnifying Party
has failed to assume the defense and employ counsel 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 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 contain any admission of
wrongdoing by, the Indemnified Party.

ARTICLE VII

MISCELLANEOUS

Section 7.01    Interpretation and Survival of Provisions. Article, Section,
Schedule, and Exhibit references are to this Agreement, unless otherwise
specified. 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.” Whenever SUN has an obligation under a Basic Document, the expense
of complying with that obligation shall be an expense of SUN unless otherwise
specified. Whenever any determination, consent or approval is to be made or
given by the Purchaser, such action shall be in such the Purchaser’s sole
discretion unless otherwise specified in this Agreement. If any provision in the
Basic Documents is held to be illegal, invalid, not binding, or unenforceable,
such provision shall be fully severable and the Basic Documents shall be
construed and enforced as if such illegal, invalid, not binding, or
unenforceable provision had never comprised a part of the Basic Documents, and
the remaining provisions shall remain in full force and effect.

Section 7.02    Survival of Provisions. The representations and warranties set
forth in Sections 3.02, 3.07, 3.08, 3.09, 3.11, 3.12, 4.02 and 4.04 hereunder
shall survive the execution and delivery of this Agreement indefinitely, 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 SUN or the Purchaser. The covenants made in this Agreement or
any other Basic Document shall survive the Closing of the transactions described
herein and remain operative and in full force and effect regardless of
acceptance of any of the Purchased Units and payment therefor and repayment or
repurchase thereof. All indemnification obligations of SUN and the Purchaser and
the provisions of Article VI shall remain operative and in full force and effect
unless such obligations are expressly terminated in a writing referencing that
individual Section, regardless of any purported general termination of this
Agreement.

 

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Section 7.03    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
or any other Basic Document shall be effective unless signed by each of the
parties hereto or thereto affected by such amendment, waiver, consent,
modification, or termination. Any amendment, supplement or modification of or to
any provision of this Agreement or any other Basic Document, any waiver of any
provision of this Agreement or any other Basic Document, and any consent to any
departure by SUN from the terms of any provision of this Agreement or any other
Basic Document 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 SUN in any case shall
entitle SUN to any other or further notice or demand in similar or other
circumstances.

Section 7.04    Binding Effect; Assignment.

(a)    Binding Effect. This Agreement shall be binding upon SUN, the Purchaser,
and their respective successors and permitted assigns. Except as expressly
provided in this Agreement (including, without limitation, Article VI), this
Agreement shall not be construed so as to confer any right or benefit upon any
Person other than the Parties and their respective successors and permitted
assigns.

(b)    Assignment of Rights. All or any portion of the rights and obligations of
the Purchaser under this Agreement may be transferred by the Purchaser to any
Affiliate of the Purchaser without the consent of SUN. No portion of the rights
and obligations of the Purchaser under this Agreement may be transferred by the
Purchaser to a non-Affiliate without the written consent of SUN (which shall not
be unreasonably withheld, delayed or conditioned).

Section 7.05    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, air courier guaranteeing overnight delivery or
personal delivery to the following addresses:

To SUN:

 

Sunoco LP

8111 Westchester Drive, Suite 500

Dallas, Texas 75225

Facsimile:

   (866) 673-0590

Attention:

   Thomas R. Miller

Email:

   tom.miller@sunoco.com

 

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with copies to:

Latham & Watkins LLP

811 Main Street, Suite 3700

Houston, Texas 77002

Facsimile:

   (713) 546-5401

Attention:

   William N. Finnegan

Email:

   bill.finnegan@lw.com

To the Purchaser:

Energy Transfer Equity, L.P.

8111 Westchester Drive, Suite 600

Dallas, Texas 75225

Facsimile:

   (214) 981-0701

Attention:

   Thomas P. Mason

Email:

   tom.mason@energytransfer.com

with copies to:

Andrews Kurth Kenyon LLP

600 Travis Street, Suite 4200

Houston, Texas 77002

Facsimile:

   (713) 220-4349

Attention:

   Jordan Hirsch

Email:

   jordanhirsch@andrewskurth.com

or to such other address as SUN or the Purchaser 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 overnight courier copy, if sent via
facsimile; and upon actual receipt when delivered to an air courier guaranteeing
overnight delivery.

Section 7.06    Entire Agreement. This Agreement and the other Basic Documents
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 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 the other Basic Documents
with respect to the rights granted by SUN or any of its Affiliates or the
Purchaser or any of its Affiliates set forth herein or therein. This Agreement
and the other Basic Documents supersede all prior agreements and understandings
between the Parties with respect to such subject matter.

Section 7.07    Governing Law. This Agreement, including all issues and
questions concerning its application, construction, validity, interpretation and
enforcement, will be construed in accordance with and governed by the laws of
the State of Delaware without regard to principles of conflicts of laws.

 

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Section 7.08    Waiver of Jury Trial. Each Party irrevocably waives the right to
a trial by jury in connection with any matter arising out of this Agreement to
the fullest extent permitted by applicable law.

Section 7.09    Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by the Parties 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. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the Party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

Section 7.10    Costs and Expenses. Each Party shall be responsible for such
Party’s own expenses in connection with the Basic Documents and the transactions
contemplated thereby.

Section 7.11    Removal of Legends. Upon request of the Purchaser or its
permitted assigns, SUN, at its sole cost, shall remove the legend described in
Section 4.09 (or instruct its transfer agent to so remove such legend) from the
certificates evidencing Purchased Units issued and sold to the Purchaser
pursuant to this Agreement if (A) such Purchased Units are sold pursuant to an
effective registration statement under the Securities Act, or (B) such Purchased
Units are sold or transferred pursuant to Rule 144, provided that the Purchaser
or its broker shall deliver to SUN and the transfer agent a customary broker
representation letter providing to SUN and the transfer agent any information
SUN deems reasonably necessary to determine that the sale of the Purchased Units
is made in compliance with Rule 144, including, as may be appropriate, a
certification that the Purchaser is not an Affiliate of SUN and regarding the
length of time the Purchased Units have been held. Upon receipt of such
representation letter, SUN shall promptly direct its transfer agent to remove
the legend referred to in Section 4.09 from the appropriate book-entry accounts
maintained by the transfer agent, and SUN shall bear all costs associated
therewith.

[Signature Page Follows]

 

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

 

SUNOCO LP By:   SUNOCO GP LLC, its general partner By:  

/s/ Thomas R. Miller

Name:   Thomas R. Miller Title:   Chief Financial Officer

 

Signature Page to Purchase Agreement

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

 

ENERGY TRANSFER EQUITY, L.P. By:   LE GP, LLC, its general partner By:  

/s/ John W. McReynolds

Name:   John W. McReynolds Title:   President

 

Signature Page to Purchase Agreement

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Exhibit A

Form of Amendment No. 5 to

First Amended and Restated Agreement of Limited Partnership of Sunoco LP

(see attached)

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AMENDMENT NO. 5

TO

FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED

PARTNERSHIP

OF

SUNOCO LP

March 30, 2017

This Amendment No. 5 (this “Amendment No. 5”) to the First Amended and Restated
Agreement of Limited Partnership of Sunoco LP (the “Partnership”), dated as of
September 25, 2012, as amended by Amendment No. 1 thereto dated as of
October 27, 2014, Amendment No. 2 thereto dated as of July 31, 2015, Amendment
No. 3 thereto dated as of January 1, 2016 and Amendment No. 4 thereto dated as
of June 6, 2016 (as so amended, the “Partnership Agreement”) is hereby adopted
effective, as of March 30, 2017, by Sunoco GP LLC, a Delaware limited liability
company (the “General Partner”), as general partner of the Partnership.
Capitalized terms used but not defined herein have the meaning given such terms
in the Partnership Agreement.

WHEREAS, Section 5.6(a) of the Partnership Agreement provides that the
Partnership, without the approval of any Limited Partner, may, for any
Partnership purpose, at any time and from time to time, issue additional
Partnership Interests 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;

WHEREAS, Section 5.6(b) of the Partnership Agreement provides that 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 (including sinking fund provisions); (v) whether such Partnership
Interest is issued with the privilege of conversion or exchange and, if so, the
terms and conditions of such conversion or exchange; (vi) the terms and
conditions upon which each Partnership Interest will be issued, evidenced by
certificates and assigned or transferred; (vii) the method for determining the
Percentage Interest as to such Partnership Interest; and (viii) the right, if
any, of each such Partnership Interest to vote on Partnership matters, including
matters relating to the relative rights, preferences and privileges of such
Partnership Interest;

WHEREAS, Section 5.6(c) of the Partnership Agreement provides that the General
Partner shall (i) take all actions that it determines to be necessary or
appropriate in connection with each issuance of Partnership Interests pursuant
to Section 5.6 of the Partnership Agreement, and (ii) determine the relative
rights, powers and duties of the holders of the Partnership Interests

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being so issued and 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
pursuant to the terms of the Partnership Agreement, including compliance with
any statute, rule, regulation or guideline of any federal, state or other
governmental agency;

WHEREAS, the General Partner, without the approval of any Partner, may amend any
provision of the Partnership Agreement (i) pursuant to Section 13.1(d)(i) of the
Partnership Agreement to reflect a change that the General Partner determines
does not adversely affect the Limited Partners (including any particular class
of Partnership Interests as compared to other classes of Partnership Interests)
in any material respect, and (ii) pursuant to Section 13.1(g) of the Partnership
Agreement to reflect an amendment that the General Partner determines to be
necessary or appropriate in connection with the creation, authorization or
issuance of any class or series of Partnership Interests pursuant to Section 5.6
of the Partnership Agreement;

WHEREAS, the Partnership is offering to Energy Transfer Equity, L.P., a Delaware
limited partnership (“ETE”), Series A Preferred Units, a new class of
Partnership Interests, as described in this Amendment No. 5;

WHEREAS, a Special Committee of the Board of Directors, by unanimous vote, in
good faith, (a) approved the creation, offering and issuance of the Series A
Preferred Units having the rights, preferences and privileges set forth in this
Amendment No. 5 and (b) resolved to recommend to the Board of Directors the
approval of the Series A Preferred Units;

WHEREAS, the Board of Directors, by unanimous vote, in good faith, approved the
creation, offering and issuance of the Series A Preferred Units having the
rights, preferences and privileges set forth in this Amendment No. 5, and the
General Partner has determined that the creation of a new class of Partnership
Interests to be designated as “Series A Preferred Units” provided for in this
Amendment No. 5 is in the best interests of the Partnership and beneficial to
the Limited Partners, including the holders of the Common Units; and

WHEREAS, the General Partner has, pursuant to its authority under Sections
13.1(d)(i) and 13.1(g), made the determinations required thereby and accordingly
is adopting this Amendment No. 5.

NOW THEREFORE, the General Partner does hereby amend the Partnership Agreement
as follows:

Section 1. Amendment.

(a) Section 1.1 of the Partnership Agreement is hereby amended to add, or amend
and restate, the following definitions in the appropriate alphabetical order:

(i) “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 that period; and
(ii) the amount of any net decrease in cash

 

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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 that period; (ii) 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 (A) by any debt instrument for the repayment of principal, interest or
premium or (B) to provide funds for Series A Payments; and (iii) the amount of
any net decrease made in subsequent periods in cash reserves for Operating
Expenditures initially established with respect to such period to the extent
such decrease results in a reduction in Adjusted Operating Surplus in subsequent
periods pursuant to clause (b)(ii). Adjusted Operating Surplus does not include
that portion of Operating Surplus included in clause (a)(i) of the definition of
Operating Surplus.

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

(a) the sum of (i) all cash and cash equivalents of the Partnership Group (or
the Partnership’s proportionate share of cash and cash equivalents in the case
of Subsidiaries that are not wholly owned) on hand at the end of such Quarter,
and (ii) if the General Partner so determines all or any portion of any
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 immediately prior to the date of
distribution of Available Cash with respect to such Quarter (including any
Working Capital Borrowings made subsequent to the end of such Quarter), less

(b) 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,
(iii) provide funds for Series A Payments, or (iv) provide funds for
distributions under Sections 5.14(b)(vi), 6.4 or 6.5 in respect of any one or
more of the next four Quarters;

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

 

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(iii) “Junior Securities” means (i) Common Units, (ii) Class C Units, (iii) the
Incentive Distribution Rights and (iv) any other class or series of Partnership
Interests established after the Series A Preferred Unit Issue Date by the Board
of Directors, the terms of which class or series do not expressly provide that
it is made senior to or on parity with Series A Preferred Units as to payment of
distributions and amounts payable upon the liquidation of the Partnership.

(iv) “LIBOR” means, for each applicable Quarter, the London interbank offered
rate, as determined by the General Partner, as of the applicable LIBOR
Determination Date, in accordance with the following provisions:

(a) the offered quotation to leading banks in the London interbank market for
three-month dollar deposits as defined by the British Bankers’ Association (or
its successor in such capacity, such as NYSE Euronext Rate Administration Ltd.)
and calculated by the General Partner and published, as such rate appears:
(A) on the Reuters Monitor Money Rates Service Page LIBOR01 (or a successor page
on such service) or (B) if such rate is not available, on such other information
system that provides such information, in each case as of 11:00 a.m., London
time, on such LIBOR Determination Date;

(b) if no such rate is so published, then the rate for such LIBOR Determination
Date shall be the arithmetic mean (rounded to five decimal places, with 0.000005
being rounded upwards) of the rates for three-month dollar deposits quoted to
the General Partner as of 11:00 a.m., London time, on such LIBOR Determination
Date; it being understood that at least two such quotes must have been so
provided to the General Partner; or

(c) if LIBOR cannot be determined on such LIBOR Determination Date using the
foregoing methods, then the LIBOR for the relevant distribution period shall be
the LIBOR as determined using the foregoing methods for the first day before
such LIBOR Determination Date on which LIBOR can be so determined;

provided, that all percentages resulting from any of the above calculations will
be rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards and all
dollar amounts used in or resulting from such calculations will be rounded to
the nearest cent (with one-half cent being rounded upwards).

(v) “LIBOR Determination Date” means the second Business Day immediately
preceding the first day of each relevant Quarter.

(vi) “Limited Partner Interest” means the ownership interest of a Limited
Partner in the Partnership, which may be evidenced by Common Units, Class C
Units, Series A Preferred Units, Incentive Distribution Rights or other
Partnership Interests or a combination thereof or interest therein, and includes
any and all benefits to which such Limited Partner is entitled as provided in
this Agreement, together with all obligations of such Limited Partner to comply
with the terms and provisions of this Agreement.

 

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(vii) “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 but
shall not include any items specially allocated under Sections 5.15(b)(ii)(D)
and 6.1(d); provided, that the determination of the items that have been
specially allocated under Sections 5.15(b)(ii)(D) and 6.1(d) shall be made
without regard to any reversal of such items under Section 6.1(d)(xii).

(viii) “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 but shall not
include any items specially allocated under Sections 5.15(b)(ii)(D) and 6.1(d);
provided, that the determination of the items that have been specially allocated
under Sections 5.15(b)(ii)(D) and 6.1(d) shall be made without regard to any
reversal of such items under Section 6.1(d)(xii).

(ix) “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, reimbursements of
expenses of the General Partner and its Affiliates, payments made in the
ordinary course of business under any Hedge Contracts, officer compensation,
repayment of Working Capital Borrowings, debt service payments and capital
expenditures, 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) Investment Capital Expenditures, (iii) payment of transaction expenses
(including taxes) relating to Interim Capital Transactions, (iv) the payments to
be made to the holders of Series A Preferred Units to redeem Series A Preferred
Units in accordance with Section 5.15(c), (v) payments made to holders of Series
A Preferred Units to purchase or otherwise acquire Series A Preferred Units,
(vi) distributions to Partners, or (vii) repurchases of Partnership Interests,
other than repurchases of Partnership Interests to satisfy obligations under
employee benefit plans, or reimbursements of expenses of the General Partner for
such purchases. Where capital expenditures are made in part for Maintenance
Capital Expenditures and in part for other purposes, the General Partner shall
determine the allocation between the amounts paid for each; and

 

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(d) (i) payments made in connection with the initial purchase of any 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 its stipulated settlement or termination date shall be included in
equal quarterly installments over what would have been the remaining scheduled
term of such Hedge Contract had it not been so terminated.

(x) “Parity Securities” means the Series A Preferred Units and any other class
or series of Partnership Interests established after the Series A Preferred Unit
Issue Date by the Board of Directors, the terms of which class or series
expressly provide that it ranks on parity with Series A Preferred Units as to
payment of distributions and amounts payable upon the liquidation of the
Partnership.

(xi) “Paying Agent” means the Transfer Agent, acting in its capacity as paying
agent for the Series A Preferred Units, and its respective successors and
assigns or any other paying agent appointed by the General Partner; provided,
however, that if no Paying Agent is specifically designated for the Series A
Preferred Units, the General Partner shall act in such capacity.

(xii) “Percentage Interest” means as of any date of determination (a) as to any
Unitholder with respect to Units, the quotient obtained by dividing (A) the
number of Units held by such Unitholder by (B) the total number of Outstanding
Units. The Percentage Interest with respect to an Incentive Distribution Right
shall be zero. The Percentage Interest with respect to the General Partner
Interest shall at all times be zero. The Percentage Interest with respect to a
Series A Preferred Unit shall at all times be zero.

(xiii) “Pro Rata” (a) when used with respect to Units (other than Series A
Preferred Units) or any class thereof, apportioned equally among all designated
Units (other than Series A Preferred Units) in accordance with their relative
Percentage Interests, (b) when used with respect to Partners or Record Holders,
apportioned among all Partners or Holders in accordance with their relative
Percentage Interests, (c) when used with respect to holders of Incentive
Distribution Rights, apportioned equally among all holders of Incentive
Distribution Rights in accordance with the relative number or percentage of
Incentive Distribution Rights held by each such holder, and (d) when used with
respect to Series A Preferred Units, apportioned among all holders of Series A
Preferred Units in accordance with the relative number or percentage of Series A
Preferred Units held by each such holder.

(xiv) “Senior Securities” means any class or series of Partnership Interests
established after the Series A Preferred Unit Issue Date by the Board of
Directors, the terms of which class or series expressly provide that it ranks
senior to Series A Preferred Units as to payment of distributions and amounts
payable upon the liquidation of the Partnership.

 

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(xv) “Series A Payments” means, collectively, the distributions with respect to
the Series A Preferred Units pursuant to Section 5.15(b)(iii), and the payments
to be made to the holders of Series A Preferred Units to redeem Series A
Preferred Units in accordance with Section 5.15(c).

(xvi) “Series A Preferred Unit Distribution Rate” means an amount per Series A
Preferred Unit equal to (i) for the period from and including, the Series A
Preferred Unit Issue date to, but not including, March 30, 2022, 10.00% per
annum (2.50% per Quarter) of the Series A Liquidation Preference, and (ii) from
and including March 30, 2022, and thereafter, a percentage of the Series A
Liquidation Preference per Series A Preferred Unit equal to the sum of
(i) LIBOR, as calculated by the General Partner on each applicable date of
determination, and (ii) 8.00%.

(xvii) “Series A Preferred Unit Issue Date” means March 30, 2017.

(xviii) “Series A Preferred Unit Issue Price” means $25.00.

(xix) “Series A Early Liquidation Preference” means a liquidation preference for
each Series A Preferred Unit equal to 101% of the Series A Liquidation
Preference.

(xx) “Series A Liquidation Preference” means a liquidation preference for each
Series A Preferred Unit initially equal to $25.00 per unit, which liquidation
preference shall be subject to increase by the per Series A Preferred Unit
amount of any accumulated and unpaid distributions (whether or not such
distributions shall have been declared).

(xxi) “Series A Preferred Unit Quarterly Distribution” has the meaning set forth
in Section 5.15(b).

(xxii) “Series A Preferred Units” means a limited partner Partnership Interest
which shall confer upon the holder thereof only the rights and obligations
specifically provided in this Agreement with respect to Series A Preferred
Units, which entitles the holder thereof to a preference over Junior Securities
with respect to distributions and amounts payable upon the liquidation of the
Partnership.

(xxiii) “Series A Redemption Date” has the meaning set forth in Section 5.15(c).

(xxiv) “Series A Redemption Notice” has the meaning set forth in
Section 5.15(c).

(xxv) “Series A Redemption Price” has the meaning set forth in Section 5.15(c).

(xxvi) “Unit” means a Partnership Interest that is designated as a “Unit” and
shall include Common Units, Class C Units and Series A Preferred Units but shall
not include (i) the General Partner Interest or (ii) Incentive Distribution
Rights.

(xxvii) “Unitholders” means the holders of Common Units, Class C Units and
Series A Preferred Units.

 

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(b) Section 5.6(a) of the Partnership Agreement shall be amended and restated to
read as follows:

“5.6 Issuances of Additional Partnership Interests.

(a) Subject to any approvals required by holders of Series A Preferred Units
pursuant to Section 5.15(b)(v), the Partnership may issue additional Partnership
Interests and Derivative Instruments 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.”

(c) Article V of the Partnership Agreement is hereby amended by adding a new
Section 5.15 at the end thereof as follows:

“5.15. Establishment of Series A Preferred Units.

(a) Designations. A series of Units designated as “Series A Preferred Units” is
hereby designated and created, and the preferences, rights, powers and duties of
the holders of the Series A Preferred Units are set forth herein, including this
Section 5.15. Each Series A Preferred Unit shall be identical in all respects to
every other Series A Preferred Unit, except as to the respective dates from
which the Series A Liquidation Preference (or Series A Early Liquidation
Preference) shall increase or from which Series A Distributions may begin
accruing, to the extent such dates may differ. The Series A Preferred Units
represent perpetual equity interests in the Partnership and, except as set forth
in Section 5.15(c), shall not give rise to a claim by the Partnership or the
holders of Series A Preferred Units for redemption or the conversion thereof, as
applicable, at a particular date.

(b) Rights of Series A Preferred Units. The Series A Preferred Units shall have
the following rights, preferences and privileges and shall be subject to the
following duties and obligations:

(i) Initial Capital Account. The initial Capital Account balance with respect to
each Series A Preferred Unit will be equal to the Series A Preferred Unit Issue
Price.

(ii) Allocations.

(A) The holders of Series A Preferred Units shall not be entitled to receive,
except as otherwise provided in this Section 5.15(b)(ii), allocations of (1) Net
Income pursuant to Section 6.1(a), (2) Net Loss pursuant to Section 6.1(b), or
(3) Net Termination Gains and Net Termination Losses pursuant to Section 6.1(c).

(B) For each taxable period, after the application of Section 6.1(b), Net Loss
shall be allocated to the holders of Series A Preferred Units, in respect of the
Series A Preferred Units, Pro Rata, until the Capital Account balance in respect
of each Series A Preferred Unit has been reduced to zero.

 

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(C) For each taxable period, after the application of Section 6.1(c)(ii)(C), the
holders of Series A Preferred Units shall be allocated Net Termination Loss, Pro
Rata, until the Capital Account balance in respect of each Series A Preferred
Unit has been reduced to zero.

(D) For each taxable period, prior to the special allocations pursuant to
Section 6.1(d) (other than Required Allocations):

(I) Items of Partnership gross income shall be allocated to the holders of
Series A Preferred Units, Pro Rata, until the aggregate amount of gross income
allocated to each holder of Series A Preferred Units pursuant hereto for the
current taxable period and all previous taxable periods is equal to the
cumulative amount of all cash distributions made with respect to such holder’s
Series A Preferred Units pursuant to Section 5.15(b)(iii) from the date such
Series A Preferred Units were issued to a date 60 days after the end of the
current taxable period.

(II) Items of Partnership gross income, gain and Unrealized Gain shall be
allocated to the holders of Series A Preferred Units, Pro Rata, until the
aggregate amount of gross income, gain and Unrealized Gain allocated to each
holder of Series A Preferred Units pursuant to this Section 5.15(b)(ii)(D)(II)
for the current and all prior taxable periods is equal to the cumulative amount
of all Net Losses allocated to such holder of Series A Preferred Units pursuant
to Section 5.15(b)(ii)(B) for all previous taxable periods.

(III) If in the year of an event of any liquidation, dissolution or winding up
of the Partnership, either voluntary or involuntary, and after having made all
other allocations provided for in Sections 5.14(b)(v), 5.15(b)(ii) and 6.1 for
the taxable period in which such liquidation, dissolution or winding up occurs,
any holder’s Per Unit Capital Amount of each Series A Preferred Unit does not
equal or exceed the Series A Liquidation Preference, then items of income, gain,
loss and deduction for such taxable period shall be allocated among the Partners
in a manner determined appropriate by the General Partner so as to cause, to the
maximum extent possible, the Per Unit Capital Amount in respect of each Series A
Preferred Unit to equal the Series A Liquidation Preference (and no other
allocation pursuant to this Agreement shall reverse the effect of such
allocations). If in the year of such liquidation, dissolution or winding up any
such holder’s Capital Account in respect of such Series A Preferred Units is
less than the

 

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aggregate Series A Liquidation Preference of such Series A Preferred Units after
the application of the preceding sentence, then to the extent permitted by 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 Schedule K-1s have not been filed by the Partnership shall be reallocated
to all Unitholders holding Series A Preferred Units, Pro Rata, until the Capital
Account in respect of each Series A Preferred Unit then Outstanding is equal to
the Series A Liquidation Preference (and no other allocation pursuant to this
Agreement shall reverse the effect of such allocation). If, after making the
allocations provided for in this Section 5.15(b)(ii)(D)(III), the Series A
Liquidation Preference exceeds the Per Unit Capital Amount in respect of each
Series A Preferred Unit, the holders of Series A Preferred Units shall be
entitled to receive, prior to the making of liquidating distributions pursuant
to Section 12.4(c), a payment in the amount of such excess, which payment shall
be treated for federal income tax purposes as a guaranteed payment for the use
of capital under Section 707(c) of the Code.

(iii) Distributions. Commencing with and including the Series A Preferred Unit
Issue Date, each Series A Preferred Unit shall accrue on a daily basis and be
entitled to receive distributions payable in cash in an amount per Series A
Preferred Unit equal to the Series A Preferred Unit Distribution Rate (each, a
“Series A Preferred Unit Quarterly Distribution”), prior to distributions
pursuant to Section 5.14(b)(vi) and any other distributions pursuant to
Section 6.3, Section 6.4 or Section 6.5. Distributions shall be paid Quarterly,
in arrears, within sixty (60) days after the end of each Quarter, commencing
with the Quarter ending June 30, 2017. Each Record Date established for a Series
A Preferred Unit Quarterly Distribution in respect of any Quarter shall be the
same Record Date established for any distribution to be made by the Partnership
in respect of other Partnership Interests pursuant to Section 6.3, Section 6.4
or Section 6.5 for such Quarter; provided, that if no such Record Date is
established for other Partnership Interests for such Quarter, the Record Date
for such Quarter shall be the forty-fifth day after the end of such Quarter (or,
if such day is not a Business Day, the first Business Day thereafter). Each
Series A Preferred Unit Quarterly Distribution (or, if applicable, portion
thereof) for any Quarter that is payable in cash shall be paid in cash. If the
Partnership fails to pay in full in cash any distribution (or portion thereof)
which a holder of Series A Preferred Units accrues and is entitled to receive
pursuant to this Section 5.15(b)(iii), then (x) the amount of such accrued and
unpaid distributions will accumulate from and after the first date of such
failure and continuing until such failure is cured by payment in full in cash of
all accrued, accumulated and unpaid distributions (such accrued, accumulated and
unpaid distributions, the “Cumulative Series A Preferred Unit Arrearage”) and
(y) the Partnership shall not be permitted to, and shall not, declare or make
(i) any distributions in respect of any other Units, other than

 

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Series A Preferred Unit Quarterly Distributions, in respect of the Quarter in
respect of which such Cumulative Series A Preferred Unit Arrearage first occurs
or any subsequent Quarter, unless and until any and all Cumulative Series A
Preferred Unit Arrearage has been paid in full in cash. For the avoidance of
doubt, except as set forth in this Section 5.15(b)(iii), the Series A Preferred
Units will not be entitled to receive distributions, including distributions of
Available Cash under Section 6.3, Section 6.4 or Section 6.5.

(iv) Liquidation Preference. In the event of any liquidation, dissolution or
winding up of the Partnership, either voluntary or involuntary, the holders of
the Series A Preferred Units shall be entitled to receive, out of the assets of
the Partnership available for distribution to Unitholders, prior to and in
preference to any distribution of any assets of the Partnership to the holders
of any other class or series of Partnership Securities, the positive value in
each such holder’s Capital Account in respect of such Series A Preferred Units.
At the time of the dissolution of the Partnership, subject to Section 17-804 of
the Delaware Act, the holders of the Series A Preferred Units shall become
entitled to receive any accrued, accumulated and unpaid distributions in respect
of the Series A Preferred Units, if any, to the date of dissolution (such
accrued, accumulated and unpaid distributions shall include a partial
distribution for the calendar Quarter in which such dissolution occurs equal to
the product of (x) any distribution that would be payable to the holder of such
Series A Preferred Unit if such Series A Preferred Unit were Outstanding on the
Record Date for determining who would receive any distribution for such calendar
quarter (calculated as of the date of dissolution) and (y) (A) the number of
days commencing on the first day of such calendar Quarter and ending on the date
of dissolution divided by (B) 90), and shall have the status of, and shall be
entitled to all remedies available to, a creditor of the Partnership, and such
entitlement of the holders of the Series A Preferred Units to such accrued,
accumulated and unpaid distributions shall have priority over any entitlement of
any other Unitholders with respect to any distributions by the Partnership to
such other Unitholders; provided, however, that the General Partner, as such,
will have no liability for any obligations with respect to such distributions to
the holders of the Series A Preferred Units.

(v) Voting Rights. Except as set forth in this Section 5.15(b)(v) and
Section 13.3(c) and except to the extent the Delaware Act gives the Series A
Preferred Units a vote as a class on any matter, the Series A Preferred Units
shall not have any voting rights. With respect to any matter on which the Series
A Preferred Units are entitled to vote, each Series A Preferred Unit will be
entitled to one vote on such matter. The General Partner shall not, without the
affirmative vote or written consent of holders of a majority of the Series A
Preferred Units then Outstanding: (1) amend, alter, modify or change this
Section 5.15(v) (or vote or consent or resolve to take such action), (2) adopt
any amendment to this Agreement that would have a material adverse effect on the
existing terms of the Series A Preferred Units, (3) create or issue any Parity
Securities in the event there are Cumulative Series A Preferred Unit Arrearages,
or (4) create or issue any Senior Securities.

 

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(vi) Redemption and Conversion Rights. The Series A Preferred Units will be
perpetual and shall not have any rights of redemption or conversion.

(vii) Certificates; Book-Entry; Transfer Restriction. Unless the General Partner
shall determine otherwise, the Series A Preferred Units shall not be evidenced
by certificates. Any certificates relating to the Series A Preferred Units that
may be issued will be in such form as the General Partner may approve. Unless
the General Partner shall determine otherwise, the Series A Preferred Units may
not be assigned or transferred in any manner.

(viii) Rank. The Series A Preferred Units shall be deemed to rank:

(1) senior to the Junior Securities;

(2) on a parity with the Parity Securities;

(3) junior to the Senior Securities; and

(4) junior to all existing and future indebtedness and other liabilities of the
Partnership with respect to assets available to satisfy claims against the
Partnership.

The Partnership may issue Junior Securities and, subject to any approvals
required by holders of Series A Preferred Units pursuant to Section 5.15(b)(v),
Parity Securities from time to time in one or more classes or series without the
consent of the holders of Series A Preferred Units.

(c) Optional Redemption.

(i) The Partnership shall have the right at any time, and from time to time, to
redeem the Series A Preferred Units, in whole or in part, using any source of
funds legally available for such purpose. Any such redemption shall occur on a
date set by the Board of Directors (the “Series A Redemption Date”). The
Partnership shall effect any such redemption by paying cash for each Series A
Preferred Unit to be redeemed equal to: (1) in the case of any Series A
Redemption Date prior to March 30, 2022, the Series A Early Liquidation
Preference for such Series A Preferred Unit on such Series A Redemption Date,
and (2) in the case of any Series A Redemption Date on or after March 30, 2022,
the Series A Liquidation Preference for such Series A Preferred Unit on such
Series A Redemption Date, in each case, plus any accrued, accumulated and unpaid
distributions (such accrued, accumulated and unpaid distributions shall include
a partial distribution for the calendar Quarter in which such redemption occurs
equal to the product of (x) any distribution that would be payable to the holder
of such Series A Preferred Unit if such Series A Preferred Unit were Outstanding
on the Record Date for determining who would receive any distribution for such
calendar Quarter (calculated as of the Series A Redemption Date) and (y) (A) the
number of days commencing on the first day of such calendar Quarter and ending
on the Series A Redemption Date divided by (B) 90, including any Cumulative
Series A Preferred Unit Arrearages (as applicable, the “Series A Redemption
Price”).

 

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(ii) The Partnership shall give written notice of any redemption in person or by
first class mail, postage prepaid, not less than 30 days and not more than
60 days before the scheduled Series A Redemption Date to the holders of Series A
Preferred Units (as of 5:00 p.m. New York City time on the Business Day next
preceding the day on which notice is given) of any Series A Preferred Units to
be redeemed. Such notice (the “Series A Redemption Notice”) shall be irrevocable
and shall state, as applicable: (1) the Series A Redemption Date, (2) the number
of Series A Preferred Units to be redeemed, (3) the Series A Redemption Price,
including the Partnership’s computation of such amount, (4) the place where any
Series A Preferred Units in certificated form are to be redeemed and shall be
presented and surrendered for payment of the Series A Redemption Price therefor
and (5) that distributions on the Series A Preferred Units to be redeemed shall
cease to accumulate from and after such Series A Redemption Date.

(iii) If the Partnership elects to redeem less than all of the Outstanding
Series A Preferred Units, the number of Series A Preferred Units to be redeemed
shall be determined by the Board of Directors, and shall be redeemed Pro Rata or
by lot, with such adjustments to avoid redemption of fractional Series A
Preferred Units. The Series A Preferred Units not redeemed shall remain
Outstanding and entitled to all the rights and preferences provided in this
Section 5.15.

(iv) If the Partnership gives or causes to be given a Series A Redemption
Notice, the Partnership shall deposit with the Paying Agent funds, sufficient to
redeem the Series A Preferred Units, as to which such Series A Redemption Notice
shall have been given, no later than 10:00 a.m. New York City time on the
Series A Redemption Date, and shall give the Paying Agent irrevocable
instructions and authority to pay the Series A Redemption Price to the holders
of Series A Preferred Units whose Series A Preferred Units are to be redeemed
upon surrender or deemed surrender of the Series A Preferred Units therefor as
set forth in the Series A Redemption Notice. If the Series A Redemption Notice
shall have been given, from and after the Series A Redemption Date, unless the
Partnership defaults in providing funds sufficient for such redemption at the
time and place specified for payment pursuant to the Series A Redemption Notice,
all distributions with respect to such Series A Preferred Units to be redeemed
shall cease to accumulate and all rights of holders of such Series A Preferred
Units as Limited Partners with respect to such Series A Preferred Units to be
redeemed, shall cease, except the right to receive the Series A Redemption
Price, and such Series A Preferred Units be deemed to be Outstanding for any
purpose whatsoever. The Partnership shall be entitled to receive from the Paying
Agent the interest income, if any, earned on such funds deposited with the
Paying Agent (to the extent that such interest income is not required to pay the
Series A Redemption Price of the Series A Preferred Units to be redeemed), and
the holders of any Series A Preferred Units so redeemed, shall

 

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have no claim to any such interest income. Any funds deposited with the Paying
Agent hereunder by the Partnership for any reason, including redemption of
Series A Preferred Units, that remain unclaimed or unpaid after two years after
the applicable Series A Redemption Date or other payment date, as applicable,
shall be, to the extent permitted by law, repaid to the Partnership upon its
written request, after which repayment the holders of Series A Preferred Units
entitled to such redemption or other payment, shall have recourse only to the
Partnership. Notwithstanding any Series A Redemption Notice, there shall be no
redemption of any Series A Preferred Units called for redemption until funds
sufficient to pay the full Series A Redemption Price of such Series A Preferred
Units shall have been deposited by the Partnership with the Paying Agent.

(v) Any Series A Preferred Units that are redeemed or otherwise acquired by the
Partnership shall be cancelled.

(vi) Notwithstanding anything to the contrary in this Section 5.15, in the event
that full cumulative cash distributions on the Series A Preferred Units shall
not have been paid or declared and set apart for payment for any Quarter in
respect of which Series A Preferred Units are Outstanding, none of the
Partnership, the General Partner or any Affiliate of the General Partner shall
be permitted to repurchase, redeem or otherwise acquire, in whole or in part,
any Series A Preferred Units except pursuant to a purchase or exchange offer
made on the same relative terms to the holders of all of the Outstanding Series
A Preferred Units. Neither the Partnership nor any of its Subsidiaries shall be
permitted to redeem, repurchase or otherwise acquire any Common Units, Class C
Units or any other Junior Securities, unless and until, the Partnership has
redeemed in full all Outstanding Series A Preferred Units pursuant to
Section 5.15(c), including for the avoidance of doubt, all Cumulative Series A
Preferred Unit Arrearage.

(d) Other Rights; Fiduciary Duties. The Series A Preferred Units shall not have
any designations, preferences, rights, powers or duties, other than as set forth
in this Article V or as provided by applicable law. Notwithstanding anything to
the contrary in this Agreement, to the fullest extent permitted by applicable
Law, neither the General Partner nor any other Indemnitee shall owe any duties
or have any liabilities to the holders of Series A Preferred Units, other than
the implied contractual covenant of good faith and fair dealing.

(e) The first sentence of Section 6.1 of the Partnership Agreement shall be
amended and restated to read as follows:

“Section 6.1 Allocations for Capital Account Purposes. Except as otherwise
required pursuant to Sections 5.14(b)(v) and
5.15(b)(ii), 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.”

 

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(f) Section 6.4(b) of the Partnership Agreement shall be amended and restated to
read as follows:

“Subject to Section 5.14(b)(vi) and Section 5.15(b)(iii) and except as otherwise
contemplated by Section 5.6(b) in respect of additional Partnership Interests
issued pursuant thereto, Available Cash with respect to any Quarter that is
deemed to be Operating Surplus pursuant to the provisions of Section 6.3 or
Section 6.5 shall be distributed as follows:

(i) First, to all the Unitholders holding 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;

(ii) Second, to all the Unitholders holding 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;

(iii) Third, (A) 15.0% to the holders of the Incentive Distribution Rights, Pro
Rata; and (B) 85.0% to all Unitholders holding 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 Second Target Distribution over the First
Target Distribution for such Quarter;

(iv) Fourth, (A) 25.0% to the holders of the Incentive Distribution Rights, Pro
Rata; and (B) 75.0% to all Unitholders holding 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 Third Target Distribution over the Second
Target Distribution for such Quarter; and

(v) Thereafter, (A) 50.0% to the holders of the Incentive Distribution Rights,
Pro Rata; and (B) 50.0% to all Unitholders holding Common Units, Pro Rata;

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

(g) Section 6.5 of the Partnership Agreement shall be amended and restated to
read as follows:

“Distributions of Available Cash from Capital Surplus. Subject to
Section 5.14(b)(vi) and Section 5.15(b)(iii) and unless the provisions of
Section 6.3 require otherwise, Available Cash that is deemed to be Capital
Surplus pursuant to the provisions of Section 6.3(a) shall be distributed:

(a) First, 100% to all the Unitholders holding Common Units, Pro Rata, until the
Minimum Quarterly Distribution has been reduced to zero pursuant to the second
sentence of Section 6.6(a);

 

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(b) Second, 100% to all Unitholders holding Common Units, Pro Rata, until there
has been distributed in respect of each Common Unit then Outstanding an amount
equal to the Cumulative Common Unit Arrearage; and

(c) Thereafter, all Available Cash shall be distributed as if it were Operating
Surplus and shall be distributed in accordance with Section 6.4(b).”

(h) Section 7.11 of the Partnership Agreement shall be amended and restated to
read as follows:

“7.11. Purchase or Sale of Partnership Interests. Subject to
Section 5.15(c)(vi), the General Partner may cause the Partnership to purchase
or otherwise acquire Partnership Interests. As long as Partnership Interests are
held by any Group Member, such Partnership Interests shall not be considered
Outstanding for any purpose, except as otherwise provided herein. The General
Partner or any Affiliate of the General Partner may also purchase or otherwise
acquire and sell or otherwise dispose of Partnership Interests for its own
account, subject to the provisions of Article IV and Article VX.”

(i) Sections 13.1(d), (e) and (g) of the Partnership Agreement shall be amended
and restated to read as follows:

“(d) subject to Section 5.15(b)(v), a change that the General Partner determines
(i) does not adversely affect the Limited Partners (including any particular
class or series of Partnership Interests as compared to other classes or series
of Partnership Interests) in any material respect (except as permitted by
subsection (g) hereof), (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 or series to facilitate
uniformity of tax consequences within such classes or series of Units) or comply
with any rule, regulation, guideline or requirement of any National Securities
Exchange on which the Units are or will be listed or admitted to trading,
(iii) to be necessary or appropriate in connection with action taken by the
General Partner pursuant to Section 5.9 or (iv) is required to effect the intent
expressed in the Registration Statement or the intent of the provisions of this
Agreement or is otherwise contemplated by this Agreement;”

“(e) a change in the fiscal year or taxable period 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 period of the Partnership
including, if the General Partner shall so determine, a change in the definition
of “Quarter” and the dates on which distributions (other than distributions to
the holders of Series A Preferred Units) are to be made by the Partnership;”

“(g) subject to the terms of Section 5.15(b)(v), Section 16.4 and Section 17.4,
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;”

 

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Section 2. Except as hereby amended, the Partnership Agreement shall remain in
full force and effect.

Section 3. If any provision or part of a provision of this Amendment No. 5 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 Amendment No. 5
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 provision or part reformed so that it
would be valid, legal and enforceable to the maximum extent possible.

Section 4. This Amendment No. 5 shall be governed by, and interpreted in
accordance with, the laws of the State of Delaware, all rights and remedies
being governed by such laws without regard to principles of conflicts of laws.

[Signature page follows]

 

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IN WITNESS WHEREOF, this Amendment has been executed as of the date first above
written.

 

GENERAL PARTNER: SUNOCO GP LLC By:  

 

Name: Thomas R. Miller Title:   Chief Financial Officer

 

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