Exhibit 10.2

Execution Version

FIRST AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

MCE, LP

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TABLE OF CONTENTS

 

ARTICLE I    DEFINITIONS   

Section 1.1

 

Definitions

     1   

Section 1.2

 

Construction

     19    ARTICLE II    ORGANIZATION   

Section 2.1

 

Formation

     19   

Section 2.2

 

Name

     19   

Section 2.3

 

Registered Office; Registered Agent; Principal Office; Other Offices

     20   

Section 2.4

 

Purpose and Business

     20   

Section 2.5

 

Powers

     20   

Section 2.6

 

Term

     20   

Section 2.7

 

Title to Partnership Assets

     20    ARTICLE III    RIGHTS OF LIMITED PARTNERS   

Section 3.1

 

Limitation of Liability

     21   

Section 3.2

 

Management of Business

     21   

Section 3.3

 

Outside Activities of the Limited Partners

     21   

Section 3.4

 

Rights of Limited Partners

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

Section 4.1

 

Certificates

     23   

Section 4.2

 

Mutilated, Destroyed, Lost or Stolen Certificates

     23   

Section 4.3

 

Record Holders

     24   

Section 4.4

 

Transfer Generally

     24   

Section 4.5

 

Registration and Transfer of Limited Partner Interests

     25   

Section 4.6

 

Transfer of the General Partner’s General Partner Interest

     25   

Section 4.7

 

Restrictions on Transfers

     25   

 

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ARTICLE V    CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS   

Section 5.1

 

Organizational Contributions

     26   

Section 5.2

 

General Partner Interest

     27   

Section 5.3

 

Contributions by Initial Limited Partners

     27   

Section 5.4

 

Interest and Withdrawal

     27   

Section 5.5

 

Capital Accounts

     27   

Section 5.6

 

Issuances of Additional Partnership Interests and Derivative Instruments

     30   

Section 5.7

 

Limited Preemptive Right

     31   

Section 5.8

 

Splits and Combinations

     31   

Section 5.9

 

Fully Paid and Non-Assessable Nature of Limited Partner Interests

     32   

Section 5.10

 

Reset Election and Reset Consideration

     32    ARTICLE VI    ALLOCATIONS AND DISTRIBUTIONS   

Section 6.1

 

Allocations for Capital Account Purposes

     34   

Section 6.2

 

Allocations for Tax Purposes

     40   

Section 6.3

 

Requirements and Characterization of Distributions; Distributions to Record
Holders

     42   

Section 6.4

 

Distributions of Available Cash from Operating Surplus

     42   

Section 6.5

 

Distributions of Available Cash from Capital Surplus

     43   

Section 6.6

 

Adjustment of Minimum Quarterly Distribution and Target Distribution Levels

     43   

Section 6.7

 

Entity-Level Taxation

     43    ARTICLE VII    MANAGEMENT AND OPERATION OF BUSINESS   

Section 7.1

 

Management

     44   

Section 7.2

 

Replacement of Fiduciary Duties

     46   

Section 7.3

 

Certificate of Limited Partnership

     46   

Section 7.4

 

Restrictions on the General Partner’s Authority

     47   

Section 7.5

 

Reimbursement of the General Partner

     47   

Section 7.6

 

Outside Activities

     48   

Section 7.7

 

Indemnification

     49   

Section 7.8

 

Liability of Indemnitees

     51   

Section 7.9

 

Standards of Conduct and Modification of Duties

     51   

Section 7.10

 

Other Matters Concerning the General Partner and Indemnitees

     53   

Section 7.11

 

Purchase or Sale of Partnership Interests

     53   

Section 7.12

 

Reliance by Third Parties

     54   

 

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ARTICLE VIII    BOOKS, RECORDS, ACCOUNTING AND REPORTS   

Section 8.1

 

Records and Accounting

     54   

Section 8.2

 

Fiscal Year

     54   

Section 8.3

 

Reports

     55    ARTICLE IX    TAX MATTERS   

Section 9.1

 

Tax Returns and Information

     55   

Section 9.2

 

Tax Elections

     55   

Section 9.3

 

Tax Controversies

     56   

Section 9.4

 

Withholding; Tax Payments

     56    ARTICLE X    ADMISSION OF PARTNERS   

Section 10.1

 

Admission of Limited Partners

     56   

Section 10.2

 

Admission of Successor General Partner

     57   

Section 10.3

 

Amendment of Agreement and Certificate of Limited Partnership

     57    ARTICLE XI    DISSOLUTION AND LIQUIDATION   

Section 11.1

 

Dissolution

     58   

Section 11.2

 

Liquidator

     58   

Section 11.3

 

Liquidation

     58   

Section 11.4

 

Cancellation of Certificate of Limited Partnership

     59   

Section 11.5

 

Return of Contributions

     59   

Section 11.6

 

Waiver of Partition

     59   

Section 11.7

 

Capital Account Restoration

     59    ARTICLE XII    AMENDMENT OF PARTNERSHIP AGREEMENT   

Section 12.1

 

Amendments of Partnership Agreement

     60   

 

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ARTICLE XIII    MERGER OR CONSOLIDATION   

Section 13.1

 

Authority

     60   

Section 13.2

 

Procedure for Merger or Consolidation

     60   

Section 13.3

 

Approval by Limited Partners

     61   

Section 13.4

 

Certificate of Merger

     63   

Section 13.5

 

Effect of Merger or Consolidation

     63    ARTICLE XIV    GENERAL PROVISIONS   

Section 14.1

 

Addresses and Notices; Written Communications

     63   

Section 14.2

 

Further Action

     64   

Section 14.3

 

Binding Effect

     64   

Section 14.4

 

Integration

     64   

Section 14.5

 

Creditors

     64   

Section 14.6

 

Waiver

     64   

Section 14.7

 

Third-Party Beneficiaries

     65   

Section 14.8

 

Counterparts

     65   

Section 14.9

 

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

     65   

Section 14.10

 

Invalidity of Provisions

     66   

Section 14.11

 

Consent of Partners

     66   

Section 14.12

 

Facsimile Signatures

     66   

 

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Execution Version

FIRST AMENDED AND RESTATED AGREEMENT

OF LIMITED PARTNERSHIP OF MCE, LP

THIS FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF MCE, LP
dated as of November 12, 2013, is entered into by and between MCE GP, LLC, a
Delaware limited liability company, as the General Partner, and MCE, LLC, a
Delaware limited liability company, in its capacity as the Organizational
Limited Partner, together with any other Persons who become Partners in the
Partnership or parties hereto as provided herein. In consideration of the
covenants, conditions and agreements contained herein, the parties hereto hereby
agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. The following definitions shall be for all purposes,
unless otherwise clearly indicated to the contrary, applied to the terms used in
this Agreement.

“Additional Book Basis” means, with respect to any Adjusted Property, the
portion of the Carrying Value of such Adjusted Property that is attributable to
positive adjustments made to such Carrying Value, as determined in accordance
with the provisions set forth below in this definition of Additional Book Basis.
For purposes of determining the extent to which Carrying Value constitutes
Additional Book Basis:

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

(b) If Carrying Value that constitutes Additional Book Basis is reduced as a
result of a Book-Down Event (an “Additional Book Basis Reduction”) and the
Carrying Value of other property is increased as a result of such Book-Down
Event (a “Carrying Value Increase”), then any such Carrying Value Increase shall
be treated as Additional Book Basis in an amount equal to the lesser of (a) the
amount of such Carrying Value Increase and (b) the amount determined by
proportionately allocating to the Carrying Value Increases resulting from such
Book-Down Event the lesser of (I) the aggregate Additional Book Basis Reductions
resulting from such Book Down-Event and (II) the amount by which the Aggregate
Remaining Net Positive Adjustments after such Book-Down Event exceeds the
remaining Additional Book Basis attributable to all of the Partnership’s
Adjusted Property after such Book-Down Event (determined without regard to the
application of this clause (b) to such Book-Down Event).

“Additional Book Basis Derivative Items” means any Book Basis Derivative Items
that are computed with reference to Additional Book Basis. To the extent that
the Additional Book Basis attributable to all of the Partnership’s Adjusted
Property as of the beginning of any taxable period exceeds the Aggregate
Remaining Net Positive Adjustments as of the beginning of such period (the
“Excess Additional Book Basis”), the Additional Book Basis Derivative Items for
such period shall be reduced by the amount that bears the same ratio to the
amount of Additional

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Book Basis Derivative Items determined without regard to this sentence as the
Excess Additional Book Basis bears to the Additional Book Basis as of the
beginning of such period. With respect to a Disposed of Adjusted Property, the
Additional Book Basis Derivative Items shall be the amount of Additional Book
Basis taken into account in computing gain or loss from the disposition of such
Disposed of Adjusted Property; provided that the provisions of the immediately
preceding sentence shall apply to the determination of the Additional Book Basis
Derivative Items attributable to Disposed of Adjusted Property.

“Additional Contribution” is defined in Section 5.3(b).

“Adjusted Capital Account” means, with respect to any Partner, the balance in
such Partner’s Capital Account at the end of each taxable period of the
Partnership, after giving effect to the following adjustments:

(i) credit to such Capital Account any amounts which such Partner is
(x) obligated to restore under the standards set by Treasury Regulation
Section 1.704-1(b)(2)(ii)(c) or (y) deemed obligated to restore pursuant to the
penultimate sentences of Treasury Regulation Sections 1.704-2(g)(1) and
1.704-2(i)(5); and

(ii) debit to such Capital Account the items described in Treasury Regulation
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
1.704-1(b)(2)(ii)(d)(6).

The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith. The “Adjusted Capital Account” of a Partner
in respect of any Partnership Interest shall be the amount that such Adjusted
Capital Account would be if such Partnership Interest were the only interest in
the Partnership held by such Partner from and after the date on which such
Partnership Interest was first issued.

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

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

“Aggregate Quantity of Reset Election Units” is defined in Section 5.10(a).

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

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

 

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“Agreed Value” of (a) a Contributed Property means the fair market value of such
property at the time of contribution and (b) an Adjusted Property means the fair
market value of such Adjusted Property on the date of the Revaluation Event, in
each case as determined by the General Partner.

“Agreement” means this First Amended and Restated Agreement of Limited
Partnership of MCE, LP, as it may be amended, supplemented or restated from time
to time.

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

“Available Cash” means, with respect to any Quarter ending prior to the
Liquidation Date, an amount equal to the quotient obtained by dividing
Distributable Cash Flow with respect to such Quarter by 1.25; provided, however,
that “Available Cash” with respect to the Quarter in which the Liquidation Date
occurs and any subsequent Quarter shall equal zero.

“Board of Directors” means the board of directors of New Source Energy GP, LLC,
the general partner of NSLP.

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

“Book-Down Event” means an event that triggers a negative adjustment to the
Capital Accounts of the Partners pursuant to Section 5.5(d).

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

“Book-Up Event” means an event that triggers a positive adjustment to the
Capital Accounts of the Partners pursuant to Section 5.5(d).

“Business Day” means Monday through Friday of each week, except that a legal
holiday recognized as such by the government of the United States of America or
the State of Oklahoma shall not be regarded as a Business Day.

 

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

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

“Capital Improvement” means any (a) addition or improvement to the capital
assets owned by any Group Member, (b) acquisition (through an asset acquisition,
merger, stock acquisition or other form of investment) of existing, or the
construction of new, capital assets by any Group Member, or (c) capital
contribution by a Group Member to a Person that is not a Subsidiary, in which a
Group Member has, or after such capital contribution will have an equity
interest, to fund the Group Member’s pro rata share of the cost of the
acquisition of existing or the construction of new or the improvement of
existing, capital assets, in each case if such addition, improvement,
acquisition or construction is made to increase over the long-term the asset
base, operating capacity or operating income of the Partnership Group from the
long-term asset base, operating capacity or operating income of the Partnership
Group, in the case of clauses (a) and (b), or such Person, in the case of clause
(c), from that existing immediately prior to such addition, improvement,
acquisition or construction.

“Capital Surplus” means Available Cash distributed by the Partnership in excess
of Operating Surplus, as described in Section 6.3(a).

“Carrying Value” means (a) with respect to a Contributed Property or an Adjusted
Property, the Agreed Value of such property reduced (but not below zero) by all
depreciation, Simulated Depletion, amortization and cost recovery deductions
charged to the Partners’ Capital Accounts in respect of such property, and
(b) with respect to any other Partnership property, the adjusted basis of such
property for U.S. federal income tax purposes, all as of the time of
determination. The Carrying Value of any property shall be adjusted from time to
time in accordance with Section 5.5(d) and to reflect changes, additions or
other adjustments to the Carrying Value for dispositions and acquisitions of
Partnership properties, as deemed appropriate by the General Partner.

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

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

 

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“Certificate of Limited Partnership” means the Certificate of Limited
Partnership of the Partnership filed with the Secretary of State of the State of
Delaware as referenced in Section 7.3, as such Certificate of Limited
Partnership may be amended, supplemented or restated from time to time.

“Class A Holder VWAP” is defined in Section 5.10(a).

“Class A Unit” means a Limited Partner Interest having the rights and
obligations specified with respect to Class A Units in this Agreement. The term
“Class A Unit” does not refer to or include any Class B Units.

“Class B Distributions” means any amount of cash distributed to the holders of
the Class B Units pursuant to Section 6.4.

“Class B Units” means a Limited Partner Interest having the rights and
obligations specified with respect to Class B Units in this Agreement.

“Closing Date” means the first date on which Class A Units are issued and
delivered by the Partnership to NSLP.

“Closing Price” means, in respect of any class of Limited Partner Interests, as
of the date of determination, the last sale price on such day, regular way, or
in case no such sale takes place on such day, the average of the closing bid and
asked prices on such day, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the principal National Securities Exchange on
which such Limited Partner Interests are listed or admitted to trading or, if
such Limited Partner Interests are not listed or admitted to trading on any
National Securities Exchange, the last quoted price on such day or, if not so
quoted, the average of the high bid and low asked prices on such day in the
over-the-counter market, as reported by the primary reporting system then in use
in relation to such Limited Partner Interests of such class, or, if on any such
day such Limited Partner Interests of such class are not quoted by any such
organization, the average of the closing bid and asked prices on such day as
furnished by a professional market maker making a market in such Limited Partner
Interests of such class selected by the General Partner, or if on any such day
no market maker is making a market in such Limited Partner Interests of such
class, the fair value of such Limited Partner Interests on such day as
determined by the General Partner.

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

“Commences Commercial Service” means the date a Capital Improvement or
replacement capital asset, as applicable, is first put into or commences
commercial service by a Group Member following, if applicable, completion of
construction, acquisition, development or testing, as applicable.

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

 

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“Conflicts Committee” means a committee of the Board of Directors composed
entirely of one or more directors, each of whom (a) is not an officer or
employee of NSLP GP (b) is not an officer or employee of any Affiliate of NSLP
GP or a director of any Affiliate of NSLP GP (other than any member of the NSLP
Partnership Group), (c) is not a holder of any ownership interest in NSLP GP or
any of its Affiliates, including any member of the NSLP Partnership Group, other
than common units of NSLP and awards that are granted to such director under
Long-Term Incentive Plan of NSLP GP, as may be amended, or any equity
compensation plan successor thereto, and (d) is determined by the Board of
Directors to be independent under the independence standards required for
directors who serve on an audit committee of a board of directors established by
the Securities Exchange Act and the rules and regulations of the Commission
thereunder and by the National Securities Exchange on which any class of NSLP
partnership interests is listed or admitted to trading.

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

“Contribution Agreement” means that certain Contribution Agreement, dated as of
November 12, 2013, among NSLP, MCE LLC and certain other parties, together with
the additional conveyance documents and instruments contemplated or referenced
thereunder, as such may be amended, supplemented or restated from time to time.

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

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

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

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

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

“Deylau” means Deylau, LLC, a Delaware limited liability company.

“Disposed of Adjusted Property” is defined in Section 6.1(d)(xii)(B).

 

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“Distributable Cash Flow” means, for any period, MCE Adjusted EBITDA less
(i) Estimated Maintenance Capital Expenditures and (ii) the cash component of
interest expense incurred with respect to such period.

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

“Election Purchase Price” is defined in Section 5.10(a).

“Estimated Incremental Quarterly Tax Amount” is defined in Section 6.8.

“Estimated Maintenance Capital Expenditures” means an estimate made by the
officer of the Partnership with primary responsibility for preparation of the
Partnership Group’s financial statements (with the concurrence of the Conflicts
Committee) of the average quarterly Maintenance Capital Expenditures that the
Partnership will need to incur over the long term to maintain the long-term
asset base of the Partnership Group (including the Partnership’s proportionate
share of the average quarterly Maintenance Capital Expenditures of its
Subsidiaries that are not wholly owned) existing at the time the estimate is
made. Such officer (with the concurrence of the Conflicts Committee) will be
permitted to make such estimate in any manner he or she determines reasonable.
The estimate will be made at least annually and whenever an event occurs that is
likely to result in a material adjustment to the amount of future Estimated
Maintenance Capital Expenditures. The Partnership shall disclose to its Partners
any change in the amount of Estimated Maintenance Capital Expenditures in its
reports made in accordance with Section 8.3 to the extent not previously
disclosed. Any adjustments to Estimated Maintenance Capital Expenditures shall
be prospective only.

“Event Issue Value” means, with respect to any Class A Unit as of any date of
determination, the value determined by the General Partner for the Class A Unit
taking into account all relevant factors.

“Event of Withdrawal” is defined in Section 11.1(a).

“Excess Additional Book Basis” is defined in the definition of Additional Book
Basis Derivative Items.

“Excess Distribution” is defined in Section 6.1(d)(iii)(A).

“Excess Distribution Unit” is defined in Section 6.1(d)(iii)(A).

“First Target Distribution” means $18,193.55 per Unit per Quarter (or, with
respect to periods of less than a full fiscal quarter, it means the product of
such amount multiplied by a fraction of which the numerator is the number of
days in such period, and the denominator is the total number of days in such
fiscal quarter), subject to adjustment in accordance with Sections 5.3, 5.10,
6.6 and 6.7.

“General Partner” means MCE GP, LLC, a Delaware limited liability company, and
its successors and permitted assigns that are admitted to the Partnership as
general partner of the Partnership, in their capacities as general partner of
the Partnership (except as the context otherwise requires).

 

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

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

“Group” means two or more Persons that with or through any of their respective
Affiliates or Associates have any contract, arrangement, understanding or
relationship for the purpose of acquiring, holding, voting (except voting
pursuant to a revocable proxy or consent given to such Person in response to a
proxy or consent solicitation made to 10 or more Persons), exercising investment
power or disposing of any Partnership Interests with any other Person that
beneficially owns, or whose Affiliates or Associates beneficially own, directly
or indirectly, Partnership Interests.

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

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

“Growth Capital Expenditures” means cash expenditures for Capital Improvements,
and shall not include Maintenance Capital Expenditures or Investment Capital
Expenditures. Growth Capital Expenditures shall include interest (and related
fees) on debt incurred to finance the construction of a Capital Improvement and
paid in respect of the period beginning on the date that a Group Member enters
into a binding obligation to commence construction of a Capital Improvement and
ending on the earlier to occur of the date that such Capital Improvement
Commences Commercial Service and the date that such Capital Improvement is
abandoned or disposed of. Debt incurred to fund such construction period
interest payments or to fund distributions in respect of equity issued
(including incremental Class B Distributions related thereto) to fund the
construction of a Capital Improvement as described in clause (a)(iv) of the
definition of Operating Surplus shall also be deemed to be debt incurred to
finance the construction of a Capital Improvement. Where capital expenditures
are made in part for Growth Capital Expenditures and in part for other purposes,
the General Partner shall determine the allocation between the amounts paid for
each.

 

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“Hedge Contract” means any exchange, swap, forward, cap, floor, collar, option
or other similar agreement or arrangement entered into for the purpose of
reducing the exposure of the Partnership Group to fluctuations in commodities,
financial instruments or other capital activity, in each case, other than for
speculative purposes.

“Incremental Income Taxes” is defined in Section 6.8.

“Indemnitee” means (a) any General Partner, (b) any Departing General Partner,
(c) any Person who is or was an Affiliate of the General Partner or any
Departing General Partner, (d) any Person who is or was a manager, managing
member, general partner, director, officer, employee, agent, fiduciary or
trustee of any Group Member, a General Partner, any Departing General Partner or
any of their respective Affiliates, (e) any Person who is or was serving at the
request of a General Partner, any Departing General Partner or any of their
respective Affiliates as an officer, director, manager, managing member, general
partner, employee, agent, fiduciary or trustee of another Person owing a
fiduciary or similar duty to any Group Member; provided that a Person shall not
be an Indemnitee by reason of providing, on a fee-for-services basis, trustee,
fiduciary or custodial services, (f) any Person who controls a General Partner
or Departing General Partner and (g) any Person the General Partner designates
as an “Indemnitee” for purposes of this Agreement because such Person’s service,
status or relationship exposes such Person to potential claims, demands,
actions, suits or proceedings relating to the Partnership Group’s business and
affairs.

“Initial Limited Partners” means (a) NSLP (with respect to the Class A Units
received by it pursuant to Section 5.3), and (b) Deylau and Signature (with
respect to the Class B Units received by each of them pursuant to Section 5.3),
in each case upon being admitted to the Partnership in accordance with Section
10.1.

“Initial Unit Price” means (a) with respect to the Class A Units, $398,085.62 or
(b) with respect to any other class or series of Units, the price per Unit at
which such class or series of Units is initially sold by the Partnership, as
determined by the General Partner, in each case adjusted as the General Partner
determines to be appropriate to give effect to any distribution, subdivision or
combination of Units.

“Interim Capital Transactions” means the following transactions if they occur
prior to the Liquidation Date: (a) borrowings, refinancings or refundings of
indebtedness (other than Working Capital Borrowings and other than for items
purchased on open account or for a deferred purchase price in the ordinary
course of business) by any Group Member and sales of debt securities of any
Group Member; (b) sales of equity interests of any Group Member; and (c) sales
or other voluntary or involuntary dispositions of any assets of any Group Member
other than (i) sales or other dispositions of inventory, accounts receivable and
other assets in the ordinary course of business, and (ii) sales or other
dispositions of assets as part of normal retirements or replacements.

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

 

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

“Limited Partner” means, unless the context otherwise requires, the Initial
Limited Partners and each additional Person that becomes a Limited Partner
pursuant to the terms of this Agreement.

“Limited Partner Interest” means the ownership interest of a Limited Partner in
the Partnership, which may be evidenced by Class A Units, Class B Units 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.

“Liquidation Date” means (a) in the case of an event giving rise to the
dissolution of the Partnership of the type described in clauses (a) and (b) of
the first sentence of Section 12.2, the date on which the applicable time period
during which the holders of Outstanding Units have the right to elect to
continue the business of the Partnership has expired without such an election
being made, and (b) in the case of any other event giving rise to the
dissolution of the Partnership, the date on which such event occurs.

“Liquidator” means one or more Persons selected pursuant to Section 11.2 to
perform the functions described in Section 11.3 as liquidating trustee of the
Partnership within the meaning of the Delaware Act.

“Maintenance Capital Expenditures” means cash expenditures (including
expenditures for the addition or improvement to or replacement of the capital
assets owned by any Group Member or for the acquisition of existing, or the
construction or development of new, capital assets) if such expenditures are
made to maintain the asset base, operating capacity or operating income of the
Partnership Group over the long-term. Maintenance Capital Expenditures shall
include interest (and related fees) on debt incurred and distributions in
respect of equity issued, in each case, to finance the construction or
development of a replacement capital asset and paid in respect of the period
beginning on the date that a Group Member enters into a binding obligation to
commence constructing or developing a replacement capital asset and ending on
the earlier to occur of the date that such replacement capital asset Commences
Commercial Service and the date that such replacement capital asset is abandoned
or disposed of. Debt incurred to pay or equity issued to fund construction or
development period interest payments, or such construction or development period
distributions in respect of equity, shall also be deemed to be debt or equity,
as the case may be, incurred to finance the construction or development of a
replacement capital asset and the incremental Class B Distributions paid
relating to newly issued equity shall be deemed to be distributions paid on
equity issued to finance the construction or development of a replacement
capital asset.

“MCE Adjusted EBITDA” means, for any period for the Partnership Group, the sum
of net income for such period plus the following expenses or charges, to the
extent deducted from net income in such period: interest expense, income taxes,
depreciation, depletion and amortization, accretion expense, non-cash
compensation expense and unrealized derivative gains and losses.

 

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“MCE LLC” means MCE, LLC, a Delaware limited liability company.

“Merger Agreement” is defined in Section 14.1.

“Minimum Quarterly Distribution” means $15,820.48 per Unit per Quarter (or with
respect to periods of less than a full fiscal quarter, it means the product of
such amount multiplied by a fraction of which the numerator is the number of
days in such period and the denominator is the total number of days in such
fiscal quarter), subject to adjustment in accordance with Sections 5.3, 5.10,
6.6 and 6.7.

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

“Net Agreed Value” means, (a) in the case of any Contributed Property, the
Agreed Value of such property reduced by any Liabilities either assumed by the
Partnership upon such contribution or to which such property is subject when
contributed and (b) in the case of any property distributed to a Partner by the
Partnership, the Partnership’s Carrying Value of such property (as adjusted
pursuant to Section 5.5(d)(ii)) at the time such property is distributed,
reduced by any Liabilities either assumed by such Partner upon such distribution
or to which such property is subject at the time of distribution.

“Net Income” means, for any taxable period, the excess, if any, of the
Partnership’s items of income and gain (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss) for
such taxable period over the Partnership’s items of loss and deduction (other
than those items taken into account in the computation of Net Termination Gain
or Net Termination Loss) for such taxable period. The items included in the
calculation of Net Income shall be determined in accordance with Section 5.5(b)
but shall not include any items specially allocated under Section 6.1(d);
provided, that the determination of the items that have been specially allocated
under Section 6.1(d) shall be made without regard to any reversal of such items
under Section 6.1(d)(xii).

“Net Loss” means, for any taxable period, the excess, if any, of the
Partnership’s items of loss and deduction (other than those items taken into
account in the computation of Net Termination Gain or Net Termination Loss) for
such taxable period over the Partnership’s items of income and gain (other than
those items taken into account in the computation of Net Termination Gain or Net
Termination Loss) for such taxable period. The items included in the calculation
of Net Loss shall be determined in accordance with Section 5.5(b) but shall not
include any items specially allocated under Section 6.1(d); provided, that the
determination of the items that have been specially allocated under
Section 6.1(d) shall be made without regard to any reversal of such items under
Section 6.1(d)(xii).

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

 

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“Net Termination Gain” means, for any taxable period, (a) the sum, if positive,
of all items of income, gain, loss or deduction (determined in accordance with
Section 5.5) that are recognized (i) after the Liquidation Date or (ii) upon the
sale, exchange or other disposition of all or substantially all of the assets of
the Partnership Group, taken as a whole, in a single transaction or a series of
related transactions (excluding any disposition to a member of the Partnership
Group), or (b) the excess, if any, of the aggregate amount of Unrealized Gain
over the aggregate amount of Unrealized Loss deemed recognized by the
Partnership pursuant to Section 5.5(d) on the date of a Revaluation Event;
provided, however, the items included in the determination of Net Termination
Gain shall not include any items of income, gain or loss specially allocated
under Sections 6.1(d)(i) through 6.1(d)(xi).

“Net Termination Loss” means, for any taxable period, (a) the sum, if negative,
of all items of income, gain, loss or deduction (determined in accordance with
Section 5.5) that are recognized (i) after the Liquidation Date or (ii) upon the
sale, exchange or other disposition of all or substantially all of the assets of
the Partnership Group, taken as a whole, in a single transaction or a series of
related transactions (excluding any disposition to a member of the Partnership
Group), or (b) the excess, if any, of the aggregate amount of Unrealized Loss
over the aggregate amount of Unrealized Gain deemed recognized by the
Partnership pursuant to Section 5.5(d) on the date of a Revaluation Event;
provided, however, items included in the determination of Net Termination Loss
shall not include any items of income, gain or loss specially allocated under
Section 6.1(d)(i) through 6.1(d)(xi).

“Noncompensatory Option” has the meaning set forth in Treasury Regulation
Section 1.721-2(f).

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

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

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

“Notice of Election to Purchase” is defined in Section 15.1(b).

“NSLP” means New Source Energy Partners L.P., a Delaware limited partnership.

“NSLP GP” means New Source Energy GP, LLC, a Delaware limited liability company,
the general partner of NSLP.

 

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“NSLP Partnership Agreement” means the First Amended and Restated Agreement of
Limited Partnership of New Source Energy Partners L.P., dated as of February 13,
2013, as amended from time to time.

“NSLP Partnership Group” means, collectively, NSLP and its subsidiaries.

“NSLP Revaluation Event” means a Revaluation Event (as such term is defined in
the NSLP Partnership Agreement) occurring with respect to NSLP.

“NSLP VWAP” is defined in Section 5.10(a).

“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 Estimated Maintenance 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 and the purchase
price of debt repurchased and cancelled) of principal of and premium on
indebtedness other than Working Capital Borrowings shall not constitute
Operating Expenditures;

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

(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.

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

(a) the sum of (i) all cash receipts of the Partnership Group (or the
Partnership’s proportionate share of cash receipts in the case of Subsidiaries
that are not wholly owned) for the period beginning on the Closing Date and
ending on the last day of such period, but excluding cash receipts from Interim
Capital Transactions and provided that cash receipts from 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 life

 

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of such Hedge Contract had it not been so terminated, (ii) all cash receipts of
the Partnership Group (or the Partnership’s proportionate share of cash receipts
in the case of Subsidiaries that are not wholly owned) after the end of such
period but on or before the date of determination of Operating Surplus with
respect to such period resulting from Working Capital Borrowings, and (iii) the
amount of cash distributions paid (including incremental Class B Distributions)
in respect of equity issued, to finance all or a portion of the construction,
acquisition or improvement of a Capital Improvement or a replacement capital
asset and paid in respect of the period beginning on the date that the Group
Member enters into a binding obligation to commence the construction,
acquisition or improvement of a Capital Improvement or a replacement capital
asset and ending on the earlier to occur of the date that such Capital
Improvement or replacement capital asset Commences Commercial Service and the
date that it is abandoned or disposed of (equity issued to fund the construction
period interest payments on debt incurred, or construction period distributions
on equity issued, to finance the construction, acquisition or improvement of a
Capital Improvement or a replacement capital asset shall also be deemed to be
equity issued to finance the construction, acquisition or improvement of a
Capital Improvement or a replacement capital asset for purposes of this clause
(iii)), less

(b) the sum of (i) Operating Expenditures for the period beginning on the
Closing Date and ending on the last day of such period; (ii) the amount of cash
reserves established by the General Partner (or the Partnership’s proportionate
share of cash reserves in the case of Subsidiaries that are not wholly owned) to
provide funds for future Operating Expenditures; (iii) all Working Capital
Borrowings not repaid within twelve (12) months after having been incurred and
(iv) any cash loss realized on disposition of an Investment Capital Expenditure;

provided, however, that the General Partner’s estimates of 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 on which cash or cash
equivalents will be distributed with respect to such period shall be deemed to
have been made, received, established, increased or reduced, for purposes of
determining Operating Surplus, within such period if the General Partner so
determines.

Notwithstanding the foregoing, “Operating Surplus” with respect to the Quarter
in which the Liquidation Date occurs and any subsequent Quarter shall equal
zero. Cash receipts from an Investment Capital Expenditure shall be treated as
cash receipts only to the extent they are a return on principal, but in no event
shall a return of principal be treated as cash receipts.

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

“Organizational Limited Partner” means MCE LLC, in its capacity as the
organizational limited partner of the Partnership pursuant to this Agreement.

“Original Holders” means (i) the natural person Kristian B. Kos; (ii) the
natural person Dikran Tourian; and (iii) any corporation, limited liability
company, partnership or other entity that is wholly owned by one of the persons
in clauses (i) or (ii) above.

 

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“Outstanding” means, with respect to Partnership Interests, all Partnership
Interests that are issued by the Partnership and reflected as outstanding on the
Partnership’s books and records as of the date of determination.

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

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

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

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

“Partnership” means MCE, LP, a Delaware limited partnership.

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

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

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

“Percentage Interest” means as of any date of determination, as to any
Unitholder with respect to Units, the product obtained by multiplying (i) 100%
by (ii) the quotient obtained by dividing the number of Units held by such
Unitholder by the total number of Outstanding Units. The Percentage Interest
with respect to both (x) a Class B Unit (y) the General Partner Interest shall
at all times be zero.

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

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

“Pro Rata” means (a) when used with respect to Units or any class thereof,
apportioned equally among all designated Units in accordance with their relative
Percentage Interests, (b) when used with respect to Partners or Record Holders,
apportioned among all Partners or Record Holders in accordance with their
relative Percentage Interests and (c) when used with respect to holders of Class
B Units, apportioned equally among all holders of Class B Units in accordance
with the relative number or percentage of Class B Units held by each such
holder.

 

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“Quarter” means, unless the context requires otherwise, a fiscal quarter of the
Partnership, or, with respect to the fiscal quarter of the Partnership in which
the Closing Date occurs, the portion of such fiscal quarter after the Closing
Date.

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

“Record Date” means the date established by the General Partner or otherwise in
accordance with this Agreement for determining the identity of Record Holders
entitled to receive any report or distribution or to participate in any offer.

“Record Holder” means (a) with respect to any class of Partnership Interests for
which a Transfer Agent has been appointed, the Person in whose name a
Partnership Interest of such class is registered on the books of the Transfer
Agent as of the closing of business on a particular Business Day, or (b) with
respect to other classes of Partnership Interests, the Person in whose name any
such other Partnership Interest is registered on the books that the General
Partner has caused to be kept as of the closing of business on such Business
Day.

“Redeemable Interests” means any Partnership Interests for which a redemption
notice has been given, and has not been withdrawn, pursuant to Section 4.9(a).

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

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

“Revaluation Event” means an event that results in an adjustment of the Carrying
Value of each Partnership property pursuant to Section 5.5(d).

“Reset Cash Flow” is defined in Section 5.10(a).

“Reset Consideration” is defined in Section 5.10(a).

“Reset Election” is defined in Section 5.10(a).

“Reset Election Notice” is defined in Section 5.10(b).

 

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“Reset Election Units” is defined in Section 5.10(b).

“Reset MQD” is defined in Section 5.10(e).

“Second Target Distribution” means $19,775.60 per Unit per Quarter (or, with
respect to periods of less than a full fiscal quarter, it means the product of
such amount multiplied by a fraction of which the numerator is the number of
days in such period, and the denominator is the total number of days in such
fiscal quarter), subject to adjustment in accordance with Sections 5.3 5.10, 6.6
and 6.7.

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

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

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

“Signature” means Signature Investments, LLC, an Oklahoma limited liability
company.

“Special Approval” means approval by a majority of the members of the Conflicts
Committee or, if the Conflicts Committee has only one member, the sole member of
the Conflicts Committee.

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

“Surviving Business Entity” is defined in Section 14.2(b)(ii).

 

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“Target Distribution” means each of the Minimum Quarterly Distribution, the
First Target Distribution, the Second Target Distribution and the Third Target
Distribution.

“Third Target Distribution” means $23,730.72 per Unit per Quarter (or, with
respect to periods of less than a full fiscal quarter, it means the product of
such amount multiplied by a fraction of which the numerator is the number of
days in such period, and the denominator is the total number of days in such
fiscal quarter), subject to adjustment in accordance with Sections 5.3, 5.10,
6.6 and 6.7.

“Trading Day” means, for the purpose of determining the Current Market Price of
any class of Limited Partner Interests, a day on which the principal National
Securities Exchange on which such class of Limited Partner Interests is listed
or admitted to trading is open for the transaction of business or, if Limited
Partner Interests of a class are not listed or admitted to trading on any
National Securities Exchange, a day on which banking institutions in New York
City generally are open.

“transfer” is defined in Section 4.4(a).

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

“Unit” means a Partnership Interest that is designated as a “Unit” and shall
include Class A Units, but shall not include Class B Units.

“Unitholders” means the holders of Units.

“Unit Majority” means at least a majority of the Outstanding Class A Units.

“Unpaid MQD” is defined in Section 6.1(c)(i)(B).

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

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

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

 

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

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

“Withdrawal Opinion of Counsel” is defined in Section 11.1(b).

“Working Capital Borrowings” means borrowings used solely for working capital
purposes or to pay distributions to Partners, made pursuant to a credit
facility, commercial paper facility or other similar financing arrangement;
provided that when incurred it is the intent of the borrower to repay such
borrowings within 12 months from sources other than additional Working Capital
Borrowings.

Section 1.2 Construction. Unless the context requires otherwise: (a) any pronoun
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms; (b) references to Articles and Sections refer to Articles and
Sections of this Agreement; (c) the terms “include”, “includes”, “including” and
words of like import shall be deemed to be followed by the words “without
limitation”; and (d) the terms “hereof”, “herein” and “hereunder” refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
table of contents and headings contained in this Agreement are for reference
purposes only, and shall not affect in any way the meaning or interpretation of
this Agreement.

ARTICLE II

ORGANIZATION

Section 2.1 Formation. The General Partner and the Organizational Limited
Partner have previously formed the Partnership as a limited partnership pursuant
to the provisions of the Delaware Act. This amendment and restatement shall
become effective on the date of this Agreement. Except as expressly provided to
the contrary in this Agreement, the rights, duties (including fiduciary duties),
liabilities and obligations of the Partners and the administration, dissolution
and termination of the Partnership shall be governed by the Delaware Act.

Section 2.2 Name. The name of the Partnership shall be “MCE, LP” The
Partnership’s business may be conducted under any other name or names as
determined by the General Partner, including the name of the General Partner.
The words “Limited Partnership,” “LP,” “Ltd.” or similar words or letters shall
be included in the Partnership’s name where necessary for the purpose of
complying with the laws of any jurisdiction that so requires. The General
Partner may change the name of the Partnership at any time and from time to time
and shall notify the Limited Partners of such change in the next regular
communication to the Limited Partners.

 

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Section 2.3 Registered Office; Registered Agent; Principal Office; Other
Offices. Unless and until changed by the General Partner, the registered office
of the Partnership in the State of Delaware shall be located at National
Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, Delaware, 19904,
and the registered agent for service of process on the Partnership in the State
of Delaware at such registered office shall be National Registered Agents, Inc.
The principal office of the Partnership shall be located at 727 N Morgan Road,
Oklahoma City, OK 73127, or such other place as the General Partner may from
time to time designate by notice to the Limited Partners. The Partnership may
maintain offices at such other place or places within or outside the State of
Delaware as the General Partner determines to be necessary or appropriate. The
address of the General Partner shall be 727 N Morgan Road, Oklahoma City, OK
73127, or such other place as the General Partner may from time to time
designate by notice to the Limited Partners.

Section 2.4 Purpose and Business. The purpose and nature of the business to be
conducted by the Partnership shall be to (a) engage directly in, or enter into
or form, hold and dispose of any corporation, partnership, joint venture,
limited liability company or other arrangement to engage indirectly in, any
business activity that is approved by the General Partner, in its sole
discretion, and that lawfully may be conducted by a limited partnership
organized pursuant to the Delaware Act and, in connection therewith, to exercise
all of the rights and powers conferred upon the Partnership pursuant to the
agreements relating to such business activity, and (b) do anything necessary or
appropriate to the foregoing, including the making of capital contributions or
loans to a Group Member; provided, however, that the General Partner shall not
cause the Partnership to engage, directly or indirectly, in any business
activity that the General Partner determines would be reasonably likely to cause
the Partnership to be treated as an association taxable as a corporation or
otherwise taxable as an entity for U.S. federal income tax purposes. To the
fullest extent permitted by law, the General Partner shall have no duty or
obligation to propose or approve, and may, in its sole discretion, decline to
propose or approve, the conduct by the Partnership of any business.

Section 2.5 Powers. The Partnership shall be empowered to do any and all acts
and things necessary, appropriate, proper, advisable, incidental to or
convenient for the furtherance and accomplishment of the purposes and business
described in Section 2.4 and for the protection and benefit of the Partnership.

Section 2.6 Term. The term of the Partnership commenced upon the filing of the
Certificate of Limited Partnership in accordance with the Delaware Act and shall
continue in existence until the dissolution of the Partnership in accordance
with the provisions of Article XII. The existence of the Partnership as a
separate legal entity shall continue until the cancellation of the Certificate
of Limited Partnership as provided in the Delaware Act.

Section 2.7 Title to Partnership Assets. Title to Partnership assets, whether
real, personal or mixed and whether tangible or intangible, shall be deemed to
be owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner, one or more of its
Affiliates or one or more nominees, as the General Partner may determine. The
General Partner hereby declares and warrants that any Partnership assets for
which record title is held in the name

 

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

ARTICLE III

RIGHTS OF LIMITED PARTNERS

Section 3.1 Limitation of Liability. The Limited Partners shall have no
liability under this Agreement except as expressly provided in this Agreement or
the Delaware Act.

Section 3.2 Management of Business. No Limited Partner, in its capacity as such,
shall participate in the operation, management or control (within the meaning of
the Delaware Act) of the Partnership’s business, transact any business in the
Partnership’s name or have the power to sign documents for or otherwise bind the
Partnership. All actions taken by any Affiliate of the General Partner or any
officer, director, employee, manager, member, general partner, agent or trustee
of the General Partner or any of its Affiliates, or any officer, director,
employee, manager, member, general partner, agent or trustee of a Group Member,
in its capacity as such, shall not be deemed to be participating in the control
of the business of the Partnership by a limited partner of the Partnership
(within the meaning of Section 17-303(a) of the Delaware Act) and shall not
affect, impair or eliminate the limitations on the liability of the Limited
Partners under this Agreement.

Section 3.3 Outside Activities of the Limited Partners. Subject to the
provisions of Section 7.6, which shall continue to be applicable to the Persons
referred to therein, regardless of whether such Persons shall also be Limited
Partners, each Limited Partner shall be entitled to and may have business
interests and engage in business activities in addition to those relating to the
Partnership, including business interests and activities in direct competition
with the Partnership Group. Neither the Partnership nor any of the other
Partners shall have any rights by virtue of this Agreement in any business
ventures of any Limited Partner.

Section 3.4 Rights of Limited Partners.

(a) The Limited Partners will not be personally liable for any obligations of
the Partnership nor will they have any obligation to make contributions to the
Partnership in excess of their respective Capital Contributions required under
Section 5.2 or have any liability for the repayment or discharge of the debts
and obligations of the Partnership except to the extent

 

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provided herein or as required by law. The Limited Partners in their capacities
as such shall take no part in the management, control or operation of the
Partnership’s business and shall have no power to bind the Partnership and no
right or authority to act for the Partnership or to vote on matters other than
the matters set forth in this Agreement or as required by applicable law.

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

(i) true and full information regarding the status of the business and financial
condition of the Partnership (provided that the requirements of this
Section 3.4(a)(i) shall be satisfied if the Limited Partner is furnished the
Partnership’s most recent annual report and any subsequent periodic reports
required to be filed (or which would be required to be filed if the Partnership
had any class of equity securities registered under the Securities Exchange Act)
with the Commission pursuant to Section 13 of the Securities Exchange Act);

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

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

(c) The rights to information granted to each of the Limited Partners pursuant
to Section 3.4(b) replace in their entirety any rights to information provided
for in Section 17-305(a) of the Delaware Act and each of the Partners and each
other Person or Group who acquires an interest in Partnership Interests hereby
agrees to the fullest extent permitted by law that they do not have any rights
as Partners to receive any information either pursuant to Sections 17-305(a) of
the Delaware Act or otherwise except for the information identified in
Section 3.4(b).

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

 

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ARTICLE IV

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

Section 4.1 Certificates. Notwithstanding anything to the contrary herein,
unless the General Partner shall determine otherwise in respect of some or all
of any or all classes of Partnership Interests, Partnership Interests shall not
be evidenced by certificates. Certificates that may be issued shall be executed
on behalf of the Partnership by the Chairman of the Board, President, the Chief
Executive Officer or any Senior Vice President or Vice President and the Chief
Financial Officer or the Secretary or any Assistant Secretary of the General
Partner. No Certificate for a class of Partnership Interests shall be valid for
any purpose until it has been countersigned by the Transfer Agent for such class
of Partnership Interests, if any; provided, however, that if the General Partner
elects to cause the Partnership to issue Partnership Interests of such class in
global form, the Certificate shall be valid upon receipt of a certificate from
the Transfer Agent certifying that the Partnership Interests have been duly
registered in accordance with the directions of the Partnership.

Section 4.2 Mutilated, Destroyed, Lost or Stolen Certificates.

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

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

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

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

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

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

If a Limited Partner fails to notify the General Partner within a reasonable
period of time after such Limited Partner has notice of the loss, destruction or
theft of a Certificate, and a transfer of the Limited Partner Interests
represented by the Certificate is registered before the

 

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Partnership, the General Partner or the Transfer Agent receives such
notification, the Limited Partner shall be precluded from making any claim
against the Partnership, the General Partner or the Transfer Agent for such
transfer or for a new Certificate.

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

Section 4.3 Record Holders. The Partnership shall be entitled to recognize the
Record Holder as the Partner with respect to any Partnership Interest and,
accordingly, shall not be bound to recognize any equitable or other claim to, or
interest in, such Partnership Interest on the part of any other Person,
regardless of whether the Partnership shall have actual or other notice thereof,
except as otherwise provided by law or any applicable rule, regulation,
guideline or requirement of any National Securities Exchange on which such
Partnership Interests are listed or admitted to trading. Without limiting the
foregoing, when a Person (such as a broker, dealer, bank, trust company or
clearing corporation or an agent of any of the foregoing) is acting as nominee,
agent or in some other representative capacity for another Person in acquiring
and/or holding Partnership Interests, as between the Partnership on the one
hand, and such other Persons on the other, such representative Person shall be
(a) the Record Holder of such Partnership Interest and (b) bound by this
Agreement and shall have the rights and obligations of a Partner hereunder as,
and to the extent, provided herein.

Section 4.4 Transfer Generally.

(a) The term “transfer,” when used in this Agreement with respect to a
Partnership Interest, shall mean a transaction (i) by which the General Partner
assigns its General Partner Interest to another Person, and includes a sale,
assignment, gift, pledge, encumbrance, hypothecation, mortgage, exchange or any
other disposition by law or otherwise or (ii) by which the holder of a Limited
Partner Interest assigns such Limited Partner Interest to another Person who is
or becomes a Limited Partner, and includes a sale, assignment, gift, exchange or
any other disposition by law or otherwise, excluding a pledge, encumbrance,
hypothecation or mortgage but including any transfer upon foreclosure of any
pledge, encumbrance, hypothecation or mortgage.

(b) No Partnership Interest shall be transferred, in whole or in part, except in
accordance with the terms and conditions set forth in this Article IV. Any
transfer or purported transfer of a Partnership Interest not made in accordance
with this Article IV shall be, to the fullest extent permitted by law, null and
void.

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

 

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Section 4.5 Registration and Transfer of Limited Partner Interests.

(a) The General Partner shall keep or cause to be kept on behalf of the
Partnership a register in which, subject to such reasonable regulations as it
may prescribe and subject to the provisions of Section 4.5(b), the Partnership
will provide for the registration and transfer of Limited Partner Interests.

(b) The Partnership shall not recognize any transfer of Limited Partner
Interests evidenced by Certificates until the Certificates evidencing such
Limited Partner Interests are surrendered for registration of transfer. No
charge shall be imposed by the General Partner for such transfer; provided, that
as a condition to the issuance of any new Certificate under this Section 4.5,
the General Partner may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed with respect thereto. Upon
surrender of a Certificate for registration of transfer of any Limited Partner
Interests evidenced by a Certificate, and subject to the provisions hereof, the
appropriate officers of the General Partner on behalf of the Partnership shall
execute and deliver, and in the case of Certificates evidencing Limited Partner
Interests, the Transfer Agent shall countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the
holder’s instructions, one or more new Certificates evidencing the same
aggregate number and type of Limited Partner Interests as was evidenced by the
Certificate so surrendered.

(c) By acceptance of the transfer of any Limited Partner Interests in accordance
with this Section 4.5 and except as provided in Section 4.8, each transferee of
a Limited Partner Interest (including any nominee holder or an agent or
representative acquiring such Limited Partner Interests for the account of
another Person) acknowledges and agrees to the provisions of Section 10.1(a).

(d) Subject to (i) the foregoing provisions of this Section 4.5,
(ii) Section 4.3, (iii) Section 4.7, (iv) with respect to any class or series of
Limited Partner Interests, the provisions of any statement of designations or an
amendment to this Agreement establishing such class or series, (v) any
contractual provisions binding on any Limited Partner and (vi) provisions of
applicable law including the Securities Act, Limited Partner Interests shall be
freely transferable.

Section 4.6 Transfer of the General Partner’s General Partner Interest. The
General Partner may at its option transfer all or any part of its General
Partner Interest with the approval of NSLP and the holders of a majority of the
Class B Units.

Section 4.7 Restrictions on Transfers.

(a) Notwithstanding the other provisions of this Article IV, no transfer of any
Partnership Interests shall be made if such transfer would (i) violate the then
applicable federal or state securities laws or rules and regulations of the
Commission, any state securities commission or any other governmental authority
with jurisdiction over such transfer or (ii) terminate the existence or
qualification of the Partnership under the laws of the jurisdiction of its
formation.

 

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(b) In the event that (i) NSLP elects to transfer all of the outstanding Class A
Units in a single transaction or series of transactions, (ii) the General
Partner elects to transfer all or substantially all of the assets to the
Partnership in a single transaction or series of transactions, or (iii) the
General Partner elects to dissolve the Partnership pursuant to Section 11.1(a),
the holders of Class B Units shall be deemed to deliver a Reset Election Notice
pursuant to Section 5.10, and such Reset Election Notice shall be deemed to have
satisfied all conditions precedent to a Reset Election within Section 5.10.
Following the delivery of a Reset Election Notice in accordance with this
Section 4.7(b), the Class B Units shall be cancelled by the Partnership and no
longer Outstanding. NSLP shall not be permitted to transfer less than all of its
Class A Units, and any attempt to transfer of less than all of its Class A Units
shall be deemed void ab initio. Notwithstanding the preceding sentence, NSLP
shall be permitted to pledge the Class A Units as collateral under its revolving
credit agreement in effect on the Closing Date, as the same may be amended or
restated from time to time.

(c) In the event a tender offer, share exchange offer, issuer bid, take-over
bid, recapitalization or similar transaction, other than a spinoff of the
Partnership into a new publicly traded partnership, with respect to NSLP common
units is proposed by NSLP or is proposed to NSLP or its partners and approved by
the board of directors of the NSLP GP or is otherwise effected or to be effected
with the consent or approval of the board of directors of NSLP GP, the holders
of Class B Units shall be permitted to participate in such transaction by
delivery of a Reset Election Notice pursuant to Section 5.10, and such Reset
Election Notice shall be deemed to have satisfied all conditions precedent to a
Reset Election within Section 5.10. Following the delivery of a Reset Election
Notice in accordance with this Section 4.7(c), the Class B Units shall be
cancelled by the Partnership and no longer Outstanding.

(d) NSLP, upon the approval of the Conflicts Committee, may elect to spin off
the Partnership into a new publicly traded partnership, provided, however, that
in any such spin off transaction, the Class B Units shall be converted into
customary incentive distribution rights that provide the holders of Class B
Units with equivalent economic incentives, as determined in the reasonable
discretion of the holders of Class B Units.

(e) An Original Holder may not transfer Class B Units other than (a) to such
Original Holder’s spouse, lineal descendant or other legal heir, by probate or
intestate succession, (b) in connection with a spinoff transaction pursuant to
Section 4.7(c) or (c) to another Original Holder. A holder of Class B Units that
is transferred Class B Units pursuant to clause (a) of the preceding sentence
may not transfer Class B Units other than (a) in connection with a spinoff
transaction pursuant to Section 4.7(c) or (b) to an Original Holder.

ARTICLE V

CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS

Section 5.1 Organizational Contributions. In connection with the formation of
the Partnership under the Delaware Act, the General Partner has been admitted as
the General Partner of the Partnership. The Organizational Limited Partner made
an initial Capital Contribution to the Partnership in the amount of $1,000.00 in
exchange for a Limited Partner Interest equal to a 100% Percentage Interest and
has been admitted as a Limited Partner of the

 

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Partnership. As of the Closing Date, and effective with the admission of other
Limited Partners to the Partnership, the interests of the Organizational Limited
Partner will be redeemed and the $1,000 initial Capital Contribution of the
Organizational Limited Partner will be refunded. One-hundred percent of any
interest or other profit that may have resulted from the investment or other use
of such initial Capital Contribution will be allocated and distributed to the
Organizational Limited Partner.

Section 5.2 General Partner Interest. The General Partner Interest is a
non-economic interest and does not include any rights to profits or losses or
any rights to receive distributions from operations or upon the liquidation or
winding up of the Partnership.

Section 5.3 Contributions by Initial Limited Partners.

(a) Prior to the Closing Date, MCE LLC contributed to the Partnership, as a
Capital Contribution, the Acquired Interests (as defined in the Contribution
Agreement) in exchange for the issuance of an initial limited partner interest
to MCE LLC. Pursuant to the Contribution Agreement, MCE LLC has transferred and
contributed such initial limited partner interest to NSLP on the Closing Date,
and such initial limited partner interest is being recapitalized pursuant to
this Agreement into 100 Class A Units.

(b) As of the Closing Date, the Partnership issued 50 Class B Units to Deylau
and 50 Class B Units to Signature.

(c) If NSLP makes a Capital Contribution to the Partnership, other than the
Capital Contribution required by Section 8.05 of the Contribution Agreement,
subsequent to the date hereof (an “Additional Contribution”), the Minimum
Quarterly Distribution shall be increased, beginning with respect to the Quarter
following the Quarter during which the Additional Contribution is made, by an
amount equal to 3.75% of the quotient of (x) the Additional Contribution and
(y) the number of Class A Units, and the First Target Distribution, Second
Target Distribution and Third Target Distribution shall be increased
proportionately to the Minimum Quarterly Distribution as so increased.

Section 5.4 Interest and Withdrawal. No interest shall be paid by the
Partnership on Capital Contributions. No Partner shall be entitled to the
withdrawal or return of its Capital Contribution, except to the extent, if any,
that distributions made pursuant to this Agreement or upon liquidation of the
Partnership may be considered as such by law and then only to the extent
provided for in this Agreement. Except to the extent expressly provided in this
Agreement, no Partner shall have priority over any other Partner either as to
the return of Capital Contributions or as to profits, losses or distributions.
Any such return shall be a compromise to which all Partners agree within the
meaning of Section 17-502(b) of the Delaware Act.

Section 5.5 Capital Accounts.

(a) The Partnership shall maintain for each Partner (or a beneficial owner of
Partnership Interests held by a nominee in any case in which the nominee has
furnished the identity of such owner to the Partnership in accordance with
Section 6031(c) of the Code or any other method acceptable to the General
Partner) owning a Partnership Interest a separate Capital Account with respect
to such Partnership Interest in accordance with the rules of Treasury

 

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Regulation Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by
(i) the amount of all Capital Contributions made to the Partnership with respect
to such Partnership Interest and (ii) all items of Partnership income and gain
(including income and gain exempt from tax) computed in accordance with
Section 5.5(b) and allocated with respect to such Partnership Interest pursuant
to Section 6.1, and decreased by (x) the amount of cash or Net Agreed Value of
all actual and deemed distributions of cash or property made to the Partner with
respect to such Partnership Interest and (y) all items of Partnership deduction
and loss computed in accordance with Section 5.5(b) and allocated with respect
to such Partnership Interest pursuant to Section 6.1. The initial Capital
Account with respect to a Class A Unit shall be $398,085.62. The initial Capital
Account with respect to a Class B Unit shall be zero.

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

(i) Solely for purposes of this Section 5.5, the Partnership shall be treated as
owning directly its proportionate share (as determined by the General Partner
based upon the provisions of the applicable Group Member Agreement) of all
property owned by (x) any other Group Member that is classified as a partnership
for U.S. federal income tax purposes and (y) any other partnership, limited
liability company, unincorporated business or other entity classified as a
partnership for U.S. federal income tax purposes of which a Group Member is,
directly or indirectly, a partner, member or other equity holder.

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

(iii) The computation of all items of income, gain, loss and deduction shall be
made (x) except as otherwise provided in Treasury Regulation
Section 1.704-1(b)(2)(iv)(m), without regard to any election under Section 754
of the Code that may be made by the Partnership, and (y) as to those items
described in Section 705(a)(1)(B) or 705(a)(2)(B) of the Code, without regard to
the fact that such items are not includable in gross income or are neither
currently deductible nor capitalized for U.S. federal income tax purposes.

(iv) To the extent an adjustment to the adjusted tax basis of any Partnership
asset pursuant to Section 734(b) of the Code (including pursuant to Treasury
Regulation Section 1.734-2(b)(1)) is required, pursuant to Treasury Regulation
Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital
Accounts, the amount of such adjustment in the Capital Accounts shall be treated
as an item of gain or loss.

(v) In the event the Carrying Value of Partnership property is adjusted pursuant
to Section 5.5(d), any Unrealized Gain resulting from such adjustment shall be
treated as an item of gain and any Unrealized Loss resulting from such
adjustment shall be treated as an item of loss.

 

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

(vii) Any deductions for depreciation, cost recovery or amortization
attributable to any Contributed Property or Adjusted Property shall be
determined under the rules prescribed by Treasury Regulation
Section 1.704-3(d)(2) as if the adjusted basis of such property were equal to
the Carrying Value of such property immediately following such adjustment.

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

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

(d) (i) Consistent with Treasury Regulation Section 1.704-1(b)(2)(iv)(f) and
1.704-1(b)(2)(iv)(h)(2), on an issuance of additional Partnership Interests for
cash or Contributed Property, the issuance of a Noncompensatory Option, the
issuance of Partnership Interests as consideration for the provision of
services, the exchange of Class B Units for Reset Consideration pursuant to
Section 5.10 or the occurrence of a NSLP Revaluation Event, the Carrying Value
of each Partnership property immediately prior to such issuance shall be
adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss
attributable to such Partnership property; provided, however, that in the event
of the issuance of a Partnership Interest pursuant to the exercise of a
Noncompensatory Option where the right to share in Partnership capital
represented by such Partnership Interest differs from the consideration paid to
acquire and exercise such option, the Carrying Value of each Partnership
property immediately after the issuance of such Partnership Interest shall be
adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss
attributable to such Partnership property and the Capital Accounts of the
Partners shall be adjusted in a manner consistent with Treasury Regulation
Section 1.704-1(b)(2)(iv)(s); provided further, however, that in the event of an
issuance of Partnership Interests for a de minimis amount of cash or Contributed
Property, in the event of an issuance of a Noncompensatory Option to acquire a
de minimis Partnership Interest, or in the event of an issuance of a de minimis
amount of Partnership Interests as consideration for the provision of services,
the General Partner may determine that such adjustments are unnecessary for the
proper administration of the Partnership. In determining such Unrealized Gain or
Unrealized Loss, the aggregate fair market value of all Partnership property
(including cash or cash equivalents) immediately prior to the issuance of
additional Partnership Interests (or, in the case of a Revaluation Event
resulting from the exercise of a Noncompensatory Option, immediately after the
issuance of the Partnership Interest acquired pursuant to the exercise of such
Noncompensatory Option) shall be determined by the General Partner using such
method of

 

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valuation as it may adopt. In making its determination of the fair market values
of individual properties, the General Partner may first determine an aggregate
value for the assets of the Partnership that takes into account the Event Issue
Value for the Class A Units, the fair market value of all other Partnership
Interests at such time, and the amount of Partnership Liabilities. The General
Partner may allocate such aggregate value among the individual properties of the
Partnership (in such manner as it determines appropriate). Absent a contrary
determination by the General Partner, the aggregate fair market value of all
Partnership assets (including, without limitation, cash or cash equivalents)
immediately prior to a Revaluation Event shall be the value that would result in
the Capital Account for each Class A Unit that is Outstanding prior to such
Revaluation Event being equal to the Event Issue Value.

(ii) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f),
immediately prior to any actual or deemed distribution to a Partner of any
Partnership property (other than a distribution of cash that is not in
redemption or retirement of a Partnership Interest), the Carrying Value of all
Partnership property shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Partnership property. In
determining such Unrealized Gain or Unrealized Loss the aggregate fair market
value of all Partnership property (including cash or cash equivalents)
immediately prior to a distribution shall (A) in the case of an actual or deemed
distribution other than a distribution made pursuant to Section 11.3, be
determined in the same manner as that provided in Section 5.5(d)(i) or (B) in
the case of a liquidating distribution pursuant to Section 12.4, be determined
by the Liquidator using such method of valuation as it may adopt.

Section 5.6 Issuances of Additional Partnership Interests and Derivative
Instruments.

(a) 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; provided, however, that the issuance of any additional Partnership
Interests or Derivative Instruments shall not adversely affect the Class B Units
as a whole in any material respect without the prior written consent of the
holders of a majority of the Class B Units. In addition, notwithstanding any
other provision of this Agreement to the contrary, the Partnership may not issue
any additional Class B Units or any Derivative Instrument relating to,
convertible into or exchangeable for Class B Units, without the prior written
consent of the holders of a majority of the Class B Units.

(b) Each additional Partnership Interest authorized to be issued by the
Partnership pursuant to Section 5.6(a) may be issued in one or more classes, or
one or more series of any such classes, with such designations, preferences,
rights, powers and duties (which may be senior to existing classes and series of
Partnership Interests), as shall be fixed by the General Partner, including
(i) the right to share in Partnership profits and losses or items thereof;
(ii) the right to share in Partnership distributions; (iii) the rights upon
dissolution and liquidation of the Partnership; (iv) whether, and the terms and
conditions upon which, the Partnership may or shall be required to redeem the
Partnership Interest (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;

 

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(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.

(c) The General Partner shall take all actions that it determines to be
necessary or appropriate in connection with (i) each issuance of Partnership
Interests and Derivative Instruments pursuant to this Section 5.6,
(ii) reflecting admission of such additional Limited Partners in the books and
records of the Partnership as the Record Holders of such Limited Partner
Interests and (iii) all additional issuances of Partnership Interests. The
General Partner shall determine the relative rights, powers and duties of the
holders of the Units or other Partnership Interests being so issued. The General
Partner shall do all things necessary to comply with the Delaware Act and is
authorized and directed to do all things that it determines to be necessary or
appropriate in connection with any future issuance of Partnership Interests
pursuant to the terms of this Agreement, including compliance with any statute,
rule, regulation or guideline of any federal, state or other governmental agency
or any National Securities Exchange on which the Units or other Partnership
Interests are listed or admitted to trading.

(d) No fractional Units shall be issued by the Partnership.

Section 5.7 Limited Preemptive Right. No Person shall have any preemptive,
preferential or other similar right with respect to the issuance of any
Partnership Interest, whether unissued, held in the treasury or hereafter
created.

Section 5.8 Splits and Combinations.

(a) Subject to Section 5.8(d), the Partnership may make a Pro Rata distribution
of Partnership Interests (other than Class B Units) to all Record Holders (other
than in respect of Class B Units) or may effect a subdivision or combination of
Partnership Interests so long as, after any such event, each Partner shall have
the same Percentage Interest in the Partnership as before such event, and any
amounts calculated on a per Unit basis or stated as a number of Units are
proportionately adjusted retroactive to the beginning of the Partnership,
including, without limitation, the Target Distributions.

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

(c) Promptly following any such distribution, subdivision or combination, the
Partnership may issue Certificates to the Record Holders of Partnership
Interests as of the applicable Record Date representing the new number of
Partnership Interests held by such Record Holders, or the General Partner may
adopt such other procedures that it determines to be

 

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necessary or appropriate to reflect such changes. If any such combination
results in a smaller total number of Partnership Interests Outstanding, the
Partnership shall require, as a condition to the delivery to a Record Holder of
such new Certificate, the surrender of any Certificate held by such Record
Holder immediately prior to such Record Date.

(d) The Partnership shall not issue fractional Units upon any distribution,
subdivision or combination of Units. If a distribution, subdivision or
combination of Units would result in the issuance of fractional Units but for
the provisions of Section 5.6(d) and this Section 5.8(d), each fractional Unit
shall be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to
the next higher Unit).

Section 5.9 Fully Paid and Non-Assessable Nature of Limited Partner Interests.
All Limited Partner Interests issued pursuant to, and in accordance with the
requirements of, this Article V shall be fully paid and non-assessable Limited
Partner Interests in the Partnership, except as such non-assessability may be
affected by Section 17-607 or 17-804 of the Delaware Act.

Section 5.10 Reset Election and Reset Consideration.

(a) Subject to the provisions of this Section 5.10, the holders of a majority of
the Class B Units shall have the right, at any time when the Partnership has
made a distribution pursuant to Section 6.4(a)(v) for each of the four most
recently completed Quarters, to make an election (the “Reset Election”) to reset
the Minimum Quarterly Distribution. In the event that the holders of Class B
Units make a Reset Election, they shall receive consideration (the “Reset
Consideration”) equal to (i) the quotient obtained by dividing (x) the lower of
(1) the average of the cash distributions made by the Partnership in respect of
each Class B Unit for the two full Quarters immediately preceding the Reset
Election and (2) the cash distribution made by the Partnership in respect of
each Class B Unit for the full Quarter immediately preceding the Reset Election
(the “Reset Cash Flow”), by (y) the cash distribution made by NSLP in respect to
its common units for the full Quarter immediately preceding the Reset Election,
multiplied by (ii) the volume weighted average trading price of NSLP common
units for the twenty-day period prior to delivery of the notice in
Section 5.10(c) below (the “NSLP VWAP”). The making of the Reset Election in the
manner specified in Section 5.10(b) shall cause the Target Distributions to be
reset in accordance with the provisions of Section 5.10(e). The Reset
Consideration may be satisfied in cash, NSLP common units (valued using the NSLP
VWAP) or a combination thereof in NSLP’s sole discretion.

(b) To exercise the Reset Election specified in Section 5.10(a), the holders of
a majority of the Class B Units shall deliver a written notice (the “Reset
Election Notice”) to the Partnership and NSLP. Within 10 Business Days after the
receipt by the Partnership and NSLP of such Reset Election Notice, NSLP shall
deliver a written notice to the holder or holders of the Class B Units of NSLP’s
determination of the Reset Consideration and the manner in which NSLP intends to
satisfy such Reset Consideration, including the aggregate number of NSLP common
units, if any, that each holder of Class B Units will be entitled to receive
(the “Reset Election Units”).

 

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(c) The holder(s) of the Class B Units will be entitled to receive the Reset
Consideration, including any Reset Election Units, on the twentieth Business Day
after receipt by NSLP of the Reset Election Notice; provided, however, that the
issuance of Reset Election Units to the holder or holders of the Class B Units
shall not occur prior to the approval of the listing or admission for trading of
such Reset Election Units by the principal National Securities Exchange upon
which NSLP’s common units are then listed or admitted for trading if any such
approval is required pursuant to the rules and regulations of such National
Securities Exchange. Notwithstanding the foregoing, NSLP shall be permitted to
delay the delivery of such Reset Election Units for up to an additional 30
Business Days if it reasonably determines such delay to be necessary in order to
comply with insider trading rules, regulations and policies; provided, however,
that in the event of any such delay that results in the Reset Election Units not
being issued to the holder(s) of Class B Units until after the next succeeding
record date for NSLP’s quarterly cash distribution, the holder(s) of Class B
Units shall be entitled to additional cash consideration in an amount equal to
the aggregate cash distributions that would have otherwise been paid with
respect to the Reset Election Units.

(d) If the principal National Securities Exchange upon which the NSLP common
units are then traded has not approved the listing or admission for trading of
the Reset Election Units to be issued pursuant to this Section 5.10 on or before
the 20th Business Day following the Partnership’s and NSLP’s receipt of the
Reset Election Notice and such approval is required by the rules and regulations
of such National Securities Exchange, then the holders of a majority of the
Class B Units shall have the right to either rescind the Reset Election or elect
to receive the entirety of the Reset Consideration in cash.

(e) Following the payment of the Reset Consideration, the Target Distributions
shall be adjusted such that (i) the Minimum Quarterly Distribution shall be
reset to be equal to the quotient of (x) the lesser of (1) the average Available
Cash in the two full Quarters prior to the Quarter during which the Reset
Election is made and (2) the Available Cash with respect to the Quarter
immediately preceding the Quarter during which the Reset Election is made, and
(y) the number of Class A Units that received a cash distribution with respect
to such Quarter (such quotient, the “Reset MQD”), (ii) the First Target
Distribution shall be reset to equal 115% of the Reset MQD, (iii) the Second
Target Distribution shall be reset to equal 125% of the Reset MQD and the Third
Target Distribution shall be reset to equal 150% of the Reset MQD.

(f) Upon the issuance of Reset Election Units pursuant to Section 5.10(a), NSLP,
as the payor of the Reset Consideration, shall succeed to the Capital Account
maintained with respect to the Class B Units in accordance with Section 5.5(c);
provided that such Capital Account will merge with and be added to the Capital
Account maintained for NSLP in its capacity as the holder of the Class A Units
and in no event shall NSLP be treated as holding Class B Units as a result of
its payment of the Reset Consideration. The Capital Account of the holders of
Class B Units with respect to any NSLP common units received as Reset
Consideration shall be determined pursuant to the NSLP Partnership Agreement.

 

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ARTICLE VI

ALLOCATIONS AND DISTRIBUTIONS

Section 6.1 Allocations for Capital Account Purposes. For purposes of
maintaining the Capital Accounts and in determining the rights of the Partners
among themselves, the Partnership’s items of income, gain, loss and deduction
(computed in accordance with Section 5.5(b)) for each taxable period shall be
allocated among the Partners as provided herein below.

(a) Net Income. After giving effect to the special allocations set forth in
Section 6.1(d), Net Income for each taxable period (including a pro rata part of
each item of income, gain, loss and deduction taken into account in computing
Net Income for such taxable period) shall be allocated:

(i) First, to the General Partner until the aggregate amount of Net Income
allocated to the General Partner pursuant to this Section 6.1(a)(i) for the
current and all previous taxable periods is equal to the aggregate amount of Net
Loss allocated to the General Partner pursuant to Section 6.1(b)(ii) for all
previous taxable periods; and

(ii) The balance, if any, 100% to the Unitholders, Pro Rata.

(b) Net Loss. After giving effect to the special allocations set forth in
Section 6.1(d), Net Loss for each taxable period (including a pro rata part of
each item of income, gain, loss and deduction taken into account in computing
Net Loss for such taxable period) shall be allocated as follows:

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

(ii) The balance, if any, 100% to the General Partner.

(c) Net Termination Gains and Losses. After giving effect to the special
allocations set forth in Section 6.1(d), Net Termination Gain or Net Termination
Loss (including a pro rata part of each item of income, gain, loss and deduction
taken into account in computing Net Termination Gain or Net Termination Loss)
for each taxable period shall be allocated in the manner set forth in this
Section 6.1(c). All allocations under this Section 6.1(c) shall be made after
Capital Account balances have been adjusted by all other allocations provided
under this Section 6.1 and after all distributions of cash and cash equivalents
provided under Section 6.4 and Section 6.5 have been made; provided, however,
that solely for purposes of this Section 6.1(c), Capital Accounts shall not be
adjusted for distributions made pursuant to Section 11.3.

(i) Subject to the provisions set forth in the last sentence of this
Section 6.1(c)(i), Net Termination Gain shall be allocated in the following
order and priority:

 

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

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

(C) Third, to all Unitholders, Pro Rata, until the Capital Account in respect of
each Class A Unit then Outstanding is equal to the sum of (1) its Unrecovered
Initial Unit Price, (2) the Unpaid MQD, and (3) the excess of (aa) the First
Target Distribution less the Minimum Quarterly Distribution for each Quarter of
the Partnership’s existence over (bb) the cumulative per Unit amount of any
distributions of cash or cash equivalents that are deemed to be Operating
Surplus made pursuant to Section 6.4(a)(ii);

(D) Fourth, 15.0% to the holders of the Class B Units, Pro Rata, and 85.0% to
all Unitholders, Pro Rata, until the Capital Account in respect of each Class A
Unit then Outstanding is equal to the product of (1) 85% times (2) the excess of
(aa) the Second Target Distribution for each Quarter of the Partnership’s
existence over (bb) the cumulative per Unit amount of any distributions of cash
or cash equivalents that are deemed to be Operating Surplus made pursuant to
Section 6.4(a)(iii); and

(E) Fifth, 25.0% to the holders of the Class B Units, Pro Rata, and 75% to all
Unitholders, Pro Rata, until the Capital Account in respect of each Class A Unit
then Outstanding is equal to the product of (1) 75% times (2) the excess of (aa)
the Third Target Distribution for each Quarter of the Partnership’s existence
over (bb) the cumulative per Unit amount of any distributions of cash or cash
equivalents that are deemed to be Operating Surplus made pursuant to
Section 6.4(a)(iv); and

(F) Finally, 50.0% to the holders of the Class B Units, Pro Rata, and 50.0% to
all Unitholders, Pro Rata.

Notwithstanding the foregoing provisions in this Section 6.1(c)(i), the General
Partner may adjust the amount of any Net Termination Gain arising in connection
with a Revaluation Event that is allocated to the holders of Class B Units in a
manner that will result (i) in the Capital Account for each Class A Unit that is
Outstanding prior to such Revaluation Event being equal to the Event Issue Value
and (ii) to the greatest extent possible, the Capital Account with respect to
the Class B Units that are Outstanding prior to such Revaluation Event being
equal to the amount of Net Termination Gain that would be allocated to the
holders of the Class B Units pursuant to this Section 6.1(c)(i) if the Capital
Accounts with respect to all Partnership Interests that were Outstanding
immediately prior to such Revaluation Event were equal to zero.

 

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(ii) Net Termination Loss (including a pro rata part of each item of income,
gain, loss and deduction taken into account in computing Net Termination Loss)
shall be allocated:

(A) First, to all Unitholders, Pro Rata, until the Capital Account in respect of
each Class A Unit then Outstanding has been reduced to zero; and

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

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

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

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

(iii) Priority Allocations.

(A) If the amount of cash or the Net Agreed Value of any property distributed
(except cash or property distributed pursuant to Section 11.3) with respect to a
Unit for a taxable period exceeds the amount of cash or the Net Agreed Value of
property distributed with respect to another Unit within the same taxable period
(the amount of the excess, an

 

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“Excess Distribution” and the Unit with respect to which the greater
distribution is paid, an “Excess Distribution Unit”), then there shall be
allocated gross income and gain to each Unitholder receiving an Excess
Distribution with respect to the Excess Distribution Unit until the aggregate
amount of such items allocated with respect to such Excess Distribution Unit
pursuant to this Section 6.1(d)(iii)(A) for the current taxable period and all
previous taxable periods is equal to the amount of the Excess Distribution.

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

(iv) Qualified Income Offset. In the event any Partner unexpectedly receives any
adjustments, allocations or distributions described in Treasury Regulation
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), items of Partnership gross income and gain shall be
specially allocated to such Partner in an amount and manner sufficient to
eliminate, to the extent required by the Treasury Regulations promulgated under
Section 704(b) of the Code, the deficit balance, if any, in its Adjusted Capital
Account created by such adjustments, allocations or distributions as quickly as
possible; provided, that an allocation pursuant to this Section 6.1(d)(iv) shall
be made only if and to the extent that such Partner would have a deficit balance
in its Adjusted Capital Account after all other allocations provided for in this
Section 6.1 have been tentatively made as if this Section 6.1(d)(iv) were not in
this Agreement.

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

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

 

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

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

(ix) Code Section 754 Adjustments. To the extent an adjustment to the adjusted
tax basis of any Partnership asset pursuant to Section 734(b) of the Code
(including pursuant to Treasury Regulation Section 1.734-2(b)(1)) is required,
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into
account in determining Capital Accounts as a result of a distribution to a
Partner in complete liquidation of such Partner’s interest in the Partnership,
the amount of such adjustment to the Capital Accounts shall be treated as an
item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis) taken into account pursuant to Section 5.5,
and such item of gain or loss shall be specially allocated to the Partners in a
manner consistent with the manner in which their Capital Accounts are required
to be adjusted pursuant to such Section of the Treasury Regulations.

(x) Changes in Law. For the proper administration of the Partnership and for the
preservation of uniformity of the Limited Partner Interests (or any class or
classes thereof), the General Partner shall (1) adopt such conventions as it
deems appropriate in determining the amount of depreciation, amortization and
cost recovery deductions; (2) make special allocations of income, gain, loss,
deduction, Net Termination Gains or Net Termination Losses; and (3) amend the
provisions of this Agreement as appropriate (x) to reflect the proposal or
promulgation of Treasury Regulations under Section 704(b) or Section 704(c) of
the Code or (y) otherwise to preserve or achieve uniformity of the Limited
Partner Interests (or any class or classes thereof). The General Partner may
adopt such conventions, make such allocations and make such amendments to this
Agreement as provided in this Section 6.1(d)(x)(D) only if such conventions,
allocations or amendments would not have a material adverse effect on the
Partners, the holders of any class or classes of Outstanding Limited Partner
Interests or the Partnership.

(xi) Curative Allocation.

(A) Notwithstanding any other provision of this Section 6.1, other than the
Required Allocations, the Required Allocations shall be taken into account in
making the Agreed Allocations so that, to the extent possible, the net amount of
items of gross income, gain, loss and deduction allocated to each Partner
pursuant to the Required Allocations and the Agreed Allocations, together, shall
be equal to the net amount of such items that would have been allocated to each
such Partner under the Agreed Allocations had the Required Allocations and the
related Curative Allocation not otherwise been provided in this Section 6.1. In
exercising its discretion under this Section 6.1(d)(xi)(A), the General Partner
may take into account future

 

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Required Allocations that, although not yet made, are likely to offset other
Required Allocations previously made. Allocations pursuant to this
Section 6.1(d)(xi)(A) shall only be made with respect to Required Allocations to
the extent the General Partner determines that such allocations will otherwise
be inconsistent with the economic agreement among the Partners.

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

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

(A) The General Partner shall allocate Additional Book Basis Derivative Items
consisting of depreciation, amortization, depletion, or any other form of cost
recovery (other than Additional Book Basis Derivative Items included in Net
Termination Gain or Net Termination Loss) with respect to any Adjusted Property
to the Unitholders, Pro Rata, the holders of Class B Units and the General
Partner, all in the same proportion as the Net Termination Gain or Net
Termination Loss resulting from the Revaluation Event that gave rise to such
Additional Book Basis Derivative Items was allocated to them pursuant to
Section 6.1(c).

(B) If a sale or other taxable disposition of an Adjusted Property, including,
for this purpose, inventory (“Disposed of Adjusted Property”) occurs other than
in connection with an event giving rise to Net Termination Gain or Net
Termination Loss, the General Partner shall allocate (1) items of gross income
and gain (aa) away from the holders of Class B Units and the General Partner and
(bb) to the Unitholders, or (2) items of deduction and loss (aa) away from the
Unitholders and (bb) to the holders of Class B Units and the General Partner, to
the extent that the Additional Book Basis Derivative Items with respect to the
Disposed of Adjusted Property (determined in accordance with the last sentence
of the definition of Additional Book Basis Derivative Items) treated as having
been allocated to the Unitholders pursuant to this section 6.1(d)(xii)(B) exceed
their Share of Additional Book Basis Derivative Items with respect to such
Disposed of Adjusted Property. For purposes of this Section 6.1(d)(xii)(B), the
Unitholders shall be treated as having been allocated Additional Book Basis
Derivative Items to the extent that such Additional Book Basis Derivative Items
have reduced the amount of income that would otherwise have been allocated to
the Unitholders under the Partnership Agreement (e.g., Additional Book Basis
Derivative Items taken into account in computing the cost of goods sold would
reduce the amount of book income otherwise available for allocation among the
Partners). Any allocation made pursuant to this Section 6.1(d)(xii)(B) shall be
made after all of the other Agreed Allocations have been made as if this
Section 6.1(d)(xii) were not in this Agreement and, to the extent necessary,
shall require the reallocation of items that have been allocated pursuant to
such other Agreed Allocations.

(C) Net Termination Loss in an amount equal to the lesser of (1) such Net
Termination Loss and (2) the Aggregate Remaining Net Positive Adjustments shall
be allocated in such a manner as is determined by the General Partner that to
the extent possible, the

 

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Capital Account balances of the Partners will equal the amount they would have
been had no prior Book-Up Events occurred, and any remaining Net Termination
Loss shall be allocated pursuant to Section 6.1(c) hereof. In allocating Net
Termination Loss pursuant to this Section 6.1(d)(xii)(C), the General Partner
shall attempt, to the extent possible, to cause the Capital Accounts of the
Unitholders, on the one hand, and holders of the Class B Units, on the other
hand, to equal the amount they would equal if (i) the Carrying Values of the
Partnership’s property had not been previously adjusted in connection with any
prior Book-Up Events, (ii) Unrealized Gain and Unrealized Loss (or, in the case
of a liquidation, actual gain or loss) with respect to such Partnership Property
were determined with respect to such unadjusted Carrying Values, and (iii) any
resulting Net Termination Gain had been allocated pursuant to Section 6.1(c)(i)
(including, for the avoidance of doubt, taking into account the provisions set
forth in the last sentence of Section 6.1(c)(i)).

(D) In making the allocations required under this Section 6.1(d)(xii), the
General Partner may apply whatever conventions or other methodology it
determines will satisfy the purpose of this Section 6.1(d)(xii). Without
limiting the foregoing, if an Adjusted Property is contributed by the
Partnership to another entity classified as a partnership for U.S. federal
income tax purposes (the “lower tier partnership”), the General Partner may make
allocations similar to those described in Sections 6.1(d)(xii)(A)—(C) to the
extent the General Partner determines such allocations are necessary to account
for the Partnership’s allocable share of income, gain, loss and deduction of the
lower tier partnership that relate to the contributed Adjusted Property in a
manner that is consistent with the purpose of this Section 6.1(d)(xii).

(xiii) Special Allocation in Event of Section 482 Adjustment. If, and to the
extent that, the Partnership is deemed to recognize any item of income, gain,
loss or deduction (or any adjustment to these items) pursuant to Section 482 of
the Code or similar provision now or hereafter in effect and the Treasury
Regulations promulgated thereunder as a result of any transaction between a
Partner and the Partnership, the General Partner shall allocate such items among
the Partners in a manner that will, as nearly as possible, cause the Capital
Account balance of each Partner (taking into account any deemed contributions or
distributions) to equal the amount it would have been had no adjustment under
Section 482 or similar provision been made.

Section 6.2 Allocations for Tax Purposes.

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

(b) In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss,
depreciation, amortization and cost recovery deductions shall be allocated for
U.S. federal income tax purposes among the Partners in the manner provided under
Section 704(c) of the Code, and the Treasury Regulations promulgated under
Section 704(b) and 704(c) of the Code, as determined appropriate by the General
Partner (taking into account the General Partner’s discretion under
Section 6.1(d)(x)(C)); provided, that the General Partner shall apply the
principles of Treasury Regulation Section 1.704-3(d) in all events.

 

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(c) The General Partner may determine to depreciate or amortize the portion of
an adjustment under Section 743(b) of the Code attributable to unrealized
appreciation in any Adjusted Property (to the extent of the unamortized Book-Tax
Disparity) using a predetermined rate derived from the depreciation or
amortization method and useful life applied to the unamortized Book-Tax
Disparity of such property, despite any inconsistency of such approach with
Treasury Regulation Section 1.167(c)-l(a)(6) or any successor regulations
thereto. If the General Partner determines that such reporting position cannot
reasonably be taken, the General Partner may adopt depreciation and amortization
conventions under which all purchasers acquiring Limited Partner Interests in
the same month would receive depreciation and amortization deductions, based
upon the same applicable rate as if they had purchased a direct interest in the
Partnership’s property. If the General Partner chooses not to utilize such
aggregate method, the General Partner may use any other depreciation and
amortization conventions to preserve the uniformity of the intrinsic tax
characteristics of any Limited Partner Interests, so long as such conventions
would not have a material adverse effect on the Limited Partners or the Record
Holders of any class or classes of Limited Partner Interests.

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

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

(f) Each item of Partnership income, gain, loss and deduction shall, for U.S.
federal income tax purposes, be determined for each taxable period and prorated
on a monthly basis and shall be allocated to the Partners as of the first
Business Day of each month; provided, further, that gain or loss on a sale or
other disposition of any assets of the Partnership or any other extraordinary
item of income, gain, loss or deduction as determined by the General Partner,
shall be allocated to the Partners as of the first Business Day of the month in
which such item is recognized for federal income tax purposes. The General
Partner may revise, alter or otherwise modify such methods of allocation to the
extent permitted or required by Section 706 of the Code and the regulations or
rulings promulgated thereunder.

(g) If, as a result of an exercise of a Noncompensatory Option, a Capital
Account reallocation is required under Treasury Regulation
Section 1.704-1(b)(2)(iv)(s)(3), the General Partner shall make corrective
allocations pursuant to Treasury Regulation Section 1.704-1(b)(4)(x).

 

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Section 6.3 Requirements and Characterization of Distributions; Distributions to
Record Holders.

(a) Within 40 days following the end of each Quarter commencing with the Quarter
ending on December 31, 2013, an amount equal to 100% of Available Cash with
respect to such Quarter shall be distributed in accordance with this Section 6.3
by the Partnership to Partners as of the Record Date selected by the General
Partner. All amounts of Available Cash distributed by the Partnership on any
date from any source shall be deemed to be Operating Surplus until the sum of
all amounts of Available Cash theretofore distributed by the Partnership to the
Partners pursuant to Section 6.4 equals the Operating Surplus from the Closing
Date through the close of the immediately preceding Quarter. Any remaining
amounts of Available Cash distributed by the Partnership on such date shall,
except as otherwise provided in Section 6.5, be deemed to be “Capital Surplus.”
All distributions required to be made under this Agreement or otherwise made by
the Partnership shall be made subject to Sections 17-607 and 17-804 of the
Delaware Act.

(b) Notwithstanding Section 6.3(a), in the event of the dissolution and
liquidation of the Partnership, all Partnership assets shall be applied and
distributed solely in accordance with, and subject to the terms and conditions
of, Section 11.3.

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

Section 6.4 Distributions of Available Cash from Operating Surplus.

(a) Available Cash with respect to any Quarter that is deemed to be Operating
Surplus pursuant to the provisions of Section 6.3 or 6.5 shall be distributed as
follows:

(i) First, to all Unitholders holding Class A Units, Pro Rata, until there has
been distributed in respect of each Class A Unit then Outstanding an amount
equal to the Minimum Quarterly Distribution for such Quarter;

(ii) Second, to all Unitholders, Pro Rata, until there has been distributed in
respect of each Unit then Outstanding an amount equal to the excess of the First
Target Distribution over the Minimum Quarterly Distribution for such Quarter;

(iii) Third, (A) 15.0% to the holders of the Class B Units, Pro Rata; and
(B) 85.0% to all Unitholders, Pro Rata, until there has been distributed an
aggregate amount for such Quarter pursuant to Sections 6.4(a)(i), (a)(ii) and
(a)(iii) equal to the product of (x) the Second Target Distribution for such
Quarter and (y) the number of Class A Units receiving a distribution with
respect to such Quarter;

 

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(iv) Fourth, (A) 25.0% to the holders of the Class B Units, Pro Rata; and
(B) 75.0% to all Unitholders, Pro Rata, until there has been distributed an
aggregate amount for such Quarter pursuant to Sections 6.4(a)(i), (a)(ii),
(a)(iii) and (a)(iv) equal to the product of (x) the Third Target Distribution
for such Quarter and (y) the number of Class A Units receiving a distribution
with respect to such Quarter; and

(v) Thereafter, 50.0% to the holders of the Class B Units, Pro Rata; and
(B) 50.0% to all Unitholders, 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(a)(v).

Section 6.5 Distributions of Available Cash from Capital Surplus. Available Cash
that is deemed to be Capital Surplus pursuant to the provisions of
Section 6.3(a) shall be distributed, unless the provisions of Section 6.3
require otherwise:

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

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

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

(a) The Target Distributions shall be proportionately adjusted in the event of
any distribution, combination or subdivision (whether effected by a distribution
payable in Units or otherwise) of Units or other Partnership Interests. In the
event of a distribution of Available Cash that is deemed to be from Capital
Surplus, the then applicable Target Distributions shall be reduced in the same
proportion that the distribution had to the fair market value of the Class A
Units immediately prior to the announcement of the distribution. If the Class A
Units are publicly traded on a National Securities Exchange, the fair market
value will be the Current Market Price before the ex-dividend date. If the
Class A Units are not publicly traded, the fair market value will be determined
by the Board of Directors.

(b) The Target Distributions shall also be subject to adjustment pursuant to
Section 5.10 and Section 6.7.

Section 6.7 Entity-Level Taxation. If legislation is enacted or the official
interpretation of existing legislation is modified by a governmental authority,
which after giving effect to such enactment or modification, results in a Group
Member becoming subject to federal, state or local or non-U.S. income or
withholding taxes in excess of the amount of such taxes due from the Group
Member prior to such enactment or modification (including, for the avoidance of
doubt, any increase in the rate of such taxation applicable to the Group
Member), then the General Partner may, in its sole discretion, reduce the Target
Distributions by the amount of income or withholding taxes that are payable by
reason of any such new legislation or interpretation (the “Incremental Income
Taxes”), or any portion thereof selected by the General Partner, in the manner
provided in this Section 6.9. If the General Partner elects to reduce the

 

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Target Distributions for any Quarter with respect to all or a portion of any
Incremental Income Taxes, the General Partner shall estimate for such Quarter
the Partnership Group’s aggregate liability (the “Estimated Incremental
Quarterly Tax Amount”) for all (or the relevant portion of) such Incremental
Income Taxes; provided that any difference between such estimate and the actual
liability for Incremental Income Taxes (or the relevant portion thereof) for
such Quarter may, to the extent determined by the General Partner, be taken into
account in determining the Estimated Incremental Quarterly Tax Amount with
respect to each Quarter in which any such difference can be determined. For each
such Quarter, the Target Distributions, shall be the product obtained by
multiplying (a) the amounts therefor that are set out herein prior to the
application of this Section 6.9 times (b) the quotient obtained by dividing
(i) Available Cash with respect to such Quarter by (ii) the sum of Available
Cash with respect to such Quarter and the Estimated Incremental Quarterly Tax
Amount for such Quarter, as determined by the General Partner. For purposes of
the foregoing, Available Cash with respect to a Quarter will be deemed reduced
by the Estimated Incremental Quarterly Tax Amount for that Quarter.

ARTICLE VII

MANAGEMENT AND OPERATION OF BUSINESS

Section 7.1 Management.

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

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

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

(iii) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation
or exchange of any or all of the assets of the Partnership or the merger or
other combination of the Partnership with or into another Person (the matters
described in this clause (iii) being subject, however, to any prior approval
that may be required by Section 7.4 or Article XIV);

 

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

(v) the negotiation, execution and performance of any contracts, conveyances or
other instruments (including instruments that limit the liability of the
Partnership under contractual arrangements to all or particular assets of the
Partnership, with the other party to the contract to have no recourse against
the General Partner or its assets other than its interest in the Partnership,
even if the same results in the terms of the transaction being less favorable to
the Partnership than would otherwise be the case);

(vi) the distribution of cash or cash equivalents by the Partnership;

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

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

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

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

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

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

(xiii) the purchase, sale or other acquisition or disposition of Partnership
Interests, or, subject to Section 5.6(a), the issuance of Derivative
Instruments;

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

 

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

(b) Each of the Partners and each other Person who acquires an interest in a
Partnership Interest and each other Person who is otherwise bound by this
Agreement hereby (i) approves, ratifies and confirms the execution, delivery and
performance by the parties thereto of this Agreement and the Contribution
Agreement (in the case of each agreement other than this Agreement, without
giving effect to any amendments, supplements or restatements after the date
hereof); (ii) agrees that the General Partner (on its own behalf or on behalf of
the Partnership) is authorized to execute, deliver and perform the agreements
referred to in clause (b) of this sentence and the other agreements, acts,
transactions and matters described in or contemplated by the Contribution
Agreement on behalf of the Partnership without any further act, approval or vote
of the Partners, the other Persons who acquire a Partnership Interest and the
Persons who are otherwise bound by this Agreement; and (iii) agrees that the
execution, delivery or performance by the General Partner, any Group Member or
any Affiliate of any of them of this Agreement or any agreement authorized or
permitted under this Agreement (including the exercise by the General Partner or
any Affiliate of the General Partner of the rights accorded pursuant to Article
XV) shall not constitute a breach by the General Partner of any fiduciary or
other duty existing at law, in equity or otherwise that the General Partner may
owe the Partnership, the Limited Partners, the other Persons who acquire a
Partnership Interest or the Persons who are otherwise bound by this Agreement.

(c) As used in the following provisions of this Article VII other than
Section 7.12, the term Partnership Interest shall include any Derivative
Instruments.

Section 7.2 Replacement of Fiduciary Duties.

Notwithstanding any other provision of this Agreement, to the extent that any
provision of this Agreement purports or is interpreted (a) to have the effect of
replacing, restricting or eliminating the duties that might otherwise, as a
result of Delaware or other applicable law, be owed by the General Partner or
any other Indemnitee to the Partnership, the Limited Partners, any other Person
who acquires an interest in a Partnership Interest or any other Person who is
bound by this Agreement, or (b) to constitute a waiver or consent by the
Partnership, the Limited Partners, any other Person who acquires an interest in
a Partnership Interest or any other Person who is bound by this Agreement to any
such replacement or restriction, such provision shall be deemed to have been
approved by the Partnership, all the Partners, each other Person who acquires an
interest in a Partnership Interest and each other Person who is bound by this
Agreement.

Section 7.3 Certificate of Limited Partnership. The General Partner has caused
the Certificate of Limited Partnership to be filed with the Secretary of State
of the State of Delaware as required by the Delaware Act. The General Partner
shall use all reasonable efforts to cause to be filed such other certificates or
documents that the General Partner determines to be necessary or appropriate for
the formation, continuation, qualification and operation of a limited
partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware or any other state in which the Partnership
may elect to do business or own property.

 

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To the extent the General Partner determines such action to be necessary or
appropriate, the General Partner shall file amendments to and restatements of
the Certificate of Limited Partnership and do all things to maintain the
Partnership as a limited partnership (or a partnership or other entity in which
the limited partners have limited liability) under the laws of the State of
Delaware or of any other state in which the Partnership may elect to do business
or own property. Subject to the terms of Section 3.4(a), the General Partner
shall not be required, before or after filing, to deliver or mail a copy of the
Certificate of Limited Partnership, any qualification document or any amendment
thereto to any Partner.

Section 7.4 Restrictions on the General Partner’s Authority.

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

(b) In addition and without limiting the foregoing, the General Partner may not
take any of the following actions without the prior written approval of the
holders of a majority of the Class B Units:

(i) the amendment of this Agreement in any manner that adversely affects the
Class B Units as a whole in any material respect; and

(ii) any other action or event requiring the approval of the holders of Class B
Units under this Agreement.

In connection with any matter submitted for approval to the holders of Class B
Units, the vote or consent of any such holder may be given by such holder or by
any person holding a proxy, power of attorney, or similar interest under any
voting agreement binding on such holder.

Section 7.5 Reimbursement of the General Partner.

(a) NSLP GP shall be reimbursed by the Partnership Group on a monthly basis, or
such other basis as NSLP GP may determine, for (i) all direct and indirect
expenses it incurs or payments it makes on behalf of the Partnership Group
(including salary, bonus, incentive compensation and other amounts paid to any
Person (including Affiliates of the General Partner) to perform services for the
Partnership Group or for the General Partner in the discharge of its duties to
the Partnership Group), and (ii) all other expenses allocable to the Partnership
Group or otherwise incurred by the General Partner in connection with operating
the Partnership Group’s business (including expenses allocated to the General
Partner by its Affiliates). The General Partner shall determine the expenses
that are allocable to the General Partner or any member of the Partnership
Group. Reimbursements pursuant to this Section 7.5 shall be in addition to any
reimbursement to the General Partner as a result of indemnification pursuant to
Section 7.7. The General Partner and its Affiliates may charge any member of the
Partnership Group a

 

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management fee to the extent necessary to allow the Partnership Group to reduce
the amount of any state franchise or income tax or any tax based upon revenues
or gross margin of any member of the Partnership Group if the tax benefit
produced by the payment for such management fee exceeds the amount of such fee.

(b) The General Partner, without the approval of the Limited Partners (who shall
have no right to vote in respect thereof), may propose and adopt on behalf of
the Partnership benefit plans, programs and practices (including plans, programs
and practices involving the issuance of Partnership Interests), or cause the
Partnership to issue Partnership Interests in connection with, or pursuant to,
any benefit plan, program or practice maintained or sponsored by the General
Partner or any of its Affiliates, in each case for the benefit of employees,
officers, consultants and directors of the General Partner or its Affiliates, in
respect of services performed, directly or indirectly, for the benefit of the
Partnership Group. The Partnership agrees to issue and sell to the General
Partner or any of its Affiliates any Partnership Interests that the General
Partner or such Affiliates are obligated to provide to any employees, officers,
consultants and directors pursuant to any such benefit plans, programs or
practices. Expenses incurred by the General Partner in connection with any such
plans, programs and practices (including the net cost to the General Partner or
such Affiliates of Partnership Interests purchased by the General Partner or
such Affiliates, from the Partnership or otherwise, to fulfill awards under such
plans, programs and practices) shall be reimbursed in accordance with
Section 7.5(a). Any and all obligations of the General Partner under any benefit
plans, programs or practices adopted by the General Partner as permitted by this
Section 7.5(b) shall constitute obligations of the General Partner hereunder and
shall be assumed by any successor General Partner approved pursuant to
Section 11.1 or Section 11.2 or the transferee of or successor to all of the
General Partner’s General Partner Interest pursuant to Section 4.6.

Section 7.6 Outside Activities.

(a) The General Partner, for so long as it is the General Partner of the
Partnership, shall not engage in any business or activity or incur any debts or
liabilities except in connection with or incidental to (A) its performance as
general partner or managing member, if any, of one or more Group Members or as
described in or contemplated by the Registration Statement, (B) the acquiring,
owning or disposing of debt securities or equity interests in any Group Member
or (C) the direct or indirect provision of management, advisory, and
administrative services to its Affiliates or to other Persons.

(b) Each Unrestricted Person (other than the General Partner) shall have the
right to engage in businesses of every type and description and other activities
for profit and to engage in and possess an interest in other business ventures
of any and every type or description, whether in businesses engaged in or
anticipated to be engaged in by any Group Member, independently or with others,
including business interests and activities in direct competition with the
business and activities of any Group Member. No such business interest or
activity shall constitute a breach of this Agreement, any fiduciary or other
duty existing at law, in equity or otherwise, or obligation of any type
whatsoever to the Partnership or other Group Member, any Partner, any Person who
acquires an interest in a Partnership Interest or any Person who is otherwise
bound by this Agreement.

 

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(c) Notwithstanding anything to the contrary in this Agreement, the doctrine of
corporate opportunity, or any analogous doctrine, shall not apply to any
Unrestricted Person (including the General Partner). No Unrestricted Person
(including the General Partner) who acquires knowledge of a potential
transaction, agreement, arrangement or other matter that may be an opportunity
for the Partnership, shall have any duty to communicate or offer such
opportunity to any Group Member, and such Unrestricted Person (including the
General Partner) shall not be liable to the Partnership or any other Group
Member, any Partner any person who acquires a Partnership Interest or any other
Person who is otherwise bound by this Agreement for breach of any fiduciary or
other duty existing at law, in equity or otherwise by reason of the fact that
such Unrestricted Person (including the General Partner) pursues or acquires
such opportunity for itself, directs such opportunity to another Person or does
not communicate such opportunity or information to any Group Member.

(d) The General Partner and each of its Affiliates may acquire Units or other
Partnership Interests in addition to those acquired on the Closing Date and,
except as otherwise expressly provided in this Agreement, shall be entitled to
exercise, at their option, all rights relating to all Units or other Partnership
Interests acquired by them. The term “Affiliates” when used in this
Section 7.6(d) with respect to the General Partner shall not include any Group
Member.

Section 7.7 Indemnification.

(a) To the fullest extent permitted by law, all Indemnitees shall be indemnified
and held harmless by the Partnership from and against any and all losses,
claims, damages, liabilities, joint or several, expenses (including legal fees
and expenses), judgments, fines, penalties, interest, settlements or other
amounts arising from any and all threatened pending or completed claims,
demands, actions, suits or proceedings, whether civil, criminal, administrative
or investigative, and whether formal or informal and including appeals, in which
any Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, by reason of its status as an Indemnitee and acting (or refraining to
act) in such capacity; provided, that the Indemnitee shall not be indemnified
and held harmless if there has been a final and non-appealable judgment entered
by a court of competent jurisdiction determining that, in respect of the matter
for which the Indemnitee is seeking indemnification pursuant to this Agreement,
the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in
the case of a criminal matter, acted with knowledge that the Indemnitee’s
conduct was unlawful; provided, further that no indemnification pursuant to this
Section 7.7 shall be available to the General Partner, any of its Affiliates or
any other Indemnitee (other than a Group Member) with respect to its obligations
pursuant to the Contribution Agreement. Any indemnification pursuant to this
Section 7.7 shall be made only out of the assets of the Partnership, it being
agreed that the General Partner shall not be personally liable for such
indemnification and shall have no obligation to contribute or loan any monies or
property to the Partnership to enable it to effectuate such indemnification.

(b) To the fullest extent permitted by law, expenses (including legal fees and
expenses) incurred by an Indemnitee who is indemnified pursuant to
Section 7.7(a) in appearing at, participating in or defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Partnership prior to a final and non-appealable judgment entered by a court of
competent jurisdiction determining that, in respect of the matter for which the

 

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Indemnitee is seeking indemnification pursuant to this Section 7.7, the
Indemnitee is not entitled to be indemnified upon receipt by the Partnership of
any undertaking by or on behalf of the Indemnitee to repay such amount if it
shall be ultimately determined that the Indemnitee is not entitled to be
indemnified as authorized by this Section 7.7.

(c) The indemnification provided by this Section 7.7 shall be in addition to any
other rights to which an Indemnitee may be entitled under any agreement,
pursuant to any vote of the holders of Outstanding Limited Partner Interests, as
a matter of law, in equity or otherwise, both as to actions in the Indemnitee’s
capacity as an Indemnitee and as to actions in any other capacity, and shall
continue as to an Indemnitee who has ceased to serve in such capacity and shall
inure to the benefit of the heirs, successors, assigns and administrators of the
Indemnitee.

(d) The Partnership may purchase and maintain (or reimburse the General Partner
or its Affiliates for the cost of) insurance, on behalf of an Indemnitee and
such other Persons as the General Partner shall determine, against any liability
that may be asserted against, or expense that may be incurred by, such
Indemnitee in connection with the Partnership’s activities or such Indemnitee’s
activities on behalf of the Partnership, regardless of whether the Partnership
would have the power to indemnify such Indemnitee against such liability under
the provisions of this Agreement.

(e) For purposes of this Section 7.7, the Partnership shall be deemed to have
requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Partnership also imposes
duties on, or otherwise involves services by, it to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute “fines”
within the meaning of Section 7.7(a); and action taken or omitted by an
Indemnitee with respect to any employee benefit plan in the performance of its
duties for a purpose reasonably believed by it to be in the best interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
that is in the best interests of the Partnership.

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

(g) An Indemnitee shall not be denied indemnification in whole or in part under
this Section 7.7 because the Indemnitee had an interest in the transaction with
respect to which the indemnification applies if the transaction was otherwise
permitted by the terms of this Agreement.

(h) The provisions of this Section 7.7 are for the benefit of the Indemnitees
and their heirs, successors, assigns, executors and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.

(i) No amendment, modification or repeal of this Section 7.7 or any provision
hereof shall in any manner terminate, reduce or impair the right of any past,
present or future Indemnitee to be indemnified by the Partnership, nor the
obligations of the Partnership to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 7.7 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.

 

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Section 7.8 Liability of Indemnitees.

(a) Notwithstanding anything to the contrary set forth in this Agreement, no
Indemnitee shall be liable for monetary damages to the Partnership, the Partners
or any other Persons who have acquired interests in a Partnership Interest or is
otherwise bound by this Agreement, for losses sustained or liabilities incurred
as a result of any act or omission of an Indemnitee unless there has been a
final and non-appealable judgment entered by a court of competent jurisdiction
determining that, in respect of the matter in question, the Indemnitee acted in
bad faith or engaged in fraud, willful misconduct or, in the case of a criminal
matter, acted with knowledge that the Indemnitee’s conduct was criminal. In the
case where an Indemnitee is liable for damages, those damages shall only be
direct damages and shall not include punitive damages, consequential damages or
lost profits.

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

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

(d) Any amendment, modification or repeal of this Section 7.8 or any provision
hereof shall be prospective only and shall not in any way affect the limitations
on the liability of the Indemnitees under this Section 7.8 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.

Section 7.9 Standards of Conduct and Modification of Duties.

(a) Whenever the General Partner, the Board of Directors or any committee of the
Board of Directors (including the Conflicts Committee), makes a determination or
takes or declines to take any other action, or any Affiliates of the General
Partner cause the General Partner to do so, in its capacity as the general
partner of the Partnership as opposed to in its individual capacity, whether
under this Agreement, any Group Member Agreement or any other agreement
contemplated hereby or otherwise, then, unless another express standard is
provided for in this Agreement, the General Partner, the Board of Directors,
such committee or such Affiliates causing the General Partner to do so, shall
make such determination or take or decline to take such other action in good
faith and shall not be subject to any higher standard

 

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contemplated hereby or under the Delaware Act or any other law, rule or
regulation or at equity. A determination, other action or failure to act by the
General Partner, the Board of Directors of the General Partner or any committee
thereof (including the Conflicts Committee) will be deemed to be in good faith
unless the General Partner, the Board of Directors of the General Partner or any
committee thereof (including the Conflicts Committee) believed such
determination, other action or failure to act was adverse to the interests of
the Partnership or NSLP. In any proceeding brought by the Partnership, any
Limited Partner, or any Person who acquires an interest in a Partnership
Interest or any other Person who is bound by this Agreement challenging such
action, determination or failure to act, the Person bringing or prosecuting such
proceeding shall have the burden of proving that such determination, action or
failure to act was not in good faith.

(b) Whenever the General Partner makes a determination or takes or declines to
take any other action, or any of its Affiliates causes it to do so, in its
individual capacity as opposed to in its capacity as the general partner of the
Partnership, whether under this Agreement or any other agreement contemplated
hereby or otherwise, then the General Partner, or such Affiliates causing it to
do so, are entitled, to the fullest extent permitted by law, to make such
determination or to take or decline to take such other action free of any
fiduciary duty or other duty existing at law, in equity or otherwise or
obligation whatsoever to the Partnership, any Limited Partner, any other Person
who acquires an interest in a Partnership Interest or any other Person who
otherwise is bound by this Agreement, and the General Partner, or such
Affiliates causing it to do so, shall not, to the fullest extent permitted by
law, be required to act in good faith or pursuant to any other standard imposed
by this Agreement or any other agreement contemplated hereby or under the
Delaware Act or any other law, rule or regulation or at equity. By way of
illustration and not of limitation, whenever the phrases, “at the option of the
General Partner,” “in its sole discretion” or some variation of those phrases,
are used in this Agreement, it indicates that the General Partner is acting in
its individual capacity. For the avoidance of doubt, whenever the General
Partner votes or transfers its Partnership Interests, or refrains from voting or
transferring its Partnership Interests, it shall be acting in its individual
capacity.

(c) Whenever a potential conflict of interest exists or arises between the
General Partner or any Affiliates, on the one hand, and the Partnership, any
Group Member or any Partner, any other Person who acquires an interest in a
Partnership Interest or any other Person who is bound by this Agreement on the
other hand, the General Partner may in its discretion submit any resolution or
course of action with respect to such conflict of interest for (i) Special
Approval or (ii) if any Class A Units are owned by a Person other than the
General Partner and its Affiliates, approval by the vote of a majority of the
Class A Units (excluding Class A Units owned by the General Partner and its
Affiliates). If such course of action or resolution receives Special Approval or
approval of a majority of the Class A Units (excluding Class A Units owned by
the General Partner and its Affiliates), then such course of action or
resolution shall be conclusively deemed approved by the Partnership, all the
Partners, each Person who acquires an interest in a Partnership Interest and
each other Person who is bound by this Agreement, and shall not constitute a
breach of this Agreement, of any Group Member Agreement, of any agreement
contemplated herein or therein, or of any fiduciary or other duty existing at
law, in equity or otherwise or obligation of any type whatsoever. For the
avoidance of doubt, any potential conflict of interest that exists or arises
between the General Partner or any Affiliates, on the one hand, and the
Partnership, any Group Member or any Partner, any other Person who

 

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acquires an interest in a Partnership Interest or any other Person who is bound
by this Agreement on the other hand may be resolved as provided in this
Section 7.9(c)(i) and (ii) or as directed by the Board of Directors of the
General Partner, provided that the Board of Directors of the General Partner
makes, takes or declines to take any action to resolve the conflict in
accordance with the standard of care set forth in Section 7.9(a).

(d) Notwithstanding anything to the contrary in this Agreement, the General
Partner and its Affiliates or any other Indemnitee shall have no duty or
obligation, express or implied, to (i) sell or otherwise dispose of any asset of
the Partnership Group other than in the ordinary course of business or
(ii) permit any Group Member to use any facilities or assets of the General
Partner and its Affiliates, except as may be provided in contracts entered into
from time to time specifically dealing with such use. Any determination by the
General Partner or any of its Affiliates to enter into such contracts shall be
in its sole discretion.

(e) The Partners, each Person who acquires an interest in a Partnership Interest
or is otherwise bound by this Agreement hereby authorize the General Partner, on
behalf of the Partnership as a partner or member of a Group Member, to approve
actions by the general partner or managing member of such Group Member similar
to those actions permitted to be taken by the General Partner pursuant to this
Section 7.9.

Section 7.10 Other Matters Concerning the General Partner and Indemnitees.

(a) The General Partner and any other Indemnitee may rely upon, and shall be
protected in acting or refraining from acting upon, any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order, bond,
debenture or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties.

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

(c) The General Partner shall have the right, in respect of any of its powers or
obligations hereunder, to act through any of its duly authorized officers, a
duly appointed attorney or attorneys-in-fact or the duly authorized officers of
any Group Member.

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

 

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Section 7.12 Reliance by Third Parties. Notwithstanding anything to the contrary
in this Agreement, any Person dealing with the Partnership shall be entitled to
assume that the General Partner and any officer of the General Partner
authorized by the General Partner to act on behalf of and in the name of the
Partnership has full power and authority to encumber, sell or otherwise use in
any manner any and all assets of the Partnership and to enter into any
authorized contracts on behalf of the Partnership, and such Person shall be
entitled to deal with the General Partner or any such officer as if it were the
Partnership’s sole party in interest, both legally and beneficially. Each
Limited Partner hereby waives, to the fullest extent permitted by law, any and
all defenses or other remedies that may be available against such Person to
contest, negate or disaffirm any action of the General Partner or any such
officer in connection with any such dealing. In no event shall any Person
dealing with the General Partner or any such officer or its representatives be
obligated to ascertain that the terms of this Agreement have been complied with
or to inquire into the necessity or expedience of any act or action of the
General Partner or any such officer or its representatives. Each and every
certificate, document or other instrument executed on behalf of the Partnership
by the General Partner or its representatives shall be conclusive evidence in
favor of any and every Person relying thereon or claiming thereunder that (a) at
the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect, (b) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership and
(c) such certificate, document or instrument was duly executed and delivered in
accordance with the terms and provisions of this Agreement and is binding upon
the Partnership.

ARTICLE VIII

BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 8.1 Records and Accounting. The General Partner shall keep or cause to
be kept at the principal office of the Partnership appropriate books and records
with respect to the Partnership’s business, including all books and records
necessary to provide to the Limited Partners any information required to be
provided pursuant to Section 3.4(a). Any books and records maintained by or on
behalf of the Partnership in the regular course of its business, including the
record of the Record Holders of Units or other Partnership Interests, books of
account and records of Partnership proceedings, may be kept on, or be in the
form of, computer disks, hard drives, magnetic tape, photographs, micrographics
or any other information storage device; provided, that the books and records so
maintained are convertible into clearly legible written form within a reasonable
period of time. The books of the Partnership shall be maintained, for financial
reporting purposes, on an accrual basis in accordance with U.S. GAAP. The
Partnership shall not be required to keep books maintained on a cash basis and
the General Partner shall be permitted to calculate cash-based measures,
including Operating Surplus and Adjusted Operating Surplus, by making such
adjustments to its accrual basis books to account for non-cash items and other
adjustments as the General Partner determines to be necessary or appropriate.

Section 8.2 Fiscal Year. The fiscal year of the Partnership shall be a fiscal
year ending December 31.

 

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Section 8.3 Reports.

(a) As soon as practicable, but in no event later than 105 days after the close
of each fiscal year of the Partnership, the General Partner shall cause to be
mailed or made available, by any reasonable means, to each Record Holder of a
Unit or other Partnership Interest as of a date selected by the General Partner,
an annual report containing financial statements of the Partnership for such
fiscal year of the Partnership, presented in accordance with U.S. GAAP,
including a balance sheet and statements of operations, Partnership equity and
cash flows, such statements to be audited by a firm of independent public
accountants selected by the General Partner, and such other information as may
be required by applicable law, regulation or rule of any National Securities
Exchange on which the Units are listed or admitted to trading, or as the General
Partner determines to be necessary or appropriate.

(b) As soon as practicable, but in no event later than 50 days after the close
of each Quarter except the last Quarter of each fiscal year, the General Partner
shall cause to be mailed or made available, by any reasonable means to each
Record Holder of a Unit or other Partnership Interest, as of a date selected by
the General Partner, a report containing unaudited financial statements of the
Partnership and such other information as may be required by applicable law,
regulation or rule of any National Securities Exchange on which the Units are
listed or admitted to trading, or as the General Partner determines to be
necessary or appropriate.

ARTICLE IX

TAX MATTERS

Section 9.1 Tax Returns and Information. The Partnership shall timely file all
returns of the Partnership that are required for federal, state and local income
tax purposes on the basis of the accrual method and the taxable period or year
that it is required by law to adopt, from time to time, as determined by the
General Partner. In the event the Partnership is required to use a taxable
period other than a year ending on December 31, the General Partner shall use
reasonable efforts to change the taxable period of the Partnership to a year
ending on December 31. The tax information reasonably required by Record Holders
for federal, state and local income tax reporting purposes with respect to a
taxable period shall be furnished to them within 90 days of the close of the
calendar year in which the Partnership’s taxable period ends. The
classification, realization and recognition of income, gain, losses and
deductions and other items shall be on the accrual method of accounting for U.S.
federal income tax purposes.

Section 9.2 Tax Elections.

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

 

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

Section 9.3 Tax Controversies. Subject to the provisions hereof, the General
Partner shall designate the Organizational Limited Partner, or such other
Partner as the General Partner shall designate, as the Tax Matters Partner (as
defined in the Code) and is authorized and required to represent the Partnership
(at the Partnership’s expense) in connection with all examinations of the
Partnership’s affairs by tax authorities, including resulting administrative and
judicial proceedings, and to expend Partnership funds for professional services
and costs associated therewith. Each Partner agrees to cooperate with the
General Partner and to do or refrain from doing any or all things reasonably
required by the General Partner to conduct such proceedings.

Section 9.4 Withholding; Tax Payments.

(a) The General Partner may treat taxes paid by the Partnership on behalf of,
all or less than all of the Partners, either as a distribution of cash to such
Partners or as a general expense of the Partnership, as determined appropriate
under the circumstances by the General Partner.

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

ARTICLE X

ADMISSION OF PARTNERS

Section 10.1 Admission of Limited Partners.

(a) A Person shall be admitted as a Limited Partner and shall become bound by
the terms of this Agreement if such Person purchases or otherwise lawfully
acquires any Limited Partner Interest and becomes the Record Holder of such
Limited Partner Interests in accordance with the provisions of Article IV or
Article V hereof. Upon the issuance by the Partnership of Class A Units and
Class B Units to NSLP, Deylau and Signature, such parties will be automatically
admitted to the Partnership as Initial Limited Partners in respect of the
Class A Units or Class B Units issued to them.

 

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(b) By acceptance of the transfer of any Limited Partner Interests in accordance
with Article IV or the acceptance of any Limited Partner Interests issued
pursuant to Article V or pursuant to a merger or consolidation or conversion
pursuant to Article XIV, and except as provided in Section 4.8, each transferee
of, or other such Person acquiring, a Limited Partner Interest (including any
nominee holder or an agent or representative acquiring such Limited Partner
Interests for the account of another Person) (i) shall be admitted to the
Partnership as a Limited Partner with respect to the Limited Partner Interests
so transferred or issued to such Person when any such transfer or admission is
reflected in the books and records of the Partnership and such Limited Partner
becomes the Record Holder of the Limited Partner Interests so transferred,
(ii) shall become bound, and shall be deemed to have agreed to be bound, by the
terms of this Agreement, (iii) represents that the transferee or other recipient
has the capacity, power and authority to enter into this Agreement, and
(iv) makes the consents, acknowledgements and waivers contained in this
Agreement, all with or without execution of this Agreement by such Person. The
transfer of any Limited Partner Interests and the admission of any new Limited
Partner shall not constitute an amendment to this Agreement. A Person may become
a Limited Partner or Record Holder of a Limited Partner Interest without the
consent or approval of any of the Partners. A Person may not become a Limited
Partner without acquiring a Limited Partner Interest and until such Person is
reflected in the books and records of the Partnership as the Record Holder of
such Limited Partner Interest.

(c) The name and mailing address of each Record Holder shall be listed on the
books and records of the Partnership maintained for such purpose by the
Partnership or the Transfer Agent. The General Partner shall update the books
and records of the Partnership from time to time as necessary to reflect
accurately the information therein (or shall cause the Transfer Agent to do so,
as applicable). A Limited Partner Interest may be represented by a Certificate,
as provided in Section 4.1.

(d) Any transfer of a Limited Partner Interest shall not entitle the transferee
to share in the profits and losses, to receive distributions, to receive
allocations of income, gain, loss, deduction or credit or any similar item or to
any other rights to which the transferor was entitled until the transferee
becomes a Limited Partner pursuant to Section 10.1(b).

Section 10.2 Admission of Successor General Partner. A successor General Partner
approved pursuant to Section 11.1 or Section 11.2 or the transferee of or
successor to all of the General Partner Interest pursuant to Section 4.6 who is
proposed to be admitted as a successor General Partner shall be admitted to the
Partnership as the General Partner, effective immediately prior to the
withdrawal or removal of the predecessor or transferring General Partner,
pursuant to Section 11.1 or 11.2 or the transfer of the General Partner Interest
pursuant to Section 4.6, provided, however, that no such successor shall be
admitted to the Partnership until compliance with the terms of Section 4.6 has
occurred and such successor has executed and delivered such other documents or
instruments as may be required to effect such admission. Any such successor
shall, subject to the terms hereof, carry on the business of the members of the
Partnership Group without dissolution.

Section 10.3 Amendment of Agreement and Certificate of Limited Partnership. To
effect the admission to the Partnership of any Partner, the General Partner
shall take all steps necessary or appropriate under the Delaware Act to amend
the records of the Partnership to reflect such admission and, if necessary, to
prepare as soon as practicable an amendment to this Agreement and, if required
by law, the General Partner shall prepare and file an amendment to the
Certificate of Limited Partnership.

 

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ARTICLE XI

DISSOLUTION AND LIQUIDATION

Section 11.1 Dissolution. The Partnership shall not be dissolved by the
admission of additional Limited Partners in accordance with the terms of this
Agreement. Subject to Section 11.2, the Partnership shall dissolve, and its
affairs shall be wound up, upon:

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

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

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

Section 11.2 Liquidator. Upon dissolution of the Partnership, the General
Partner shall select one or more Persons to act as Liquidator. The Liquidator
(if other than the General Partner or an Affiliate of the General Partner) shall
be entitled to receive such compensation for its services as may be approved by
holders of at least a majority of the Outstanding Class A Units. The Liquidator
(if other than the General Partner) shall agree not to resign at any time
without 15 days’ prior notice and may be removed at any time, with or without
cause, by notice of removal approved by holders of at least a majority of the
Outstanding Class A Units. Upon dissolution, removal or resignation of the
Liquidator, a successor and substitute Liquidator (who shall have and succeed to
all rights, powers and duties of the original Liquidator) shall within 30 days
thereafter be approved by holders of at least a majority of the Outstanding
Class A Units. The right to approve a successor or substitute Liquidator in the
manner provided herein shall be deemed to refer also to any such successor or
substitute Liquidator approved in the manner herein provided. Except as
expressly provided in this Article XI, the Liquidator approved in the manner
provided herein shall have and may exercise, without further authorization or
consent of any of the parties hereto, all of the powers conferred upon the
General Partner under the terms of this Agreement (but subject to all of the
applicable limitations, contractual and otherwise, upon the exercise of such
powers, other than the limitation on sale set forth in Section 7.4) necessary or
appropriate to carry out the duties and functions of the Liquidator hereunder
for and during the period of time required to complete the winding up and
liquidation of the Partnership as provided for herein.

Section 11.3 Liquidation. The Liquidator shall proceed to dispose of the assets
of the Partnership, discharge its liabilities, and otherwise wind up its affairs
in such manner and over such period as determined by the Liquidator, subject to
Section 17-804 of the Delaware Act and the following:

 

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(a) The assets may be disposed of by public or private sale or by distribution
in kind to one or more Partners on such terms as the Liquidator and such Partner
or Partners may agree. If any property is distributed in kind, the Partner
receiving the property shall be deemed for purposes of Section 11.3(c) to have
received cash equal to its fair market value; and contemporaneously therewith,
appropriate cash distributions must be made to the other Partners. The
Liquidator may defer liquidation or distribution of the Partnership’s assets for
a reasonable time if it determines that an immediate sale or distribution of all
or some of the Partnership’s assets would be impractical or would cause undue
loss to the Partners. The Liquidator may distribute the Partnership’s assets, in
whole or in part, in kind if it determines that a sale would be impractical or
would cause undue loss to the Partners.

(b) Liabilities of the Partnership include amounts owed to the Liquidator as
compensation for serving in such capacity (subject to the terms of Section 11.2)
and amounts to Partners otherwise than in respect of their distribution rights
under Article VI. With respect to any liability that is contingent, conditional
or unmatured or is otherwise not yet due and payable, the Liquidator shall
either settle such claim for such amount as it thinks appropriate or establish a
reserve of cash or other assets to provide for its payment. When paid, any
unused portion of the reserve shall be distributed as additional liquidation
proceeds.

(c) All property and all cash in excess of that required to discharge
liabilities as provided in Section 11.3(b) shall be distributed to the Partners
in accordance with, and to the extent of, the positive balances in their
respective Capital Accounts, as determined after taking into account all Capital
Account adjustments (other than those made by reason of distributions pursuant
to this Section 11.3(c)) for the taxable period of the Partnership during which
the liquidation of the Partnership occurs (with such date of occurrence being
determined pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(g)), and
such distribution shall be made by the end of such taxable period (or, if later,
within 90 days after said date of such occurrence).

Section 11.4 Cancellation of Certificate of Limited Partnership. Upon the
completion of the distribution of Partnership cash and property as provided in
Section 11.3 in connection with the liquidation of the Partnership, the
Certificate of Limited Partnership and all qualifications of the Partnership as
a foreign limited partnership in jurisdictions other than the State of Delaware
shall be canceled and such other actions as may be necessary to terminate the
Partnership shall be taken.

Section 11.5 Return of Contributions. The General Partner shall not be
personally liable for, and shall have no obligation to contribute or loan any
monies or property to the Partnership to enable it to effectuate, the return of
the Capital Contributions of the Limited Partners or Unitholders, or any portion
thereof, it being expressly understood that any such return shall be made solely
from Partnership assets.

Section 11.6 Waiver of Partition. To the maximum extent permitted by law, each
Partner hereby waives any right to partition of the Partnership property.

Section 11.7 Capital Account Restoration. No Limited Partner shall have any
obligation to restore any negative balance in its Capital Account upon
liquidation of the Partnership. The General Partner shall be obligated to
restore any negative balance in its Capital Account upon liquidation of its
interest in the Partnership by the end of the taxable period of the Partnership
during which such liquidation occurs, or, if later, within 90 days after the
date of such liquidation.

 

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ARTICLE XII

AMENDMENT OF PARTNERSHIP AGREEMENT

Section 12.1 Amendments of Partnership Agreement.

(a) Except as otherwise expressly provided elsewhere in this Agreement, this
Agreement shall not be amended, modified, superseded or restated except by an
amendment approved by the General Partner. Without limiting the generality of
the foregoing, and except as otherwise set forth in this Section 12.1(a), this
Agreement may be amended without the consent or approval of any Limited Partner.

(b) The General Partner shall cause to be prepared and filed any amendment to
the Certificate that may be required to be filed under the Act as a consequence
of any amendment to this Agreement.

(c) Any modification or amendment to this Agreement or the Certificate made in
accordance with this Section 12.1 shall be binding on all Partners.

ARTICLE XIII

MERGER OR CONSOLIDATION

Section 13.1 Authority. The Partnership may merge or consolidate with or into
one or more corporations, limited liability companies, statutory trusts or
associations, real estate investment trusts, common law trusts or unincorporated
businesses, including a partnership (whether general or limited (including a
limited liability partnership)) or convert into any such entity, whether such
entity is formed under the laws of the State of Delaware or any other state of
the United States of America, pursuant to a written plan of merger or
consolidation (“Merger Agreement”) in accordance with this Article XIII.

Section 13.2 Procedure for Merger or Consolidation.

(a) Merger or consolidation of the Partnership pursuant to this Article XIII
requires the prior consent of the General Partner, provided, however, that, to
the fullest extent permitted by law, the General Partner shall have no duty or
obligation to consent to any merger or consolidation of the Partnership and may
decline to do so free of any fiduciary duty or obligation whatsoever to the
Partnership, any Limited Partner and, in declining to consent to a merger or
consolidation, shall not be required to act in good faith or pursuant to any
other standard imposed by this Agreement, any other agreement contemplated
hereby or under the Delaware Act or any other law, rule or regulation or at
equity.

 

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

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

(ii) the name and jurisdiction of formation or organization of the business
entity that is to survive the proposed merger or consolidation (the “Surviving
Business Entity”);

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

(iv) the manner and basis of exchanging or converting the equity interests of
each constituent business entity for, or into, cash, property or interests,
rights, securities or obligations of the Surviving Business Entity; and (i) if
any interests, securities or rights of any constituent business entity are not
to be exchanged or converted solely for, or into, cash, property or interests,
rights, securities or obligations of the Surviving Business Entity, then the
cash, property or interests, rights, securities or obligations of any general or
limited partnership, corporation, trust, limited liability company,
unincorporated business or other entity (other than the Surviving Business
Entity) which the holders of such interests, securities or rights are to receive
in exchange for, or upon conversion of their interests, securities or rights,
and (ii) in the case of equity interests represented by certificates, upon the
surrender of such certificates, which cash, property or interests, rights,
securities or obligations of the Surviving Business Entity or any general or
limited partnership, corporation, trust, limited liability company,
unincorporated business or other entity (other than the Surviving Business
Entity), or evidences thereof, are to be delivered;

(v) a statement of any changes in the constituent documents or the adoption of
new constituent documents (the articles or certificate of incorporation,
articles of trust, declaration of trust, certificate or agreement of limited
partnership, certificate of formation or limited liability company agreement or
other similar charter or governing document) of the Surviving Business Entity to
be effected by such merger or consolidation;

(vi) the effective time of the merger, which may be the date of the filing of
the certificate of merger pursuant to Section 13.4 or a later date specified in
or determinable in accordance with the Merger Agreement (provided, that if the
effective time of the merger is to be later than the date of the filing of such
certificate of merger, the effective time shall be fixed at a date or time
certain and stated in the certificate of merger); and

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

Section 13.3 Approval by Limited Partners.

(a) Except as provided in Section 13.3(d), the General Partner, upon its
approval of the Merger Agreement shall direct that the Merger Agreement and the
merger or consolidation contemplated thereby, as applicable, be submitted to a
vote of Limited Partners other than the holders of Class B Units, whether at a
special meeting or by written consent. A copy or a summary of the Merger
Agreement, as the case may be, shall be included in or enclosed with the notice
of a special meeting or the written consent.

 

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(b) Except as provided in Sections 13.3(d) and 13.3(e), the Merger Agreement
shall be approved upon receiving the affirmative vote or consent of the holders
of a Unit Majority unless the Merger Agreement contains any provision that, if
contained in an amendment to this Agreement, the provisions of this Agreement or
the Delaware Act would require for its approval the vote or consent of a greater
percentage of the Outstanding Units or of any class of Limited Partners, in
which case such greater percentage vote or consent shall be required for
approval of the Merger Agreement.

(c) Except as provided in Sections 13.3(d) and 13.3(e), after such approval by
vote or consent of the Limited Partners other than the holders of Class B Units,
and at any time prior to the filing of the certificate of merger pursuant to
Section 13.4, the merger or consolidation may be abandoned pursuant to
provisions therefor, if any, set forth in the Merger Agreement.

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

(e) Additionally, notwithstanding anything else contained in this Article XIII
or in this Agreement, the General Partner is permitted, without Limited Partner
approval, to merge or consolidate the Partnership with or into another entity if
(A) the General Partner has received an Opinion of Counsel that the merger or
consolidation, as the case may be, would not result in the loss of the limited
liability under the Delaware Act of any Limited Partner or cause the Partnership
or any Group Member to be treated as an association taxable as a corporation or
otherwise to be taxed as an entity for U.S. federal income tax purposes (to the
extent not already treated as such), (B) the merger or consolidation would not
result in an amendment to this Agreement, other than any amendments that could
be adopted pursuant to Section 12.1, (C) the Partnership is the Surviving
Business Entity in such merger or consolidation, (D) each Partnership Interest
outstanding immediately prior to the effective date of the merger or
consolidation is to be an identical Partnership Interest of the Partnership
after the effective date of the merger or consolidation, and (E) the number of
Partnership Interests to be issued by the Partnership in such merger or
consolidation does not exceed 20% of the Partnership Interests (other than Class
B Units) Outstanding immediately prior to the effective date of such merger or
consolidation.

 

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(f) Pursuant to Section 17-211(g) of the Delaware Act, an agreement of merger or
consolidation approved in accordance with this Article XIII may (a) effect any
amendment to this Agreement or (b) effect the adoption of a new partnership
agreement for the Partnership if it is the Surviving Business Entity. Any such
amendment or adoption made pursuant to this Section 13.3 shall be effective at
the effective time or date of the merger or consolidation.

Section 13.4 Certificate of Merger. Upon the required approval by the General
Partner and the Unitholders of a Merger Agreement, a certificate of merger shall
be executed and filed with the Secretary of State of the State of Delaware in
conformity with the requirements of the Delaware Act.

Section 13.5 Effect of Merger or Consolidation.

(a) At the effective time of the certificate of merger:

(i) all of the rights, privileges and powers of each of the business entities
that has merged or consolidated, and all property, real, personal and mixed, and
all debts due to any of those business entities and all other things and causes
of action belonging to each of those business entities, shall be vested in the
Surviving Business Entity and after the merger or consolidation shall be the
property of the Surviving Business Entity to the extent they were of each
constituent business entity;

(ii) the title to any real property vested by deed or otherwise in any of those
constituent business entities shall not revert and is not in any way impaired
because of the merger or consolidation;

(iii) all rights of creditors and all liens on or security interests in property
of any of those constituent business entities shall be preserved unimpaired; and

(iv) all debts, liabilities and duties of those constituent business entities
shall attach to the Surviving Business Entity and may be enforced against it to
the same extent as if the debts, liabilities and duties had been incurred or
contracted by it.

ARTICLE XIV

GENERAL PROVISIONS

Section 14.1 Addresses and Notices; Written Communications.

(a) Any notice, demand, request, report or proxy materials required or permitted
to be given or made to a Partner under this Agreement shall be in writing and
shall be deemed given or made when delivered in person or when sent by first
class United States mail or by other means of written communication to the
Partner at the address described below. Any notice, payment or report to be
given or made to a Partner hereunder shall be deemed conclusively to have been
given or made, and the obligation to give such notice or report or to make such
payment shall be deemed conclusively to have been fully satisfied, upon sending
of such notice, payment or report to the Record Holder of such Partnership
Interests at his address as shown on the records of the Transfer Agent or as
otherwise shown on the records of the Partnership, regardless of any claim

 

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of any Person who may have an interest in such Partnership Interests by reason
of any assignment or otherwise. Notwithstanding the foregoing, if (i) a Partner
shall consent to receiving notices, demands, requests, reports or proxy
materials via electronic mail or by the Internet or (ii) the rules of the
Commission shall permit any report or proxy materials to be delivered
electronically or made available via the Internet, any such notice, demand,
request, report or proxy materials shall be deemed given or made when delivered
or made available via such mode of delivery. An affidavit or certificate of
making of any notice, payment or report in accordance with the provisions of
this Section 14.1 executed by the General Partner, the Transfer Agent or the
mailing organization shall be prima facie evidence of the giving or making of
such notice, payment or report. If any notice, payment or report given or made
in accordance with the provisions of this Section 14.1 is returned marked to
indicate that such notice, payment or report was unable to be delivered, such
notice, payment or report and, in the case of notices, payments or reports
returned by the United States Postal Service (or other physical mail delivery
mail service outside the United States of America), any subsequent notices,
payments and reports shall be deemed to have been duly given or made without
further mailing (until such time as such Record Holder or another Person
notifies the Transfer Agent or the Partnership of a change in his address) or
other delivery if they are available for the Partner at the principal office of
the Partnership for a period of one year from the date of the giving or making
of such notice, payment or report to the other Partners. Any notice to the
Partnership shall be deemed given if received by the General Partner at the
principal office of the Partnership designated pursuant to Section 2.3. The
General Partner may rely and shall be protected in relying on any notice or
other document from a Partner or other Person if believed by it to be genuine.

(b) The terms “in writing”, “written communications,” “written notice” and words
of similar import shall be deemed satisfied under this Agreement by use of
e-mail and other forms of electronic communication.

Section 14.2 Further Action. The parties shall execute and deliver all
documents, provide all information and take or refrain from taking action as may
be necessary or appropriate to achieve the purposes of this Agreement.

Section 14.3 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns.

Section 14.4 Integration. This Agreement constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof and supersedes all
prior agreements and understandings pertaining thereto.

Section 14.5 Creditors. None of the provisions of this Agreement shall be for
the benefit of, or shall be enforceable by, any creditor of the Partnership.

Section 14.6 Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach of any other covenant, duty, agreement or
condition.

 

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Section 14.7 Third-Party Beneficiaries. Each Partner agrees that (a) any
Indemnitee shall be entitled to assert rights and remedies hereunder as a
third-party beneficiary hereto with respect to those provisions of this
Agreement affording a right, benefit or privilege to such Indemnitee and (b) any
Unrestricted Person shall be entitled to assert rights and remedies hereunder as
a third-party beneficiary hereto with respect to those provisions of this
Agreement affording a right, benefit or privilege to such Unrestricted Person.

Section 14.8 Counterparts. This Agreement may be executed in counterparts, all
of which together shall constitute an agreement binding on all the parties
hereto, notwithstanding that all such parties are not signatories to the
original or the same counterpart. Each party shall become bound by this
Agreement immediately upon affixing its signature hereto or, in the case of a
Person acquiring a Limited Partner Interest, pursuant to Section 10.1(a) without
execution hereof.

Section 14.9 Applicable Law; Forum, Venue and Jurisdiction; Waiver of Trial by
Jury.

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

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

(i) irrevocably agrees that any claims, suits, actions or proceedings
(A) arising out of or relating in any way to this Agreement (including any
claims, suits or actions to interpret, apply or enforce the provisions of this
Agreement or the duties, obligations or liabilities among Partners or of
Partners to the Partnership, or the rights or powers of, or restrictions on, the
Partners or the Partnership), (B) brought in a derivative manner on behalf of
the Partnership, (C) asserting a claim of breach of a fiduciary duty owed by any
director, officer, or other employee of the Partnership or the General Partner,
or owed by the General Partner, to the Partnership or the Partners,
(D) asserting a claim arising pursuant to any provision of the Delaware Act or
(E) asserting a claim governed by the internal affairs doctrine shall be
exclusively brought in the Court of Chancery of the State of Delaware (or, if
such court does not have subject matter jurisdiction thereof, any other court
located in the State of Delaware with subject matter jurisdiction), in each case
regardless of whether such claims, suits, actions or proceedings sound in
contract, tort, fraud or otherwise, are based on common law, statutory,
equitable, legal or other grounds, or are derivative or direct claims;

(ii) irrevocably submits to the exclusive jurisdiction of the Court of Chancery
of the State of Delaware (or, if such court does not have subject matter
jurisdiction thereof, any other court located in the State of Delaware with
subject matter jurisdiction) in connection with any such claim, suit, action or
proceeding;

(iii) agrees not to, and waives any right to, assert in any such claim, suit,
action or proceeding that (A) it is not personally subject to the jurisdiction
of the Court of Chancery of the State of Delaware or of any other court to which
proceedings in the Court of Chancery of the State of Delaware may be appealed,
(B) such claim, suit, action or proceeding is brought in an inconvenient forum,
or (C) the venue of such claim, suit, action or proceeding is improper;

 

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

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

Section 14.10 Invalidity of Provisions. If any provision or part of a provision
of this Agreement is or becomes for any reason, invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions and/or parts thereof contained herein shall not be affected
thereby and this Agreement shall, to the fullest extent permitted by law, be
reformed and construed as if such invalid, illegal or unenforceable provision,
or part of a provision, had never been contained herein, and such provision or
part reformed so that it would be valid, legal and enforceable to the maximum
extent possible.

Section 14.11 Consent of Partners. Each Partner hereby expressly consents and
agrees that, whenever in this Agreement it is specified that an action may be
taken upon the affirmative vote or consent of less than all of the Partners,
such action may be so taken upon the concurrence of less than all of the
Partners and each Partner shall be bound by the results of such action.

Section 14.12 Facsimile Signatures. The use of facsimile signatures affixed in
the name and on behalf of the transfer agent and registrar of the Partnership on
Certificates representing Units is expressly permitted by this Agreement.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

 

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

 

GENERAL PARTNER: MCE GP, LLC By:   /s/ Dikran Tourian Name:   Dikran Tourian
Title:   President ORGANIZATIONAL LIMITED PARTNER: MCE, LLC By:   /s/ Dikran
Tourian Name:   Dikran Tourian Title:   Manager INITIAL LIMITED PARTNERS: NEW
SOURCE ENERGY PARTNERS, L.P. By: New Source Energy GP, LLC, its general partner
By:   /s/ Richard D. Finley Name:   Richard D. Finley Title:   Chief Financial
Officer DEYLAU, LLC By:   /s/ Kristian B. Kos Name:   Kristian B. Kos Title:  
Manager

 

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SIGNATURE INVESTMENTS, LLC By:   /s/ Dikran Tourian Name:   Dikran Tourian
Title:   Manager

 

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