Exhibit 10.1

 

 

 

 

CLASS B PREFERRED UNIT

PURCHASE AGREEMENT

among

SANCHEZ PRODUCTION PARTNERS LP

and

THE PURCHASERS PARTY HERETO

 

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TABLE OF CONTENTS

 

 

 

 

 

 

 

    

Page

Article I DEFINITIONS

 

1 

Section 1.01

Definitions

 

1 

Section 1.02

Accounting Procedures and Interpretation

 

6 

Article II AGREEMENT TO SELL AND PURCHASE

 

6 

Section 2.01

Purchase

 

6 

Section 2.02

Closing; Closing Conditions

 

7 

Section 2.03

Deliveries at the Closing

 

8 

Section 2.04

Independent Nature of Purchasers’ Obligations and Rights

 

10 

Section 2.05

Further Assurances

 

10 

Section 2.06

NYSE MKT Listing

 

10 

Section 2.07

Pre-Closing Covenants of the Partnership Entities

 

10 

Article III REPRESENTATIONS AND WARRANTIES AND COVENANTS RELATED TO SANCHEZ

 

11 

Section 3.01

Existence

 

11 

Section 3.02

Capitalization and Valid Issuance of Purchased Units

 

12 

Section 3.03

Sanchez SEC Documents; Sanchez Financial Statements

 

13 

Section 3.04

No Material Adverse Change

 

13 

Section 3.05

No Registration Required

 

14 

Section 3.06

Litigation

 

14 

Section 3.07

No Conflicts

 

14 

Section 3.08

Authority; Enforceability

 

14 

Section 3.09

Approvals

 

15 

Section 3.10

MLP Status

 

15 

Section 3.11

Investment Company Status

 

15 

Section 3.12

Certain Fees

 

15 

Section 3.13

Insurance

 

15 

Section 3.14

Books and Records; Sarbanes-Oxley Compliance

 

16 

Section 3.15

Listing and Maintenance Requirements

 

16 

Section 3.16

Taxes

 

16 

Section 3.17

Compliance with Laws; Permits; and Environmental Matters

 

17 

Section 3.18

Title to Property

 

18 

Section 3.19

Rights of Way

 

18 

Article IV REPRESENTATIONS AND WARRANTIES AND COVENANTS OF THE PURCHASERS

 

19 

Section 4.01

Existence

 

19 

Section 4.02

Authorization, Enforceability

 

19 

Section 4.03

No Breach

 

19 

Section 4.04

Certain Fees

 

19 

Section 4.05

Unregistered Securities

 

20 

 

 

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Section 4.06

Short Selling

 

21 

Article V INDEMNIFICATION, COSTS AND EXPENSES

 

22 

Section 5.01

Indemnification by Sanchez

 

22 

Section 5.02

Indemnification by the Purchasers

 

22 

Section 5.03

Indemnification Procedure

 

22 

Section 5.04

Tax Matters

 

24 

Article VI TERMINATION

 

24 

Section 6.01

Termination

 

24 

Section 6.02

Effect of Termination

 

24 

Article VII MISCELLANEOUS

 

25 

Section 7.01

Expenses

 

25 

Section 7.02

Interpretation

 

25 

Section 7.03

Survival of Provisions

 

26 

Section 7.04

No Waiver; Modifications in Writing

 

26 

Section 7.05

Binding Effect

 

26 

Section 7.06

Non-Disclosure

 

27 

Section 7.07

Communications

 

28 

Section 7.08

Removal of Legend

 

29 

Section 7.09

Entire Agreement

 

29 

Section 7.10

Governing Law; Submission to Jurisdiction

 

29 

Section 7.11

Waiver of Jury Trial

 

30 

Section 7.12

Execution in Counterparts

 

30 

 

 

 

 

SCHEDULE A – Purchasers and Purchased Units

 

 

EXHIBIT A — Form of Opinion of Andrews Kurth LLP

 

 

EXHIBIT B — Form of Opinion of Morris, Nichols, Arsht & Tunnell LLP

 

 

EXHIBIT C — Form of Amended Partnership Agreement

 

 

EXHIBIT D — Form of Board Representation and Standstill Agreement

 

 

EXHIBIT E — Form of Registration Rights Agreement

 

 

EXHIBIT F — Form of GP LLC Agreement Amendment

 

 

 

 

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CLASS B PREFERRED UNIT PURCHASE AGREEMENT

This CLASS B PREFERRED UNIT PURCHASE AGREEMENT, dated as of September 25, 2015
(this “Agreement”), is entered into by and among SANCHEZ PRODUCTION PARTNERS LP,
a Delaware limited partnership (“Sanchez”), and the purchasers set forth in
Schedule A hereto (the “Purchasers”).

WHEREAS, Sanchez desires to issue and sell to the Purchasers, and the Purchasers
desire to purchase from Sanchez, certain of Sanchez’s Class B Preferred Units
(as defined below), in accordance with the provisions of this Agreement; and

WHEREAS, Sanchez has agreed to provide the Purchasers with certain registration
and board representation rights with respect to the Class B Preferred Units and
Common Units underlying the Class B Preferred Units acquired pursuant hereto.

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

Article I
DEFINITIONS

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

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by or is
under common control with, the Person in question.  As used herein, the term
“control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise.  For the avoidance of
doubt, for purposes of this Agreement, the Partnership Entities, on the one
hand, and any Purchaser, on the other, shall not be considered Affiliates.

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

“Amended Partnership Agreement” means the Second Amended and Restated Agreement
of Limited Partnership of Sanchez, in substantially the form attached to this
Agreement as Exhibit C.

“Basic Documents” means, collectively, this Agreement, the Registration Rights
Agreement, the Amended Partnership Agreement, the Board Representation and
Standstill Agreement and the GP LLC Agreement Amendment, and any and all other
agreements or instruments executed and delivered to the Purchasers by the
Partnership Entities hereunder or thereunder.

“Board Representation and Standstill Agreement” means the Board Representation
and Standstill Agreement among Sanchez, the General Partner and the Purchasers,
in substantially the form attached to this Agreement as Exhibit D.

 

 

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

“Claims” means any and all actions, suits, proceedings (including any
investigations, litigation or inquiries), demands, and causes of action.

“Class A Preferred Holder” means a holder of a Class A Preferred Unit.

“Class A Preferred Units” means Sanchez’s Class A Preferred Units.

“Class B Preferred Units” means Sanchez’s Class B Preferred Units.

“Closing” has the meaning specified in Section 2.02.

“Closing Date” has the meaning specified in Section 2.02.

“Code” has the meaning specified in Section 3.10.

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

“Common Units” means common units representing limited partner interests in
Sanchez.

“Confidentiality Period” means the period from the date of this Agreement
through the first anniversary of the Designation Right Termination Event (as
defined in the Board Representation and Standstill Agreement).

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

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

“Credit Agreement” means the Third Amended and Restated Credit Agreement, dated
as of March 31, 2015 among the Partnership, as Borrower, Royal Bank of Canada,
as Administrative Agent, and the lenders from time to time party thereto, as may
be amended, refinanced or replaced from time to time.

“Damages” means costs, losses, liabilities, damages, or expenses of any kind or
nature whatsoever (including the reasonable fees and disbursements of counsel
and all other reasonable expenses incurred in connection with investigating,
defending, settling or preparing to defend or settle any such matter that may be
incurred by them or asserted against or involve any of them), whether or not
involving a third party claim.

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

“Environmental Law” means any Law applicable to the Partnership Entities or the
operation of their business in any way relating to the protection of human
health and safety (to

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the extent such health and safety relate to exposure to Hazardous Substances),
the environment, natural resources, endangered and protected species, and
including the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. § 9601 et seq.), the Hazardous Materials Transportation Act (49
U.S.C. App. § 5101 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. § 6901 et seq.), the Clean Water Act (33 U.S.C. § 1251 et seq.), the
Clean Air Act (42 U.S.C. § 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. § 2601 et seq.), the Oil Pollution Act of 1990 (33 U.S.C. § 2701 et
seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136
et seq.), the Endangered Species Act (16 U.S.C. § 1531 et seq.), the Migratory
Bird Treaty Act (16 U.S.C. § 703 et seq.), the Occupational Safety and Health
Act (29 U.S.C. § 651 et seq.), and state and local counterparts.

“Environmental Liability” means any liability arising in connection with (a) the
use, generation, storage, transportation, processing, handling, disposal or
release of any Hazardous Substances, (b) the violation of or liability under any
Environmental Law or Environmental Permit or (c) any suit, action,  proceeding
or claim alleging injury or liability relating to Hazardous Substances or
alleging a violation of or liability under Environmental Law.

“Environmental Permits” means all approvals, authorizations, consents, licenses,
permits, variances, waivers, exemptions, registrations or other certifications
of or by a Governmental Authority required under any Environmental Laws for the
ownership of the assets and the operation of the business of the Partnership
Entities.

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

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

“General Partner” means Sanchez Production Partners GP LLC, a Delaware limited
liability company and the general partner of Sanchez.

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

“GP LLC Agreement” means the Limited Liability Company Agreement of the General
Partner, dated as of March 2, 2015, as amended through the date hereof.

“GP LLC Agreement Amendment” has the meaning specified in Section 2.03(a)(x).

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“Hazardous Substances” means (a) any “hazardous substance” as defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, (b) any “hazardous waste” as defined in the Resource Conservation and
Recovery Act, as amended, (c) any petroleum, petroleum products, natural
gas,  oil and gas waste, and oil and any components or derivatives thereof, (d)
any polychlorinated biphenyl, asbestos or radioactive material and (e) any
pollutant, contaminant or hazardous or toxic, material, waste or substance, or
any mixture, solution or gas, in each case regulated under  or for which
liability or standards of care are imposed by any Environmental Law.

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

“Indemnified Party” has the meaning specified in Section 5.03.

“Indemnifying Party” has the meaning specified in Section 5.03.

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

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

“Material Adverse Effect”  means any change, event or effect that, individually
or together with any other changes, events or effects, has a material adverse
effect on (i) the condition (financial or otherwise), business, assets or
results of operations of the Partnership Entities, taken as a whole, (ii)  the
limited partners of Sanchez resulting from any event which subjects them to any
liability or disability, or (iii) the ability of the Partnership Entities to
perform their obligations under the Basic Documents; provided,  however, that a
Material Adverse Effect shall not include any material and adverse effect on the
foregoing to the extent such material and adverse effect results from, arises
out of, or relates to (x) a general deterioration in the economy or changes in
the general state of the industry in which Sanchez operates, except to the
extent that Sanchez, taken as a whole, is adversely affected in a
disproportionate manner as compared to other industry participants, (y) the
outbreak or escalation of hostilities involving the United States, the
declaration by the United States of a national emergency or war or the
occurrence of any other calamity or crisis, including acts of terrorism, or (z)
any change in accounting requirements or principles imposed upon any Partnership
Entity or their respective businesses or any change in applicable Law, or the
interpretation thereof, (1) except to the extent that Sanchez, taken as a whole,
is adversely affected in a disproportionate manner as compared to other industry
participants and (2) excluding any change that would result in Sanchez being
treated as a corporation for federal Tax purposes.

“Midstream Purchase Agreement” means the Purchase and Sale Agreement among
Sanchez Energy Corporation, SN Catarina, LLC and Sanchez, dated as of the date
hereof.

“NYSE MKT” means the NYSE MKT LLC.

“Operative Agreements” has the meaning specified in Section 3.01(c).

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“Partnership Agreement” means the First Amended and Restated Agreement of
Limited Partnership of Sanchez, dated as of August 31, 2015.

“Partnership Entities” means the General Partner, Sanchez and its Subsidiaries.

“Permits” means any approvals, authorizations, consents, licenses, permits,
variances, waivers, grants, franchises, concessions, exemptions, orders,
registrations or certificates of a Governmental Authority.

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

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, and tangible or intangible (including intellectual property
rights).

“Purchase Price” means an amount equal to $18.00 per Class B Preferred Unit,
multiplied by the number of Purchased Units to be purchased by the Purchasers on
the Closing Date.

“Purchased Units” has the meaning specified in Section 2.01.

“Purchaser Related Parties” has the meaning specified in Section 5.01.

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

“Registration Rights Agreement” means the Registration Rights Agreement between
Sanchez and the Purchasers, in substantially the form attached to this Agreement
as Exhibit E.

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

“Rights-of-Way” has the meaning specified in Section 3.19.

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

“Sanchez Financial Statements” has the meaning specified in Section 3.03.

“Sanchez Related Parties” has the meaning specified in Section 5.02.

“Sanchez SEC Documents” has the meaning specified in Section 3.03.

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

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“Short Sales” means, without limitation, all “short sales” as defined in Rule
200 promulgated under Regulation SHO under the Exchange Act, whether or not
against the box, and forward sale contracts, options, puts, calls, short sales,
“put equivalent positions” (as defined in Rule 16a-1(h) under the Exchange Act)
and similar arrangements, and sales and other transactions through non-U.S.
broker dealers or foreign regulated brokers.

“Subsidiary” means, as to any Person, any corporation or other entity of
which:  (i) such Person or a Subsidiary of such Person is a general partner or
manager; (ii) at least a majority of the outstanding equity interests having by
the terms thereof ordinary voting power to elect a majority of the board of
directors or similar governing body of such corporation or other entity
(irrespective of whether at the time any equity interest of any other class or
classes of such corporation or other entity shall or might have voting power by
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more of its
Subsidiaries; or (iii) any corporation or other entity, the equity interests or
securities of which are owned directly or indirectly by such Person, that is
consolidated with such Person for accounting purposes.

“Tax Return” has the meaning specified in Section 3.16(b).

“Taxes” has the meaning specified in Section 3.16(b).

“Third Party Claim” has the meaning specified in Section 5.03(b).

“Transaction Fee” means an amount equal to 2.25% of the aggregate Purchase Price
for all Purchased Units.

“Transfer Agent” has the meaning set forth in the Partnership Agreement.

Section 1.02Accounting Procedures and Interpretation.  Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all Sanchez Financial Statements and certificates and reports as to financial
matters required to be furnished to the Purchasers hereunder shall be prepared,
in accordance with GAAP applied on a consistent basis during the periods
involved (except, with respect to consistency, as may be indicated in the notes
thereto or, in the case of unaudited statements, as permitted by Form 10-Q
promulgated by the Commission) and in compliance as to form in all material
respects with applicable accounting requirements and other promulgated rules and
regulations of the Commission with respect thereto.

Article II
AGREEMENT TO SELL AND PURCHASE

Section 2.01Purchase.  On the Closing Date, subject to the terms and conditions
hereof, each Purchaser hereby agrees to purchase from Sanchez, and Sanchez
hereby agrees to issue and sell to each Purchaser, the number of Class B
Preferred Units set forth opposite each Purchaser’s name on Schedule A for the
Purchase Price per Class B Preferred Unit (collectively, the “Purchased Units”).

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Section 2.02Closing; Closing Conditions. 

(a)Closing.  Subject to the terms and conditions hereof, the consummation of the
purchase and sale of the Purchased Units hereunder (the “Closing”) shall take
place at the offices of Andrews Kurth LLP, 600 Travis, Suite 4200, Houston,
Texas 77002, at a time and on a date to be specified by the parties hereto (the
“Closing Date”), which shall be no earlier than ten Business Days following the
date of this Agreement and no later than the later of (i) fifteen Business Days
following the date of this Agreement and (ii) the second Business Day after the
satisfaction or waiver of the latest to occur of the conditions set forth in
Section 2.02(b) (other than those conditions that by their nature cannot be
satisfied until the Closing Date or are to be delivered at the Closing, which
conditions shall be required to be so satisfied, waived or delivered on the
Closing Date).

(b)Conditions of Sanchez’s Obligations at the Closing.  The obligation of
Sanchez to consummate the transactions contemplated by this Agreement is subject
to the satisfaction or waiver (by Sanchez) on or prior to the Closing of the
following conditions:

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

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

(iii)All of the representations and warranties of Purchasers contained in this
Agreement shall be true and correct in all material respects on and as of the
date hereof and as of the Closing Date (other than representations and
warranties made as of a specified date, which shall be true and correct in all
material respects on and as of such date only) as if such representations and
warranties were made on and as of that date, except that those representations
and warranties that are qualified by materiality, Material Adverse Effect or
similar phrase shall be true and correct in all respects as written on and as of
the date hereof and as of the Closing Date (other than representations and
warranties made as of a specified date, which shall be true and correct in all
respects on and as of such date only) as if such representations and warranties
were made on and as of that date;

(iv)Each of the Purchasers shall have performed in all material respects all of
the covenants required to be performed by it hereunder on or prior to the
Closing Date;

(v)Purchasers shall have delivered to Sanchez all documents, certificates and
instruments required to be delivered pursuant to Section 2.03(b); and

(vi)The conditions to closing in the Midstream Purchase Agreement shall have
been satisfied or waived in accordance with their terms (except for those
conditions which, by their nature, will be satisfied concurrently with the
closing), and the parties to such agreement

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shall have indicated they are ready, willing and able to consummate the
transactions contemplated thereby.

(c)Conditions of Purchasers’ Obligations at the Closing.  The obligation of the
Purchasers to consummate the transactions contemplated by this Agreement is
subject to the satisfaction or waiver (by the Purchasers) on or prior to the
Closing of the following conditions:

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

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

(iii)All of the representations and warranties of Sanchez contained in this
Agreement shall be true and correct in all material respects on and as of the
date hereof and as of the Closing Date (other than representations and
warranties made as of a specified date, which shall be true and correct in all
material respects on and as of such date only) as if such representations and
warranties were made on and as of that date, except that those representations
and warranties that are qualified by materiality, Material Adverse Effect or
similar phrase shall be true and correct in all respects as written on and as of
the date hereof and as of the Closing Date (other than representations and
warranties made as of a specified date, which shall be true and correct in all
respects on and as of such date only) as if such representations and warranties
were made on and as of that date;

(iv)Sanchez shall have performed in all material respects all of the covenants
required to be performed by it hereunder on or prior to the Closing Date;

(v)Sanchez shall have delivered to the Purchasers all documents, certificates
and instruments required to be delivered pursuant to Section 2.03(a);  

(vi)The conditions to closing in the Midstream Purchase Agreement shall have
been satisfied or waived in accordance with their terms (except for those
conditions which, by their nature, will be satisfied concurrently with the
closing), and the parties to such agreement shall have indicated they are ready,
willing and able to consummate the transactions contemplated thereby; and

(vii)From the date hereof until the Closing Date, no Material Adverse Effect
shall have occurred and be continuing.

Section 2.03Deliveries at the Closing.

(a)Deliveries of Sanchez at the Closing.  At the Closing, Sanchez shall deliver
or cause to be delivered (unless waived by the Purchasers) to the Purchasers:

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(i)An opinion from Andrews Kurth LLP, counsel for the Partnership Entities, in
substantially the form attached hereto as Exhibit A, which shall be addressed to
the Purchasers and dated the date of the Closing;

(ii)An opinion from Morris, Nichols, Arsht & Tunnell LLP, counsel for the
Partnership Entities, in substantially the form attached hereto as Exhibit B,
which shall be addressed to the Purchasers and dated the date of the Closing;

(iii)A copy of a tax opinion of Andrews Kurth LLP, counsel for the Partnership
Entities, in a form reasonably acceptable to the Purchasers, which shall be
addressed to the Partnership and dated the date of Closing;

(iv)A “Supplemental Listing Application” approving the Conversion Units for
listing by the NYSE MKT;

(v)Evidence of issuance of the Purchased Units credited to book-entry accounts
maintained by the Transfer Agent, bearing a restrictive notation as required by
the Partnership Agreement, free and clear of any Liens other than transfer
restrictions under the Partnership Agreement or the Delaware LP Act and
applicable federal and state securities laws;

(vi)A certificate of the Secretary or Assistant Secretary of the General
Partner, on behalf of Sanchez, certifying as to and attaching (1) the
Partnership Agreement, (2) board resolutions authorizing the execution and
delivery of the Basic Documents and the consummation of the transactions
contemplated thereby, including the issuance of the Purchased Units, and (3) the
incumbency of the officers authorized to execute the Basic Documents on behalf
of Sanchez, setting forth the name and title and bearing the signatures of such
officers;

(vii)A cross-receipt executed by Sanchez and delivered to the Purchasers
certifying that it has received from the Purchasers an amount in cash equal to
the Purchase Price and that Sanchez has paid to the Purchasers the Transaction
Fee (which payment will be made by netting the Transaction Fee due to each
Purchaser from such Purchaser’s Purchase Price for the Purchased Units purchased
by such Purchaser as of the Closing Date);

(viii)The Registration Rights Agreement, which shall have been duly executed by
Sanchez;

(ix)The Board Representation and Standstill Agreement, which shall have been
duly executed by Sanchez and the General Partner;

(x)An amendment to the limited liability company agreement of the General
Partner, in substantially the form attached to this Agreement as Exhibit F,
which shall have been duly executed by SP Holdings, LLC (the “GP LLC Agreement
Amendment”);

(xi)Evidence that the hedges with Société Générale have been novated to one or
more lenders under the Credit Agreement;

(xii)A copy of the conversion notice delivered by Sanchez to the holders of
Class A Preferred Units pursuant to Section 5.9(b)(iii) of the Partnership
Agreement; and

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(xiii)Any other document or deliverable reasonably required by the Purchasers in
connection with the consummation of the transactions contemplated hereunder.

(b)Deliveries of Each Purchaser at the Closing.  At the Closing, each Purchaser
shall deliver or cause to be delivered (unless waived by Sanchez) to Sanchez:

(i)The Registration Rights Agreement, which shall have been duly executed by
such Purchaser;

(ii)The Board Representation and Standstill Agreement, which shall have been
duly executed by such Purchaser;

(iii)Payment of such Purchaser’s Purchase Price (which payment will be net of
the Transaction Fee due to such Purchaser from such Purchaser’s Purchase Price
for the Purchased Units purchased by such Purchaser as of the Closing Date)
payable by wire transfer of immediately available funds to an account designated
no later than two (2) Business Days in advance of the Closing Date by Sanchez by
notice to the Purchasers; and

(iv)Any other document or deliverable reasonably required by Sanchez in
connection with the consummation of the transactions contemplated hereunder.

Section 2.04Independent Nature of Purchasers’ Obligations and Rights.  The
obligations of each Purchaser under any Basic Document are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Basic Document.  The failure or waiver by Sanchez of
performance under any Basic Document of any Purchaser does not excuse
performance by any other Purchaser and the waiver of performance of Sanchez by
any Purchaser does not excuse performance by Sanchez with respect to each other
Purchaser.  Nothing contained herein or in any other Basic Document, and no
action taken by any Purchaser pursuant thereto, shall be deemed to constitute
the Purchasers as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Basic Documents.  Each Purchaser shall be
entitled to independently protect and enforce its rights, including the rights
arising out of this Agreement or the other Basic Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.

Section 2.05Further Assurances.  From time to time after the date hereof,
without further consideration, Sanchez and each Purchaser shall use their
commercially reasonable efforts to take, or cause to be taken, all actions
necessary or appropriate to consummate the transactions contemplated by this
Agreement.

Section 2.06NYSE MKT Listing.  Sanchez shall use commercially reasonable efforts
to cause the Conversion Units to be listed on the NYSE MKT as soon as reasonably
practicable after the Closing Date.

Section 2.07Pre-Closing Covenants of the Partnership Entities.  From and after
the date of this Agreement and until the Closing Date, each of the Partnership
Entities will use

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commercially reasonable efforts to conduct its business in the ordinary course
of business, preserve intact its existence and business organization and
goodwill and present business relationships with all material customers,
suppliers, licensors, distributors and others having significant business
relationships with the Partnership Entities, to the extent such relationships
are beneficial to the Partnership Entities and their business. From and after
the date of this Agreement and until the Closing Date, except as otherwise
consented to by the Purchasers, each of the Partnership Entities (a) will not
transfer, sell, swap, encumber or otherwise dispose of any Assets, except for
sales of Hydrocarbon production in the ordinary course of business consistent
with recent practices, (b) will not voluntarily terminate, materially amend,
execute or extend any agreement or arrangement with any Affiliate of any
Partnership Entity and will not amend or modify the Midstream Purchase Agreement
or any exhibits thereto (c) will pay, when due, expenses, taxes, revenues and
other obligations with respect to the business of the Partnership Entities and
will not waive any rights of substantial value with respect to any of the assets
of the Partnership Entities, and (d) will not enter into an agreement with
respect to any of the foregoing.

Article III
REPRESENTATIONS AND WARRANTIES AND
COVENANTS RELATED TO SANCHEZ

As of the Closing Date, Sanchez represents and warrants to and covenants with
the Purchasers as follows:

Section 3.01Existence.

(a)Each of the Partnership Entities has been duly incorporated or formed, as the
case may be, and is validly existing as a limited liability company, limited
partnership or corporation, as the case may be, in good standing under the Laws
of its jurisdiction of incorporation or formation, as the case may be, and has
the full limited liability company, limited partnership or corporate, as the
case may be, power and authority to own or lease its Properties and assets and
to conduct the businesses in which it is engaged, and is duly registered or
qualified as a foreign limited liability company, limited partnership or
corporation, as the case may be, for the transaction of business under the laws
of each jurisdiction in which the character of the business conducted by it or
the nature or location of the properties owned or leased by it makes such
registration or qualification necessary, except where the failure to so register
or qualify would not reasonably be expected to have a Material Adverse Effect.

(b)None of the Partnership Entities is in default in the performance, observance
or fulfillment of any provision of, in the case of Sanchez, the Partnership
Agreement or its certificate of limited partnership, in the case of the General
Partner, any provision of its certification of formation, limited liability
company agreement or other similar organizational documents, or, in the case of
any Subsidiary of Sanchez, its certificate of incorporation, certification of
formation, certificate of limited partnership, bylaws, limited liability company
agreement, partnership agreement or other similar organizational documents. 

(c)The Partnership Agreement has been duly authorized, executed and delivered by
the General Partner and is a valid and legally binding agreement of the General
Partner, enforceable against the General Partner in accordance with its terms;
the GP LLC Agreement

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(together with the Partnership Agreement, the “Operative Agreements”) has been
duly authorized, executed and delivered by the parties thereto and is a valid
and legally binding agreement of the parties thereto, enforceable against the
parties thereto in accordance with its terms; provided that, with respect to
each Operative Agreement, the enforceability thereof may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors’ rights generally and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law); and provided further, that the indemnity,
contribution and exoneration provisions contained in any of such Operative
Agreements may be limited by applicable laws and public policy.

Section 3.02Capitalization and Valid Issuance of Purchased Units.

(a)As of September 15, 2015, the issued and outstanding limited partner
interests of Sanchez consist of 3,149,693 Common Units, 11,130,855 Class A
Preferred Units and the incentive distribution rights (as defined in the
Partnership Agreement, the “Incentive Distribution Rights”).  All outstanding
Common Units, Incentive Distribution Rights, Class A Preferred Units and the
limited partner interests represented thereby have been duly authorized and
validly issued in accordance with the Partnership Agreement and are fully paid
(to the extent required under the Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described in
Sections 17-303, 17-607 and 17-804 of the Delaware LP Act).

(b)The General Partner is the sole general partner of Sanchez with a
non-economic general partner interest in Sanchez; such general partner interest
has been duly authorized and validly issued in accordance with the Partnership
Agreement, and the General Partner owns such interest free and clear of all
Liens (except for (A) restrictions on transferability contained in the
Partnership Agreement or as disclosed in the Sanchez SEC Documents (B) Liens
created, arising under or securing the Credit Agreement and (C) Liens arising
under the Partnership Agreement or the Delaware LP Act).

(c)The Purchased Units being purchased by the Purchasers hereunder and the
limited partner interests represented thereby are duly authorized by Sanchez
pursuant to the Partnership Agreement and, when issued and delivered to the
Purchasers against payment therefor in accordance with the terms of this
Agreement, will be validly issued, fully paid (to the extent required by the
Partnership Agreement) and nonassessable (except as such nonassessability may be
affected by matters described in Sections 17-303, 17-607 and 17-804 of the
Delaware LP Act) and will be free of any and all Liens and restrictions on
transfer, other than (i) restrictions on transfer under the Partnership
Agreement or this Agreement and under applicable state and federal securities
laws, (ii) such Liens as are created by the Purchasers and (iii) such Liens as
arise under the Delaware LP Act. Except as disclosed in the Sanchez SEC
Documents, there are no persons entitled to statutory, preemptive or other
similar contractual rights to subscribe for the Purchased Units; and, except for
the Purchased Units to be issued pursuant to this Agreement or as disclosed in
the Sanchez SEC Documents, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any obligations
into or exchange any securities for, partnership securities or ownership
interests in Sanchez are outstanding.

(d)Upon issuance in accordance with this Agreement and the terms of the Class B
Preferred Units, the Conversion Units will be duly authorized, validly issued,
fully paid (to the

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extent required by the Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in Sections 17-303, 17-607
and 17-804 of the Delaware LP Act) and will be free of any and all Liens and
restrictions on transfer, other than (i) restrictions on transfer under
the  Basic Documents and under applicable state and federal securities laws,
(ii) such Liens as are created by the Purchasers at or after the Closing and
(iii) such Liens as arise under the Delaware LP Act.

Section 3.03Sanchez SEC Documents; Sanchez Financial Statements.  Except as
disclosed in the Sanchez SEC Documents, since January 1, 2014, Sanchez’s forms,
registration statements, reports, schedules and statements required to be filed
by it under the Exchange Act or the Securities Act (all such documents filed
prior to the date hereof, collectively the  “Sanchez SEC Documents”) have been
filed with the Commission on a timely basis.  The Sanchez SEC Documents,
including any audited or unaudited financial statements and any notes thereto or
schedules included therein (the “Sanchez Financial Statements”), at the time
filed (or in the case of registration statements, solely on the dates of
effectiveness) (except to the extent corrected by a subsequent Sanchez SEC
Document) (a) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made in the case of any prospectus, not misleading, (b) complied as to form in
all material respects with the applicable requirements of the Exchange Act and
the Securities Act, as the case may be, (c) complied as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the Commission with respect thereto, (d) in the case of the
Sanchez Financial Statements, were prepared in accordance with GAAP applied on a
consistent basis during the periods involved (except, with respect to
consistency, as may be indicated in the notes thereto or, in the case of
unaudited statements, as permitted by Form 10‑Q of the Commission), and (e) in
the case of the Sanchez Financial Statements, fairly present (subject in the
case of unaudited statements to normal and recurring and year-end audit
adjustments) in all material respects the consolidated financial position of
Sanchez and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of its operations and cash flows of Sanchez and its
Subsidiaries for the periods then ended.  The auditor of Sanchez as of the date
of the most recent balance sheet of Sanchez is an independent registered public
accounting firm with respect to Sanchez and has not resigned or been dismissed
as independent registered public accountants of Sanchez as a result of or in
connection with any disagreement with Sanchez on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedures.  Since the date of the most recent balance sheet of Sanchez reviewed
or audited by such auditor, and the audit committee of the board of directors of
the General Partner until the Closing Date, (i) the interactive data in
eXtensible Business Reporting Language included or incorporated by reference in
the Sanchez SEC Documents fairly presents the information called for in all
material respects and has been prepared in accordance with the Commission’s
rules and guidelines applicable thereto and (ii) there are no material
weaknesses or significant deficiencies in Sanchez’s internal controls.

Section 3.04No Material Adverse Change.  Except as expressly set forth in or
contemplated by the Sanchez SEC Documents, since December 31, 2014 through the
Closing Date: (a) there has not occurred any adverse change, or any development
involving or which may reasonably be expected to involve, individually or in the
aggregate, an adverse change, in the condition, financial or otherwise, general
affairs, business, operations, prospects, properties,

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management, partners’ capital, stockholders’ equity, net worth or results of
operations of the Partnership Entities, taken as a whole, in each case except as
would not, in the aggregate, reasonably be expected to have a Material Adverse
Effect; and (b) there is not any default or event which, with notice or lapse of
time or both, would constitute a default under the any agreement of Sanchez
governing material indebtedness for borrowed money, except such events of
default and other events as to which requisite waivers or consents have been
obtained or which are no longer continuing.

 

Section 3.05No Registration Required.  Assuming the accuracy of the
representations and warranties of each Purchaser contained in Article IV, the
issuance and sale of the Purchased Units pursuant to this Agreement is exempt
from registration requirements of the Securities Act, and neither Sanchez nor,
to the knowledge of the Partnership Entities, any authorized Representative
acting on its behalf has taken or will take any action hereafter that would
cause the loss of such exemption.

Section 3.06Litigation. Except as set forth in the Sanchez SEC Documents, there
are no legal or governmental proceedings pending to which any Partnership Entity
is a party or to which any Property or asset of any Partnership Entity is
subject that would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or which challenges the validity of any of
the Basic Documents or the right of any Partnership Entity to enter into any of
the Basic Documents or to consummate the transactions contemplated hereby and
thereby and, to the knowledge of the Partnership Entities, no such proceedings
are threatened by Governmental Authorities or others.

Section 3.07No Conflicts.  None of (i) the offering, issuance and sale by
Sanchez of the Purchased Units and the application of the proceeds therefrom,
(ii) the execution, delivery and performance of the Basic Documents, or (iii)
the consummation of the transactions contemplated thereby (1) constitutes or
will constitute a violation of the Partnership Agreement, the GP LLC Agreement
or the other organizational documents of any of Sanchez, the General Partner or
the Subsidiaries, (2)  constitutes or will constitute a breach or violation of,
or a default (or an event which, with notice or lapse of time or both, would
constitute such a default) under, any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which any of Sanchez, the
General Partner or the Subsidiaries is a party or by which any of them or any of
their respective properties may be bound, (3) violates or will violate any
statute, Law, Permit or regulation or any order, judgment, decree or injunction
of any court or Governmental Authority or body having jurisdiction over of
Sanchez, the General Partner or the Subsidiaries or any of their properties in a
proceeding to which any of them or their property is or was a party, or
(4) results or will result in the creation or imposition of any Lien upon any
property or assets of any of Sanchez, the General Partner or the Subsidiaries,
which conflicts, breaches, violations, defaults or liens, in the case of clauses
(2), (3) or (4), would, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

Section 3.08Authority; Enforceability.  Sanchez has all requisite power and
authority to issue, sell and deliver the Purchased Units, in accordance with and
upon the terms and conditions set forth in this Agreement and the Partnership
Agreement. All partnership or limited liability company action, as the case may
be, required to be taken by the General Partner and Sanchez for the
authorization, issuance, sale and delivery of the Purchased Units, the execution

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and delivery of the Basic Documents and the consummation of the transactions
contemplated thereby shall have been validly taken. No approval from the holders
of outstanding Common Units, the Class A Preferred Units or any other security
or interest issued under the Partnership Agreement is required under the
Partnership Agreement or the rules of the NYSE MKT in connection with Sanchez’s
issuance and sale of the Purchased Units to the Purchasers.  Each of the Basic
Documents has been duly and validly authorized and has been or, with respect to
the Basic Documents to be delivered at the Closing, will be, validly executed
and delivered by Sanchez and constitutes, or will constitute, the legal, valid
and binding obligations of Sanchez, enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors’ rights and by general principles of equity.

Section 3.09Approvals.  Except as required by the Commission in connection with
Sanchez’s obligations under the Registration Rights Agreement or has already
been obtained, no authorization, consent, approval, waiver, license,
qualification or written exemption from, nor any filing, declaration,
qualification or registration with, any Governmental Authority or any other
Person is required in connection with the execution, delivery or performance by
Sanchez of any of the Basic Documents or Sanchez’s issuance and sale of the
Purchased Units, except (i) for the filing of a Form D with the Commission and
as may otherwise be required under the state securities or “Blue Sky” Laws, or
(ii) for the filing of a supplemental listing application with the NYSE MKT
seeking approval of the Conversion Units for listing by the NYSE MKT.

Section 3.10MLP Status.  Sanchez has, for each taxable year beginning after
December 31, 2007, during which Sanchez was in existence, met the gross income
requirements of Section 7704(c)(2) of the Internal Revenue Code of 1986, as
amended (the “Code”).  Sanchez expects to meet the gross income requirements of
Section 7704(c)(2) of the Code for its taxable year ending December 31, 2015.

Section 3.11Investment Company Status.  None of the Partnership Entities is now,
and immediately after the sale of the Purchased Units hereunder and the
application of the net proceeds from such sale none of the Partnership Entities
will be, an “investment company” or a company controlled by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.

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

Section 3.13Insurance.  The Partnership Entities maintain or are entitled to the
benefits of insurance from reputable insurers covering their properties,
operations, personnel and businesses against such losses and risks as are
reasonably adequate to protect them and their businesses in a commercially
reasonable manner. None of the Partnership Entities (i) has received notice from
any insurer or agent of such insurer that substantial capital improvements or

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other expenditures will have to be made in order to continue such insurance or
(ii) has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its business at a
cost that would not have a Material Adverse Effect, except as described in the
Sanchez SEC Documents.

Section 3.14Books and Records; Sarbanes-Oxley Compliance.

(a)The Partnership Entities maintain systems of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of the Partnership
Entities’ financial statements in conformity with GAAP and to maintain
accountability for their assets, (iii) access to the Partnership Entities’
assets is permitted only in accordance with management’s general or specific
authorization and (iv) the recorded accountability for the Partnership Entities’
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. Sanchez is not aware of any
failures of such internal accounting controls that are material or that would be
required to be disclosed pursuant to any applicable Law.

(b)Sanchez has established and maintains disclosure controls and procedures (to
the extent required by and as defined in Rules 13a- 15(e) and 15d-15(e) under
the Exchange Act), which are designed to provide reasonable assurance that
information required to be disclosed by Sanchez in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and
communicated to Sanchez’s management, including its principal executive officer
and principal financial officer, as appropriate, to allow for timely decisions
regarding required disclosure. Sanchez has carried out evaluations of the
effectiveness of its disclosure controls and procedures and such disclosure
controls and procedures are effective in all material respects to perform the
functions for which they were established.

(c)There is and has been no failure on the part of Sanchez and, to Sanchez’s
knowledge, the General Partner’s directors or officers, in their capacities as
such, to comply in all material respects with all applicable provisions of the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith.

Section 3.15Listing and Maintenance Requirements. The Partnership has submitted
a listing application to the NYSE MKT for the listing of the Conversion Units
thereon, and Sanchez has not received any notice of delisting of the Common
Units. The issuance and sale of the Purchased Units and the offer of the Common
Units and issuance of such Common Units upon conversion of the Purchased Units
does not contravene NYSE MKT rules and regulations.

Section 3.16Taxes.  

(a)Except as would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect, (i) each of the Partnership Entities has
prepared and timely filed (taking into account any extension of time within
which to file) all Tax Returns required to be filed by it and all such filed Tax
Returns are complete and accurate, (ii) each of the Partnership Entities has
timely paid all Taxes that are required to be paid by it, (iii) there are no
audits,

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examinations, investigations, actions, suits, claims or other proceedings in
respect of Taxes pending or threatened in writing nor has any deficiency for any
Tax been assessed by any Governmental Authority in writing against any
Partnership Entity, (iv) there is not currently in effect any extension or
waiver of any statute of limitations of any jurisdiction regarding the
assessment or collection of any such Tax, (v) there are no liens on any of the
assets of the Partnership Entities that arose in connection with any failure (or
alleged failure) to pay any Tax except for liens for Taxes not yet due or that
may be paid without penalty or interest and (vi) all Taxes required to be
withheld by any Partnership Entity have been withheld and paid over to the
appropriate Tax authority (except, in the case of this clause (vi) or clause (i)
or (ii) above, with respect to matters contested in good faith and for which
adequate reserves have been established on the Partnership Entities’ financial
statements in accordance with GAAP).  None of the Partnership Entities has
entered into any transaction that, as of the date of this Agreement has been
identified by the Internal Revenue Service in published guidance as a “listed
transaction” as defined under Section 1.6011-4(b)(2) of the Treasury Regulations
promulgated under the Code.  Sanchez is currently, and has been since formation,
properly treated as either a partnership or disregarded as an entity separate
from its owner for U.S. federal income tax purposes.

(b)As used in this Agreement, (i) “Taxes” means any and all domestic or foreign,
federal, state, local or other taxes of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any Governmental Authority, including taxes on or
with respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, severance, production, payroll, employment,
unemployment, social security, workers’ compensation or net worth, and taxes in
the nature of excise, withholding, ad valorem or value added, unclaimed property
or escheat obligations and including any liability in respect of any items
described above as a transferee or successor, pursuant to Section 1.1502-6 of
the Treasury Regulations (or any similar provision of state, local or foreign
Law), or as an indemnitor, guarantor, surety or in a similar capacity under any
Contract and (ii) “Tax Return” means any return, report or similar filing
(including the attached schedules) filed or required to be filed with respect to
Taxes (and any amendments thereto), including any information return, claim for
refund or declaration of estimated Taxes.

Section 3.17Compliance with Laws; Permits; and Environmental Matters.

(a)None of the Partnership Entities is in violation of any Law applicable to
such Partnership Entities, except as would not, individually or in the
aggregate, have a Material Adverse Effect.  The Partnership Entities possess all
Permits issued by the appropriate regulatory authorities necessary to conduct
their respective businesses, except where the failure to possess such Permits
would not, individually or in the aggregate, have a Material Adverse Effect, and
none of the Partnership Entities has received any notice of proceedings relating
to the revocation or modification of any such Permit, except where such
potential revocation or modification would not, individually or in the
aggregate, have a Material Adverse Effect.

(b)Each of the Partnership Entities has such Permits as are necessary to own its
properties and to conduct its business in the manner described in the Sanchez
SEC Documents, subject to such qualifications as may be set forth in the Sanchez
SEC Documents and except for such Permits which, if not obtained, would not,
individually or in the aggregate, have a Material Adverse Effect; each of the
Partnership Entities has fulfilled and performed all of its material

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obligations with respect to such Permits which are due to have been fulfilled
and performed and no event has occurred which allows, or after notice or lapse
of time would allow, revocation or termination thereof or results in any
impairment of the rights of the holder of any such Permit, except for such
revocations, terminations and impairments that would not, individually or in the
aggregate, have a Material Adverse Effect, subject in each case to such
qualifications as may be set forth in the Sanchez SEC Documents; and, except as
described in the Sanchez SEC Documents, none of such Permits contains any
restriction that is materially burdensome to the Partnership Entities, taken as
a whole.

(c)The Partnership Entities have timely applied for or obtained and are
in  compliance with all Environmental Permits required for their operations as
currently conducted and as conducted for the past five years, except as (i)
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or (ii) have been disclosed in Sanchez SEC
Documents.  None of the Partnership Entities has received written notice of any
pending action or proceeding and, to the knowledge of the Partnership Entities,
no action or proceeding is threatened, to suspend, revoke, modify or terminate
any Environmental Permit held by the Partnership Entities.  The operations of
the Partnership Entities are and for the past five years have been in compliance
with all Environmental Laws and, to the knowledge of Partnership Entities, no
occurrences or conditions currently exist that would reasonably be expected to
adversely affect the Partnership Entities’ continued compliance with
Environmental Laws and Environmental Permits, except as (i) would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
or (ii) have been disclosed in the Sanchez SEC Documents.  There are no present
claims under Environmental Law asserted against any of the Partnership Entities,
including claims relating to the release, spill or disposal of any Hazardous
Substances resulting from the operations of the Partnership Entities or relating
to their assets or properties, and there have been no violations of
Environmental Law by any Partnership Entity, or any spill, release or disposal
of any Hazardous Substance in a location, quantity or condition that, in each
case, would give rise to a violation of Environmental Law, except as such claims
or violations (i) would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect or (ii) have been disclosed in Sanchez
SEC Documents. No Partnership Entity has assumed by contract any Environmental
Liability of a third party other than in connection with the acquisition of
Sanchez’s assets or properties.  Notwithstanding any other provision of this
Agreement, the representations and warranties set forth in this Section 3.17(c)
are the only representations and warranties relating to Environmental Laws,
Environmental Liability or Environmental Permits.

Section 3.18Title to Property.  Each of the Partnership Entities has good and
indefeasible title to all real property (save and except for Rights-of-Way) and
good title to all personal property described in the Sanchez SEC Documents as
owned by such Partnership Entity, free and clear of all Liens except such (i) as
are described in the Sanchez SEC Documents, (ii) as are created, arise under or
secure the Credit Agreement or (iii) as would not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.

Section 3.19Rights of Way.  Each of the Partnership Entities has such consents,
easements, rights-of-way or licenses (“Rights-of-Way”) from any person as are
necessary to conduct its business in the manner described in the Sanchez SEC
Documents, subject to such qualifications as may be set forth in the Sanchez SEC
Documents and except for such Rights-of-

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Way the failure of which to have obtained would not have, individually or in the
aggregate, a Material Adverse Effect.

Article IV
REPRESENTATIONS AND WARRANTIES AND
COVENANTS OF THE PURCHASERS

Each of the Purchasers, severally but not jointly, represent and warrant and
covenant to Sanchez as follows:

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

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

Section 4.03No Breach.  The execution, delivery and performance of the Basic
Documents by such Purchaser and the consummation by such Purchaser of the
transactions contemplated thereby will not (a) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any material agreement to which such Purchaser is a party or by
which such Purchaser is bound or to which any of the property or assets of such
Purchaser is subject, (b) conflict with or result in any violation of the
provisions of the organizational documents of such Purchaser, or (c) violate any
statute, order, rule or regulation of any court or governmental agency or body
having jurisdiction over such Purchaser or the property or assets of such
Purchaser, except in the case of clauses (a) and (c), for such conflicts,
breaches, violations or defaults as would not prevent the consummation of the
transactions contemplated by the Basic Documents.

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

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connection with the purchase of the Purchased Units or the consummation of the
transactions contemplated by this Agreement.

Section 4.05Unregistered Securities.

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

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

(c)Residency. Such Purchaser shall cooperate reasonably with Sanchez to provide
any information necessary for any applicable securities filings.

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

(e)Purchase Representation. Such Purchaser is purchasing the Purchased Units for
its own account and not with a view to distribution in violation of any
securities laws. Such Purchaser has been advised and understands that neither
the Purchased Units nor the Conversion Units have been registered under the
Securities Act or under the “blue sky” laws of any jurisdiction and may be
resold only if registered pursuant to the provisions of the Securities Act (or
if eligible, pursuant to the provisions of Rule 144 promulgated under the
Securities Act or pursuant to another available exemption from the registration
requirements of the Securities Act). Such Purchaser has been advised and
understands that Sanchez, in issuing the Purchased

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Units, is relying upon, among other things, the representations and warranties
of such Purchaser contained in this Article IV in concluding that such issuance
is a “private offering” and is exempt from the registration provisions of the
Securities Act.

(f)Rule 144. Such Purchaser understands that there is no public trading market
for the Purchased Units, that none is expected to develop and that the Purchased
Units must be held indefinitely unless and until Purchased Units or Conversion
Units received upon conversion thereof are registered under the Securities Act
or an exemption from registration is available. Each Purchaser has been advised
of and is aware of the provisions of Rule 144 promulgated under the Securities
Act.

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

Section 4.06Short Selling.  No Purchaser has engaged in any Short Sales
involving Common Units owned by it between July 1, 2015 and the date of
execution of this Agreement.

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Article V
INDEMNIFICATION, COSTS AND EXPENSES

Section 5.01Indemnification by Sanchez.  Sanchez agrees to indemnify each
Purchaser and their respective Representatives (collectively, “Purchaser Related
Parties”) from Damages, and hold each of them harmless against Claims, and, in
connection therewith, and promptly upon demand, pay or reimburse each of them
for all Damages, whether or not involving a third party claim, as a result of,
arising out of, or in any way related to (i) the failure of any of the
representations or warranties made by Sanchez contained herein to be true and
correct in all material respects as of the date made (except with respect to any
provisions including the word “material” or words of similar import, with
respect to which such representations and warranties must have been true and
correct in all respects) or (ii) the breach of any covenants of Sanchez
contained herein, provided that, in the case of the immediately preceding clause
(i), such claim for indemnification is made prior to the expiration of such
representation or warranty; provided,  however, that for purposes of determining
when an indemnification claim has been made, the date upon which a Purchaser
Related Party shall have given notice (stating in reasonable detail the basis of
the claim for indemnification) to Sanchez shall constitute the date upon which
such claim has been made; provided,  further, that the liability of Sanchez
shall not be greater in amount than the Purchase Price.  No Purchaser Related
Party shall be entitled to recover special, consequential or punitive Damages
under this Section 5.01;  provided,  however, that such limitation shall not
prevent any Purchaser Related Party from recovering under this Section 5.01 for
any such Damages to the extent that such Damages (y) are in the form of
diminution in value or (z) arise in connection with any Third Party Claims.

Section 5.02Indemnification by the Purchasers.  Each Purchaser agrees, severally
and not jointly, to indemnify Sanchez, the General Partner and their respective
Representatives (collectively, “Sanchez Related Parties”) from, Damages, and
hold each of them harmless against Claims, and, in connection therewith, and
promptly upon demand, pay or reimburse each of them for all Damages, whether or
not involving a third party claim, as a result of, arising out of, or in any way
related to (i) the failure of any of the representations or warranties made by
such Purchaser contained herein to be true and correct in all material respects
as of the date made or (ii) the breach of any of the covenants of such Purchaser
contained herein, provided that, in the case of the immediately preceding clause
(i), such claim for indemnification relating to a breach of any representation
or warranty is made prior to the expiration of such representation or warranty;
provided,  however, that for purposes of determining when an indemnification
claim has been made, the date upon which a Sanchez Related Party shall have
given notice (stating in reasonable detail the basis of the claim for
indemnification) to such Purchaser shall constitute the date upon which such
claim has been made; provided,  further, that the liability of such Purchaser
shall not be greater in amount than the sum of such Purchaser’s Purchase
Price.  No Sanchez Related Party shall be entitled to recover special,
consequential or punitive Damages under this Section 5.02;  provided,  however,
that such limitation shall not prevent any Sanchez Related Party from recovering
under this Section 5.02 for any such Damages to the extent that such Damages
arise in connection with any Third Party Claims.

Section 5.03Indemnification Procedure.

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(a)A claim for indemnification for any matter not involving a third party claim
may be asserted by notice to the party from whom indemnification is sought;
provided,  however, that failure to so notify the indemnifying party shall not
preclude the indemnified party from any indemnification which it may claim in
accordance with this Article V, except as otherwise provided in Section 5.01 and
Section 5.02.

(b)Promptly after any Sanchez Related Party or Purchaser Related Party
(hereinafter, the “Indemnified Party”) has received notice of any indemnifiable
claim hereunder, or the commencement of any action, suit or proceeding by a
third person, which the Indemnified Party believes in good faith could give rise
to an indemnifiable claim under this Agreement (each a “Third Party Claim”), the
Indemnified Party shall give the indemnitor hereunder (the “Indemnifying Party”)
written notice of such Third Party Claim, but failure to so notify the
Indemnifying Party will not relieve the Indemnifying Party from any liability it
may have to such Indemnified Party hereunder except to the extent that the
Indemnifying Party is materially prejudiced by such failure. Such notice shall
state the nature and the basis of such Third Party Claim to the extent then
known.  Except as set forth below, the Indemnifying Party shall have the right
to defend and settle, at its own expense and by its own counsel who shall be
reasonably acceptable to the Indemnified Party, any such Third Party Claim as
long as the Indemnifying Party pursues the same diligently and in good faith. If
the Indemnifying Party undertakes to defend such Third Party Claim, it shall
promptly, and in no event later than ten (10) Business Days after receipt of
notice of such Third Party Claim, notify the Indemnified Party of its intention
to do so, and the Indemnified Party shall cooperate with the Indemnifying Party
and its counsel in all commercially reasonable respects in the defense thereof
and the settlement thereof (subject to the limitations set forth above). Such
cooperation shall include, but shall not be limited to, furnishing the
Indemnifying Party with any books, records and other information reasonably
requested by the Indemnifying Party and in the Indemnified Party’s possession or
control.  Such cooperation of the Indemnified Party shall be at the cost of the
Indemnifying Party.  After the Indemnifying Party has notified the Indemnified
Party of its intention to undertake to defend any such Third Party Claim, and
for so long as the Indemnifying Party diligently pursues such defense, the
Indemnifying Party shall not be liable for any additional legal expenses
incurred by the Indemnified Party in connection with any defense or settlement
of such asserted liability; provided,  however, that the Indemnified Party shall
be entitled (i) at its expense, to participate in the defense of such Third
Party Claim and the negotiations of the settlement thereof and (ii) if (A) the
Indemnifying Party has, within ten (10) Business Days of receipt of notice of a
Third Party Claim, failed (y) to assume the defense or employ counsel reasonably
acceptable to the Indemnified Party and (z) notify the Indemnified Party of such
assumption or (B) if the defendants in any such action include both the
Indemnified Party and the Indemnifying Party and counsel to the Indemnified
Party shall have concluded that there may be reasonable defenses available to
the Indemnified Party that are different from or in addition to those available
to the Indemnifying Party or if the interests of the Indemnified Party
reasonably may be deemed to conflict with the interests of the Indemnifying
Party, then the Indemnified Party shall have the right to select a separate
counsel and to assume such legal defense and otherwise to participate in the
defense of such action, with the expenses and fees of such separate counsel and
other expenses related to such participation to be reimbursed by the
Indemnifying Party as incurred.  Notwithstanding any other provision of this
Agreement, the Indemnifying Party shall not settle any indemnified claim without
the prior written consent of the Indemnified Party, unless the settlement
thereof imposes no liability or obligation on, and includes a complete

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release from liability of, and does not include any admission of wrongdoing or
malfeasance by, the Indemnified Party.  The remedies provided for in this
Section 5.03 are cumulative and are not exclusive of any remedies that may be
available to a party at law or in equity or otherwise.

Section 5.04Tax Matters.  All indemnification payments under this Article V
shall be adjustments to the Purchase Price except as otherwise required by
applicable Law.

Article VI
TERMINATION

Section 6.01Termination.  This Agreement may be terminated at any time prior to
the Closing:

(a)By mutual written consent of Sanchez and the Purchasers;

(b)By either Sanchez or the Purchasers, if the Closing has not occurred on or
before November 13, 2015 or such later date as mutually agreed, provided, that
no party may terminate this Agreement pursuant to this clause (b) if such
party’s failure to fulfill any of its obligations under this Agreement shall
have been the reason that the Closing shall not have occurred on or before such
date;

(c)by either Sanchez or the Purchasers, if any Governmental Authority shall have
commenced or threatened to commence any proceeding to permanently delay or
enjoin the transactions evidenced by this Agreement or to make the transactions
contemplated by this Agreement illegal;

(d)by Sanchez, upon delivery of written notice to the Purchasers at any time
prior to the Closing in the event that any Purchaser has breached in any
material respect any representation, warranty or covenant contained in this
Agreement such that any of the conditions to closing in Section 2.02(b) would
not be satisfied, provided, that Sanchez has notified the Purchasers of the
breach in writing, and the breach has continued without cure for a period of 30
days after the written notice of breach;

(e)by the Purchasers, upon delivery of written notice to Sanchez at any time
prior to the Closing in the event that Sanchez has breached in any material
respect any representation, warranty or covenant contained in this Agreement
such that any of the conditions to closing in Section 2.02(c) would not be
satisfied, provided, that the Purchasers have notified Sanchez of the breach in
writing, and the breach has continued without cure for a period of 30 days after
the written notice of breach; or

(f)if this Agreement is not otherwise terminated pursuant to another provision
of this Section 6.01, then this Agreement shall automatically terminate without
further action by any party hereto upon termination of the Midstream Purchase
Agreement.

Section 6.02Effect of Termination.  In the event of termination of this
Agreement in accordance with Section 6.01, this Agreement shall become null and
void and have no further force or effect, provided, however, that (a) the
parties hereto shall not be released from any liability arising from or in
connection with any breach of this Agreement occurring prior to such

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termination and (b) the provisions of Article V and all indemnification rights
and obligations of Sanchez and the Purchasers thereunder, this Section 6.02 and
Article VII shall remain operative and in full force and effect as between
Sanchez and each Purchaser, unless Sanchez and the applicable Purchaser execute
a writing that expressly (with specific references to the applicable Section or
subsection of this Agreement) terminates such rights and obligations as between
Sanchez and such Purchaser.

Article VII
MISCELLANEOUS

Section 7.01Expenses.  All reasonable out-of-pocket costs and expenses,
including fees and disbursements of counsel, financial advisors and accountants,
incurred by the Purchasers in connection with the Basic Documents and the
transactions contemplated thereby shall be paid by the Partnership out of the
proceeds received from the consummation of the transactions contemplated by this
Agreement.

Section 7.02Interpretation.  Article, Section, Schedule and Exhibit references
in this Agreement are references to the corresponding Article, Section, Schedule
or Exhibit to this Agreement, unless otherwise specified.  All Exhibits and
Schedules to this Agreement are hereby incorporated and made a part hereof as if
set forth in full herein and are an integral part of this Agreement.  All
references to instruments, documents, Contracts and agreements are references to
such instruments, documents, Contracts and agreements as the same may be
amended, supplemented and otherwise modified from time to time, unless otherwise
specified.  The word “including” shall mean “including but not limited to” and
shall not be construed to limit any general statement that it follows to the
specific or similar items or matters immediately following it.  Whenever Sanchez
has an obligation under the Basic Documents, the expense of complying with that
obligation shall be an expense of Sanchez unless otherwise specified.  Any
reference in this Agreement to $ shall mean U.S. dollars.  Whenever any
determination, consent or approval is to be made or given by a Purchaser, such
action shall be in such Purchaser’s sole discretion, unless otherwise specified
in this Agreement.  If any provision in the Basic Documents is held to be
illegal, invalid, not binding or unenforceable, (i) such provision shall be
fully severable and the Basic Documents shall be construed and enforced as if
such illegal, invalid, not binding or unenforceable provision had never
comprised a part of the Basic Documents, and the remaining provisions shall
remain in full force and effect and (ii) the parties hereto shall negotiate in
good faith to modify the Basic Documents so as to effect the original intent of
the parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.  When calculating the period of time before which,
within which or following which any act is to be done or step taken pursuant to
the Basic Documents, the date that is the reference date in calculating such
period shall be excluded.  If the last day of such period is a non-Business Day,
the period in question shall end on the next succeeding Business Day.  Any words
imparting the singular number only shall include the plural and vice versa.  The
words such as “herein,” “hereinafter,” “hereof” and “hereunder” refer to this
Agreement as a whole and not merely to a subdivision in which such words appear
unless the context otherwise requires.  The provision of a Table of Contents,
the division of this Agreement into Articles, Sections and other subdivisions
and the insertion of headings are for convenience of reference only and shall
not affect or be utilized in construing or interpreting this Agreement.

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Section 7.03Survival of Provisions.  The representations and warranties set
forth in Section 3.01(a),  Section 3.02,  Section 3.04,  Section 3.08,  Section
3.09,  Section 3.11,  Section 3.12,  Section 4.01,  Section 4.02,  Section 4.04
and Section 4.05 hereunder shall survive the execution and delivery of this
Agreement indefinitely, the representations and warranties set forth in Section
3.16 shall survive until thirty (30) days after the expiration of the applicable
statute of limitations, the representations and warranties set forth in Section
3.17 shall survive for a period of three (3) years following the Closing Date
regardless of any investigation made by or on behalf of Sanchez or the
Purchasers, and the other representations and warranties set forth herein shall
survive for a period of fifteen (15) months following the Closing Date,
regardless of any investigation made by or on behalf of Sanchez or the
Purchasers.  The covenants made in this Agreement or any other Basic Document
shall survive the Closing and remain operative and in full force and effect
regardless of acceptance of any of the Purchased Units and payment therefor and
repayment, conversion or repurchase thereof.  Regardless of any purported
general termination of this Agreement, the provisions of Article V and all
indemnification rights and obligations of Sanchez and the Purchasers thereunder,
and this Article VII shall remain operative and in full force and effect as
between Sanchez and each Purchaser, unless Sanchez and the applicable Purchaser
execute a writing that expressly (with specific references to the applicable
Section or subsection of this Agreement) terminates such rights and obligations
as between Sanchez and such Purchaser.

Section 7.04No Waiver; Modifications in Writing.

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

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

Section 7.05Binding Effect.  This Agreement shall be binding upon Sanchez, each
of the Purchasers and their respective successors and permitted assigns.  Except
as expressly provided in this Agreement, this Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and permitted assigns.

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Section 7.06Non-Disclosure. 

(a)For the Confidentiality Period, no Purchaser shall, directly or indirectly,
disclose to any person any information received from Sanchez, in any form,
whether acquired prior to or after the Closing Date, relating to the business
and operations of the Partnership Entities; provided,  however, that information
shall not be deemed confidential information for purposes of this Section 7.06,
where such information (i) was already known to such Purchaser (or its
Representatives) at the time of disclosure, (ii) later becomes known to such
Purchaser by having been disclosed to such Purchaser (or its Representatives) by
a third party to such Purchaser’s knowledge not subject to any legally binding
obligation to keep such information confidential or otherwise prohibited from
transmitting such information, (iii) is or becomes publicly known through no
wrongful act of such Purchaser (or its Representatives), or (iv) is
independently developed by such Purchaser (or its Representatives) without
reference to any confidential information disclosed to such Purchaser under this
Agreement. Notwithstanding the foregoing, a Purchaser may disclose any
information relating to the business and operations of the Partnership Entities
(i) to its Representatives, Affiliates, and funding sources and limited
partners, investors, and potential investors of such Purchaser and its
Affiliates, to whom such disclosure is necessary or convenient and who in each
case either (1) acknowledge that they are bound by the confidentiality
provisions of this Agreement or (2) are bound by confidentiality obligations to
the Purchaser or its Affiliates that are at least as stringent as the
confidentiality provisions of this Agreement, and in each case the Purchasers
shall use reasonable best efforts to cause such Representatives, Affiliates, and
funding sources and limited partners, investors, and potential investors of such
Purchaser and its Affiliates to keep any such  information confidential; (ii) to
any transferee or proposed transferee of the Purchased Units permitted under the
Partnership Agreement; (iii) as required by applicable Law or any securities
exchange or market rule; (iv) as may be requested or required by any
Governmental Authority (provided that such Purchaser first notifies Sanchez and
gives Sanchez the opportunity to contest such request or requirement, in each
case as permitted by applicable Law (except no such opportunity shall be
afforded in the case of a routine audit or examination by, or a blanket document
request from, a governmental or regulatory entity that does not reference the
Partnership)); or (v) except with prior notice of such request for disclosure
to, and consent of, Sanchez (which consent may be withheld in Sanchez’s sole
discretion). 

(b)Other than filings made by Sanchez with the Commission, the Partnership
Entities and any of their respective Representatives shall disclose the identity
of, or any other information concerning the Purchasers or any of their
respective Affiliates only after providing the Purchasers a reasonable
opportunity to review and comment on such disclosure (with such comments being
incorporated or reflected, to the extent reasonable, in any such disclosure);
provided,  however, that nothing in this Section 7.06 shall delay any required
filing or other disclosure with the Commission, NYSE MKT or any Governmental
Authority or otherwise hinder the Partnership Entities’ or their
Representatives’ ability to timely comply with all laws or rules and regulations
of the Commission, NYSE MKT or other Governmental Authority.

(c)Notwithstanding anything to the contrary in this Section 7.06, Sanchez agrees
that the Purchasers may (i) publicize their ownership in Sanchez, as well as the
identity of Sanchez, the size of the investment and its pricing terms with
respect to the Class B Preferred Units on its internet site or in marketing
materials, press releases, published “tombstone” announcements or

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any other print or electronic medium and (ii) display Sanchez’s logo in
conjunction with any such reference.

(d)By 9:00 a.m., New York City time, on the trading day immediately following
the date of this Agreement, Sanchez shall issue a press release (the “Press
Release”) reasonably acceptable to the Purchasers disclosing all material terms
of the transactions contemplated by the Basic Documents.  Sanchez shall not
publicly disclose the name of any Purchaser or an affiliate of any Purchaser, or
include the name of any Purchaser or an affiliate of any Purchaser in any press
release or filing with the Commission or any regulatory agency or trading
market, without the prior written consent of such Purchaser, except (i) as
required by federal securities law in connection with (A) the registration
statement contemplated by the Registration Rights Agreement and (B) the filing
of final transaction documents (including signature pages thereto) with the
Commission and (ii) to the extent such disclosure is required by law, request of
the Commission or trading market regulations, in which case Sanchez shall
provide the Purchasers with prior written notice of such disclosure permitted
under this subclause (ii). 

Section 7.07Communications.  All notices and demands provided for hereunder
shall be in writing and shall be given by registered or certified mail, return
receipt requested, telecopy, air courier guaranteeing overnight delivery or
personal delivery to the following addresses

(a)If to a Purchaser, to the address specified on such Purchaser’s signature
page hereto, with a copy to (which shall not constitute notice):

Sidley Austin LLP

1000 Louisiana Street, Suite 6000

Houston TX 77002

Attention: Tim Langenkamp
Facsimile: 713-495-7799

Email: tlangenkamp@sidley.com

 

(b)If to Sanchez:

Sanchez Production Partners LP

1000 Main Street, Suite 3000

Houston, TX 77002

Attention:  Charles C. Ward

Email: cward@sanchezpp.com;

 

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

 

Andrews Kurth LLP

600 Travis Street, Suite 4200

Houston TX 77002

Attention: Scott Olson
Facsimile: 713-238-7410

Email: solson@andrewskurth.com

 

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or to such other address as Sanchez or the Purchasers may designate in
writing.  All notices and communications shall be deemed to have been duly
given:  at the time delivered by hand, if personally delivered; upon actual
receipt if sent by certified or registered mail, return receipt requested, or
regular mail, if mailed; upon actual receipt of the overnight courier copy, if
sent via facsimile; and upon actual receipt when delivered to an air courier
guaranteeing overnight delivery.

Section 7.08Removal of Legend.  In connection with a sale of the Purchased Units
by a Purchaser in reliance on Rule 144, the applicable Purchaser or its broker
shall deliver to the transfer agent and Sanchez a broker representation letter
providing to the transfer agent and Sanchez any information Sanchez deems
necessary to determine that the sale of the Purchased Units is made in
compliance with Rule 144, including, as may be appropriate, a certification that
the Purchaser is not an Affiliate of Sanchez and regarding the length of time
the Purchased Units have been held.  Upon receipt of such representation letter,
Sanchez shall promptly direct its transfer agent to remove the notation of a
restrictive legend in such Purchaser’s or the book-entry account maintained by
the transfer agent, including the legend referred to in Section 4.05, and
Sanchez shall bear all costs associated therewith.  After a registration
statement under the Securities Act permitting the public resale of the Purchased
Units has become effective or any Purchaser or its permitted assigns have held
the Purchased Units for one year, if the book-entry account of such Purchased
Units still bears the notation of the restrictive legend referred to in Section
4.05, Sanchez agrees, upon request of the Purchaser or permitted assignee, to
take all steps necessary to promptly effect the removal of the legend described
in Section 4.05 from the Purchased Units, and Sanchez shall bear all costs
associated therewith, regardless of whether the request is made in connection
with a sale or otherwise, so long as such Purchaser or its permitted assigns
provide to Sanchez any information Sanchez deems reasonably necessary to
determine that the legend is no longer required under the Securities Act or
applicable state laws, including (if there is no such registration statement) a
certification that the holder is not an Affiliate of Sanchez and regarding the
length of time the Purchased Units have been held.  Sanchez shall cooperate with
each Purchaser to effect the removal of the legend referred to in Section 4.05
at any time such legend is no longer appropriate.

Section 7.09Entire Agreement.  This Agreement, the other Basic Documents and the
other agreements and documents referred to herein are intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and therein.  There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or the other Basic Documents with respect to the rights
granted by Sanchez or any of its Affiliates or the Purchasers or any of their
respective Affiliates set forth herein or therein.  This Agreement, the other
Basic Documents and the other agreements and documents referred to herein or
therein supersede all prior agreements and understandings between the parties
with respect to such subject matter.

Section 7.10Governing Law; Submission to Jurisdiction.  This Agreement, and all
claims or causes of action (whether in contract or tort) that may be based upon,
arise out of or relate to this Agreement or the negotiation, execution or
performance of this Agreement (including any claim or cause of action based
upon, arising out of or related to any representation or warranty made in or in
connection with this Agreement), will be construed in accordance with

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and governed by the laws of the State of Delaware without regard to principles
of conflicts of laws.  Any action against any party relating to the foregoing
shall be brought in any federal or state court of competent jurisdiction located
within the State of Delaware, and the parties hereto hereby irrevocably submit
to the non-exclusive jurisdiction of any federal or state court located within
the State of Delaware over any such action.  The parties hereby irrevocably
waive, to the fullest extent permitted by applicable Law, any objection which
they may now or hereafter have to the laying of venue of any such dispute
brought in such court or any defense of inconvenient forum for the maintenance
of such dispute.  Each of the parties hereto agrees that a judgment in any such
dispute may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by Law.

Section 7.11Waiver of Jury Trial.  THE PARTIES TO THIS AGREEMENT EACH HEREBY
WAIVES, AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR (ii) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT
OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY
OR OTHERWISE.  THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREES AND CONSENTS
THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

Section 7.12Execution in Counterparts.  This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which counterparts, when so executed and delivered, shall be deemed to
be an original and all of which counterparts, taken together, shall constitute
but one and the same agreement.

[Remainder of Page Left Intentionally Blank]

 

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

 

 

 

 

SANCHEZ PRODUCTION PARTNERS LP

 

 

 

 

By:

Sanchez Production Partners GP LLC,
its general partner

 

 

 

 

By:

/s/ Charles C. Ward

 

Name:

Charles C. Ward

 

Title:

Chief Financial Officer

 

 

 

 

[Signature Page to Purchase Agreement]

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

 

 

 

 

 

 

STONEPEAK CATARINA HOLDINGS LLC

 

 

 

 

By:

STONEPEAK INFRASTRUCTURE FUND
(ORION AIV) LP, its managing member

 

 

 

 

By:

STONEPEAK ASSOCIATES LLC,
its general partner

 

 

 

 

By:

STONEPEAK GP HOLDINGS LP,
its sole member

 

 

 

 

By:

STONEPEAK GP INVESTORS LLC,
its general partner

 

 

 

 

By:

STONEPEAK GP INVESTORS MANAGER LLC,
its managing member

 

 

 

 

 

 

 

By:

/s/ Michael Dorrell

 

Name:

Michael Dorrell

 

Title:

Co-Founder and Senior Managing
Director

 

 

 

 

Address:

c/o Stonepeak Infrastructure Partners

 

 

717 Fifth Avenue, 25th Floor

 

 

New York, NY 10022

 

Attn:

Adrienne Saunders, General Counsel

 

Fax:

212-907-5101

 

Email:

saunders@stonepeakpartners.com

 

 

[Signature Page to Purchase Agreement]

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Schedule A

 

 

 

 

 

 

 

Purchaser

    

Purchased

Units

    

Purchase Price

 

 

 

 

 

 

 

Stonepeak Catarina Holdings LLC

 

19,444,445 

 

$

350,000,010 

 

 

 

 

Schedule A-1

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Final Form
Exhibit A

EXHIBIT A

FORM OF OPINION OF ANDREWS KURTH LLP

 

September [___], 2015

Purchaser listed on

Schedule I hereto

Re:Class B Preferred Unit Purchase Agreement, dated September [___], 2015, by
and between Sanchez Production Partners LP and the Purchaser named therein

Ladies and Gentlemen:

We have acted as special counsel to Sanchez Production Partners LP, a Delaware
limited partnership (the “Partnership”), in connection with the Class B
Preferred Unit Purchase Agreement, dated September [___], 2015 (the “Purchase
Agreement”), among the Partnership and the purchaser named therein and listed on
Schedule I hereto (the “Purchaser”), relating to the sale by the Partnership to
the Purchaser of 19,444,445 Class B Preferred Units (as defined herein) (the
“Purchased Units”), which are convertible into Common Units (as defined herein)
pursuant to the terms of the Amended Partnership Agreement (as defined herein).

We are furnishing this opinion letter to you pursuant to Section 2.03(a)(i) of
the Purchase Agreement.

In rendering the opinions set forth herein, we have examined and relied on
originals or copies, certified or otherwise identified to our satisfaction, of
the following:

(a)an executed copy of the Purchase Agreement;

(b)an executed copy of the Registration Rights Agreement, dated September [___],
2015, among the Partnership and the Purchaser (the “Registration Rights
Agreement”);

(c)an executed copy of the Board Representation and Standstill Agreement, dated
September [___], 2015, among Sanchez Production Partners GP LLC, a Delaware
limited liability company and the general partner of the Partnership (the
“General Partner,” and along with the Partnership, the “Sanchez Entities,” and
each, a “Sanchez Entity”), the Partnership and the Purchaser (the “Board
Representation Agreement”);

(d)a copy of the Certificate of Limited Partnership of the Partnership, dated
March 6, 2015, as certified by the Secretary of State of the State of Delaware
as of a recent date and certified by the Secretary of the General Partner, as in
effect on each of the date of adoption of the resolutions specified in paragraph
(h) below, the date of the Purchase Agreement and the date hereof (the
“Partnership Certificate”);

 

 

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(e)a copy of each of (i) the First Amended and Restated Agreement of Limited
Partnership of the Partnership dated August 31, 2015 (the “Original Partnership
Agreement”), and (ii) the Second Amended and Restated Agreement of Limited
Partnership of the Partnership dated September [___], 2015 (the “Amended
Partnership Agreement”), each as certified by the Secretary of the General
Partner as in effect on each of the date of adoption of the resolutions
specified in paragraph (h) below (except the Amended Partnership Agreement), the
date of the Purchase Agreement and the date hereof;

(f)a copy of the Certificate of Formation of the General Partner, dated February
10, 2015, as certified by the Secretary of State of the State of Delaware as of
a recent date and certified by the Secretary of the General Partner as in effect
on each of the date of adoption of the resolutions specified in paragraph (h)
below, the date of the Purchase Agreement and the date hereof (the “GP
Certificate”);

(g)a copy of the Limited Liability Company Agreement of the General Partner,
dated March 2, 2015, as amended, as certified by the Secretary of the General
Partner as in effect on each of the date of adoption of the resolutions
specified in paragraph (h) below, the date of the Purchase Agreement and the
date hereof (the “GP LLC Agreement”);

(h)copies of resolutions of the Conflicts Committee of the Board of Directors of
the General Partner adopted on September [___], 2015, and copies of resolutions
of the Board of Directors of the General Partner adopted on September [___],
2015, each certified by the Secretary of the General Partner to be true,
complete and correct copies thereof;

(i)copies of certificates from the Secretary of State of the State of Delaware,
dated as of a recent date, as to the valid existence and good standing of each
Sanchez Entity;

(j)a certificate, dated as of the date hereof (the “Opinion Support
Certificate”), executed by the Chief Financial Officer of the General Partner, a
copy of which is attached hereto as Exhibit A; and

(k)each of the Applicable Agreements (as defined below).

We have also examined originals or copies, certified or otherwise identified to
our satisfaction, of such records of the Sanchez Entities and such agreements,
certificates of public officials, certificates of officers or other
representatives of the Sanchez Entities and others, and such other documents,
certificates and records, as we have deemed necessary or appropriate as a basis
for the opinions set forth herein.  In our examination, we have assumed the
legal capacity of all natural persons, the genuineness of all

2

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signatures, the authenticity of all documents submitted to us as originals, and
the conformity to authentic original documents of all documents submitted to us
as certified or photostatic copies.  As to any facts material to the opinions
and statements expressed herein that we did not independently establish or
verify, we have relied, to the extent we deem appropriate, upon (i) oral or
written statements and representations of officers and other representatives of
the Sanchez Entities (including, without limitation, the facts certified in the
Opinion Support Certificate) and (ii) statements and certifications of public
officials and others.

Any term used, but not defined herein, shall have the meaning ascribed to such
term in the Purchase Agreement.  As used herein the following terms have the
respective meanings set forth below:

“Applicable Agreements” means those agreements and other instruments identified
on Schedule 1 to the Opinion Support Certificate, which have been certified by a
duly authorized officer of the General Partner as being every indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease or other
agreement that is both (i) material in relation to the business, operations,
affairs, financial condition, assets, or properties of the Partnership and its
subsidiaries, considered as a single enterprise, and (ii) an instrument by which
the Partnership or any of its subsidiaries is bound or by which the Partnership
or any of its subsidiaries or any of its respective properties may be bound or
affected.

“Basic Documents” means, collectively, the Purchase Agreement, the Registration
Rights Agreement, the Board Representation Agreement and the Amended Partnership
Agreement.

“Class B Preferred Units” has the meaning set forth in the Amended Partnership
Agreement.

“Commission” means the Securities and Exchange Commission.

“Common Units” means common units representing limited partner interests in the
Partnership.

“Governmental Authority” means any executive, legislative, judicial,
administrative or regulatory body of the State of New York, the State of Texas,
the State of Delaware or the United States of America, pursuant to (i)
applicable laws of the State of New York, (ii) applicable laws of the State of
Texas, (iii) the Delaware Revised Uniform Limited Partnership Act  (the
“Delaware LP Act”), (iv) the Delaware Limited Liability Company Act (the
“Delaware LLC Act”) and (v) applicable laws of the United States of America,
respectively.

3

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“Organizational Agreements” means the Partnership Certificate, the Amended
Partnership Agreement, the GP Certificate and the GP LLC Agreement.

“Person” means a natural person or a legal entity organized under the laws of
any jurisdiction.

“Securities Act” means the Securities Act of 1933, as amended.

Based upon the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that:

1.The Partnership is validly existing as a limited partnership and is in good
standing under the Delaware LP Act.  The Partnership has all requisite limited
partnership power and authority under the Delaware LP Act to own its properties
and carry on its business in all material respects as described in the
Partnership’s Quarterly Report on Form 10-Q filed with the Commission on August
14, 2015 (the “Form 10-Q”).  The General Partner is validly existing as a
limited liability company and is in good standing under the Delaware LLC
Act.  The General Partner has all requisite limited liability company power and
authority under the Delaware LLC Act to own its properties and carry on its
business in all material respects as described in the Form 10-Q.

2.Except as set forth in any Organizational Agreement, (i) there are no options,
warrants or other rights to purchase, or any restrictions upon the voting or
transfer of, agreements or other obligations to issue or rights to convert any
securities into or exchange any securities into or exchange any securities for
any equity interest of any Sanchez Entity under any Applicable Agreement, and
(ii) there are no preemptive rights or similar rights to subscribe for or
purchase any equity interest in any Sanchez Entity under any Applicable
Agreement.

3.The Purchased Units have been duly authorized by the General Partner on behalf
of the Partnership pursuant to the Amended Partnership Agreement and, when
issued and delivered to the Purchaser against payment therefor in accordance
with the terms of the Purchase Agreement, will be validly issued, fully paid (to
the extent required by applicable law and the Amended Partnership Agreement) and
non-assessable (except as such nonassessability may be affected by matters
described in Sections 17-303, 17‑607 and 17‑804 of the Delaware LP
Act).  Assuming the Class B Preferred PIK Units (as defined in the Amended
Partnership Agreement) are issued in accordance with the terms of the Amended
Partnership Agreement, the Class B Preferred PIK Units will be duly authorized,
validly issued, fully paid (to the extent required by applicable law and the
Amended Partnership Agreement) and non-assessable (except as such
nonassessability may be affected by matters described in Sections 17-303, 17‑607
and 17‑804 of the Delaware LP Act).

4

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4.The Conversion Units (as defined in the Purchase Agreement) have been duly
authorized by the General Partner on behalf of the Partnership pursuant to the
Amended Partnership Agreement and, when issued upon conversion of the Purchased
Units in accordance with the terms of the Amended Partnership Agreement, will be
validly issued, fully paid (to the extent required by applicable law and the
Amended Partnership Agreement) and non-assessable (except as such
nonassessability may be affected by matters described in Sections 17-303, 17‑607
and 17‑804 of the Delaware LP Act).

5.None of the offering, issuance and sale by the Partnership of the Purchased
Units or the Conversion Units or the execution, delivery and performance of the
Basic Documents by or on behalf of the Sanchez Entities party thereto
(A) constitutes or will constitute a violation of the Organizational Agreements,
(B) without duplication of clause (A), constitutes or will constitute a breach
or violation of, or a default under (or an event which, with notice or lapse of
time or both, would constitute such an event), any Applicable Agreement, or
(C) results or will result in any violation of the Delaware LP Act, the Delaware
LLC Act, the applicable laws of the State of New York, the applicable laws of
the State of Texas or any applicable law of the United States of America.

6.Each of the Basic Documents has been duly authorized and validly executed and
delivered by each Sanchez Entity party thereto. 

7.The Registration Rights Agreement constitutes a valid and binding obligation
of the Partnership, enforceable against the Partnership in accordance with its
terms, under applicable laws of the State of New York.

8.Except for the approvals required by the Commission in connection with the
Partnership’s obligations under the Registration Rights Agreement (including the
registration statement referenced therein) and for approvals from the NYSE MKT
LLC regarding the listing of the Common Units, no authorization, consent,
approval, waiver, license, qualification or written exemption from, nor any
filing, declaration, qualification or registration with, any Governmental
Authority or any other Person is required to authorize, or is required for, the
execution and delivery by the Sanchez Entities of any of the Basic Documents to
which they are a party or the performance by the Sanchez Entities of their
obligations under the Basic Documents to which they are a party in accordance
with the terms thereof, except those that have been obtained or may be required
under the federal or state securities or “blue sky” laws, as to which we do not
express any opinion.

9.The Partnership is not an “investment company” within the meaning of said term
as used in the Investment Company Act of 1940, as amended.

5

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10.Assuming the accuracy of the representations and warranties of each Purchaser
contained in the Purchase Agreement, the issuance and sale of the Purchased
Units pursuant to the Purchase Agreement are exempt from the registration
requirements of the Securities Act; provided that we express no opinion as to
any subsequent resale or other transfer of the Purchased Units.

We express no opinion as to the laws of any jurisdiction other than
(i) applicable laws of the State of New York, (ii) applicable laws of the United
States of America, (iii) certain other specified laws of the United States of
America to the extent referred to specifically herein, (iv) applicable laws of
the State of Texas, (v) the Delaware LP Act and (vi) the Delaware LLC Act. 
References herein to “applicable laws” mean those laws, rules and regulations
that, in our experience, are normally applicable to transactions of the type
contemplated by the Basic Documents, without our having made any special
investigation as to the applicability of any specific law, rule or regulation,
and that are not the subject of a specific opinion herein referring expressly to
a particular law or laws; provided, however, that such references (including,
without limitation, those appearing in paragraph 5 above) do not include any
municipal or other local laws, rules or regulations, or any antifraud,
environmental, labor, securities, tax, insurance or antitrust, laws, rules or
regulations, or any law, rule or regulation that may become applicable to the
Sanchez Entities or their subsidiaries as a result of the involvement of the
Sanchez Entities with the transactions contemplated by the Basic Documents or
because of the legal or regulatory status or nature of the business of any
Sanchez Entity.

Our opinions expressed herein are subject to the following additional
assumptions and qualifications:

(i)The opinions set forth in paragraph 1 above as to the valid existence and
good standing of the Sanchez Entities are based solely upon our review of
certificates and other communications from the appropriate public officials.

(ii)The opinion expressed in paragraph 9 above is given in reliance upon facts
set forth in the Opinion Support Certificate.

(iii)In rendering the opinions set forth in paragraph 5 above regarding
Applicable Agreements, we do not express any opinion as to whether the execution
or delivery by any Sanchez Entity of the Basic Documents to which it is a party,
or the incurrence or performance by such Sanchez Entity of its obligations
thereunder, will constitute a violation of, or a default under or as a result
of, any covenant, restriction or provision with respect to any financial ratio
or test or any aspect of the financial condition or results of operation of such
Sanchez Entity.

(iv)Our opinion in paragraph 7 above may be:

6

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(1)limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or transfer or other similar laws relating to or affecting
the rights of creditors generally; and

(2)subject to the application of general principles of equity (regardless of
whether considered in a proceeding in equity or at law), including, without
limitation, the possible unavailability of specific performance, injunctive
relief or any other equitable remedy and concepts of materiality,
reasonableness, good faith and fair dealing.

(v)We express no opinion as to the validity, effect or enforceability of any
provisions: 

(1)purporting to set forth an agreement to agree in the future on any matter;

(2)providing for the payment of liquidated damages;

(3)relating to severability or separability;

(4)purporting to limit the liability of, or to exculpate, any Person for
violation of securities laws;

(5)relating to indemnification, contribution or reimbursement obligations to the
extent any such provisions (i) violate any law, rule or regulation (including
any federal or state securities law, rule or regulation) or (ii) are determined
to be contrary to public policy;

(6)purporting to set forth the obligations of any party by reference to a
reasonable or commercially reasonable standard; or

(7)purporting to require that all amendments and waivers be in writing or
otherwise purporting to disregard any course of dealing.

(vi)In making our examination of executed documents, we have assumed (except to
the extent that we expressly opine above) (1) the valid existence and good
standing of each of the parties thereto, (2) that such parties had the power and
authority, corporate, partnership, limited liability company or other, to enter
into and to incur and perform all of their obligations thereunder, (3) the due
authorization by all requisite action, corporate, partnership, limited liability
company or other, and the due execution and delivery by such parties of such
documents and (4) to the extent such documents purport to constitute agreements,
that each of such documents constitutes the legal, valid and binding obligation
of each party thereto, enforceable against such party in accordance

7

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with its terms.  In this paragraph (vi), all references to parties to documents
shall be deemed to mean and include each of such parties, and each other person
(if any) directly or indirectly acting on its behalf.

This opinion is being furnished only to you in connection with the sale of the
Purchased Units under the Purchase Agreement occurring today and is solely for
your benefit and is not to be used, circulated, quoted or otherwise referred to
for any other purpose or relied upon by any other Person, including any
purchaser of any Purchased Units from you and any subsequent purchaser of any
Purchased Unit, without our express written permission.  The opinions expressed
herein are as of the date hereof only and are based on laws, orders, contract
terms and provisions, and facts as of such date, and we disclaim any obligation
to update this opinion letter after such date or to advise you of changes of
facts stated or assumed herein or any subsequent changes in law.

Very truly yours,

 

(SO/MM) 

 

8

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Schedule I

PURCHASER

 

Stonepeak Catarina Holdings LLC

 

 

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

 

 

EXHIBIT A

 

SANCHEZ PRODUCTION PARTNERS LP

 

OFFICER’S CERTIFICATE

September [___], 2015

Reference is made to the Class B Preferred Unit Purchase Agreement, dated as of
September [___], 2015 (the “Purchase Agreement”) by and among Sanchez Production
Partners LP, a Delaware limited partnership (the “Partnership”), and the
Purchaser named therein (the “Purchaser”).  The undersigned, Charles C. Ward,
hereby certifies that he is the duly elected and qualified Chief Financial
Officer and Secretary of Sanchez Production Partners GP LLC, the general partner
of the Partnership.

Such officer understands that pursuant to the Purchase Agreement, Andrews Kurth
LLP (“AK”), special counsel to the Partnership, is delivering to the Purchaser
an opinion letter dated the date hereof (the “Opinion Letter”).  Such officer
further understands that AK is relying on this certificate and the statements
made herein in rendering certain of the opinions expressed in the Opinion
Letter.

With regard to the foregoing, the undersigned certifies that he has made due
inquiry of all persons necessary or appropriate to verify or confirm the
statements contained herein and further certifies the following:

1.Attached as Schedule 1 to this Officers’ Certificate is a true, accurate and
complete list of every indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease or other agreement (collectively, “Applicable
Agreements”) that is both (i) material in relation to the business, operations,
affairs, financial condition, assets, or properties of the Partnership and its
subsidiaries, considered as a single enterprise, and (ii) an instrument by which
the Partnership or any of its subsidiaries is bound or by which the Partnership
or any of its subsidiaries or any of their respective properties may be bound or
affected.

2.The Partnership and its subsidiaries are engaged in businesses other than that
of investing, reinvesting, owning, holding or trading in
Securities.  Furthermore, the Partnership and its subsidiaries:

(a) are not engaged primarily, nor does any of them hold itself out as being
engaged primarily, nor does any of them propose to engage primarily, in the
business of investing, reinvesting, or trading in Securities;

(b) are not engaged, nor does any of them propose to engage, in the business of
issuing Face-Amount Certificates of the Installment Type, nor has any of them
been engaged in such business and has any such certificates outstanding;

 

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

 

 

(c) are not engaged, nor does any of them propose to engage, in the business of
investing, reinvesting, owning, holding or trading in Securities (other than
Securities of its respective subsidiaries); and

(d) do not own, nor does any of them propose to acquire, Investment Securities
having a value exceeding 40 percent of the value of its total assets (exclusive
of Government Securities and cash items) on an unconsolidated basis.

As used in paragraph 2 of this certificate:

“cash items” means cash, coins, paper currency, demand deposits with banks,
timely checks of others, certified checks, bank drafts, money orders, travelers
checks, letters of credit, and shares of a registered investment company that
holds itself out as a money market fund and seeks to maintain a stable net asset
value of $1.00 per share;

“Face-Amount Certificate of the Installment Type” means any certificate,
investment contract or other Security which represents an obligation on the part
of its issuer to pay a stated or determinable sum or sums at a fixed or
determinable date or dates more than twenty-four months after the date of
issuance, in consideration of the payment of periodic installments of a stated
or determinable amount;

“Government Security” means any Security issued or guaranteed as to principal or
interest by the United States, or by an entity controlled or supervised by and
acting as an instrumentality of the Government of the United States pursuant to
authority granted by the Congress of the United States; or any certificate of
deposit for any of the foregoing;

“Investment Securities” means all Securities except (i) Government Securities
and (ii) Securities issued by majority-owned subsidiaries of the owner, which
subsidiaries: (A) are not themselves engaged in any activity described in
clauses (a)-(c) of paragraph 2 of this certificate; and (B) do not own or
propose to own Investment Securities having a value exceeding 40 percent of the
value of each such subsidiary's total assets (exclusive of Government Securities
and cash items) on an unconsolidated basis; and

“Security” or “Securities” means any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation in
any profit-sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a security, fractional
undivided interest in oil, gas or other mineral rights, any put, call, straddle,
option or privilege on any security (including a certificate of deposit) or on
any group or index of securities (including any interest therein or based on the
value thereof), or any put, call, straddle, option or privilege entered into on
a national securities exchange relating to foreign currency, or, in general, any
interest or instrument commonly known as a “security,” or any certificate of
interest or participation in,

 

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

 

 

temporary or interim certificate for, receipt for, guarantee of, or warrant or
right to subscribe to or purchase, any of the foregoing.

Capitalized terms used herein without definition shall have the meanings
specified in the Purchase Agreement and the Opinion Letter.

[Remainder of page intentionally left blank.]

 

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IN WITNESS WHEREOF, the undersigned has executed this Officer’s Certificate as
of the date first written above.

 

 

 

 

 

 

Charles C. Ward

 

 

 

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Schedule 1

 

Applicable Agreements

 

1.Purchase and Sale Agreement, dated as of March 8, 2007, between EnergyQuest
Resources, L.P., Oklahoma Processing EQR, LLC and Constellation Energy Partners
LLC

2.Purchase and Sale Agreement, dated as of March 8, 2007, between EnergyQuest
Resources, L.P., Oklahoma Processing EQR, LLC, Kansas Production EQR, LLC and
Kansas Processing EQR, LLC and Constellation Energy Partners LLC

3.Agreement of Merger, dated as of July 12, 2007, among AMVEST Osage, Inc.,
AMVEST Oil & Gas, Inc. and CEP Mid-Continent LLC, f/k/a CEP Cherokee Basin LLC

4.Purchase and Sale Agreement, dated as of August 2, 2007, between Newfield
Exploration Mid-Continent Inc. and Constellation Energy Partners LLC

5.Nominee Agreement, dated as of September 21, 2007, by and between Newfield
Exploration Mid-Continent Inc. and CEP Mid-Continent LLC

6.Asset Purchase and Sale Agreement, dated as of May 12, 2005, by and among
Everlast Energy LLC, RB Marketing Company LLC, Robinson’s Bend Operating Company
LLC and CBM Equity IV, LLC

7.Agreement for Purchase and Sale, dated as of February 19, 2008, among CoLa
Resources LLC and CEP Mid-Continent LLC, as amended by First Amendment to
Agreement for Purchase and Sale, dated as of March 31, 2008, among CoLa
Resources LLC and CEP Mid-Continent LLC

8.Membership Interest Purchase and Sale Agreement, dated February 1, 2013
between Constellation Energy Partners LLC and Constellation Commodities Upstream
LLC

9.Contribution Agreement, dated as of August 9, 2013, by and between
Constellation Energy Partners LLC and Sanchez Energy Partners I, LP

10.Exploration and Development Agreement, dated July 25, 2005, by and between
The Osage Nation and AMVEST Osage, Inc., as amended by Substituted and Replaced
First Amendment to the Exploration and Development Agreement, dated October 18,
2006, by and between The Osage Nation and AMVEST Osage, Inc.

11.Assignment, Assumption and Ratification Agreement, dated as of July 25, 2007,
by and between AMVEST Osage, Inc. and CEP Mid-Continent LLC

Schedule 1 - 1

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12.Water Gathering and Disposal Agreement, dated as of August 9, 1990, by and
between Torch Energy Associates Ltd. and Valasco Gas Company Ltd., as amended by
First Amendment to Water Gathering and Disposal Agreement, dated as of October
1, 1993, by and between Torch Energy Associates Ltd. and Valasco Gas Company
Ltd., Second Amendment to Water Gathering and Disposal Agreement, dated as of
November 30, 2004, by and between Robinson’s Bend Operating Company, LLC and
Everlast Energy LLC, and Third Amendment, dated June 13, 2011, to Water
Gathering and Disposal Agreement dated November 30, 2004, by and between
Robinson’s Bend Operating II, LLC, Robinson’s Bend Production II, LLC and Torch
Energy Associates Ltd.

13.Amended and Restated Employment Agreement, dated April 5, 2012, by and
between CEP Services Company, Inc. and Charles C. Ward

14.Purchase and Sale Agreement, dated as of March 31, 2015, between SEP Holdings
III, LLC, Sanchez Production Partners LP and SEP Holdings IV, LLC

15.Third Amended and Restated Credit Agreement, dated as of March 31, 2015,
among Sanchez Production Partners LP, Royal Bank of Canada, as administrative
agent and collateral agent, and the lenders party thereto, as amended by
Amendment and Waiver of Third Amended and Restated Credit Agreement, dated as of
August 12, 2015 and Joinder, Assignment and Second Amendment to Third Amended
and Restated Credit Agreement, dated as of September [___], 2015

16.Amended and Restated Shared Services Agreement, dated March 6, 2015, between
Sanchez Production Partners LP and SP Holdings, LLC

17.Contract Operating Agreement, dated May 8, 2014, between Constellation Energy
Partners LLC and Sanchez Oil & Gas Corporation

18.Geophysical Seismic Data Use License Agreement, dated May 8, 2014, between
Constellation Energy Partners, LLC, certain subsidiaries thereof, and Sanchez
Oil & Gas Corporation

19.Registration Rights Agreement, dated March 31, 2015, between Sanchez
Production Partners LP and the purchasers named therein

20.Registration Rights Agreement, dated April 15, 2015, between Sanchez
Production Partners LP and the purchasers named therein

21.Purchase and Sale Agreement, dated September [___], 2015, among Sanchez
Energy Corporation, SN Catarina, LLC and Sanchez Production Partners LP

22.Firm Gathering and Processing Agreement, dated September [___], 2015 between
SN Catarina, LLC and Catarina Midstream, LLC

 

 

Schedule 1 - 2

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Final Form
Exhibit B

EXHIBIT B

FORM OF OPINION OF MORRIS, NICHOLS, ARSHT & TUNNELL LLP

 

September [●], 2015

 

 

Stonepeak Catarina Holdings LLC

c/o Stonepeak Infrastructure Partners

717 Fifth Avenue, 25th Floor

New York, NY 10022

 

Re:Sanchez Production Partners LP

 

Ladies and Gentlemen:

 

We have acted as special Delaware counsel to Sanchez Production Partners GP LLC
(the “General Partner”), a Delaware limited liability company and the sole
general partner of Sanchez Production Partners LP (the “Partnership”), a
Delaware limited partnership, in connection with certain matters of Delaware law
as set forth below.  Capitalized terms used herein and not herein defined that
are used with respect to the Partnership are used as defined in the Partnership
Agreement (as defined below) and that are used with respect to the General
Partner are used as defined in the GP Agreement (as defined below).

In rendering this opinion, we have examined and relied on copies of the
following documents in the forms provided to us:  the Second Amended and
Restated Agreement of Limited Partnership of the Partnership dated as of
September [●], 2015 (the “Partnership Agreement”); the Limited Liability Company
Agreement of the General Partner dated as of March 2, 2015, as amended by
Amendment No. 1 thereto dated as of May 8, 2015 and Amendment No. 2 thereto
dated as of September [●], 2015 (as so amended, the “GP Agreement”); the Board
Representation and Standstill Agreement dated as of September [●], 2015 by and
among the Partnership, the General Partner and Stonepeak Catarina Holdings LLC
(the “Standstill Agreement” and, together with the Partnership Agreement and the
GP Agreement, the “Opinion Documents” and each, individually, an “Opinion
Document”).  In such examinations, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as copies or
drafts of documents to be executed and the legal capacity of natural persons to
complete the execution of documents.  We have further assumed for the purposes
of this opinion:  (i) the due formation or organization, valid existence and
good standing of the Partnership and the General Partner and each entity that is
a party to any of the documents reviewed by us under the laws of the
jurisdiction of its formation or organization; (ii) the due authorization,
adoption, execution and, as applicable, delivery by, or on behalf of, each of
the parties thereto of the documents reviewed by us; (iii) except to the extent

 

 

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addressed by our opinions below, that each Opinion Document constitutes a legal,
valid and binding agreement of each of the parties thereto and is enforceable in
accordance with its terms; (iv) that the application of Delaware law to the
Standstill Agreement would not be contrary to a fundamental policy of a
jurisdiction (other than the State of Delaware) that (a) would be the
jurisdiction of applicable law in the absence of an effective choice of law and
(b) has a materially greater interest than Delaware in the determination of a
particular matter relating to the Standstill Agreement; and (v) that each of the
above-referenced documents sets forth the entire understanding of the parties
thereto with respect to the subject matter thereof and has not been
supplemented, amended or otherwise modified, except as herein referenced.  No
opinion is expressed herein with respect to the requirements of, or compliance
with, federal or state securities or blue sky laws.  We have not reviewed any
documents other than those identified above in connection with this opinion, and
we have assumed that there are no other documents that are contrary to or
inconsistent with the opinions expressed herein.  As to any facts material to
our opinion, other than those assumed, we have relied, without independent
investigation, on the above-referenced documents and the accuracy, as of the
date hereof, of the matters therein contained.

Based on and subject to the foregoing and to the further assumptions and
qualifications set forth below, and limited in all respects to matters of
Delaware law, it is our opinion that:

1.The Partnership Agreement constitutes a legal, valid and binding obligation of
the General Partner, enforceable against the General Partner in accordance with
its terms, provided that (a) the provisions of Sections 4.6 and 11.1 of the
Partnership Agreement, to the extent they purport to restrict the voluntary
withdrawal by the General Partner, will be subject to the provisions of Section
17-602 of Delaware Revised Uniform Limited Partnership Act, 6 Del. C. §§ 17-101
et seq. (the “Delaware LP Act”); (b) any provision in the Partnership Agreement
purporting to allow the General Partner or any of its Affiliates to make a
determination or take or decline to take any action free of any duty or
obligation whatsoever will be subject to the provisions of Sections 17-1101(d)
and (f) of the Delaware LP Act; and (c) any restrictions on the transfer of
partnership interests in Partnership set forth in the Partnership Agreement will
be subject to the provisions of Sections 17-703 and 17-705 of the Delaware LP
Act; and provided, further, that we express no opinion as to the effect of
Section 11.1 or 11.2 of the Partnership Agreement to the extent such section
provides that the withdrawal of the General Partner shall automatically
constitute the withdrawal of the General Partner as general partner or managing
member of any other Group Member, to the extent such section provides that the
removal of the General Partner shall automatically constitute the removal of the
General Partner as general partner or managing member of any other Group Member
or to the extent such section provides that the election of any Person as a
successor General Partner shall cause such Person automatically to become a
successor general partner or managing member of any other Group Member.

2

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2.The GP Agreement constitutes a legal, valid and binding obligation of SP
Holdings, LLC, a Texas limited liability company (the “Member”), enforceable
against the Member in accordance with its terms, provided that (a) the
provisions of Section 6.1(c)(vii) of the GP Agreement will be subject to the
provisions of Section 18-801 of the Delaware Limited Liability Company Act, 6
Del. C. §§ 18-101 et seq. (the “Delaware LLC Act”); (b) the provisions of
Sections 6.5 and 6.6 of the GP Agreement will be subject to the provisions of
Section 18-1101(e) of the Delaware LLC Act; and (c) the provisions of Sections
5.1 and 9.2 of the GP Agreement will be subject to the provisions of Sections
18-607 and 18-804 of the Delaware LLC Act; and (d) any restrictions on the
transfer of membership interests in the General Partner set forth in the GP
Agreement will be subject to the provisions of Sections 18-703 and 18-705 of the
Delaware LLC Act.

3.The Standstill Agreement constitutes a legal, valid and binding obligation of
each of the Partnership and the General Partner, enforceable against each of the
Partnership and the General Partner in accordance with its terms.

The opinions set forth above are subject to the effect of (i) bankruptcy,
insolvency, receivership, conservatorship, reorganization, fraudulent
conveyance, moratorium or other laws, rules or regulations, as from time to time
in effect, relating to or affecting the enforcement of creditors’ rights and
remedies generally or the rights and remedies of creditors; (ii) application of
equitable principles (regardless of whether such enforceability is considered
and applied in a proceeding in equity or at law); (iii) considerations of public
policy or the effect of applicable law relating to fiduciary duties; and (iv)
principles of course of dealing or course of performance and standards of good
faith, fair dealing, materiality and reasonableness that may be applied by a
court to the exercise of rights and remedies and the possible unavailability of
the remedies of specific performance or injunctive relief; provided that we
express no opinion with respect to the enforceability of (A) any other document
referenced in the Partnership Agreement, the GP Agreement or the Standstill
Agreement; (B) any purported waiver or consent granted by any person or entity
pursuant to the Partnership Agreement, the GP Agreement or the Standstill
Agreement except to the extent such person or entity may so waive or consent and
has effectively so waived or consented in accordance with applicable law; (C)
the Partnership Agreement, the GP Agreement or the Standstill Agreement against
or with respect to any person or entity who or which is not a party thereto or
requiring any person or entity to cause any third person or entity to take or
refrain from taking specific actions; and (D) the obligation of any person or
entity to pay or reimburse any party for attorneys’ fees under the Partnership
Agreement or the GP Agreement to the extent such payment or reimbursement is in
excess of that permitted by law.

The opinions herein expressed are intended solely for the benefit of the
addressee hereof in connection with the matters contemplated hereby and may not
be relied upon by any other person or entity, or for any other purpose, without
our prior written consent.  This opinion speaks only as of the date hereof and
is based on our understandings or assumptions as to present facts, and on our
review of the above-referenced documents and certificates and the application of

3

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Delaware law as the same exist on the date hereof, and we undertake no
obligation to update or supplement this opinion after the date hereof for the
benefit of any person or entity with respect to any facts or circumstances that
may hereafter come to our attention or any changes in facts or law that may
hereafter occur or take effect.

 

 

 

Very truly yours,

 

 

 

MORRIS, NICHOLS, ARSHT & TUNNELL LLP

 

 

 

 

 

Louis G. Hering

 

 

 

4

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Final Form
Exhibit C

 

EXHIBIT C

FORM OF AMENDED PARTNERSHIP AGREEMENT

 

SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

OF

SANCHEZ PRODUCTION PARTNERS LP

 

 

 

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

 

 

TABLE OF CONTENTS

 

 

 

 

 

Page

Article I

 

DEFINITIONS

 

Section 1.1

Definitions

1 

Section 1.2

Construction

27 

Article II

 

ORGANIZATION

 

Section 2.1

Formation

27 

Section 2.2

Name

27 

Section 2.3

Registered Office; Registered Agent; Principal Office; Other Offices

27 

Section 2.4

Purpose and Business

28 

Section 2.5

Powers

28 

Section 2.6

Term

28 

Section 2.7

Title to Partnership Assets

28 

Article III

 

RIGHTS OF LIMITED PARTNERS

 

Section 3.1

Limitation of Liability

29 

Section 3.2

Management of Business

29 

Section 3.3

Outside Activities of the Limited Partners

29 

Section 3.4

Rights of Limited Partners

29 

Article IV

 

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

 

Section 4.1

Certificates

30 

Section 4.2

Mutilated, Destroyed, Lost or Stolen Certificates

31 

Section 4.3

Record Holders

31 

Section 4.4

Transfer Generally

32 

Section 4.5

Registration and Transfer of Limited Partner Interests

32 

Section 4.6

Transfer of the General Partner’s General Partner Interest

33 

Section 4.7

Restrictions on Transfers

34 

Section 4.8

Eligibility Certificates; Ineligible Holders

36 

Section 4.9

Redemption of Partnership Interests of Ineligible Holders

37 

Article V

 

CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS

 

Section 5.1

Organizational Contributions

39 

Section 5.2

Interest and Withdrawal

39 

Section 5.3

Capital Accounts

39 

Section 5.4

Issuances of Additional Partnership Interests

43 

Section 5.5

Limited Preemptive Right

44 

Section 5.6

Splits and Combinations

44 

 

i

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Section 5.7

Fully Paid and Non-Assessable Nature of Limited Partner Interests

44 

Section 5.8

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

45 

Section 5.9

Establishment of Class A Preferred Units.

46 

Section 5.10

Establishment of Class B Preferred Units.

53 

Article VI

 

ALLOCATIONS AND DISTRIBUTIONS

 

Section 6.1

Allocations for Capital Account Purposes

62 

Section 6.2

Allocations for Tax Purposes

73 

Section 6.3

Distributions; Characterization of Distributions; Distributions to Record
Holders

75 

Section 6.4

Distributions from Operating Surplus

76 

Section 6.5

Distributions from Capital Surplus

77 

Section 6.6

Adjustment of Target Distribution Levels

77 

Section 6.7

Special Provisions Relating to the Holders of IDR Reset Common Units

78 

Section 6.8

Entity-Level Taxation

78 

Section 6.9

Special Provisions Relating to the Preferred Holders.

78 

Article VII

 

MANAGEMENT AND OPERATION OF BUSINESS

 

Section 7.1

Management

79 

Section 7.2

Replacement of Fiduciary Duties

81 

Section 7.3

Certificate of Limited Partnership

81 

Section 7.4

Restrictions on the General Partner’s Authority

82 

Section 7.5

Reimbursement of the General Partner

82 

Section 7.6

Outside Activities

83 

Section 7.7

Indemnification

84 

Section 7.8

Liability of Indemnitees

86 

Section 7.9

Standards of Conduct and Modification of Duties

87 

Section 7.10

Other Matters Concerning the General Partner and Indemnitees

89 

Section 7.11

Purchase or Sale of Partnership Interests

90 

Section 7.12

Registration Rights of the General Partner and its Affiliates

90 

Section 7.13

Reliance by Third Parties

93 

Article VIII

 

BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

Section 8.1

Records and Accounting

93 

Section 8.2

Fiscal Year

94 

Section 8.3

Reports

94 

Article IX

 

TAX MATTERS

 

Section 9.1

Tax Returns and Information

94 

Section 9.2

Tax Elections

95 

Section 9.3

Tax Controversies

95 

Section 9.4

Withholding; Tax Payments

95 

 

ii

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Article X

 

ADMISSION OF PARTNERS

 

Section 10.1

Admission of Limited Partners

96 

Section 10.2

Admission of Successor General Partner

96 

Section 10.3

Amendment of Agreement and Certificate of Limited Partnership

97 

Article XI

 

WITHDRAWAL OR REMOVAL OF PARTNERS

 

Section 11.1

Withdrawal of the General Partner

97 

Section 11.2

Removal of the General Partner

99 

Section 11.3

Interest of Departing General Partner and Successor General Partner

99 

Section 11.4

Withdrawal of Limited Partners

101 

Article XII

 

DISSOLUTION AND LIQUIDATION

 

Section 12.1

Dissolution

101 

Section 12.2

Continuation of the Business of the Partnership After Dissolution

101 

Section 12.3

Liquidator

102 

Section 12.4

Liquidation

102 

Section 12.5

Cancellation of Certificate of Limited Partnership

103 

Section 12.6

Return of Contributions

103 

Section 12.7

Waiver of Partition

103 

Section 12.8

Capital Account Restoration

103 

Article XIII

 

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE

 

Section 13.1

Amendments to be Adopted Solely by the General Partner

103 

Section 13.2

Amendment Procedures

105 

Section 13.3

Amendment Requirements

105 

Section 13.4

Special Meetings

106 

Section 13.5

Notice of a Meeting

107 

Section 13.6

Record Date

107 

Section 13.7

Adjournment

107 

Section 13.8

Waiver of Notice; Approval of Meeting; Approval of Minutes

108 

Section 13.9

Quorum and Voting

108 

Section 13.10

Conduct of a Meeting

108 

Section 13.11

Action Without a Meeting

109 

Section 13.12

Right to Vote and Related Matters

109 

Section 13.13

Voting of Incentive Distribution Rights

110 

Article XIV

 

MERGER OR CONSOLIDATION

 

Section 14.1

Authority

110 

Section 14.2

Procedure for Merger or Consolidation

111 

Section 14.3

Approval by Limited Partners

112 

Section 14.4

Certificate of Merger

113 

Section 14.5

Effect of Merger or Consolidation

113 

 

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Article XV

 

RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS

 

Section 15.1

Right to Acquire Limited Partner Interests

114 

Article XVI

 

GENERAL PROVISIONS

 

Section 16.1

Addresses and Notices; Written Communications

115 

Section 16.2

Further Action

116 

Section 16.3

Binding Effect

116 

Section 16.4

Integration

116 

Section 16.5

Creditors

116 

Section 16.6

Waiver

116 

Section 16.7

Third-Party Beneficiaries

116 

Section 16.8

Counterparts

116 

Section 16.9

Applicable Law; Forum, Venue and Jurisdiction

116 

Section 16.10

Invalidity of Provisions

118 

Section 16.11

Consent of Partners

118 

Section 16.12

Facsimile and Email Signatures

118 

 

 

 

iv

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SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
SANCHEZ PRODUCTION PARTNERS LP

This SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF SANCHEZ
PRODUCTION PARTNERS LP dated as of August ___, 2015, is entered into by and
between Sanchez Production Partners GP LLC, a Delaware limited liability
company, as the General Partner, and 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 1.1Definitions.  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 and the Carrying Value of other property is
increased as a result of such Book-Down Event, an allocable portion of any such
increase in Carrying Value shall be treated as Additional Book Basis; provided,
 however, that the amount treated as Additional Book Basis pursuant hereto as a
result of such Book-Down Event shall not exceed the amount by which the
Aggregate Remaining Net Positive Adjustments after such Book-Down Event exceeds
the remaining Additional Book Basis attributable to all of the Partnership’s
Adjusted Property after such Book-Down Event (determined without regard to the
application of this clause (b) to such Book-Down Event).

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

 

 

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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.

“Adjusted Available Cash” means, with respect to the last day of any month
ending prior to the Liquidation Date:

(a)the sum of:

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

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

(b)the amount of any cash reserves established by the General Partner (or the
Partnership’s proportionate share of cash reserves in the case of Subsidiaries
that are not wholly owned) to provide for the proper conduct of the business of
the Partnership Group (including cash reserves for future capital expenditures
and for anticipated future debt service requirements of the Partnership Group)
for the month as of which the determination of Adjusted Available Cash is made,
which amount shall not exceed the amount established in the most recent budget
approved by the Board to which a Purchaser Designated Director (as defined in
the Board Representation and Standstill Agreement) gave his or her
consent.  Notwithstanding the foregoing, “Adjusted Available Cash” with respect
to the Quarter in which the Liquidation Date occurs and any subsequent Quarter
shall equal zero.

 “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: (a) credit to such
Capital Account any amount which such Partner is (i) obligated to restore under
the standards set by Treasury Regulation Section 1.704-1(b)(2)(ii)(c) or (ii)
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 (b) 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 5.3(d).

2

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

 

 

“Advisers” is defined in Section 7.10(b).

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by or is
under common control with, the Person in question. As used herein, the term
“control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise. For avoidance of
doubt, for purposes of this Agreement, (i) the Partnership, on the one hand, and
the Class A Preferred Unit Purchasers, on the other hand, shall not be
considered Affiliates solely by virtue of such Class A Preferred Unit Purchasers
holding Class A Preferred Units, and (ii) the Partnership, on the one hand, and
the Class B Preferred Unit Holders, on the other hand, shall not be considered
Affiliates solely by virtue of such Class B Preferred Unit Holders holding Class
B Preferred Units or the right to appoint a member to the Board of Directors
pursuant to the Board Representation and Standstill Agreement or as Affiliates
of such member of the Board of Directors.

“Aggregate Quantity of IDR Reset Common Units” is defined in Section 5.8(a).

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

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

“Agreed Value” of (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
both cases as determined by the General Partner. The General Partner shall use
such method as it determines to be appropriate to allocate the aggregate Agreed
Value of Contributed Properties contributed to the Partnership in a single or
integrated transaction among each separate property on a basis proportional to
the fair market value of each Contributed Property.

“Agreement” means this Second Amended and Restated Agreement of Limited
Partnership of Sanchez Production Partners LP, as it may be further amended,
supplemented or restated from time to time.

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

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

(c)the sum of:

3

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

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

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

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

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

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

provided, however, that the General Partner may not establish cash reserves
pursuant to subclause (iii) above if the effect of such reserves would be that
the Partnership is unable to distribute the cash portion of any Class B
Preferred Quarterly Distribution on all Class B Preferred Units with respect to
such Quarter or Minimum Quarterly Distribution on all Common Units with respect
to such Quarter; and, provided further, that disbursements made by a Group
Member or cash reserves established, increased or reduced after the end of such
Quarter but on or before the date of determination of Available Cash with
respect to such Quarter shall be deemed to have been made, established,
increased or reduced, for purposes of determining Available Cash, within such
Quarter if the General Partner so determines.

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

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

“Board Representation and Standstill Agreement” means that certain Board
Representation and Standstill Agreement, dated as of September [___], 2015, by
and among the Partnership, the General Partner and Stonepeak, as the same may be
amended, restated or otherwise modified from time to time.

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“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 a Revaluation Event that gives rise to a Net
Termination Loss.

“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
5.3 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 a Revaluation Event that gives rise to a Net Termination
Gain.

“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 States of New York or Texas shall not be regarded as a Business Day.

“Capital Account” means the capital account maintained for a Partner pursuant to
Section 5.3.  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 contributed or contributes to the
Partnership or that was or 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) replacement, improvement, addition or
expansion of capital assets owned by any Group Member, (b) acquisition of
existing or new capital assets (through an asset acquisition, merger, stock
acquisition or other form of investment) or construction or development 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 had or has,
or after such capital contribution had or will have, directly or indirectly, an
equity interest, to fund such Group Member’s pro rata share of the cost of any
replacement, improvement, addition or expansion of capital assets or acquisition
of existing or new capital assets or construction or development of new capital
assets, by such Person, in each case if and to the extent such replacement,
improvement, addition, expansion, acquisition, construction or development is
made to increase over the long-term, the operating capacity, operating income or
asset base of the Partnership Group, in the case of clauses (a) and (b), or such
Person, in the case of clause (c), from the operating capacity, operating income
or asset base of the Partnership Group or such Person, as the case may be,
existing immediately prior to such replacement, improvement, addition,
expansion, acquisition, construction, development or Capital Contribution.

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“Capital Surplus” means cash and cash equivalents distributed by the Partnership
or SPP LLC 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 other 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 5.3(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 or wanton misconduct in its
capacity as a general partner of the Partnership.

“Certificate” means a certificate in such form (including in global form if
permitted by applicable rules and regulations) as may be adopted by the General
Partner, issued by the Partnership evidencing ownership of one or more
Partnership Interests.  The initial form of certificate approved by the General
Partner for Common Units is attached as Exhibit A to this Agreement.

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

“Citizenship Eligibility Trigger” is defined in Section 4.8(a)(ii).

“claim” (as used in Section 7.12(c)) is defined in Section 7.12(c).

“Class A Holder Optional Conversion Date” has the meaning set forth in Section
5.9(b)(ii).

“Class A Preferred Conversion Date” means the Mandatory Conversion Date, the
Partnership Optional Conversion Date, the Class A Holder Optional Conversion
Date or the Class A Preferred Voluntary Conversion Date, as applicable. 

“Class A Preferred Conversion Notice” has the meaning set forth in Section
5.9(b)(ii).

“Class A Preferred Conversion Price” means the lesser of (i) the Class A
Preferred Unit Price applicable to the Class A Preferred Unit that is converted
and (ii) the lowest price after March 31, 2015 and on or prior to the applicable
Class A Preferred Conversion Date for which a Common Unit is issued by the
Partnership (including pursuant to a Qualified Public Offering), other than in
connection with an at-the-market offering or pursuant to the LTIP.

“Class A Preferred Conversion Rate” has the meaning set forth in Section
5.9(b)(i).

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“Class A Preferred Distribution Rate” means an amount per Class A Preferred Unit
equal to the following percentages of the applicable Class A Preferred Unit
Price:  (i) from the Class A Preferred Issue Date applicable to such Class A
Preferred Unit through and including March 31, 2016, 10.0% per annum (2.5% per
quarter), (ii) from April 1, 2016 through and including March 31, 2017, 11.5%
per annum (2.875% per quarter) and (iii) from and after April 1, 2017, 12.5% per
annum (3.125% per quarter).

“Class A Preferred Holder” means a holder of a Class A Preferred Unit.

“Class A Preferred Issue Date” means, with respect to a Class A Preferred
Holder, the definition set forth for the term “Closing Date” in the Class A
Preferred Unit Purchase Agreement to which such Class A Preferred Holder is a
party.

“Class A Preferred Liquidation Preference” means, with respect to each Class A
Preferred Unit, an amount equal to the amount set forth in the definition for
the term “Purchase Price” in the Class A Preferred Unit Purchase Agreement
pursuant to which such Class A Preferred Unit was issued, plus all accrued and
unpaid distributions on such Class A Preferred Unit to the applicable Class A
Preferred Conversion Date.

“Class A Preferred PIK Unit” means a Class A Preferred Unit issued pursuant to a
Class A Preferred Unit Distribution in accordance with Section 5.9(c).

“Class A Preferred Quarterly Distribution” has the meaning set forth in Section
5.9(c)(i).

“Class A Preferred Unit” means a Partnership Interest representing a fractional
part of the Partnership Interests of all Limited Partners and assignees, and
having the rights and obligations specified with respect to a Class A Preferred
Unit in this Agreement, including Class A Preferred PIK Units, provided that
such Class A Preferred PIK Units shall be subject to such restrictions as are
set forth herein. A Class A Preferred Unit that is convertible into a Common
Unit shall not constitute a Common Unit until such conversion occurs.

“Class A Preferred Unit Price” means, with respect to a Class A Preferred Unit,
an amount equal to ten (10) times the amount set forth in the definition for the
term “Purchase Price” in the Class A Preferred Unit Purchase Agreement pursuant
to which such Class A Preferred Unit was issued.

“Class A Preferred Unit Purchase Agreement” means the applicable purchase
agreement between the Partnership and a Class A Preferred Holder with respect to
such Class A Preferred Holder’s Class A Preferred Units.

“Class A Preferred Unit Purchasers” means each of the Persons named on Schedule
A to a Class A Preferred Unit Purchase Agreement.

“Class A Preferred Voluntary Conversion Date” has the meaning set forth in
Section 5.9(b)(iv).

“Class A Units” means “Class A Units” as defined in that certain Second Amended
and Restated Operating Agreement, dated as of November 20, 2006, as amended, of
SPP LLC.

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“Class B Preferred Conversion Date” has the meaning set forth in Section
5.10(b)(i).

“Class B Preferred Conversion Notice” has the meaning set forth in Section
5.10(b)(i).

“Class B Preferred Conversion Price” means the lesser of (i) the Class B
Preferred Unit Price, as may be adjusted pursuant to Section 5.10(b)(ix) and
(ii) the volume weighted average price for which Common Units are issued by the
Partnership (including pursuant to a Qualified Public Offering or in connection
with an at-the-market offering) during the Subsequent Issuance Period, other
than pursuant to the LTIP.

“Class B Preferred Conversion Rate” has the meaning set forth in Section
5.10(b)(i).

“Class B Preferred Distribution Rate” means an amount per Class B Preferred Unit
equal to the following percentages from and after the Class B Preferred Issue
Date applicable to such Class B Preferred Unit (pro rata for the Quarter in
which such Class B Preferred Issue Date occurs) until such Class B Preferred
Unit is no longer Outstanding:  (i) if paid fully in cash, 10% per annum (2.5%
per quarter), and (ii) if paid in a combination of cash and Class B Preferred
PIK Units, 8% per annum (2.0% per quarter) payable in cash and 4% per annum (1%
per quarter) payable in Class B Preferred PIK Units (the “Class B Preferred
Initial Distribution Rate”); provided, however, that (a) if the transactions
contemplated by Section 5.10(f) have not been consummated on or before September
30, 2016, then from and after September 30, 2016 until the last day of the
Quarter in which such transactions have been consummated, the Class B Preferred
Initial Distribution Rate shall instead be the Class B Preferred Increased
Distribution Rate and (b) if any Class A Preferred Units remain Outstanding
after March 31, 2016, then from and after April 1, 2016 until the last day of
the Quarter in which no Class A Preferred Units are Outstanding, the Class B
Preferred Initial Distribution Rate shall instead be the Class B Preferred
Increased Distribution Rate.

“Class B Preferred Holder” means a holder of a Class B Preferred Unit.

“Class B Preferred Increased Distribution Rate” means an amount per Class B
Preferred Unit equal to the following percentages: (A) if paid fully in cash,
14% per annum (3.5% per quarter) and (B) if paid in a combination of cash and
Class B Preferred PIK Units, 12% per annum (3% per quarter) payable in cash and
4% per annum (1% per quarter) payable in Class B Preferred PIK Units.

“Class B Preferred Issue Date” means September [___], 2015.

“Class B Preferred Liquidation Preference” means, with respect to each Class B
Preferred Unit, an amount equal to the Class B Preferred Unit Price, plus all
accrued and unpaid distributions on such Class B Preferred Unit and, without
duplication, any increase in the balance of such accrued and unpaid
distributions, as set forth in Section 5.10(c)(ii)(B), to the applicable Class B
Preferred Conversion Date.

“Class B Preferred PIK Unit” means a Class B Preferred Unit issued pursuant to a
Class B Preferred Unit Distribution in accordance with Section 5.10(c).

“Class B Preferred Quarterly Distribution” has the meaning set forth in Section
5.10(c)(i).

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“Class B Preferred Redemption Date” means any date on which Class B Preferred
Units are redeemed pursuant to Section 5.10(d), as set forth in a Class B
Preferred Redemption Notice.

“Class B Preferred Redemption Notice” has the meaning set forth in Section
5.10(d)(iv).

“Class B Preferred Unit” means a Partnership Interest representing a fractional
part of the Partnership Interests of all Limited Partners and assignees, and
having the rights and obligations specified with respect to a Class B Preferred
Unit in this Agreement, including Class B Preferred PIK Units, provided that
such Class B Preferred PIK Units shall be subject to such restrictions as are
set forth herein. A Class B Preferred Unit that is convertible into a Common
Unit shall not constitute a Common Unit until such conversion occurs.

“Class B Preferred Unit Liquidation Amount” means the greater of (i) the Current
Market Price (as of the relevant date of determination) or (ii) with respect to
a redemption occurring, (A) on or before December 31, 2016, an amount equal to
160% of the Class B Preferred Liquidation Preference, (B) on or after January 1,
2017 and on or before December 31, 2017, an amount equal to 150% of the Class B
Preferred Liquidation Preference, (C) on or after January 1, 2018 and on or
before December 31, 2018, an amount equal to 130% of the Class B Preferred
Liquidation Preference, (D) on or after January 1, 2019 and on or before
December 31, 2019, an amount equal to 120% of the Class B Preferred Liquidation
Preference, (E) on or after January 1, 2020 and on or before December 31, 2020,
an amount equal to 110% of the Class B Preferred Liquidation Preference, and (F)
on or after January 1, 2021, an amount equal to the Class B Preferred
Liquidation Preference. 

“Class B Preferred Unit Price” means, subject to Section 5.10(g), with respect
to a Class B Preferred Unit, the amount set forth in the definition for the term
“Purchase Price” in the Class B Preferred Unit Purchase Agreement.

“Class B Preferred Unit Purchase Agreement” means the Class B Preferred Unit
Purchase Agreement between the Partnership and the Class B Preferred Unit
Purchasers, dated as of September [___], 2015.

“Class B Preferred Unit Purchasers” means each of the Persons named on Schedule
A to the Class B Preferred Unit Purchase Agreement.

“Class Z Units” means “Class Z Units” as defined in that certain Second Amended
and Restated Operating Agreement, dated as of November 20, 2006, as amended, of
SPP LLC.

“Closing Date” means November 20, 2006, which is the first date on which SPP LLC
issued and delivered Predecessor Units.

“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 the respective Limited Partner Interests are listed or admitted to trading
or, if such Limited Partner Interests are not listed or admitted to trading on
any National Securities Exchange, the last quoted price on such

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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.

“Combined Interest” is defined in Section 11.3(a).

“Commercial Service Commencement Date” means the date on which a Capital
Improvement or capital asset, as applicable, was or is first put into commercial
service by a Group Member following, if applicable, completion of construction,
acquisition or development and testing, as applicable.

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

“Common Unit” means a Partnership Interest representing a fractional part of the
Partnership Interests of all Limited Partners and assignees, and having the
rights and obligations specified with respect to the Common Units in this
Agreement. A Preferred Unit will not constitute a Common Unit until the
applicable Preferred Conversion Date with respect to such Preferred Unit.

“Conflicts Committee” means a committee of the Board of Directors composed
entirely of two or more directors, each of whom (a) is not an officer or
employee of the General Partner, (b) is not an officer or employee of any
Affiliate of the General Partner or a director of any Affiliate of the General
Partner (other than any Group Member), (c) is not a holder of any ownership
interest in the General Partner or any of its Affiliates, including any Group
Member, other than Common Units and awards that are granted to such director
under the LTIP and (d) is determined by the Board of Directors to be independent
under the independence standards for directors who serve on an audit committee
of a board of directors established by the Securities Exchange Act and the rules
and regulations of the Commission thereunder and by the National Securities
Exchange on which any class of Partnership Interests is listed or admitted to
trading.

“Contributed Property” means each property or other asset, in such form as may
be permitted by the Delaware Act, but excluding cash, contributed to the
Partnership.  Once the Carrying Value of a Contributed Property is adjusted
pursuant to Section 5.3(d), such property or other assets shall no longer
constitute a Contributed Property, but shall be deemed an Adjusted Property.

“Conversion Date” means the effective date and time of the conversion of SPP LLC
from a limited liability company to the Partnership. 

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“Converted Units” means “Class A Units” as defined in that certain Second
Amended and Restated Operating Agreement, dated as of November 20, 2006, as
amended, of SPP LLC.

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

“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 Section 11.2.

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

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

“Eligibility Certificate” is defined in Section 4.8(b).

“Eligible Holder” means a Person that satisfies the eligibility requirements
established by the General Partner for Partners pursuant to Section 4.8.

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

“Estimated Maintenance Capital Expenditures” means an estimate made in good
faith by the Board of Directors of the average quarterly Maintenance Capital
Expenditures that the Partnership will need to incur to maintain, over the
long-term, the operating capacity, operating income or asset base of the
Partnership Group existing at the time the estimate is made.  The Board of
Directors will be permitted to make such estimate in any manner it determines
reasonable.  The estimate will be made at least annually and whenever an event
occurs that is likely to result in a material adjustment to the amount of future
Estimated Maintenance Capital Expenditures.  The Partnership shall disclose to
its Partners any change in the amount of Estimated Maintenance Capital
Expenditures in its reports made in accordance with Section 8.3 to the extent
not previously disclosed.  Any adjustments to Estimated Maintenance Capital
Expenditures shall be prospective only.

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

“Event Issue Value” means, with respect to any Common Unit as of any date of
determination, (i) in the case of a Revaluation Event that includes the issuance
of Common Units pursuant to a public offering and solely for cash, the price
paid for such Common Units, or (ii) in the case of any other Revaluation Event,
the Closing Price of the Common Units on the date of

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such Revaluation Event or, if the General Partner determines that a value for
the Common Unit other than such Closing Price more accurately reflects the Event
Issue Value, the value determined by the General Partner.

“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).

“Existing Credit Facility” means the Third Amended and Restated Credit
Agreement, dated as of March 31, 2015 among the Partnership, as Borrower, Royal
Bank of Canada, as Administrative Agent, and the lenders from time to time party
thereto, as may be amended, restated, refinanced, replaced or otherwise modified
from time to time; provided that the credit facility provided under the Existing
Credit Facility shall be, at all times, a revolving bank facility provided by
commercial banks and/or affiliates of commercial banks that are primarily
engaged in providing such facilities.

“Expansion Capital Expenditures” means cash expenditures for Capital
Improvements, and shall not include Maintenance Capital Expenditures or
Investment Capital Expenditures.  Expansion Capital Expenditures shall include
interest (and related fees) on debt incurred and distributions on equity issued
to finance all or any portion of the construction of a Capital Improvement and
paid in respect of the period beginning on the date that a Group Member entered
or enters into a binding obligation to commence construction of a Capital
Improvement and ending on the earlier to occur of (i) the Commercial Service
Commencement Date for such Capital Improvement and (ii) the date that such
Capital Improvement is abandoned or disposed of.  Debt incurred to pay or equity
issued to fund the construction period interest payments, or such construction
period distributions on equity, shall also be deemed to be debt or equity, as
the case may be, incurred to finance the construction of a Capital Improvement
and the incremental Incentive Distributions paid relating to newly issued equity
to finance the construction of a Capital Improvement.  If capital expenditures
are made in part for Expansion Capital Expenditures and in part for other
purposes, the General Partner shall determine the allocation of such capital
expenditures between the amounts paid for each.

“First Liquidation Target Amount” is defined in Section 6.1(c)(i)(D).

“First Target Distribution” means $0.575 per Unit per Quarter (or, with respect
to periods of more or less than one 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 Section 5.8, Section 6.6 and
Section 6.8.

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

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“General Partner Interest” means the non-economic management interest of the
General Partner in the Partnership (in its capacity as a general partner and
without any 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.  The General
Partner Interest does not include any rights to ownership or profits or losses
or any rights to receive distributions from operations or upon the liquidation
or winding-up of the Partnership. 

“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.

“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.

“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 the price of
hydrocarbons or interest rates, basis differentials or currency exchange rates
in their operations or financing activities, in each case, other than for
speculative purposes.

“Holder” as used in Section 7.12, is defined in Section 7.12(a).

“IDR Reset Common Unit” is defined in Section 5.8(a).

“IDR Reset Election” is defined in Section 5.8(a).

“Incentive Distribution Right” means a Limited Partner Interest having the
rights and obligations specified with respect to Incentive Distribution Rights
in this Agreement.

“Incentive Distributions” means any amount of cash distributed to the holders of
the Incentive Distribution Rights pursuant to Section 6.4.

“Incremental Income Taxes” is defined in Section 6.8.

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“Indemnified Persons” is defined in Section 7.12(c).

“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.

“Ineligible Holder” is defined in Section 4.8(c).

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

“Initial Offering” means the initial offering and sale of Predecessor Units to
the public.

“Initial Unit Price” means (a) with respect to the Common Units, the initial
public offering price per Predecessor Unit at which they were sold on the
Closing Date 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 Expansion Capital Expenditures.

“Junior Securities” means any class or series of Partnership Interests that,
with respect to distributions on such Partnership Interests of cash or property
and distributions upon liquidation of the Partnership (taking into account the
intended effects of the allocation of gains and losses as provided in this
Agreement), ranks junior to the Class B Preferred Units, including, but not
limited to, Common Units.

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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, each Person who
holds Predecessor Units or Converted Units on the Conversion Date, each
additional Person that becomes a Limited Partner pursuant to the terms of this
Agreement and any Departing General Partner upon the change of its status from
General Partner to Limited Partner pursuant to Section 11.3, in each case, in
such Person’s capacity as a limited partner of the Partnership.

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

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

“Liquidator” means one or more Persons selected by the General Partner to
perform the functions described in Section 12.4 as liquidating trustee of the
Partnership within the meaning of the Delaware Act.

“LTIP” means the Long-Term Incentive Plan of the Partnership, as may be amended,
or any equity compensation plan successor thereto.

“Maintenance Capital Expenditures” means cash expenditures (including
expenditures for the replacement, improvement, addition or expansion of the
capital assets owned by any Group Member or for the acquisition of existing or
new capital assets or the construction or development of new capital assets) by
a Group Member if such expenditures are made to maintain, over the long-term,
the operating capacity, operating income or asset base of the Partnership
Group. 

“Mandatory Conversion Date” means the earlier of (i) March 31, 2018 and (ii) the
closing date for a Qualified Public Offering.

“Member” means “Member” as defined in that certain Second Amended and Restated
Operating Agreement, dated as of November 20, 2006, as amended, of SPP LLC.

“Member Interest” means “Member Interest” as defined in that certain Second
Amended and Restated Operating Agreement, dated as of November 20, 2006, as
amended, of SPP LLC.

“Merger Agreement” is defined in Section 14.1.

“Minimum Conversion Amount” means (i) a number of Class B Preferred Units having
an aggregate value of $17.5 million, which value is calculated by multiplying
the number of Class B

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Preferred Units to be converted by the Class B Preferred Conversion Price or
(ii) if the value of the Class B Preferred Units (calculated in accordance with
clause (i) above) to be converted by the Class B Preferred Holder requesting
conversion does not equal or exceed $17.5 million, then all of the Class B
Preferred Units held by such Class B Preferred Holder.

“Minimum Quarterly Distribution” means $0.50 per Unit per Quarter (or with
respect to periods of more or 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 Section 5.8,
Section 6.6 and Section 6.8.

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

“Net Agreed Value” means, (a) in the case of any Contributed Property, the
Agreed Value of such property reduced by any Liabilities either assumed by the
Partnership upon such contribution or to which such property is subject when
contributed and (b) in the case of any property distributed to a Partner by the
Partnership, the Partnership’s Carrying Value of such property (as adjusted
pursuant to Section 5.3(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 5.3 and
shall include Simulated Gain but shall not include any items specially allocated
under Section 6.1(d) or Section 6.1(e); provided, that the determination of the
items that have been specially allocated under Section 6.1(d) or Section 6.1(e)
shall be made without regard to any reversal of such items under Section
6.1(d)(xiv).

“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 5.3 and
shall include Simulated Gain but shall not include any items specially allocated
under Section 6.1(d) or Section 6.1(e); provided, that the determination of the
items that have been specially allocated under Section 6.1(d) or Section 6.1(e)
shall be made without regard to any reversal of such items under Section
6.1(d)(xiv).

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

“Net Termination Gain” means, for any taxable period, (a) the sum, if positive,
of all items of income, gain, loss or deduction (determined in accordance with
Section 5.3) that are recognized by the Partnership (i) after the Liquidation
Date, (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 (iii) upon the sale of assets to fund a
redemption pursuant to Section 4.9(a)(iii) or Section 5.10(d), 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 5.3(d) on the date of a Revaluation Event; provided,  however, that the
items included in the determination of Net Termination Gain shall include
Simulated Gain, but shall not include any items of income, gain or loss
specially allocated under Section 6.1(d) or Section 6.1(e).

“Net Termination Loss” means, for any taxable period, (a) the sum, if negative,
of all items of income, gain, loss or deduction (determined in accordance with
Section 5.3) that are recognized by the Partnership (i) after the Liquidation
Date, (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 (iii) upon the sale of assets to fund a
redemption pursuant to Section 4.9(a)(iii) or Section 5.10(d) 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 5.3(d)
on the date of a Revaluation Event; provided,  however, that the items included
in the determination of Net Termination Loss shall include Simulated Gain, but
shall not include any items of income, gain or loss specially allocated under
Section 6.1(d) or Section 6.1(e).

“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(d) if such properties were disposed of in a
taxable transaction in full satisfaction of such liabilities and for no other
consideration.

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

“Offering Notice” is defined in Section 4.7(e)(iii).

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“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, amounts paid under the Shared
Services Agreement, reimbursements of expenses of the General Partner and its
Affiliates, payments made in the ordinary course of business under any Hedge
Contracts, Board of Directors, officer and employee compensation, repayment of
Working Capital Borrowings, debt service payments and Estimated Maintenance
Capital Expenditures, subject to the following:

(e)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;

(f)payments (including prepayments and prepayment penalties and the purchase
price of indebtedness that is repurchased and cancelled) of principal of and
premium on indebtedness other than Working Capital Borrowings shall not
constitute Operating Expenditures;

(g)Operating Expenditures shall not include (i) Expansion Capital Expenditures,
(ii) actual Maintenance Capital Expenditures, (iii) Investment Capital
Expenditures, (iv) payment of transaction expenses (including taxes) relating to
Interim Capital Transactions, (v) distributions to Partners (including in
respect of Incentive Distribution Rights) or (vi) repurchases of Partnership
Interests, other than repurchases of Partnership Interests to satisfy
obligations under employee benefit plans, or reimbursements of expenses of the
General Partner for such purchases.  If capital expenditures are made in part
for Maintenance Capital Expenditures and in part for other purposes, the General
Partner shall determine the allocation of such capital expenditures between the
amounts paid for each; and

(h)(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 amortized 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,

(i)the sum of (i) $20.0 million, (ii) all cash receipts of the Partnership Group
(or the Partnership’s proportionate share of cash receipts in the case of
Subsidiaries that are not wholly owned) for the period beginning on the Closing
Date and ending on the last day of such period, but excluding cash receipts from
Interim Capital Transactions and provided that cash receipts from the
termination of any Hedge Contract prior to its stipulated settlement or
termination date shall be amortized in equal quarterly installments over what
would have been the remaining scheduled term of such Hedge Contract had it not
been so terminated, (iii) all cash receipts of the Partnership Group (or the
Partnership’s proportionate share of cash receipts in the case of Subsidiaries
that are not wholly owned) after the end of such period but on or before the
date of determination of Operating Surplus with respect to such period resulting
from Working Capital Borrowings, and (iv) the amount of cash distributions paid
(including incremental Incentive Distributions) in respect of equity issued,
other than equity issued in the Initial Offering, to finance all or a portion of
the

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Expansion Capital Expenditures and paid in respect of the period beginning on
the date that the Group Member entered or enters into a binding obligation to
commence the replacement, improvement, addition, expansion, acquisition,
construction or development of a Capital Improvement and ending on the earlier
to occur of the Commercial Service Commencement Date for such Capital
Improvement and the date on which such Capital Improvement is abandoned or
disposed of (equity issued, other than equity issued in the Initial Offering, to
fund the construction period interest payments on debt incurred (including
periodic net payments under related interest rate swap agreements), or
construction period distributions on equity issued (including incremental
Incentive Distributions), to finance the Expansion Capital Expenditures shall
also be deemed to be equity issued to finance the replacement, improvement,
addition, expansion, acquisition, construction or development of a Capital
Improvement for purposes of this clause (iv)); less

(j)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 SPP LLC (or the Partnership’s or SPP LLC’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 12 months after having been
incurred or repaid within such 12-month period with the proceeds of additional
Working Capital Borrowings, and (iv) any cash loss realized on 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), the General Partner’s estimates of cash received, or cash reserves
established, increased or reduced after the end of such period but on or before
the date of determination of cash or cash equivalents to 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.  Customer payments that
are paid no more than several days after their due date will be treated as paid
on their due date.

“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.

“Outstanding” means, with respect to Partnership Interests, all Partnership
Interests that are issued by the Partnership and reflected as outstanding on the
Partnership’s books and records as of the date of determination; provided,
 however, that if at any time any Person or Group (other than the General
Partner or its Affiliates) beneficially owns 20% or more of the Outstanding
Partnership Interests of any class then Outstanding (other than the Preferred
Units), none of the Partnership Interests owned by such Person or Group shall be
entitled to be voted on any matter or be considered to be Outstanding when
sending notices of a meeting of Limited Partners to vote on any matter (unless
otherwise required by law or approved by the Board of Directors),

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calculating required votes, determining the presence of a quorum or for other
similar purposes under this Agreement, except that Partnership Interests so
owned shall be considered to be Outstanding for purposes of Section 11.1(b)(iv)
(such Partnership Interests shall not, however, be treated as a separate class
of Partnership Interests for purposes of this Agreement or the Delaware Act);
provided,  further, that the foregoing limitation shall not apply to (i) any
Person or Group who acquired 20% or more of the Outstanding Partnership
Interests of any class then Outstanding directly from the General Partner or its
Affiliates (other than the Partnership), (ii) any Person or Group who acquired
20% or more of the Outstanding Partnership Interests of any class then
Outstanding directly or indirectly from a Person or Group described in clause
(i) provided that the General Partner shall have notified such Person or Group
in writing that such limitation shall not apply, or (iii) any Person or Group
who acquired 20% or more of any Partnership Interests issued by the Partnership
provided that the General Partner shall have notified such Person or Group in
writing that such limitation shall not apply; provided, moreover, that if any
Person or Group beneficially owns 20% or more of the Outstanding Partnership
Interests of any class then Outstanding solely as a result of actions taken by
the Partnership, then the 20% threshold specified herein shall be increased,
with respect to such Person, to a percentage equal to such Person’s new
beneficial ownership after the taking of such action plus the difference between
20% and such Person’s beneficial ownership prior to such action.  For the
avoidance of doubt, the Board of Directors has approved the issuance of the
Class B Preferred Units (including the Common Units issued upon conversion
thereof) to the Class B Preferred Unit Purchasers pursuant to the Class B
Preferred Unit Purchase Agreement in accordance with clause (iii) of the
immediately preceding sentence, and any Class B Preferred PIK Units (including
any Common Units issued upon conversion thereof) issued to the Class B Preferred
Unit Purchasers shall be deemed to be approved by the Board of Directors in
accordance with clause (iii) of the immediately preceding sentence and the
foregoing limitations of the immediately preceding sentence do not apply to the
Class B Preferred Unit Purchasers, their Affiliates or their permitted assigns
with respect to their ownership of the Class B Preferred Units (including any
Common Units issued upon conversion thereof).

“Parity Securities” means any class or series of Partnership Interests that,
with respect to distributions on such Partnership Interests of cash or property
and distributions upon liquidation of the Partnership (taking into account the
intended effects of the allocation of gains and losses as provided in this
Agreement), ranks pari passu with the Class B Preferred Units.

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

“Partners” means the General Partner and the Limited Partners (and, as
applicable, the Members prior to the Conversion Date).

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“Partnership” means Sanchez Production Partners LP, a Delaware limited
partnership (and, as applicable, SPP LLC prior to the Conversion Date).

“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 Interest (including, for the avoidance of doubt, any Preferred Unit and
Incentive Distribution Right), but shall exclude any options, rights, warrants
and appreciation rights relating to an equity interest in the Partnership (and,
as applicable, Member Interests prior to the Conversion Date).

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

“Partnership Optional Conversion Date” has the meaning set forth in Section
5.9(b)(vi).

“Percentage Interest” means as of any date of determination as to any Unitholder
with respect to Units or a class thereof, the quotient obtained by dividing the
number of such Units held by such Unitholder, by the total number of such
Outstanding Units. The Percentage Interest with respect to the General Partner
Interest and an Incentive Distribution Right shall at all times be zero.

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

“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.

“PIK Unit” means a Class A Preferred PIK Unit or a Class B Preferred PIK Unit.

“Predecessor Units” means “Common Units” as defined in that certain Second
Amended and Restated Operating Agreement, dated as of November 20, 2006, as
amended, of SPP LLC.

“Preferred Conversion Date” means a Class A Preferred Conversion Date or a Class
B Preferred Conversion Date, as applicable.

“Preferred Holder” means a Class A Preferred Holder or a Class B Preferred
Holder, as applicable.

“Preferred Units” means the Class A Preferred Units and the Class B Preferred
Units.

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

“Pro Rata” means (a) when used with respect to (i) Units (other than the
Preferred Units) or any class thereof, apportioned equally among all designated
Outstanding Units (other than the Preferred Units) in accordance with the
relative Percentage Interests of such Units, (ii) all Partners

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or Record Holders, apportioned among all Partners or Record Holders in
accordance with their relative Percentage Interests and (iii) some but not all
Partners or Record Holders, in accordance with the relative Percentage Interests
of such Partners or Record Holders and (b) when used with respect to Class A
Preferred Units or Class B Preferred Units, apportioned among all Class A
Preferred Holders or Class B Preferred Holders, as applicable, in accordance
with the relative number or percentage of Class A Preferred Units or Class B
Preferred Units, as applicable, held by each such holder to the total number of
Outstanding Class A Preferred Units or Outstanding Class B Preferred Units, as
applicable.

“Proposed Transaction” is defined in Section 4.7(e)(iii).

“Purchase Date” means the date determined by the General Partner as the date for
purchase of all Outstanding Limited Partner Interests of a certain class (other
than Limited Partner Interests owned by the General Partner and its Affiliates)
pursuant to Article XV.

“Qualified Public Offering” means a firm commitment underwritten public offering
by the Partnership of Common Units that results in the Partnership receiving
gross proceeds (before underwriting discounts, commissions, fees and expenses)
of not less than $75,000,000.

“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 Conversion Date occurs, the portion of such fiscal quarter after the
Conversion Date.

“Rate Eligibility Trigger” is defined in Section 4.8(a)(i).

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

“Record Date” means the date established by the General Partner or otherwise in
accordance with this Agreement for determining (a) the identity of the Record
Holders entitled to notice of, or to vote at, any meeting of Limited Partners or
entitled to vote by ballot or give approval of Partnership action in writing
without a meeting or entitled to exercise rights in respect of any lawful action
of Limited Partners or (b) the identity of Record Holders entitled to receive
any report or distribution or to participate in any offer.

“Record Holder” means (a) with respect to 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;
provided that, for the avoidance of doubt, Partnership Interests owned by
Stonepeak shall under no circumstances constitute Redeemable Interests.

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“Registration Statement” means, collectively, the Registration Statements on
Form S-4 (Registration Nos. 333-198440 and 333-202526) as they may have been or
as they may be amended or supplemented from time to time, filed by SPP LLC with
the Commission under the Securities Act to register the Common Units issued to
the holders of the Predecessor Units and Converted Units in connection with the
conversion of the Predecessor Units and Converted Units into Common Units.

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

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

“Reset MQD” is defined in Section 5.8(a).

“Reset Notice” is defined in Section 5.8(b).

“Revaluation Event” means an event that results in adjustment of the Carrying
Value of each Partnership property pursuant to Section 5.3(d).

“ROFO Interest” is defined in Section 4.7(e)(iii).

“ROFO Response” is defined in Section 4.7(e)(iii).

“Sanchez” is defined in Section 4.7(e)(iii).

“Second Liquidation Target Amount” is defined in Section 6.1(c)(i)(E).

“Second Target Distribution” means $0.625 per Unit per Quarter (or, with respect
to periods of more or 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 Section 5.8, Section
6.6 and Section 6.8.

“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.

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“Senior Securities” means any class or series of Partnership Interests that,
with respect to distributions on such Partnership Interests of cash or property
or distributions upon liquidation of the Partnership (taking into account the
intended effects of the allocation of gains and losses as provided in this
Agreement), or both, ranks senior to the Class B Preferred Units, including, but
not limited to, the Class A Preferred Units.

“Shared Services Agreement” means that certain Shared Services Agreement between
SP Holdings, LLC and SPP LLC dated May 8, 2014.

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

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

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

“Simulated Gain” means the excess, if any, of the amount realized from the sale
or other disposition of an oil or gas property over the Carrying Value of such
property and determined pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(k)(2).

“Simulated Loss” means the excess, if any, of the Carrying Value of an oil or
gas property over the amount realized from the sale or other disposition of such
property and determined pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(k)(2).

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

“SPP LLC” means Sanchez Production Partners LLC (formerly known as Constellation
Energy Partners LLC), a Delaware limited liability company, which is being
continued as of the Conversion Date as the Partnership.

“Stonepeak” means Stonepeak Catarina Holdings LLC, a Delaware limited liability
company.

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“Subsequent Issuance Period” means the period beginning on the Class B Preferred
Issuance Date and ending on the date on which the Partnership has issued, in one
or more transactions (excluding issuances pursuant to the LTIP), additional
Common Units in exchange for cash in an aggregate amount equal to at least
$75,000,000; provided, however, that if any Class A Preferred Units are
converted on or before September 30, 2016 into Common Units at the Class A
Preferred Conversion Rate (subject to adjustment pursuant to Section
5.9(b)(xiii)) pursuant to Section 5.9(b), then the aggregate amount of
$75,000,000 shall be reduced by an amount equal to the Class A Preferred
Liquidation Preference, multiplied by the number of Class A Preferred Common
Units so converted.

“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 on 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).

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

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

“Third Target Distribution” means $0.875 per Unit per Quarter (or, with respect
to periods of more or 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 Section 5.8, Section
6.6 and Section 6.8.

“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.

“Transaction Agreements” means (i) the Shared Services Agreement, (ii) that
certain Contract Operating Agreement, dated May 8, 2014, between SPP LLC and
Sanchez Oil & Gas Corporation, (iii) that certain Geophysical Seismic Data Use
License Agreement, dated May 8,

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2014, between SPP LLC, certain subsidiaries thereof and Sanchez Oil & Gas
Corporation, and (iv) that certain Transition and Assistance Agreement, dated
May 8, 2014, between SPP LLC, SP Holdings, LLC and Sanchez Oil & Gas
Corporation.

“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 Common Units and Preferred Units but shall not include (i) the General
Partner Interest or (ii) Incentive Distribution Rights.

“Unitholders” means the holders of Units.

“Unit Majority” means at least a majority of the Outstanding Common Units and,
subject to Section 13.13, the Incentive Distribution Rights together as a single
class.

“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 5.3(d)) over (b) the
Carrying Value of such property as of such date (prior to any adjustment to be
made pursuant to Section 5.3(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
5.3(d) as of such date) over (b) the fair market value of such property as of
such date (as determined under Section 5.3(d)).

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

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

“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).

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“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 such borrowings are incurred it is the intent of the borrower
to repay such borrowings within 12 months from the date of such borrowings other
than from additional Working Capital Borrowings.

Section 1.2Construction.  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.  The General Partner has the power to construe and interpret
this Agreement and to act upon any such construction or interpretation.  Any
construction or interpretation of this Agreement and any action taken pursuant
thereto and any determination, in each case, made by the General Partner in good
faith shall, in each case, be conclusive and binding on any Limited Partner, any
Person who acquires an interest in a Partnership Interest and any other Person
who is bound by this Agreement.

Article II
ORGANIZATION

Section 2.1Formation.  On the Conversion Date, SPP LLC converted from a limited
liability company to the Partnership, with the Partnership continuing in all of
the rights, privileges and powers of SPP LLC.  This Agreement shall become
effective on the date hereof.  Except as expressly provided to the contrary in
this Agreement, the rights, duties (including fiduciary duties), liabilities and
obligations of the Partners and the administration, dissolution and termination
of the Partnership shall be governed by the Delaware Act.

Section 2.2Name.  The name of the Partnership shall be “Sanchez Production
Partners 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,” “L.P.,” “Ltd.” or similar words or
letters shall be included in the Partnership’s name where necessary for the
purpose of complying with the laws of any jurisdiction that so requires.  The
General Partner may change the name of the Partnership at any time and from time
to time and shall notify the Limited Partners of such change in the next regular
communication to the Limited Partners.

Section 2.3Registered Office; Registered Agent; Principal Office; Other
Offices.  Unless and until changed by the General Partner, the registered office
of the Partnership in the State of Delaware shall be located at Corporation
Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808,
and the registered agent for service of process on the Partnership in the State
of Delaware at such registered office shall be Corporation Service Company.  The
principal office of the Partnership shall be located at 1000 Main Street, Suite
3000, Houston, Texas 77002, 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

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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
1000 Main Street, Suite 3000, Houston, Texas 77002, or such other place as the
General Partner may from time to time designate by notice to the Limited
Partners.

Section 2.4Purpose 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 and may, in
its sole discretion, decline to so propose or approve free of any duty
(fiduciary or otherwise) or obligation whatsoever to the Partnership, any
Limited Partner or any Person who acquires an interest in the Partnership or is
bound by this Agreement and, in declining to so propose or approve, shall not be
required to act in good faith or pursuant to any other standard imposed by this
Agreement, any Group Member Agreement, any other agreement contemplated hereby
or under the Delaware Act or any other law, rule or regulation or at equity.

Section 2.5Powers.  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 2.6Term.  The term of the Partnership commenced on the date of formation
of SPP LLC in accordance with the Delaware Limited Liability Company Act and
shall continue 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 2.7Title to Partnership Assets.  Title to Partnership assets, whether
real, personal or mixed and whether tangible or intangible, shall be deemed to
be owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion thereof.  Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner, one or more of its
Affiliates or one or more nominees, as the General Partner may determine.  The
General Partner hereby declares and warrants that any Partnership assets for
which record title is held in the name of the General Partner or one or more of
its Affiliates or one or more nominees shall be held by the General Partner or
such Affiliate or nominee for the use and benefit of the Partnership in

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

Section 3.2Management 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 3.3Outside 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 3.4Rights of Limited Partners.

(a)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 to the extent the Limited Partner is furnished the
Partnership’s most recent

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annual report and any subsequent quarterly or periodic reports required to be
filed (or which would be required to be filed) 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;

(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;

(iv)information as to the amount of cash, and a description and statement of the
agreed value of any other capital contribution, contributed or to be contributed
by each Partner and the date on which each became a Partner; and

(v)such other information regarding the affairs of the Partnership as the
General Partner determines is just and reasonable.

(b)The General Partner may keep confidential from the Limited Partners, for such
period of time as the General Partner deems reasonable, (i) any information that
the General Partner reasonably believes to be in the nature of trade secrets or
(ii) other information the disclosure of which the General Partner believes
(A) is not in the best interests of the Partnership Group, (B) could damage the
Partnership Group or its business or (C) that any Group Member is required by
law or by agreement with any third party to keep confidential (other than
agreements with Affiliates of the Partnership the primary purpose of which is to
circumvent the obligations set forth in this Section 3.4).

(c)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.

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

Section 4.1Certificates.  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, Chief Executive
Officer, President or any Executive 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; provided, however, that if the General

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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.  The Transfer Agent may, and is hereby authorized to, effect any
countersignature of any Certificate authorized or required by this Agreement
either in manual form or by facsimile signature.

Section 4.2Mutilated, Destroyed, Lost or Stolen Certificates.

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

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

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

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

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

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

If a Limited Partner fails to notify the General Partner within a reasonable
period of time after such Limited Partner has notice of the loss, destruction or
theft of a Certificate, and a transfer of the Limited Partner Interests
represented by the Certificate is registered before the Partnership, the General
Partner or the Transfer Agent receives such notification, 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 4.3Record 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

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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 4.4Transfer 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, limited liability
company interests, partnership interests or other ownership interests in such
Partner and the term “transfer” shall not mean any such disposition.

Section 4.5Registration 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

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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)Upon the receipt of proper transfer instructions from the registered owner of
uncertificated Common Units, such uncertificated Common Units shall be
cancelled, issuance of new equivalent uncertificated Common Units shall be made
to the holder of Common Units entitled thereto and the transaction shall be
recorded upon the Partnership’s register.

(d)By acceptance of the transfer of any Limited Partner Interests in accordance
with this Section 4.5 and except as provided in Section 4.7, each transferee of
a Limited Partner Interest (including any nominee holder or an agent or
representative acquiring such Limited Partner Interests for the account of
another Person) (i) shall be admitted to the Partnership as a Limited Partner
with respect to the Limited Partner Interests so transferred to such Person when
any such transfer or admission is reflected in the books and records of the
Partnership and such Limited Partner becomes the Record Holder of the Limited
Partner Interests so transferred, (ii) shall become bound by the terms of this
Agreement, (iii) represents that the transferee has the capacity, power and
authority to enter into this Agreement and (iv) makes the consents,
acknowledgements and waivers contained in this Agreement, all with or without
execution of this Agreement by such Person.  The transfer of any Limited Partner
Interests and the admission of any new Limited Partner shall not constitute an
amendment to this Agreement.

(e)Subject to (i) the foregoing provisions of this Section 4.5, (ii) Section
4.4, (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.

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

Section 4.6Transfer of the General Partner’s General Partner Interest.

(a)The General Partner may at its option transfer all or any part of its General
Partner Interest without Unitholder approval.

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

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or otherwise to be taxed as an entity for U.S. federal income tax purposes (to
the extent not already so treated or taxed) and (iii) such transferee also
agrees to purchase all (or the appropriate portion thereof, if applicable) of
the partnership or membership interest held by the General Partner as the
general partner or managing member, if any, of each other Group Member.  In the
case of a transfer pursuant to and in compliance with this Section 4.6, the
transferee or successor (as the case may be) shall, subject to compliance with
the terms of Section 10.2, be admitted to the Partnership as the General Partner
effective immediately prior to the transfer of the General Partner Interest, and
the business of the Partnership shall continue without dissolution.

Section 4.7Restrictions 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, (ii) terminate the existence or
qualification of the Partnership under the laws of the jurisdiction of its
formation, or (iii) cause the Partnership to be treated as an association
taxable as a corporation or otherwise to be taxed as an entity for U.S. federal
income tax purposes (to the extent not already so treated or taxed).

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

(c)Nothing contained in this Agreement, other than Section 4.7(a), shall
preclude the settlement of any transactions involving Partnership Interests
entered into through the facilities of any National Securities Exchange on which
such Partnership Interests are listed or admitted to trading.

(d)The transfer of an IDR Reset Common Unit that was issued in connection with
an IDR Reset Election pursuant to Section 5.8 shall be subject to the
restrictions imposed by Section 6.7.

(e)Transfer Restrictions on Preferred Units.

(i)Except as otherwise provided in this Section 4.7(e), no Preferred Unit shall
be transferrable by any Preferred Holder without the prior written consent of
the General Partner.

(ii)Notwithstanding anything to the contrary contained herein, a Preferred
Holder shall be permitted to transfer any Preferred Units held by such Preferred
Holder

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without the prior written consent of the General Partner to an Affiliate of such
Preferred Holder or (A) in the case of a Class A Preferred Holder to another
Class A Preferred Unit Holder or its Affiliates or (B) in the case of a Class B
Preferred Holder to any Person, including another Class B Preferred Unit Holder
or its Affiliates, subject to Section 4.7(e)(iii), provided that such Person
agrees to be bound by the “standstill” provisions of the Board Representation
and Standstill Agreement.

(iii)Until December 31, 2021, at any time prior to the sale or transfer of any
Class B Preferred Units by a Class B Preferred Holder to a party or group (as
defined by Section 13(d) of the Securities Exchange Act) other than an Affiliate
or another Class B Preferred Holder (a “Proposed Transaction”), such selling
Class B Preferred Holder shall first provide written notice (the “Offering
Notice”) to the Partnership of its intention to enter into a Proposed
Transaction.  The Partnership and its Affiliates (collectively, “Sanchez”) shall
then have a right of first offer with respect to any or all of such Class B
Preferred Units (the “ROFO Interest”).  Sanchez shall have 10 days following
receipt of the Offering Notice to propose an offer to enter into the Proposed
Transaction with such Class B Preferred Holder (the “ROFO Response”). The ROFO
Response shall set forth the terms and conditions (including, without
limitation, the purchase price Sanchez proposes to pay for the such Class B
Preferred Units and the other terms of the purchase) pursuant to which Sanchez
would be willing to enter into a binding agreement for such purpose.  If no ROFO
Response is delivered by Sanchez within such 10-day period, then Sanchez shall
be deemed to have waived its right of first offer with respect to such Proposed
Transaction, and such Class B Preferred Holder shall be free to enter into a
Proposed Transaction with any third person on terms and conditions determined in
the sole discretion of such Class B Preferred Holder without the consent of the
General Partner.  If Sanchez submits a ROFO Response, Sanchez and the Class B
Preferred Holder shall negotiate, in good faith, the terms of the purchase and
sale of all such Preferred Units for 15 days following the receipt of the ROFO
Response by the Class B Preferred Holder.  If the Class B Preferred Holder and
the Partnership are unable to agree on such terms during such 15-day period, the
Class B Preferred Holder may, without the prior written consent of the General
Partner, Transfer any or all such Class B Preferred Units to any third person on
terms generally no less favorable to the Class B Preferred Holder within the
next 180 days, subject to this Article IV.  Any Person acquiring Class B
Preferred Units pursuant to this Section 4.7(e)(iii) (other than Sanchez) shall
agree to be bound by the “standstill” provisions of the Board Representation and
Standstill Agreement as a condition precedent to any such Transfer during the
period such “standstill” provisions would have applied to Stonepeak in
accordance with the terms of the Board Representation and Standstill Agreement.

(iv)Notwithstanding anything to the contrary contained herein, no Class A
Preferred Holder shall transfer any Class A Preferred Units to any Person that
(a) is an operating company (and not a financial institution) and (b) engages in
the upstream energy business or otherwise provides similar services or engages
in similar business as the Partnership at any time during the twelve months
preceding the proposed transfer.  Notwithstanding anything to the contrary
contained herein, no Class B Preferred Holder shall transfer any Class B
Preferred Units to any Person that (a) is an operating company (and not a
financial institution) and (b) engages in the upstream energy business,
midstream

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energy business or otherwise provides similar services or engages in similar
business as the Partnership at any time during the twelve months preceding the
proposed transfer.

Section 4.8Eligibility Certificates; Ineligible Holders.

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

(i)the Partnership’s status other than as an association taxable as a
corporation for U.S. federal income tax purposes or the failure of the
Partnership otherwise to be subject to an entity-level tax for U.S. federal,
state or local income tax purposes, coupled with the tax status (or lack of
proof of the U.S. federal income tax status) of one or more Limited Partners or
their beneficial owners has or is reasonably likely to have a material adverse
effect on the rates that can be charged to customers by any Group Member with
respect to assets that are subject to regulation by the Federal Energy
Regulatory Commission or similar regulatory body (a “Rate Eligibility Trigger”);
or

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

then, the General Partner may adopt such amendments to this Agreement as it
determines to be necessary or appropriate to (x) in the case of a Rate
Eligibility Trigger, obtain such proof of the U.S. federal income tax status of
the Limited Partners and, to the extent relevant, their beneficial owners, as
the General Partner determines to be necessary or appropriate to reduce the risk
of the occurrence of a material adverse effect on the rates that can be charged
to customers by any Group Member or (y) in the case of a Citizenship Eligibility
Trigger, obtain such proof of the nationality, citizenship or other related
status of the Limited Partner, and to the extent relevant, their beneficial
owners as the General Partner determines to be necessary or appropriate to
eliminate or mitigate a significant risk of cancellation or forfeiture of any
properties or interests therein of a Group Member.

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

(c)Such amendments may provide that any Partner who fails to furnish to the
General Partner within a reasonable period requested proof of its (and its
beneficial owners’) status as an Eligible Holder or if upon receipt of such
Eligibility Certificate or other requested information the General Partner
determines that a Limited Partner (or its beneficial owner) is not an Eligible
Holder (an “Ineligible Holder”), the Limited Partner Interests owned by such
Limited Partner shall be subject to redemption in accordance with the provisions
of Section 4.9.  In addition, if the General Partner exercises its right to
redeem the Limited Partner Interests owned by such Limited Partner, the General
Partner shall be treated as the owner of all Limited Partner Interests owned by
an Ineligible Holder and the Limited Partner with respect thereto.

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(d)The General Partner shall, in exercising voting rights in respect of Limited
Partner Interests held by it on behalf of Ineligible Holders, cast such votes in
the same manner and in the same ratios as the votes of Limited Partners
(including the General Partner and its Affiliates) in respect of Limited Partner
Interests other than those of Ineligible Holders are cast.

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

(f)At any time after he can and does certify that he has become an Eligible
Holder, an Ineligible Holder may, upon application to the General Partner,
request that with respect to any Limited Partner Interests of such Ineligible
Holder not redeemed pursuant to Section 4.9, such Ineligible Holder be admitted
as a Limited Partner, and upon approval of the General Partner, such Ineligible
Holder shall be admitted as a Partner and shall no longer constitute an
Ineligible Holder and the General Partner shall cease to be deemed to be the
owner and Limited Partner in respect of such Ineligible Holder’s Limited Partner
Interests.

Section 4.9Redemption of Partnership Interests of Ineligible Holders.

(a)If at any time a Limited Partner fails to furnish an Eligibility Certificate
or other information requested within the period of time specified in amendments
adopted pursuant to Section 4.8, or if upon receipt of such Eligibility
Certificate or other information the General Partner determines, with the advice
of counsel, that a Limited Partner is an Ineligible Holder, the Partnership may,
unless the Limited Partner establishes to the satisfaction of the General
Partner that such Limited Partner is an Eligible Holder or has transferred his
Partnership Interests to a Person who is an Eligible Holder and who furnishes an
Eligibility Certificate to the General Partner prior to the date fixed for
redemption as provided below, redeem the Limited Partner Interest of such
Limited Partner as follows:

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

(ii)The aggregate redemption price for Redeemable Interests (except for any
Class B Preferred Units) shall be an amount equal to the Current Market Price
(the date of determination of which shall be the date fixed for redemption) of
Limited Partner Interests

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of the class to be so redeemed multiplied by the number of Limited Partner
Interests of each such class included among the Redeemable Interests.  The
redemption price shall be paid, as determined by the General Partner, in cash or
by delivery of a promissory note of the Partnership in the principal amount of
the redemption price, bearing interest at the rate of 8% annually and payable in
three equal annual installments of principal together with accrued interest,
commencing one year after the redemption date.

(iii)With respect to the redemption of any Class B Preferred Units pursuant to
this Section 4.9, the redemption price for the Units so redeemed will be
determined in accordance with the applicable formula set forth in Section
5.10(d)(i) based on the date of such redemption (provided that the right to
redeem percentage for such calculation shall be 100%); provided, however, that
(A) the redemption price for any redemption occurring under this Section 4.9 on
or before December 31, 2016 for Class B Preferred Units shall be equal to the
number of Class B Preferred Units so redeemed multiplied by the greater of (I)
the Current Market Price (the date of determination of which shall be the date
of redemption) of a Common Unit and (II) 160% of the Class B Preferred
Liquidation Preference and (B) the redemption price for any redemption occurring
under this Section 4.9 on or after January 1, 2017 and on or before December 31,
2017 for Class B Preferred Units shall be equal to the number of Class B
Preferred Units so redeemed multiplied by the greater of (I) the Current Market
Price (the date of determination of which shall be the date of redemption) of a
Common Unit and (II) 150% of the Class B Preferred Liquidation Preference.  The
redemption price shall be paid in cash at the time of the redemption.

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

(v)After the redemption date, Redeemable Interests shall no longer constitute
issued and Outstanding Limited Partner Interests.

(b)The provisions of this Section 4.9 shall also be applicable to Limited
Partner Interests held by a Limited Partner as nominee of a Person determined to
be an Ineligible Holder.

(c)Nothing in this Section 4.9 shall prevent the recipient of a notice of
redemption from transferring his Limited Partner Interest before the redemption
date if such transfer is otherwise permitted under this Agreement.  Upon receipt
of notice of such a transfer, the General Partner shall withdraw the notice of
redemption, provided the transferee of such Limited Partner Interest certifies
to the satisfaction of the General Partner that he is an Eligible Holder.  If
the transferee fails to make such certification, such redemption will be
effected from the transferee on the original redemption date.

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Article V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS

Section 5.1Organizational Contributions.  On the Conversion Date, (a) each
Predecessor Unit was converted into one Common Unit, (b) the Converted Units
were converted into Common Units equal to 2.0% of the outstanding Common Units
on the Conversion Date (after giving effect to the conversion of such Converted
Units and the conversion of the Predecessor Units), (c) the Class Z Unit of SPP
LLC was cancelled, (d) Sanchez Production Partners GP LLC, a Delaware limited
liability company, was issued all of the General Partner Interests and (e) the
Incentive Distribution Rights were issued to SP Holdings, LLC as contemplated by
the Shared Services Agreement.

Section 5.2Interest 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 5.3Capital Accounts.

(a)The Partnership shall maintain for each Partner (or a beneficial owner of
Partnership Interests held by a nominee in any case in which the nominee has
furnished the identity of such owner to the Partnership in accordance with
Section 6031(c) of the Code or any other method acceptable to the General
Partner) owning a Partnership Interest a separate Capital Account with respect
to such Partnership Interest in accordance with the rules of Treasury Regulation
Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the
amount of all Capital Contributions made to the Partnership with respect to such
Partnership Interest (including, with respect to the Preferred Units, the net
amount of cash contributed for the Preferred Units by the holders thereof
pursuant to a Class A Preferred Unit Purchase Agreement or the Class B Preferred
Unit Purchase Agreement, as applicable) and (ii) all items of Partnership income
and gain (including Simulated Gain and income and gain exempt from tax) computed
in accordance with Section 5.3(b) and allocated with respect to such Partnership
Interest pursuant to Section 6.1, and decreased by (x) the amount of cash or Net
Agreed Value of all actual and deemed distributions of cash or property (other
than PIK Units) made with respect to such Partnership Interest and (y) all items
of Partnership deduction and loss (including Simulated Depletion and Simulated
Loss) computed in accordance with Section 5.3(b) and allocated with respect to
such Partnership Interest pursuant to Section 6.1. In connection with the
foregoing, the Partnership shall adopt the methodology set forth in the
noncompensatory option regulations under Treasury Regulation Sections 1.704-1
and 1.721-2 with respect to the issuance and conversion of Preferred Units,
unless otherwise required by applicable law.

(b)For purposes of computing the amount of any item of income, gain, loss,
deduction, Simulated Depletion, Simulated Gain or Simulated Loss that is to be
allocated pursuant to Article VI and is to be reflected in the Partners’ Capital
Accounts, the determination, recognition and

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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 5.3, 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)Except as otherwise provided in Treasury Regulation
Section 1.704-1(b)(2)(iv)(m), the computation of all items of income, gain,
loss, deduction, Simulated Depletion, Simulated Gain and Simulated Loss shall be
made without regard to any election under Section 754 of the Code that may be
made by the Partnership and, as to those items described in Section 705(a)(1)(B)
or 705(a)(2)(B) of the Code, without regard to the fact that such items are not
includable in gross income or are neither currently deductible nor capitalized
for U.S. federal income tax purposes.  To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b)
of the Code (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.

(iv)In the event the Carrying Value of Partnership property is adjusted pursuant
to Section 5.3(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.

(v)Any income, gain, loss, Simulated Gain or Simulated 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.

(vi)Any deductions for depreciation, cost recovery, amortization or Simulated
Depletion 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.

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

(c)(i) Except as provided in this Section 5.3(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.

(i)Subject to Section 6.7(b), immediately prior to the transfer of an IDR Reset
Common Unit by a holder thereof (other than a transfer to an Affiliate unless
the General Partner elects to have this subparagraph Section 5.3(c)(ii) apply),
the Capital Account maintained for such Person with respect to its IDR Reset
Common Units will (A) first, be allocated to the IDR Reset Common Units to be
transferred in an amount equal to the product of (x) the number of such IDR
Reset Common Units to be transferred and (y) the Per Unit Capital Amount for a
Common Unit, and (B) second, any remaining balance in such Capital Account will
be retained by the transferor, regardless of whether it has retained any IDR
Reset Common Units.  Following any such allocation, the transferor’s Capital
Account, if any, maintained with respect to the retained IDR Reset Common Units,
if any, will have a balance equal to the amount allocated under clause
(B) hereinabove, and the transferee’s Capital Account established with respect
to the transferred IDR Reset Common Units will have a balance equal to the
amount allocated under clause (A) above.

(d)(i) Consistent with Treasury Regulation Sections 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 issuance of IDR Reset Common Units pursuant to Section 5.8, the
conversion of the Combined Interest to Common Units pursuant to Section 11.3(b),
or the conversion of a Preferred Unit in accordance with Section 5.9(b) or
Section 5.10(b), the Carrying Value of each Partnership property immediately
prior to such issuance (or, in the case of a Preferred Conversion Date,
immediately after such Preferred Conversion Date) shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized Loss attributable to such
Partnership property, as if such Unrealized Gain or Unrealized Loss had been
recognized on an actual sale of each such property for an amount equal to its
fair market value immediately prior to such issuance; 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, 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

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services, the General Partner may determine that such adjustments are
unnecessary for the proper administration of the Partnership. Any such
Unrealized Gain or Unrealized Loss (or items thereof) shall be allocated (A) if
the operation of this sentence is triggered by the conversion of a Preferred
Unit, first among the Partners holding Common Units as may be necessary to cause
the Capital Account attributable to each such Common Unit to be the same, and
(B) any remaining Unrealized Gain or Unrealized Loss shall be allocated among
the Partners pursuant to Section 6.1 in the same manner as any item of gain or
loss actually recognized would have been allocated. If the Unrealized Gain or
Unrealized Loss allocated as a result of the occurrence of a Preferred
Conversion Date is not sufficient to cause the Capital Account attributable to
each Common Unit to be the same, then Capital Account balances shall be
reallocated between the Partners holding such Common Units so as to cause the
Capital Account attributable to each such Common Unit to be the same, in
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(s)(3). In
determining Unrealized Gain or Unrealized Loss in connection with the issuance
of additional Partnership Interests or a Preferred Conversion Date, the
aggregate cash amount and fair market value of all Partnership assets (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 (including conversion of a Preferred Unit),
immediately after the issuance of the Partnership Interest acquired pursuant to
the exercise of the Noncompensatory Option) shall be determined by the General
Partner using such method of valuation as it may adopt. For this purpose, the
General Partner may first determine an aggregate value for the assets of the
Partnership that takes into account the current trading price of the Common
Units, the fair market value of all other Partnership Interests at such time (on
a fully converted basis), and the amount of Partnership liabilities, and, if
before the Preferred Conversion Date of any Preferred Units, may adjust the fair
market value of all Partnership assets to reflect the difference, if any,
between the fair market value of any Preferred Units for which the Preferred
Conversion Date has not occurred and the aggregate Capital Accounts attributable
to such Preferred Units to the extent of any Unrealized Gain or Unrealized Loss
that has not been reflected in the Partners’ Capital Accounts previously,
consistent with the methodology of Treasury Regulation
Section 1.704-1(b)(2)(iv)(h)(2). The General Partner shall 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 (including conversion of a Preferred Unit) shall be the value
that would result in the Capital Account for each Common Unit that is
Outstanding prior to such Revaluation Event being equal to the Event Issue
Value.

(i)In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f),
immediately prior to any 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, and any such Unrealized Gain or
Unrealized Loss shall be treated, for purposes of maintaining Capital Accounts,
as if it had been recognized on an actual sale of each such property immediately
prior to such distribution for an amount equal to its fair market value, and had
been allocated among the Partners, at such time, pursuant to Section 6.1(c) in
the same manner as any item of gain, loss, Simulated Gain or Simulated Loss
actually recognized following an event giving rise to the dissolution of the
Partnership would have been

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allocated.  In determining such Unrealized Gain or Unrealized Loss, the
aggregate fair market value of all Partnership property (including cash or cash
equivalents) immediately prior to a distribution shall (A) in the case of a
distribution other than a distribution made pursuant to Section 12.4, be
determined in the same manner as that provided in Section 5.3(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 5.4Issuances of Additional Partnership Interests.

(a)Subject to Section 5.10(e), the Partnership may issue additional Partnership
Interests and options, rights, warrants and appreciation rights relating to the
Partnership Interests for any Partnership purpose at any time and from time to
time to such Persons for such consideration and on such terms and conditions as
the General Partner in its sole discretion shall determine, all without the
approval of any Limited Partners.

(b)Subject to Section 5.10(e), each additional Partnership Interest authorized
to be issued by the Partnership pursuant to Section 5.4(a) may be issued in one
or more classes, or one or more series of any such classes, with such
designations, preferences, rights, powers and duties (which may be senior to
existing classes and series of Partnership Interests), as shall be fixed by the
General Partner, including (i) the right to share in Partnership profits and
losses or items thereof; (ii) the right to share in Partnership distributions;
(iii) the rights upon dissolution and liquidation of the Partnership;
(iv) whether, and the terms and conditions upon which, the Partnership may or
shall be required to redeem the Partnership Interest (including sinking fund
provisions); (v) whether such Partnership Interest is issued with the privilege
of conversion or exchange and, if so, the terms and conditions of such
conversion or exchange; (vi) the terms and conditions upon which each
Partnership Interest will be issued, evidenced by certificates and assigned or
transferred; (vii) the method for determining the Percentage Interest as to such
Partnership Interest; and (viii) the right, if any, of each such Partnership
Interest to vote on Partnership matters, including matters relating to the
relative rights, preferences and privileges of such Partnership Interest.

(c)The General Partner shall take all actions that it determines in its sole
discretion to be necessary or appropriate in connection with (i) each issuance
of Partnership Interests and options, rights, warrants and appreciation rights
relating to Partnership Interests pursuant to this Section 5.4, (ii) the
conversion of the Combined Interest into Units pursuant to the terms of this
Agreement, (iii) the issuance of Common Units pursuant to Section 5.8,
(iv) 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 (v) 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, subject to Section 5.10(e), is authorized and directed to do all things
that it determines in its sole discretion to be necessary or appropriate in
connection with any future issuance of Partnership Interests or in connection
with the conversion of the Combined Interest into Units pursuant to the terms of
this Agreement, including compliance with any statute, rule, regulation or
guideline of any federal, state or other governmental agency or any National
Securities Exchange on which the Units or other Partnership Interests are listed
or admitted to trading.

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

Section 5.5Limited Preemptive Right.  Except as otherwise provided in a separate
agreement by the Partnership, no Person shall have any preemptive, preferential
or other similar right with respect to the issuance of any Partnership Interest,
whether unissued, held in the treasury or hereafter created.

Section 5.6Splits and Combinations.

(a)Subject to Section 5.6(d), the Partnership may make a Pro Rata distribution
of Partnership Interests to all Record Holders or may effect a subdivision or
combination of Partnership Interests so long as, after any such event, each
Partner shall have the same Percentage Interest in the Partnership as before
such event, and any amounts calculated on a per Unit basis or stated as a number
of Units are proportionately adjusted retroactive to the beginning of the
Partnership.

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

(c)Promptly following any such distribution, subdivision or combination, the
Partnership may issue Certificates or uncertificated Partnership Interests to
the Record Holders of Partnership Interests as of the applicable Record Date
representing the new number of Partnership Interests held by such Record
Holders, or the General Partner may adopt such other procedures that it
determines to be necessary or appropriate to reflect such changes.  If any such
combination results in a smaller total number of Partnership Interests
Outstanding, the Partnership shall require, as a condition to the delivery to a
Record Holder of 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 5.4(d) and this Section 5.6(d), each fractional Unit
shall be rounded to the nearest whole Unit (with fractional Units equal to or
greater than 0.5 Unit rounded to the next higher Unit).

Section 5.7Fully 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.

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Section 5.8Issuance of Common Units in Connection with Reset of Incentive
Distribution Rights.

(a)Subject to the provisions of this Section 5.8, the holder of the Incentive
Distribution Rights (or, if there is more than one holder of the Incentive
Distribution Rights, the holders of a majority in interest of the Incentive
Distribution Rights) shall have the right, at any time when the Partnership has
made a distribution pursuant to Section 6.4(g) for each of the four most
recently completed Quarters, to make an election (the “IDR Reset Election”) to
cause the Target Distributions to be reset in accordance with the provisions of
Section 5.8(e) and, in connection therewith, the holder or holders of the
Incentive Distribution Rights will become entitled to receive their respective
proportionate share of a number of Common Units (the “IDR Reset Common Units”)
derived by dividing (i) the amount of cash distributions made by the Partnership
in respect of the Incentive Distribution Rights for the two full Quarters
immediately preceding the giving of the Reset Notice (as defined in Section
5.8(b)) by (ii) the average of the cash distributions made by the Partnership in
respect of each Common Unit during each of the two full Quarters immediately
preceding the giving of the Reset Notice (the “Reset MQD”) (the number of Common
Units determined by such quotient is referred to herein as the “Aggregate
Quantity of IDR Reset Common Units”).  If at the time of any IDR Reset Election
the General Partner and its Affiliates are not the holders of a majority in
interest of the Incentive Distribution Rights, then the IDR Reset Election shall
be subject to the prior written concurrence of the General Partner that the
conditions described in the immediately preceding sentence have been
satisfied.  The making of the IDR Reset Election in the manner specified in
Section 5.8(b) shall cause the Target Distributions to be reset in accordance
with the provisions of Section 5.8(e) and, in connection therewith, the holder
or holders of the Incentive Distribution Rights will become entitled to receive
Common Units on the basis specified above, without any further approval required
by the General Partner or the Unitholders, at the time specified in Section
5.8(c) unless the IDR Reset Election is rescinded pursuant to Section 5.8(d).

(b)To exercise the right specified in Section 5.8(a), the holder of the
Incentive Distribution Rights (or, if there is more than one holder of the
Incentive Distribution Rights, the holders of a majority in interest of the
Incentive Distribution Rights) shall deliver a written notice (the “Reset
Notice”) to the Partnership.  Within 10 Business Days after the receipt by the
Partnership of such Reset Notice, the Partnership shall deliver a written notice
to the holder or holders of the Incentive Distribution Rights of the
Partnership’s determination of the aggregate number of Common Units that each
holder of Incentive Distribution Rights will be entitled to receive.

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

(d)If the principal National Securities Exchange upon which the Common Units are
then traded has not approved the listing or admission for trading of the Common
Units to be issued

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pursuant to this Section 5.8 on or before the 30th calendar day following the
Partnership’s receipt of the Reset Notice and such approval is required by the
rules and regulations of such National Securities Exchange, then the holder of
the Incentive Distribution Rights (or, if there is more than one holder of the
Incentive Distribution Rights, the holders of a majority in interest of the
Incentive Distribution Rights) shall have the right to either rescind the IDR
Reset Election or elect to receive other Partnership Interests having such terms
as the General Partner may approve, with the approval of the Conflicts
Committee, that will provide (i) the same economic value, in the aggregate, as
the Aggregate Quantity of IDR Reset Common Units would have had at the time of
the Partnership’s receipt of the Reset Notice, as determined by the General
Partner, and (ii) for the subsequent conversion (on terms acceptable to the
National Securities Exchange upon which the Common Units are then traded) of
such Partnership Interests into Common Units within not more than 12 months
following the Partnership’s receipt of the Reset Notice upon the satisfaction of
one or more conditions that are reasonably acceptable to the holder of the
Incentive Distribution Rights (or, if there is more than one holder of the
Incentive Distribution Rights, the holders of a majority in interest of the
Incentive Distribution Rights).

(e)The Target Distributions shall be adjusted at the time of the issuance of
Common Units or other Partnership Interests pursuant to this Section 5.8 such
that (i) the Minimum Quarterly Distribution shall be reset to be equal to the
Reset MQD, (ii) the First Target Distribution shall be reset to equal 115% of
the Reset MQD, (iii) the Second Target Distribution shall be reset to equal 125%
of the Reset MQD and (iv) the Third Target Distribution shall be reset to equal
175% of the Reset MQD.

(f)Upon the issuance of IDR Reset Common Units pursuant to Section 5.8(a) (or
other Partnership Interests as described in Section 5.8(d)), the Capital Account
maintained with respect to the Incentive Distribution Rights shall (A) first, be
allocated to IDR Reset Common Units (or other Partnership Interests) in an
amount equal to the product of (x) the Aggregate Quantity of IDR Reset Common
Units (or other Partnership Interests) and (y) the Per Unit Capital Amount for
an Initial Common Unit, and (B) second, any remaining balance in such Capital
Account will be retained by the holder of the Incentive Distribution Rights.  In
the event that there is not a sufficient Capital Account associated with the
Incentive Distribution Rights to allocate the full Per Unit Capital Amount for
an Initial Common Unit to the IDR Reset Common Units in accordance with clause
(A) of this Section 5.8(f), the IDR Reset Common Units shall be subject to
Section 6.1(d)(xi)(A) and Section 6.1(d)(xi)(B).

Section 5.9Establishment of Class A Preferred Units.

(a)General. The General Partner hereby designates and creates a series of Units,
including any Class A Preferred PIK Units issued pursuant to Section 5.9(c), to
be designated as “Class A Preferred Units,” having the same rights and
preferences, and subject to the same duties and obligations as the Common Units,
except as set forth in this Section 5.9.

(b)Conversion. 

(i)Each Class A Preferred Unit, unless previously converted, shall automatically
convert on the Mandatory Conversion Date into a number of Common Units equal to
the Class A Preferred Liquidation Preference divided by the Class A Preferred

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Conversion Price (the “Class A Preferred Conversion Rate”), subject to
adjustment pursuant to Section 5.9(b)(xiii); provided, however, that if a Class
A Preferred Holder together with its Affiliates and Associates would
beneficially own Common Units after such Mandatory Conversion Date that exceeds
19.99% of the Outstanding Common Units after the conversion of all Class A
Preferred Units in accordance with this Section 5.9(b)(i), then the provisions
of this Section 5.9(b)(i) shall apply, with respect to such Class A Preferred
Holder, only to such Class A Preferred Units that would result, upon such
conversion, in such Class A Preferred Holder together with its Affiliates and
Associates beneficially owning 19.99% of the Outstanding Common Units after the
conversion of all Class A Preferred Units in accordance with this Section
5.9(b)(i), and the remaining Class A Preferred Units held by such Class A
Preferred Holder shall remain Outstanding.  Notwithstanding anything to the
contrary herein, a Class A Preferred Holder shall not be entitled, with or
without the consent of the Partnership, to waive the limitation on conversion of
the Class A Preferred Units set forth in this Section 5.9(b)(i) on less than
sixty-one (61) days prior written notice to the Partnership.

(ii)Each of the holders of Class A Preferred Units (including a Class A
Preferred PIK Unit) shall have the right, from and after March 31, 2016 at the
option of such holder, to request conversion in whole or in part of its Class A
Preferred Units into a number of Common Units equal to the Class A Preferred
Conversion Rate, subject to adjustment pursuant to Section 5.9(b)(xiii);
provided, however, that if a Class A Preferred Holder together with its
Affiliates and Associates would beneficially own Common Units after such Class A
Holder Optional Conversion Date that exceeds 19.99% of the Outstanding Common
Units after the conversion of all Class A Preferred Units in accordance with
this Section 5.9(b)(ii), then the provisions of this Section 5.9(b)(ii) shall
apply, with respect to such Class A Preferred Holder, only to such Class A
Preferred Units that would result, upon such conversion, in such Class A
Preferred Holder together with its Affiliates and Associates beneficially owning
19.99% of the Outstanding Common Units after the conversion of all Class A
Preferred Units in accordance with this Section 5.9(b)(ii), and the remaining
Class A Preferred Units held by such Class A Preferred Holder shall remain
Outstanding.  Notwithstanding anything to the contrary herein, a Class A
Preferred Holder shall not be entitled, with or without the consent of the
Partnership, to waive the limitation on conversion of the Class A Preferred
Units set forth in this Section 5.9(b)(ii) on less than sixty-one (61) days
prior written notice to the Partnership.  To convert Class A Preferred Units
into Common Units pursuant to this Section 5.9(b)(ii), the Class A Preferred
Holder shall give written notice (a “Class A Preferred Conversion Notice”) to
the Partnership stating that such holder elects to so convert Class A Preferred
Units into Common Units and shall state therein with respect to Class A
Preferred Units to be converted pursuant to Section 5.9(b)(ii):  (a) the number
of Class A Preferred Units (including Class A Preferred PIK Units) to be
converted, (b) the name or names in which such holder wishes the certificate or
certificates for Common Units to be issued, (c) the holder’s computation of the
number of Common Units to be received by the holder (or designated recipients)
upon the Conversion Date and (d) the Class A Preferred Conversion Rate on the
Class A Holder Optional Conversion Date. The date of any Class A Preferred
Conversion Notice shall hereinafter be referred to as a “Class A Holder Optional
Conversion Date.”

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(iii)The Partnership shall have the right to cause all, but not less than all,
of the Class A Preferred Units to convert into Common Units at the Class A
Preferred Conversion Rate at any time beginning March 31, 2016, subject to
adjustment pursuant to Section 5.9(b)(xiii); provided, however, that if a Class
A Preferred Holder together with its Affiliates and Associates would
beneficially own Common Units after such Partnership Optional Conversion Date
that exceeds 19.99% of the Outstanding Common Units after the conversion of all
Class A Preferred Units in accordance with this Section 5.9(b)(iii), then the
provisions of this Section 5.9(b)(iii) shall apply, with respect to such Class A
Preferred Holder, only to such Class A Preferred Units that would result, upon
such conversion, in such Class A Preferred Holder together with its Affiliates
and Associates beneficially owning 19.99% of the Outstanding Common Units after
the conversion of all Class A Preferred Units in accordance with this Section
5.9(b)(iii), and the remaining Class A Preferred Units held by such Class A
Preferred Holder shall remain Outstanding.  Notwithstanding anything to the
contrary herein, a Class A Preferred Holder shall not be entitled, with or
without the consent of the Partnership, to waive the limitation on conversion of
the Class A Preferred Units set forth in this Section 5.9(b)(iii) on less than
sixty-one (61) days prior written notice to the Partnership.

(iv)The Partnership and a Class A Preferred Holder may mutually agree, in their
respective sole discretion, to convert some or all of the Class A Preferred
Units held by such Class A Preferred Holder into Common Units at the Class A
Preferred Conversion Rate at any time, subject to adjustment pursuant to Section
5.9(b)(xiii); provided, however, that if a Class A Preferred Holder together
with its Affiliates and Associates would beneficially own Common Units after
such conversion that exceeds 19.99% of the Outstanding Common Units after the
conversion of all Class A Preferred Units in accordance with this Section
5.9(b)(iv), then the provisions of this Section 5.9(b)(iv) shall apply, with
respect to such Class A Preferred Holder, only to such Class A Preferred Units
that would result, upon such conversion, in such Class A Preferred Holder
together with its Affiliates and Associates beneficially owning 19.99% of the
Outstanding Common Units after the conversion of all Class A Preferred Units in
accordance with this Section 5.9(b)(iv), and the remaining Class A Preferred
Units held by such Class A Preferred Holder shall remain
Outstanding.  Notwithstanding anything to the contrary herein, a Class A
Preferred Holder shall not be entitled, with or without the consent of the
Partnership, to waive the limitation on conversion of the Class A Preferred
Units set forth in this Section 5.9(b)(iv) on less than sixty-one (61) days
prior written notice to the Partnership.  The mutually agreed upon date of any
conversion pursuant to this Section 5.9(b)(iv) shall be hereinafter be referred
to as a “Class A Preferred Voluntary Conversion Date.”

(v)If a Class A Preferred Unit conversion shall occur before a Record Date for
payment of a distribution on the Common Units in respect of any completed
Quarter and the Class A Preferred Units convert into additional Common Units,
the additional Common Units issued in such conversion shall not receive the
Common Unit distribution with respect to such completed Quarter.

(vi)In order to exercise the right to convert Class A Preferred Units prior to
the Mandatory Conversion Date, the Partnership must: 

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(A)deliver to the Class A Preferred Holders a “Notice of Partnership Optional
Conversion” (attached as Exhibit B to this Agreement) not later than 30 days
prior to the Partnership Optional Conversion Date; and

(B)pay all transfer or similar taxes, if any, required under Section
5.9(b)(vii).

The date specified in the Notice of Partnership Optional Conversion is the
“Partnership Optional Conversion Date.”

(vii)The Partnership shall pay any documentary, stamp or similar issue or
transfer taxes that may be payable in respect of any issuance or delivery of
Common Units upon conversion of Class A Preferred Units, other than the transfer
taxes payable upon the issuance of Common Units upon conversion of Class A
Preferred Units in a name or names other than that of the Class A Preferred
Holder, which shall be paid by the converting Class A Preferred Holder. 

(viii)Effective immediately prior to 5:00 p.m., New York City time, on the
applicable Class A Preferred Conversion Date, distributions on the converted
Class A Preferred Units shall cease to accrue and the converted Class A
Preferred Units shall cease to be outstanding, in each case subject to the right
of Class A Preferred Holders of such converted Class A Preferred Units to
receive the consideration issuable upon conversion which they are entitled to
pursuant to this Section 5.9(b).

(ix)As of 5:00 p.m., New York City time, on the applicable Class A Preferred
Conversion Date, the issuance by the Partnership of Common Units upon conversion
of Class A Preferred Units shall become effective and the Person entitled to
receive such Common Units shall be treated for all purposes as the record holder
or holders of such Common Units. Prior to 5:00 p.m., New York City time, on the
applicable Class A Preferred Conversion Date, the Common Units issuable upon
conversion shall be deemed not outstanding for any purpose, and Holders of Class
A Preferred Units shall have no rights with respect to the Common Units issuable
upon conversion by virtue of holding Class A Preferred Units.

(x)In connection with the conversion of any Class A Preferred Units, no
fractional Common Units shall be issued to the converting Class A Preferred
Holders. In lieu of any fractional Common Units issuable to a Class A Preferred
Holder upon conversion, the Partnership shall pay or deliver, as applicable, to
the converting Class A Preferred Holder, at the Partnership’s option, either (i)
a number of Common Units rounded up to the next whole number of units, or (ii)
an amount in cash (computed to the nearest cent) equal to the product of the
fractional Common Unit and the Closing Price of Common Units on the Trading Day
immediately preceding the applicable Class A Preferred Conversion Date. 

(xi)If more than one Class A Preferred Unit shall be surrendered for conversion
at one time by or for the same Class A Preferred Holder, the number of Common
Units

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issuable upon conversion of those Class A Preferred Units shall be computed on
the basis of the aggregate number of Class A Preferred Units so surrendered.

(xii)With respect to any conversion of Preferred Units,

(1) promptly following the applicable Class A Preferred Conversion Date, the
Partnership shall instruct the Transfer Agent to deliver or cause to be
delivered to the converting Class A Preferred Holder confirmation by book-entry
of the whole number of Common Units issued upon conversion of such Class A
Preferred Units; and

(2)on the Business Day immediately following the applicable Class A Preferred
Conversion Date, the Partnership shall deliver or cause to be delivered to the
converting Class A Preferred Holder any cash payment for any fractional units
that the Partnership is obligated to pay under Section 5.9(b)(x).

(xiii)If the Partnership (1) makes a distribution on its Common Units in Common
Units, (2) subdivides or splits its outstanding Common Units into a greater
number of Common Units, (3) combines or reclassifies its Common Units into a
smaller number of Common Units or (4) issues by reclassification of its Common
Units any Partnership Interest (including any reclassification in connection
with a merger, consolidation or business combination in which the Partnership is
the surviving Person), then the Class A Preferred Unit Price in effect at the
time of the Record Date for such distribution or the effective date of such
subdivision, split, combination or reclassification shall be proportionately
adjusted so that the conversion of the Class A Preferred Units after such time
shall entitle the holder to receive the aggregate number of Common Units (or
shares of any Partnership Interest into which such shares of Common Units would
have been combined, consolidated, merged or reclassified pursuant to clauses (3)
and (4) above) that such holder would have been entitled to receive if the Class
A Preferred Units had been converted into Common Units immediately prior to such
Record Date or effective date, as the case may be, and in the case of a merger,
consolidation or business combination in which the Partnership is the surviving
Person, the Partnership shall provide effective provisions to ensure that the
provisions in this Section 5.9 relating to the Class A Preferred Units shall not
be abridged or amended and that the Class A Preferred Units shall thereafter
retain the same powers, preferences and relative participating, optional and
other special rights, and the qualifications, limitations and restrictions
thereon, that the Class A Preferred Units had immediately prior to such
transaction or event.  An adjustment made pursuant to this Section 5.9(b)(xiii)
shall become effective immediately after the Record Date in the case of a
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination, reclassification (including any
reclassification in connection with a merger, consolidation or business
combination in which the Partnership is the surviving Person) or split.  Such
adjustment shall be made successively whenever any event described above shall
occur.

(c)Distributions. 

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(i)Commencing with the Quarter ending on June 30, 2015 through the Class A
Preferred Conversion Date, the holders of the Class A Preferred Units as of an
applicable Record Date shall be entitled to receive distributions (each, a
“Class A Preferred Quarterly Distribution”), prior to any other distributions
made in respect of the any other Partnership Interests pursuant to Section 6.3,
Section 6.4 or Section 6.5, in an amount equal to the Class A Preferred
Distribution Rate on all Outstanding Class A Preferred Units. Distributions
shall be paid on or about the last day of each of February, May, August and
November following the end of each Quarter commencing with the Quarter ending
June 30, 2015.  Each Record Date established pursuant to this Section 5.9(c)(i)
for a Class A Preferred Quarterly Distribution in respect of any Quarter shall
be the same Record Date established for any distribution to be made by the
Company in respect of other Company Securities pursuant to Section 6.3, Section
6.4 or Section 6.5 for such Quarter.  For the Quarter ending June 30, 2015,
through and including the Quarter ending June 30, 2016, Class A Preferred
Quarterly Distributions shall be paid in Class A Preferred PIK Units.  For the
Quarters ending from and after September 30, 2016, the Class A Preferred
Quarterly Distributions may be paid in cash, in Class A Preferred PIK Units or
in a combination thereof, as determined by the Board of Directors in its sole
discretion, but shall be paid in Class A Preferred PIK Units absent an
affirmative determination otherwise by the Board of Directors.  The number of
Class A Preferred PIK Units to be issued to a Class A Preferred Holder on
account of its Class A Preferred Units in connection with any Class A Preferred
Quarterly Distribution paid in Class A Preferred PIK Units (commencing with the
Quarter ending June 30, 2015) shall be determined by multiplying the Class A
Preferred Distribution Rate by the number of Class A Preferred Units held by
such Class A Preferred Holder.  Any fractional Class A Preferred PIK Unit will
be rounded up to the nearest whole Class A Preferred PIK Unit.  Unless otherwise
expressly provided, references in this Agreement to Class A Preferred Units
shall include all Class A Preferred PIK Units Outstanding as of the date of such
determination.  If, in violation of this Agreement, the Partnership fails to pay
in full any in-kind Class A Preferred Quarterly Distribution when due, then the
holders entitled to the unpaid Class A Preferred PIK Units shall be entitled to
Class A Preferred Quarterly Distributions in subsequent Quarters, and to all
other rights under this Agreement, as if such unpaid Class A Preferred PIK Units
had in fact been distributed on the date due.  Nothing in this clause (i) shall
alter the obligation of the Partnership to pay any unpaid Class A Preferred PIK
Units or the right of Class A Preferred Holders to enforce this Agreement to
compel the Partnership to distribute any unpaid Class A Preferred PIK Units.

(ii)Notwithstanding anything in this Section 5.9(c) to the contrary, with
respect to Class A Preferred Units that are converted into Common Units, the
holder thereof shall not be entitled to a Class A Preferred Unit Distribution
and a Common Unit distribution with respect to the same period, but shall be
entitled only to the distribution to be paid based upon the class of Units held
as of the close of business on the applicable Record Date, together with all
accrued but unpaid distributions on the converted Class A Preferred Units.

(iii)When any Class A Preferred PIK Units are payable to a Class A Preferred
Holder pursuant to this Section 5.9, the Partnership shall make a notation in
book-entry form in the books of the Transfer Agent, or, at the request of a
Class A Preferred Holder,

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issue to such Class A Preferred Holder a Certificate or Certificates for the
number of Class A Preferred PIK Units to which such Class A Preferred Holder
shall be entitled, and all such Class A Preferred PIK Units shall, when so
issued, be duly authorized, validly issued 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, and shall be free from
preemptive rights and free of any lien, claim, rights or encumbrances, other
than those arising under the Delaware Act or this Agreement.

(iv)For purposes of maintaining Capital Accounts, if the Partnership issues one
or more Class A Preferred PIK Units with respect to a Class A Preferred Unit,
(i) the Partnership shall be treated as distributing cash with respect to such
Class A Preferred Unit in an amount equal to the Class A Preferred Unit
Distribution Rate attributable to such Class A Preferred PIK Units, and (ii) the
holder of such Class A Preferred Unit shall be treated as having contributed to
the Partnership in exchange for such newly issued Class A Preferred PIK Units an
amount of cash equal to the Class A Preferred Unit Distribution Rate
attributable to such Class A Preferred PIK Units. 

(v)Accrued and unpaid distributions in respect of the Class A Preferred Units
will not constitute an obligation of the Partnership.

(d)Voting Rights. Except as provided in Section 5.9(f) or as a result of
requirements imposed by the Delaware Act, the Class A Preferred Units shall have
no voting rights.

(e)Certificates.  

(i)If requested by a Class A Preferred Holder, the Class A Preferred Units shall
be evidenced by Certificates in such form as the Board of Directors may approve
and, subject to the satisfaction of any applicable legal, regulatory and
contractual requirements, may be assigned or transferred in a manner identical
to the assignment and transfer of other Units. The Certificates evidencing
Class A Preferred Units shall be separately identified and shall not bear the
same CUSIP number as the Certificates evidencing Common Units.

(ii)The Certificate(s) representing the Class A Preferred Units may be imprinted
with a legend in substantially the following form:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IN THE CASE OF A
TRANSACTION EXEMPT FROM REGISTRATION, UNLESS SOLD PURSUANT TO RULE 144 UNDER
SUCH ACT OR THE ISSUER HAS RECEIVED DOCUMENTATION REASONABLY SATISFACTORY TO IT
THAT SUCH TRANSACTION DOES NOT

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REQUIRE REGISTRATION UNDER SUCH ACT. THIS SECURITY IS SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER SET FORTH IN (i) THE AGREEMENT OF LIMITED PARTNERSHIP
OF THE PARTNERSHIP, DATED AS MARCH 6, 2015, AS AMENDED, AND (ii) A CLASS A
PREFERRED UNIT PURCHASE AGREEMENT, BY AND BETWEEN THE PARTNERSHIP AND THE UNIT
PURCHASERS PARTY THERETO, IN EACH CASE, A COPY OF WHICH MAY BE OBTAINED FROM THE
PARTNERSHIP AT ITS PRINCIPAL EXECUTIVE OFFICES.”

(iii)In connection with a sale of Class A Preferred Units pursuant to an
effective registration statement or in reliance on Rule 144 of the rules and
regulations promulgated under the Securities Act, upon receipt by the
Partnership of such information as the Partnership reasonably deems necessary to
determine that the sale of the Class A Preferred Units is made in compliance
with Rule 144, the Partnership shall remove or cause to be removed the
restrictive legend from the Certificate(s) representing such Class A Preferred
Units (or the book-entry account maintained by the Transfer Agent), and the
Partnership shall bear all costs associated therewith.

(f)Amendments.  This Section 5.9 shall not be amended in any manner that would
adversely affect a Class A Preferred Holder without the prior written consent of
such Class A Preferred Holder.

Section 5.10Establishment of Class B Preferred Units.

(a)General. The General Partner hereby designates and creates a series of Units,
including any Class B Preferred PIK Units issued pursuant to Section 5.10(c), to
be designated as “Class B Preferred Units,” having the same rights and
preferences, and subject to the same duties and obligations as the Common Units,
except as set forth in this Section 5.10.

(b)Conversion. 

(i)Each of the holders of Class B Preferred Units (including a Class B Preferred
PIK Unit) shall have the right, at any time at the option of such holder, to
convert any number of its Class B Preferred Units in an aggregate amount
exceeding the Minimum Conversion Amount into a number of Common Units equal to
(A) the Class B Preferred Liquidation Preference, divided by the Class B
Preferred Conversion Price (the “Class B Preferred Conversion Rate”), multiplied
by (B) the number of its Class B Preferred Units to be converted, subject to
adjustment pursuant to Section 5.10(b)(ix).    To convert Class B Preferred
Units into Common Units pursuant to this Section 5.10(b)(i), the Class B
Preferred Holder shall give written notice (a “Class B Preferred Conversion
Notice”) to the Partnership stating that such holder elects to so convert Class
B Preferred Units into Common Units and shall state therein with respect to
Class B Preferred Units to be converted pursuant to this Section
5.10(b)(i):  (a) the number of Class B Preferred Units (including Class B
Preferred PIK Units) to be converted, (b) the name or names in which such holder
wishes the Certificate or Certificates for Common Units to be issued, (c) the
holder’s computation of the number of Common Units to be received by the holder
(or

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designated recipients) upon the Class B Preferred Conversion Date and (d) the
Class B Preferred Conversion Rate on the Class B Preferred Conversion Date. The
date of any Class B Preferred Conversion Notice shall hereinafter be referred to
as a “Class B Preferred Conversion Date.”

(ii)If, on any Class B Preferred Conversion Date, the distribution pursuant to
Section 5.10(c)(i) has not yet been made for the immediately preceding Quarter
with respect to the Class B Preferred Units to be converted, the Partnership
shall make a distribution pursuant to Section 5.10(c)(i) for such Quarter;
provided, however, that if prior to the Class B Preferred Conversion Date, a
Record Date for a distribution on the Common Units has been announced for such
Quarter (which Record Date is after the Class B Preferred Conversion Date), then
the amount to be distributed per Class B Preferred Unit pursuant to Section
5.10(c)(i) and this Section 5.10(b)(ii) shall be reduced by the amount of the
distribution announced for each Common Unit for such Quarter.  With respect to
any Quarter in which a Class B Preferred Conversion Date occurred, the holder of
converted Class B Preferred Units shall not be entitled to distributions payable
pursuant to Section 5.10(c)(i) for such Quarter with respect to such converted
Class B Preferred Units and the Common Unit distribution with respect to the
same period, but shall be entitled only to the distribution to be paid based
upon the class of Units held as of the close of business on the applicable
Record Date for such Quarter.

(iii)The Partnership shall pay any documentary, stamp or similar issue or
transfer taxes that may be payable in respect of any issuance or delivery of
Common Units upon conversion of Class B Preferred Units, other than the transfer
taxes payable upon the issuance of Common Units upon conversion of Class B
Preferred Units in a name or names other than that of the Class B Preferred
Holder, which shall be paid by the converting Class B Preferred Holder.

(iv)Effective immediately prior to 5:00 p.m., New York City time, on the
applicable Class B Preferred Conversion Date, distributions on the converted
Class B Preferred Units shall cease to accrue and the converted Class B
Preferred Units shall cease to be outstanding, in each case subject to the right
of Class B Preferred Holders of such converted Class B Preferred Units to
receive the consideration issuable upon conversion which they are entitled to
pursuant to this Section 5.10(b).

(v)As of 5:00 p.m., New York City time, on the applicable Class B Preferred
Conversion Date, the issuance by the Partnership of Common Units upon conversion
of Class B Preferred Units shall become effective and the Person entitled to
receive such Common Units shall be treated for all purposes as the record holder
or holders of such Common Units. Prior to 5:00 p.m., New York City time, on the
applicable Class B Preferred Conversion Date, the Common Units issuable upon
conversion shall be deemed not outstanding for any purpose, and Holders of Class
B Preferred Units shall have no rights with respect to the Common Units issuable
upon conversion by virtue of holding Class B Preferred Units.

(vi)In connection with the conversion of any Class B Preferred Units, no
fractional Common Units shall be issued to the converting Class B Preferred
Holders. In

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lieu of any fractional Common Units issuable to a Class B Preferred Holder upon
conversion, the Partnership shall pay or deliver, as applicable, to the
converting Class B Preferred Holder, at the Partnership’s option, either (i) a
number of Common Units rounded up to the next whole number of units, or (ii) an
amount in cash (computed to the nearest cent) equal to the product of the
fractional Common Unit and the Closing Price of Common Units on the Trading Day
immediately preceding the applicable Class B Preferred Conversion Date. 

(vii)If more than one Class B Preferred Unit shall be surrendered for conversion
at one time by or for the same Class B Preferred Holder, the number of Common
Units issuable upon conversion of those Class B Preferred Units shall be
computed on the basis of the aggregate number of Class B Preferred Units so
surrendered.

(viii)With respect to any conversion of Class B Preferred Units,

(1) promptly following the applicable Class B Preferred Conversion Date, the
Partnership shall instruct the Transfer Agent to deliver or cause to be
delivered to the converting Class B Preferred Holder confirmation by book-entry
of the whole number of Common Units issued upon conversion of such Class B
Preferred Units; and

(2)on the Business Day immediately following the applicable Class B Preferred
Conversion Date, the Partnership shall deliver or cause to be delivered to the
converting Class B Preferred Holder any cash payment for any fractional units
that the Partnership is obligated to pay under Section 5.10(b)(vi).

(ix)If the Partnership (1) makes a distribution on its Common Units in Common
Units, (2) subdivides or splits its outstanding Common Units into a greater
number of Common Units, (3) combines or reclassifies its Common Units into a
smaller number of Common Units or (4) issues by reclassification of its Common
Units any Partnership Interest (including any reclassification in connection
with a merger, consolidation or business combination in which the Partnership is
the surviving Person), then the Class B Preferred Unit Price in effect at the
time of the Record Date for such distribution or the effective date of such
subdivision, split, combination or reclassification shall be proportionately
adjusted so that the conversion of the Class B Preferred Units after such time
shall entitle the holder to receive the aggregate number of Common Units (or
shares of any Partnership Interest into which such shares of Common Units would
have been combined, consolidated, merged or reclassified pursuant to clauses (3)
and (4) above) that such holder would have been entitled to receive if the Class
B Preferred Units had been converted into Common Units immediately prior to such
Record Date or effective date, as the case may be, and in the case of a merger,
consolidation or business combination in which the Partnership is the surviving
Person, the Partnership shall provide effective provisions to ensure that the
provisions in this Section 5.10 relating to the Class B Preferred Units shall
not be abridged or amended and that the Class B Preferred Units shall thereafter
retain the same powers, preferences and relative participating, optional and
other special rights, and the qualifications, limitations and restrictions
thereon, that the Class B Preferred

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Units had immediately prior to such transaction or event.  An adjustment made
pursuant to this Section 5.10(b)(ix) shall become effective immediately after
the Record Date in the case of a distribution and shall become effective
immediately after the effective date in the case of a subdivision, combination,
reclassification (including any reclassification in connection with a merger,
consolidation or business combination in which the Partnership is the surviving
Person) or split.  Such adjustment shall be made successively whenever any event
described above shall occur.

(x)The Partnership shall keep free from preemptive rights a sufficient number of
Common Units to permit the conversion of all outstanding Class B Preferred Units
into Common Units to the extent provided in, and in accordance with, this
Section 5.10(b).

(xi)All Common Units delivered upon conversion of the Class B Preferred Units in
accordance with this Section 5.10(b) shall be (1) newly issued, (2) duly
authorized, validly issued 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, and shall be free from
preemptive rights and free of any lien, claim, rights or encumbrances, other
than those arising under the Securities Act, the Delaware Act or the Partnership
Agreement.

(xii)The Partnership shall comply with all applicable securities laws regulating
the offer and delivery of any Common Units upon conversion of Class B Preferred
Units and, if the Common Units are then listed or quoted on any National
Securities Exchange shall list or cause to have quoted and keep listed and
quoted the Common Units issuable upon conversion of the Class B Preferred Units
to the extent permitted or required by the rules of such National Securities
Exchange.

(c)Distributions. 

(i)Commencing with the Quarter ending on September 30, 2015, the holders of the
Class B Preferred Units as of an applicable Record Date shall be entitled to
receive cumulative distributions (each, a “Class B Preferred Quarterly
Distribution”), prior to any other distributions made in respect of any other
Partnership Interests (other than Class A Preferred Units) pursuant to Section
6.3, Section 6.4 or Section 6.5 or any other provision of this Agreement (other
than Section 5.9(c)), in an amount equal to the Class B Preferred Distribution
Rate on all Outstanding Class B Preferred Units.  Distributions shall be paid on
or about the last day of each of February, May, August and November following
the end of each Quarter commencing with the Quarter ending September 30, 2015
(pro rata for the period between the Class B Preferred Issue Date and the last
day of such Quarter).  Each Record Date established pursuant to this Section
5.10(c)(i) for a Class B Preferred Quarterly Distribution in respect of any
Quarter shall be the same Record Date established for any distribution to be
made by the Company in respect of other Company Securities pursuant to Section
5.9(c), Section 6.3, Section 6.4 or Section 6.5 for such Quarter.  The Class B
Preferred Quarterly Distributions may be paid either 100% in cash or in a
combination of cash and Class B Preferred PIK Units, as more particularly set
forth in the definition of Class B Preferred Distribution Rate, as determined by
the Board of Directors in its sole discretion.  The amount of cash paid to a
Class B Preferred Holder on account

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of each Class B Preferred Unit held by such Class B Preferred Holder shall be
determined by multiplying the Class B Preferred Distribution Rate by the Class B
Preferred Unit Price applicable to such Class B Preferred Unit.  The number of
Class B Preferred PIK Units to be issued to a Class B Preferred Holder on
account of its Class B Preferred Units in connection with any Class B Preferred
Quarterly Distribution paid in Class B Preferred PIK Units shall be determined
by multiplying the Class B Preferred Distribution Rate by the number of Class B
Preferred Units held by such Class B Preferred Holder.  Any fractional Class B
Preferred PIK Unit will be rounded up to the nearest whole Class B Preferred PIK
Unit.  Unless otherwise expressly provided, references in this Agreement to
Class B Preferred Units shall include all Class B Preferred PIK Units
Outstanding as of the date of such determination.  If, in violation of this
Agreement, the Partnership fails to pay in full any in-kind portion of a Class B
Preferred Quarterly Distribution when due, then the holders entitled to the
unpaid Class B Preferred PIK Units shall be entitled to Class B Preferred
Quarterly Distributions in subsequent Quarters, and to all other rights under
this Agreement, as if such unpaid Class B Preferred PIK Units had in fact been
distributed on the date due.  Nothing in this Section 5.10(c)(i) shall alter the
obligation of the Partnership to pay any unpaid Class B Preferred PIK Units or
the right of Class B Preferred Holders to enforce this Agreement to compel the
Partnership to distribute any unpaid Class B Preferred PIK Units.

(ii)Each Class B Preferred Quarterly Distribution (or, if applicable, portion
thereof) for any Quarter that is payable in cash shall be paid in cash unless
either the Partnership’s Available Cash is insufficient to pay the Class B
Preferred Quarterly Distribution or such payment is prohibited by the terms of
the Partnership’s material financing agreements, in which case (A) the amount of
such accrued and unpaid distributions will accumulate until paid in full in
cash, (B) the balance of such accrued and unpaid distributions shall increase at
a rate of 10% per annum, compounded quarterly, from the date such distribution
was due until the date it is paid and (C) the Partnership shall not be permitted
to, and shall not, declare or make (i) any cash distributions in respect of any
Junior Securities or (ii) any cash distributions in respect of any Parity
Securities, in each case, unless and until all accrued and unpaid cash
distributions on the Class B Preferred Units have been paid in full in cash.    

(iii)Unless Available Cash less cash on hand from Working Capital Borrowings or
other amounts borrowed under the Existing Credit Facility during the Quarter or
subsequent to Quarter-end at the time of such distribution equals at least 1.65
times the sum of (i) the aggregate cash component of such Class B Preferred
Quarterly Distribution and (ii) the aggregate cash component, if any, of the
Class A Preferred Quarterly Distribution for such Quarter, the Partnership shall
not be permitted to, and shall not, declare or make (A) any cash distributions
in respect of any Junior Securities or (B) any cash distributions in respect of
any Parity Securities.

(iv)When any Class B Preferred PIK Units are payable to a Class B Preferred
Holder pursuant to this Section 5.10, the Partnership shall make a notation in
book-entry form in the books of the Transfer Agent, or, at the request of a
Class B Preferred Holder, issue to such Class B Preferred Holder a Certificate
or Certificates for the number of Class B Preferred PIK Units to which such
Class B Preferred Holder shall be entitled, and all

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such Class B Preferred PIK Units shall, when so issued, be duly authorized,
validly issued 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, and shall be free from preemptive rights and free
of any lien, claim, rights or encumbrances, other than those arising under the
Delaware Act or this Agreement. 

(v)The Partnership shall pay any documentary, stamp or similar issue or transfer
taxes that may be payable in respect of any issuance or delivery of Class B
Preferred PIK Units, other than the transfer taxes payable upon the issuance of
Class B Preferred PIK Units in a name or names other than that of the Class B
Preferred Holder, which shall be paid by the converting Class B Preferred
Holder.

(vi)For purposes of maintaining Capital Accounts and as otherwise set forth
herein, if the Partnership issues one or more Class B Preferred PIK Units with
respect to a Class B Preferred Unit, (i) the Partnership shall be treated as
distributing cash with respect to such Class B Preferred Unit in an amount equal
to the Class B Preferred Distribution Rate attributable to such Class B
Preferred PIK Units (rounded up as appropriate with respect to each whole Class
B Preferred PIK Unit issued in lieu of a fractional interest therein), and
(ii) the holder of such Class B Preferred Unit shall be treated as having
contributed to the Partnership in exchange for such newly issued Class B
Preferred PIK Units an amount of cash equal to the amount treated as distributed
pursuant to Section 5.10(c)(i).

(vii)Accrued and unpaid distributions in respect of the Class B Preferred Units
will not constitute an obligation of the Partnership. 

(d)Redemption.    

(i)The Partnership shall have the right to redeem Outstanding Class B Preferred
Units as follows:

(A)commencing January 1, 2018 through and including December 31, 2018, the
Partnership shall have the right to redeem 33.33% of the Outstanding Class B
Preferred Units for cash in an amount equal to the number of Class B Preferred
Units so redeemed multiplied by the greater of (I) the Current Market Price (the
date of determination of which shall be the Class B Preferred Redemption Date)
of a Common Unit and (II) 130% of the Class B Preferred Liquidation Preference;

(B)commencing January 1, 2019 through and including December 31, 2019, the
Partnership shall have the right to redeem 66.67% of the Outstanding Class B
Preferred Units as of January 1, 2018, less any Class B Preferred Units already
redeemed pursuant to clause (A), for cash in an amount equal to the number of
Class B Preferred Units so redeemed multiplied by the greater of (I) the Current
Market Price (the date of determination of which shall be the Class B Preferred
Redemption Date) of a Common Unit and (II) 120% of the Class B Preferred
Liquidation Preference;

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(C)commencing January 1, 2020 through and including December 31, 2020, the
Partnership shall have the right to redeem 100% of the Outstanding Class B
Preferred Units for cash in an amount equal to the number of Class B Preferred
Units so redeemed multiplied by the greater of (I) the Current Market Price (the
date of determination of which shall be the Class B Preferred Redemption Date)
of a Common Unit and (II) 110% of the Class B Preferred Liquidation Preference;
and

(D)commencing January 1, 2021, the Partnership shall have the right to redeem
100% of the Outstanding Class B Preferred Units for cash in an amount equal to
the number of Class B Preferred Units so redeemed multiplied by the greater of
(I) the Current Market Price (the date of determination of which shall be the
Class B Preferred Redemption Date) of a Common Unit and (II) the Class B
Preferred Liquidation Preference.

(ii)Failure to redeem the Outstanding Class B Preferred Units on or before
December 31, 2021 shall be a breach by the Partnership of this Agreement, and
the Class B Preferred Holders shall be entitled to pursue any and all rights or
remedies that may be available to them at law or in equity in respect of such
breach.  Without limiting the generality of the foregoing sentence, if all
Outstanding Class B Preferred Units are not redeemed on or before December 31,
2021, then (A) the Class B Quarterly Distribution payable from and after
December 31, 2021 in respect of the Class B Preferred Units not redeemed shall
be in an amount equal to the Class B Preferred Increased Distribution Rate on
all Outstanding Class B Preferred Units and (B) 100% of all Adjusted Available
Cash on hand and thereafter received by the Partnership shall be distributed to
the Class B Preferred Holders, pro rata in accordance with each Class B
Preferred Holder’s ownership of Outstanding Class B Preferred Units, within five
(5) Business Days after the end of each month, with the first distribution to
occur no later than the fifth Business Day of January 2022 and continuing until
all Outstanding Class B Preferred Units have been redeemed in accordance with
Section 5.10(d)(i)(D).  Without limiting the generality of the foregoing, the
right of the Class B Preferred Holders to have their Outstanding Class B
Preferred Units redeemed pursuant to this Section 5.10(d)(ii) will be senior in
right of payment to all distributions or redemptions of Partnership Interests by
the Partnership. 

(iii)Immediately prior to the redemption of the Class B Preferred Units on a
Class B Preferred Redemption Date, the Partnership shall (A) with respect to the
immediately preceding Quarter for which a distribution pursuant to Section
5.10(c)(i) has not yet been made, make a distribution pursuant to Section
5.10(c)(i) for such Quarter with respect to the Class B Preferred Units being
redeemed and (B) with respect to the period from the beginning of the Quarter in
which a Class B Preferred Redemption Date occurs through such Class B Preferred
Redemption Date, make a distribution pursuant to Section 5.10(c)(i) for such
period equal to (y) the product obtained by multiplying (1) the number of
Class B Preferred Units held by such Class B Preferred Holder on such Class B
Preferred Redemption Date that are being redeemed by (2) the Class B Preferred
Distribution Rate, and multiplying such result by (z) a quotient obtained by
dividing (1) the number of days from the beginning of the Quarter in which such
Class B Preferred Redemption Date occurs through and including such Class B
Preferred Redemption Date, by (2) the total number of days in the Quarter in
which such Class B Preferred Redemption Date occurs.  For the

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avoidance of doubt, the distribution pursuant to this Section 5.10(d)(iii) shall
not be considered part of the Class B Preferred Liquidation Preference.

(iv)No later than three (3) Trading Days before the Class B Preferred Redemption
Date, the Partnership shall deliver a written notice in the form attached as
Exhibit C hereto (the “Class B Preferred Redemption Notice”) to the Class B
Preferred Holders stating that all or a portion of the Class B Preferred Units
will be redeemed pursuant to this Section 5.10(d) on the Class B Preferred
Redemption Date.  The Class B Preferred Redemption Notice shall state therein
the number of Class B Preferred Units to be redeemed and the Partnership’s
computation of the cash amount to be received by the Class B Preferred Holders
upon redemption of such Class B Preferred Units.

(v)No later than ten (10) Trading Days following the Class B Preferred
Redemption Date, the Partnership shall remit the applicable cash consideration
to the Class B Preferred Holders.  The Class B Preferred Holders shall deliver
to the Partnership any Certificates representing the Class B Preferred Units as
soon as practicable following the Class B Preferred Redemption Date.  Class B
Preferred Holders shall retain all of the rights and privileges of the Class B
Preferred Units unless and until the full cash consideration due to them as a
result of such redemption shall be paid in full in cash.

(e)Voting Rights; Amendment. 

(i)Subject to the Board Representation and Standstill Agreement, the Class B
Preferred Units will have such voting rights pursuant to this Agreement
identical to the voting rights of the Common Units and shall vote together with
the Common Units as a single class, so that the Class B Preferred Units
(including, for the avoidance of doubt, the Class B Preferred PIK Units) will be
entitled to one vote for each Common Unit into which such Class B Preferred
Units are convertible, except that the Class B Preferred Units shall be entitled
to vote as a separate class on any matter on which Unitholders are entitled to
vote that adversely affects the rights or preferences of the Class B Preferred
Units in relation to other classes of Partnership Interests in any material
respect or as required by law or as otherwise set forth in this Section
5.10(e).  The affirmative vote of holders of a majority of the Outstanding
Class B Preferred Units, voting separately as a class with one vote per Class B
Preferred Unit, shall be required to approve any matter for which the Class B
Preferred Holders are entitled to vote as a separate class.

(ii)Notwithstanding any other provision of this Agreement, in addition to all
other requirements imposed by Delaware law, and all other voting rights granted
under this Agreement, the affirmative vote of holders of a majority of the
Outstanding Class B Preferred Units, voting separately as a class with one vote
per Class B Preferred Unit, shall be necessary to amend this Agreement in any
manner that (A) alters or changes the rights, powers, privileges or preferences
or duties and obligations of the Class B Preferred Units in any material
respect, (B)  results in the issuance of Class A Preferred Units or any
additional Class B Preferred Units, other than Class A Preferred PIK Units
issued pursuant to Section 5.9, Class B Preferred PIK Units or Class B Preferred
Units created pursuant to Section 5.10(g), or (C) otherwise adversely affects
the Class B Preferred Units, including, without limitation, the creation (by
reclassification or otherwise) or issuance of any class

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of Senior Securities or Parity Securities (or amending the provisions of any
existing class of Partnership Interests to make such class of Partnership
Interests a class of Senior Securities or Parity Securities); provided, however,
that the Partnership may, without the affirmative vote of holders of a majority
of the Outstanding Class B Preferred Units, create (by reclassification or
otherwise) and issue Junior Securities (including by amending the provisions of
any existing class of Partnership Interests to make such class of Partnership
Interests a class of Junior Securities) in an unlimited amount.

(iii)To the extent that any proposed amendment to this Agreement would adversely
affect any Class B Preferred Holder in a disproportionate manner as compared to
any other Class B Preferred Holder, the consent of such Class B Preferred Holder
so adversely and disproportionately affected, in addition to the affirmative
vote of the holders of a majority of the Outstanding Class B Preferred Units
pursuant to Section 5.10(e)(ii), shall be necessary to effect such amendment.

(f)Common Equity Commitment.  On or before September 30, 2016, the Partnership
shall use good faith efforts to issue, in one or more transactions (excluding
issuances pursuant to the LTIP), additional Common Units in exchange for cash in
an aggregate amount equal to at least $75,000,000; provided, however, that if
any Class A Preferred Units are converted into Common Units at the Class A
Preferred Conversion Rate (subject to adjustment pursuant to Section
5.9(b)(xiii)) pursuant to Section 5.9(b) on or before September 30, 2016, then
the aggregate amount of $75,000,000 shall be reduced by an amount equal to the
Class A Preferred Liquidation Preference, multiplied by the number of Class A
Preferred Common Units so converted.

(g)Adjustment to Class B Preferred Unit Price.  During the Subsequent Issuance
Period, if the Partnership issues any Common Units (including pursuant to a
Qualified Public Offering or an at-the-market offering, but excluding issuances
pursuant to the LTIP) at a price less than $18.00 per Common Unit, then the
following adjustments shall be made promptly, but in no event later than 10
Business Days, following the end of the Subsequent Issuance Period:

(i)the definition of “Class B Preferred Unit Price” shall be deemed to be equal
to the volume weighted average price for which such Common Units were issued
during the Subsequent Issuance Period; and

(ii)the number of Class B Preferred Units held by each Class B Preferred Holder
shall be split to take into account the new Class B Preferred Unit Price such
that each Class B Preferred Holder shall hold a number of Class B Preferred
Units equal to (A) $18.00, divided by (B) the volume weighted average price for
which such Common Units were issued during the Subsequent Issuance Period,
multiplied by (C) the number of Class B Preferred Units held by such Class B
Preferred Holder, and any fractional Class B Preferred Unit resulting from such
calculation will be rounded up to the nearest whole Class B Preferred Unit.  

(h)Certificates.  

(i)If requested by a Class B Preferred Holder, the Class B Preferred Units shall
be evidenced by Certificates in such form as the Board of Directors may approve
and,

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subject to the satisfaction of any applicable legal, regulatory and contractual
requirements, may be assigned or transferred in a manner identical to the
assignment and transfer of other Units. The Certificates evidencing Class B
Preferred Units shall be separately identified and shall not bear the same CUSIP
number as the Certificates evidencing Common Units.

(ii)The Certificate(s) representing the Class B Preferred Units may be imprinted
with a legend in substantially the following form:

“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT
OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IN THE CASE OF A
TRANSACTION EXEMPT FROM REGISTRATION, UNLESS SOLD PURSUANT TO RULE 144 UNDER
SUCH ACT OR THE ISSUER HAS RECEIVED DOCUMENTATION REASONABLY SATISFACTORY TO IT
THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER SUCH ACT. THIS
SECURITY IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN (i) THE
SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF THE PARTNERSHIP,
DATED AS OF SEPTEMBER [___], 2015, AND (ii) THE CLASS B PREFERRED UNIT PURCHASE
AGREEMENT, BY AND BETWEEN THE PARTNERSHIP AND THE UNIT PURCHASERS PARTY THERETO,
IN EACH CASE, A COPY OF WHICH MAY BE OBTAINED FROM THE PARTNERSHIP AT ITS
PRINCIPAL EXECUTIVE OFFICES.”

(iii)In connection with a sale of Class B Preferred Units pursuant to an
effective registration statement or in reliance on Rule 144 of the rules and
regulations promulgated under the Securities Act, upon receipt by the
Partnership of such information as the Partnership reasonably deems necessary to
determine that the sale of the Class B Preferred Units is made in compliance
with Rule 144, the Partnership shall remove or cause to be removed the
restrictive legend from the Certificate(s) representing such Class B Preferred
Units (or the book-entry account maintained by the Transfer Agent), and the
Partnership shall bear all costs associated therewith.

Article VI
ALLOCATIONS AND DISTRIBUTIONS1

Section 6.1Allocations for Capital Account Purposes.  For purposes of
maintaining the Capital Accounts and in determining the rights of the Partners
among themselves, the Partnership’s items of income, gain, loss, deduction,
Simulated Depletion, Simulated Gain and Simulated Loss

 

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

1 Note: This draft remains subject to review and comment by Sidley Tax.

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(computed in accordance with Section 5.3(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) and Section 6.1(e), Net Income for each taxable period and all
items of income, gain, loss, deduction and Simulated Gain taken into account in
computing Net Income for such taxable period shall be allocated as follows:

(i)First,  to the General Partner until the 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 of the Net Loss allocated to the
General Partner pursuant to Section 6.1(b)(iv) for all previous taxable periods;

(ii)Second, to the Class A Preferred Holders in proportion to the amounts to be
allocated to each of them under this Section 6.1(a)(ii) until the Net Income
allocated to such holders of Class A Preferred Units pursuant to this Section
6.1(a)(ii) for the current and all previous taxable periods is equal to the
aggregate of the Net Loss allocated to the Class A Preferred Holders pursuant to
Section 6.1(b)(iii) for all previous taxable periods;

(iii)Third, to the Class B Preferred Holders in proportion to the amounts to be
allocated to each of them under this Section 6.1(a)(iii) until the Net Income
allocated to such holders of Class B Preferred Units pursuant to this Section
6.1(a)(iii) for the current and all previous taxable periods is equal to the
aggregate of the Net Loss allocated to the Class B Preferred Holders pursuant to
Section 6.1(b)(ii) for all previous taxable periods; and

(iv)The balance, if any, 100% to the Unitholders, Pro Rata (determined without
regard to any Preferred Units then held by them).

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

(i)First,  to the Unitholders (other than Preferred Holders), Pro Rata
(determined without regard to any Preferred Units then held by them); 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 such 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) as such
Adjusted Capital Account would be determined without regard to any Preferred
Units then held by such Unitholder;

(ii)Second, to the Class B Preferred Holders pro rata in accordance with the
number of Class B Preferred Units held by them; provided, that the Net Loss
shall not be allocated pursuant to this Section 6.1(b)(ii) to the extent that
such allocation would cause any such Class B Preferred Holder 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);

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(iii)Third, to the Class A Preferred Holders pro rata in accordance with the
number of Class A Preferred Units held by them; provided, that the Net Loss
shall not be allocated pursuant to this Section 6.1(b)(iii) to the extent that
such allocation would cause any such Class A Preferred Holder 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

(iv)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) and Section 6.1(e), Net Termination Gain
or Net Termination Loss (including a pro rata part of each item of income, gain,
loss, deduction and Simulated Gain 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 5.9, Section
6.3, Section 6.4 and Section 6.5 have been made; provided, however, that solely
for purposes of this Section 6.1(c), Capital Accounts shall not be adjusted for
distributions made pursuant to Section 12.4.

(i)Subject to the provisions set forth in the last sentence of this Section
6.1(c)(i), Net Termination Gain (including a pro rata part of each item of
income, gain, loss, and deduction taken into account in computing Net
Termination Gain) shall be allocated:

(A)First,  to the General Partner until the Net Termination Gain allocated to
the General Partner pursuant to this Section 6.1(c)(i)(A) for the current and
all previous taxable periods is equal to the aggregate of the Net Termination
Loss allocated to the General Partner pursuant to Section 6.1(c)(ii)(D) for all
previous taxable periods;

(B)Second,  to the Class A Preferred Holders in proportion to the amounts to be
allocated to each of them under this Section 6.1(c)(i)(B) until the Net
Termination Gain allocated to such Class A Preferred Holders pursuant to this
Section 6.1(c)(i)(B) for the current and all previous taxable periods is equal
to the aggregate of the Net Termination Loss allocated to the Class A Preferred
Holders pursuant to Section 6.1(c)(ii)(C) for all previous taxable periods;

(C)Third, to the Class B Preferred Holders in proportion to the amounts to be
allocated to each of them under this Section 6.1(c)(i)(C) until the Net
Termination Gain allocated to such Class B Preferred Holders pursuant to this
Section 6.1(c)(i)(C) for the current and all previous taxable periods is equal
to the aggregate of the Net Termination Loss allocated to the Class B Preferred
Holders pursuant to Section 6.1(c)(ii)(B) for all previous taxable periods;

(D)Fourth,  to all Unitholders, Pro Rata (determined without regard to any
Preferred Units then held by them), until the Capital Account in respect of each

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Common Unit then Outstanding is equal to the sum of (1) its Unrecovered Initial
Unit Price, (2) the Minimum Quarterly Distribution for the Quarter during which
the Liquidation Date occurs, reduced by any distribution pursuant to Section
6.4(d) with respect to such Common Unit for such Quarter, and (3) the excess of
(aa) the First Target Distribution less the Minimum Quarterly Distribution for
each Quarter after the Closing Date or the date of the most recent IDR Reset
Election, if any, 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(d) for such period (the sum of (1), (2), and (3)  is
hereinafter referred to as the “First Liquidation Target Amount”);

(E)Fifth, 13% to the holders of the Incentive Distribution Rights, Pro Rata, and
87% to all Unitholders, Pro Rata (determined without regard to any Preferred
Units then held by them), until the Capital Account in respect of each Common
Unit then Outstanding is equal to the sum of (1) the First Liquidation Target
Amount, and (2) the excess of (aa) the Second Target Distribution less the First
Target Distribution for each Quarter after the Closing Date or the date of the
most recent IDR Reset Election, if any, 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(e) for such period (the sum of (1) and
(2) is hereinafter referred to as the “Second Liquidation Target Amount”);

(F)Sixth, 23% to the holders of the Incentive Distribution Rights, Pro Rata, and
77% to all Unitholders, Pro Rata (determined without regard to any Preferred
Units then held by them), until the Capital Account in respect of each Common
Unit then Outstanding is equal to the sum of (1) the Second Liquidation Target
Amount, and (2) the excess of (aa) the Third Target Distribution less the Second
Target Distribution for each Quarter after the Closing Date or the date of the
most recent IDR Reset Election, if any, 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(f) for such period (the sum of (1) and (2)
is hereinafter defined as the “Third Liquidation Target Amount”); and

(G)Finally, 35.5% to the holders of the Incentive Distribution Rights, Pro Rata,
and 64.5% to all Unitholders, Pro Rata (determined without regard to any
Preferred Units then held by them).

Notwithstanding the foregoing provisions in this Section 6.1(c)(i), the General
Partner may (1) adjust the amount of any Net Termination Gain arising in
connection with a Revaluation Event that is allocated to the holders of
Incentive Distribution Rights in a manner that will result (i) in the Capital
Account for each Common 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 Incentive Distribution Rights 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 Incentive
Distribution Rights 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 and the Carrying Value of each Partnership
property were equal to zero and (2) adjust the

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allocations of any Net Termination Gain arising in connection with a redemption
of Class B Preferred Units, so as to cause the Per Unit Capital Amount
associated with each Class B Preferred Unit being redeemed (after adjustment to
take into account required allocations of income, gain, loss and deduction) to
equal, to the maximum extent possible, the Class B Preferred Unit Liquidation
Amount with respect to such Class B Preferred Unit.

(ii)Net Termination Loss shall be allocated:

(A)First, to all Unitholders, Pro Rata (determined without regard to any
Preferred Units then held by them) until the Adjusted Capital Account in respect
of each Common Unit then Outstanding has been reduced to zero;

(B)Second, to the Class B Preferred Holders, pro rata in accordance with the
number of Class B Preferred Units held by them until the Adjusted Capital
Account in respect of each Class B Preferred Unit then Outstanding has been
reduced to zero; 

(C)Third,  to the Class A Preferred Holders, pro rata in accordance with the
number of Class A Preferred Units held by them until the Adjusted Capital
Account in respect of each Class A Preferred Unit then Outstanding has been
reduced to zero; and

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

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

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

(ii)Chargeback of Partner Nonrecourse Debt Minimum Gain.  Notwithstanding the
other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as
provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net
decrease in Partner Nonrecourse Debt Minimum Gain during any Partnership taxable
period, any Partner with a share of Partner Nonrecourse Debt Minimum Gain at the
beginning of such taxable period shall be allocated items of Partnership income,
gain and Simulated Gain for such period (and, if necessary, subsequent periods)
in the manner and amounts provided in

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Treasury Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any
successor provisions.  For purposes of this Section 6.1(d), each Partner’s
Adjusted Capital Account balance shall be determined, and the allocation of
income, gain or Simulated Gain required hereunder shall be effected, prior to
the application of any other allocations pursuant to this Section 6.1(d), other
than Section 6.1(d)(i) and other than an allocation pursuant to Section
6.1(d)(vi) or Section 6.1(d)(vii), with respect to such taxable period.  This
Section 6.1(d)(ii) is intended to comply with the chargeback of items of income
and gain requirement in Treasury Regulation Section 1.704-2(i)(4) and shall be
interpreted consistently therewith.

(iii)Priority Allocations.

(A)If the amount of cash or the Net Agreed Value of any property distributed
(except cash or property distributed pursuant to Section 12.4) 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 “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; provided, however, that this Section 6.1(d)(iii)(A) shall
not apply to any Excess Distribution in respect to or measured by a distribution
to a Preferred Unit.

(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 Incentive Distribution Rights, Pro Rata, until the
aggregate amount of such items allocated to the holders of Incentive
Distribution Rights pursuant to this Section 6.1(d)(iii)(B) for the current
taxable period and all previous taxable periods is equal to the cumulative
amount of all Incentive Distributions made to the holders of Incentive
Distribution Rights from the Closing Date to a date 45 days after the end of the
current taxable period.

(iv)Qualified Income Offset.  In the event any Partner unexpectedly receives any
adjustments, allocations or distributions described in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), items of Partnership 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.

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(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, gain and
Simulated Gain in the amount of such excess as quickly as possible; provided,
that an allocation pursuant to 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 Common Unitholders 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.

(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 as
determined by the General Partner in accordance with any permissible method
under Treasury Regulation Section 1.752-3(a)(3).

(ix)Code Section 754 Adjustments.  To the extent an adjustment to the adjusted
tax basis of any Partnership asset pursuant to Section 734(b) or 743(b) of the
Code (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 or Simulated Gain (if the adjustment increases the
basis of the asset) or loss or Simulated Loss (if the adjustment decreases such
basis) taken into account pursuant to Section 5.3, and such item of gain, loss,
Simulated Gain or Simulated Loss shall be specially allocated to the Partners in
a manner consistent with the manner in which their Capital Accounts are required
to be adjusted pursuant to such Section of the Treasury Regulations.

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(x)Exercise of Noncompensatory Option.  Upon the exercise of a Noncompensatory
Option, including a conversion of a Preferred Unit into a Common Unit, the
Company shall make such special allocations as described in Treasury Regulations
Section 1.704-1(b)(2)(iv)(s)(2).

(xi)Economic Uniformity; Changes in Law.

(A)With respect to an event triggering an adjustment to the Carrying Value of
Partnership property pursuant to Section 5.3(d) during any taxable period of the
Partnership ending upon, or after, the issuance of IDR Reset Common Units
pursuant to Section 5.8, any Unrealized Gains and Unrealized Losses shall be
allocated among the Partners in a manner that to the nearest extent possible
results in the Capital Accounts maintained with respect to such IDR Reset Common
Units issued pursuant to Section 5.8 equaling the product of (1) the Aggregate
Quantity of IDR Reset Common Units and (2) the Per Unit Capital Amount for an
Initial Common Unit.

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

(C)For the proper administration of the Partnership and for the preservation of
uniformity of the Limited Partner Interests (or any class or classes thereof),
the General Partner shall (i) adopt such conventions as it deems appropriate in
determining the amount of depreciation, amortization and cost recovery
deductions; (ii) make special allocations of income, gain, loss, deduction,
Unrealized Gain or Unrealized Loss; and (iii) 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)(xi)(C) only if such conventions, allocations or amendments would
not have a material adverse effect on the Partners, the holders of any class or
classes of Outstanding Limited Partner Interests or the Partnership.

(xii)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, deduction, Simulated Depletion, Simulated
Gain

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and Simulated Loss allocated to each Partner pursuant to the Required
Allocations and the Agreed Allocations, together, shall be equal to the net
amount of such items that would have been allocated to each such Partner under
the Agreed Allocations had the Required Allocations and the related Curative
Allocation not otherwise been provided in this Section 6.1.  In exercising its
discretion under this Section 6.1(d)(xii)(A), the General Partner may take into
account future Required Allocations that, although not yet made, are likely to
offset other Required Allocations previously made.  Allocations pursuant to this
Section 6.1(d)(xii)(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)(xii)(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)(xii)(A)
among the Partners in a manner that is likely to minimize such economic
distortions.

(xiii)Equalization of Capital Accounts With Respect to Privately Placed Units.
Net Termination Gain or Net Termination Loss deemed recognized as a result of a
Revaluation Event shall first be allocated to the (A) Unitholders holding
Privately Placed Units, Pro Rata, or (B) Unitholders holding Common Units, Pro
Rata, as applicable, to the extent necessary to cause the Capital Account in
respect of each Privately Placed Unit then Outstanding to equal the Capital
Account in respect of each Common Unit (other than Privately Placed Units) then
Outstanding.

(xiv)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, Simulated 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 and the holders of Incentive Distribution Rights,
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 (“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 Incentive
Distribution Rights and (bb) to the Unitholders, or (2) items of deduction and
loss (aa) away from the Unitholders and (bb) to the holders of Incentive
Distribution Rights, to the extent that the Additional Book Basis Derivative
Items with respect to the Disposed of Adjusted Property (determined in
accordance with

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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)(xiv)(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)(xiv)(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.  Any
allocation made pursuant to this Section 6.1(d)(xiv)(B) shall be made after all
of the other Agreed Allocations have been made as if this Section 6.1(d)(xiv)
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 determined by the General Partner, that to the
extent possible, the 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)(xiv)(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 Incentive Distribution Rights, 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)(xiv), the
General Partner may apply whatever conventions or other methodology it
determines will satisfy the purpose of this Section 6.1(d)(xiv).  Without
limiting the foregoing, if an Adjusted Property is contributed by the
Partnership to another entity classified as a partnership for federal income tax
purposes (the “lower tier partnership”), the General Partner may make
allocations similar to those described in Section 6.1(d)(xiv)(A) through Section
6.1(d)(xiv)(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)(xiv).

(xv)Allocations with respect to Preferred Units.

(A)Items of Partnership gross income shall be allocated to the Preferred Holders
in amounts equal to the amount of cash actually distributed in respect of

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each such holder’s Preferred Units and the amount of cash treated as having been
distributed with respect to Class B Preferred Units upon issuance of PIK Units,
until the aggregate amount of such items allocated pursuant hereto for the
current taxable period and all previous taxable periods is equal to the
cumulative amount of all cash distributions actually made to the Preferred
Holders pursuant to Section 5.9(c)(i) or Section 5.10(c), as applicable, or
treated as having been made upon the issuance of PIK Units pursuant to Section
5.10(c)(vi) (for the avoidance of doubt, without taking into account the cash
distribution treated as made to the Class A Preferred Holders pursuant to
Section 5.9(c)(iv)); provided that the allocations to a Preferred Holder with
respect to any distributions provided under this Section 6.1(d)(xv) shall be
reduced to the extent such distributions are properly treated as guaranteed
payments under Section 707(c) of the Code or payments to such Preferred Holder
other than in its capacity as a partner pursuant to Section 707(a) of the Code.

(B)Notwithstanding any other provision of this Section 6.1 (other than the
Required Allocations), if (A) the Liquidation Date occurs prior to the
conversion or redemption of the last Outstanding Preferred Unit and (B) after
tentatively making all other allocations provided for in this Section 6.1 for
the taxable period in which the Liquidation Date occurs, the Per Unit Capital
Amount of each Class A Preferred Unit does not equal or exceed the Class A
Preferred Liquidation Preference with respect to the Outstanding Class A
Preferred Units or the Per Unit Capital Amount of each Class B Preferred Unit
does not equal or exceed the Class B Preferred Unit Liquidation Amount, then
items of income, gain, loss and deduction for such taxable period shall be
allocated among the Partners in a manner determined appropriate by the General
Partner, to the maximum extent possible, first to cause the Per Unit Capital
Amount in respect of each Class A Preferred Unit to equal the Class A Preferred
Liquidation Preference, and then to cause the Per Unit Capital Amount in respect
of each Class B Preferred Unit to equal the Class B Preferred Unit Liquidation
Amount.  For the avoidance of doubt, the reallocation of items set forth in the
immediately preceding sentence provides that, to the extent necessary to achieve
the Per Unit Capital Amount balances described above, items of income and gain
that would otherwise be included in Net Income or Net Loss, as the case may be,
for the taxable period in which the Liquidation Date occurs, shall be
reallocated from the Unitholders holding Units other than Preferred Units to
Preferred Holders.  In the event that (i) the Liquidation Date occurs on or
before the date (not including any extension of time) prescribed by law for the
filing of the Partnership’s federal income tax return for the taxable period
immediately prior to the taxable period in which the Liquidation Date occurs and
(ii) the reallocation of items for the taxable period in which the Liquidation
Date occurs as set forth above in this Section 6.1(d)(xv)(B) fails to achieve
the Per Unit Capital Amounts described above, items of income, gain, loss and
deduction that would otherwise be included in the Net Income or Net Loss, as the
case may be, for such prior taxable period shall be reallocated among all
Partners in a manner that will, to the maximum extent possible and after taking
into account all other allocations made pursuant to this Section 6.1(d)(xv)(B),
cause, first, the Per Unit Capital Amount in respect of each Class A Preferred
Unit to equal the Class A Preferred Liquidation Preference and then, the Per
Unit Capital Amount in respect

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of each Class B Preferred Unit to equal the Class B Preferred Unit Liquidation
Amount.

(e)Simulated Depletion and Simulated Loss.

(i)Except as otherwise required pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(k), Simulated Depletion with respect to each oil and gas
property shall be allocated (A) first, among the Common Unitholders Pro Rata
until the Adjusted Capital Account in respect of each Common Unit then
Outstanding has been reduced to zero; (B) second, to the Class B Preferred
Holders, pro rata in accordance with the number of Class B Preferred Units held
by them until the Adjusted Capital Account in respect of each Class B Preferred
Unit then Outstanding has been reduced to zero; (C) third, to the Class A
Preferred Holders, pro rata in accordance with the number of Class A Preferred
Units held by them until the Adjusted Capital Account in respect of each Class A
Preferred Unit then Outstanding has been reduced to zero; and (D) thereafter, to
the General Partner.

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

Section 6.2Allocations for Tax Purposes.

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

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

(c)Except as provided in Section 6.2(c)(iii), for the purposes of the separate
computation of gain or loss by each Partner on the sale or disposition of each
separate oil and gas property (as defined in Section 614 of the Code), the
Partnership’s allocable share of the “amount

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realized” (as such term is defined in Section 1001(b) of the Code) from such
sale or disposition shall be allocated for U.S. federal income tax purposes
among the Partners as follows: 

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

(ii)second, the remainder of such amount realized, if any, to the Partners so
that, to the maximum extent possible, the amount realized allocated to each
Partner under this Section 6.1(c)(ii) will equal such Partner’s share of the
Simulated Gain recognized by the Partnership from such sale or disposition.

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

(d)In an attempt to eliminate Book-Tax Disparities attributable to a Contributed
Property or Adjusted Property, other than oil and gas properties pursuant to
Section 6.2(c), items of income, gain, loss, depreciation, amortization and cost
recovery deductions shall be allocated for U.S. federal income tax purposes
among the Partners 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)(xi)(C)); provided, that the
General Partner shall apply the principles of Treasury Regulation
Section 1.704-3(d) in all events.

(e)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.

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(f)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.

(g)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.

(h)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 opening of
the National Securities Exchange on which Partnership Interests are listed or
admitted to trading on the first Business Day of each month; provided,  however,
that gain or loss on a sale or other disposition of any assets of the
Partnership or any other extraordinary item of income, gain, loss or deduction
as determined by the General Partner, shall be allocated to the Partners as of
the opening of the National Securities Exchange on which Partnership Interests
are listed or admitted to trading on 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 the General Partner determines necessary or appropriate to comply with
Section 706 of the Code and the regulations or rulings promulgated thereunder or
for the proper administration of the Partnership.

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

(j)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 may make corrective allocations
pursuant to Treasury Regulation Section 1.704-1(b)(4)(x).

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

(a)On or about the last day of each of February, May, August and November
following the end of each Quarter, beginning with the Quarter in which the
Conversion Date occurs, an amount equal to 100% of Available Cash with respect
to such Quarter shall be distributed in accordance with this Article VI by the
Partnership to the Partners as of the Record Date selected by the General
Partner.  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 cash and cash equivalents theretofore distributed by the
Partnership to the Partners pursuant to Section 6.4

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equals the Operating Surplus from the Closing Date through the close of the
immediately preceding Quarter.  Any remaining amounts of cash and cash
equivalents 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 12.4.

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

(d)Each distribution in respect of a Partnership Interest shall be paid by the
Partnership, directly or through 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 6.4Distributions from Operating Surplus. Cash and cash equivalents that
are deemed to be Operating Surplus pursuant to the provisions of Section 6.3 or
Section 6.5 shall be distributed as follows, except as otherwise contemplated by
Section 5.4(b) in respect of additional Partnership Interests issued pursuant
thereto:

(a)First, to the Unitholders holding Class A Preferred Units, Pro Rata, until
there has been distributed in respect of each Class A Preferred Unit then
Outstanding an amount equal to the Class A Preferred Quarterly Distribution;

(b)Second, to the Unitholders holding Class B Preferred Units, Pro Rata, until
there has been distributed in respect of each Class B Preferred Unit then
Outstanding an amount equal to the Class B Preferred Quarterly Distribution;

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

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

(e)Fifth, (A) 13% to the holders of the Incentive Distribution Rights, Pro Rata,
and (B) 87% to all Unitholders holding Common Units, Pro Rata, until there has
been distributed in respect of each Common Unit then Outstanding an amount equal
to the excess of the Second Target Distribution over the First Target
Distribution for such Quarter;

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(f)Sixth, (A) 23% to the holders of the Incentive Distribution Rights, Pro Rata,
and (B) 77% to all Unitholders holding Common Units, Pro Rata, until there has
been distributed in respect of each Common Unit then Outstanding an amount equal
to the excess of the Third Target Distribution over the Second Target
Distribution for such Quarter; and

(g)Thereafter, (A) 35.5% to the holders of the Incentive Distribution Rights,
Pro Rata, and (B) 64.5% to all Unitholders holding Common Units, Pro Rata;

provided,  however, that if the Target Distributions have been reduced to zero
pursuant to the second sentence of Section 6.6(a), the distribution of cash or
cash equivalents that are deemed to be Operating Surplus with respect to any
Quarter will be made solely in accordance with Section 6.4(g).

Section 6.5Distributions from Capital Surplus.  Cash and cash equivalents that
are distributed and 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 Unitholders holding Class A Preferred Units, Pro Rata, until
there has been distributed in respect of each Class A Preferred Unit then
Outstanding an amount equal to the Class A Preferred Quarterly Distribution;

(b)Second, 100% to Unitholders holding Class B Preferred Units, Pro Rata, until
there has been distributed in respect of each Class B Preferred Unit then
Outstanding an amount equal to the Class B Preferred Quarterly Distribution;

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

(d)Thereafter, all cash and cash equivalents that are distributed shall be
distributed as if they were Operating Surplus and shall be distributed in
accordance with Section 6.4.

Section 6.6Adjustment of 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 cash or cash equivalents 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
Common Units immediately prior to the announcement of the distribution.  If the
Common Units are publicly traded on a National Securities Exchange, the fair
market value will be the Current Market Price before the ex-dividend date.  If
the Common Units are not publicly traded, the fair market value will be
determined by the Board of Directors.

(b)The Target Distributions shall also be subject to adjustment pursuant to
Section 5.8 and Section 6.8.

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Section 6.7Special Provisions Relating to the Holders of IDR Reset Common Units.

(a)A Unitholder shall not be permitted to transfer an IDR Reset Common Unit
(other than a transfer to an Affiliate) if the remaining balance in the
transferring Unitholder’s Capital Account with respect to the retained IDR Reset
Common Units would be negative after giving effect to the allocation under
Section 5.3(c)(ii).

(b)A Unitholder holding an IDR Reset Common Unit shall not be permitted to
transfer such Common Unit to a Person that is not an Affiliate of the holder
until such time as the General Partner determines, based on advice of counsel,
that upon transfer each such Common Unit should have, as a substantive matter,
like intrinsic economic and U.S. federal income tax characteristics to the
transferee, in all material respects, to the intrinsic economic and U.S. federal
income tax characteristics of an Initial Common Unit to such transferee.  In
connection with the condition imposed by this Section 6.7(b), the General
Partner may apply Section 5.3(c)(ii), Section 6.1(d)(xi) and Section 6.7(a) or,
to the extent not resulting in a material adverse effect on the Unitholders
holding Common Units, take whatever steps are required to provide economic
uniformity to such Common Units in preparation for a transfer of such IDR Reset
Common Units.

Section 6.8Entity-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 6.8.  If the General Partner elects to reduce the
Target Distributions for any Quarter with respect to all or a portion of any
Incremental Income Taxes, the General Partner shall estimate for such Quarter
the Partnership Group’s aggregate liability (the “Estimated Incremental
Quarterly Tax Amount”) for all (or the relevant portion of) such Incremental
Income Taxes; provided that any difference between such estimate and the actual
liability for Incremental Income Taxes (or the relevant portion thereof) for
such Quarter may, to the extent determined by the General Partner, be taken into
account in determining the Estimated Incremental Quarterly Tax Amount with
respect to each Quarter in which any such difference can be determined.  For
each such Quarter, the 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 6.8 times (b) the quotient obtained by dividing
(i) cash and cash equivalents with respect to such Quarter by (ii) the sum of
cash and cash equivalents 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, cash and cash equivalents with respect
to a Quarter will be deemed reduced by the Estimated Incremental Quarterly Tax
Amount for that Quarter.

Section 6.9Special Provisions Relating to the Preferred Holders.

(a)Except as otherwise provided herein, a Preferred Holder shall have all of the
rights and obligations of a Unitholder holding Common Units hereunder; provided,
 however, that

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immediately upon the conversion of any Preferred Unit into Common Units pursuant
to Section 5.9(b) or Section 5.10(b), the Unitholder holding a Preferred Unit
that is converted shall possess all of the rights and obligations of a
Unitholder holding Common Units hereunder, including the right to vote as a
Common Unitholder and the right to participate in allocations of income, gain,
loss and deduction and distributions made with respect to Common Units.

(b)A Unitholder holding a Preferred Unit that has converted into a Common Unit
pursuant to Section 5.9(b) or Section 5.10(b) shall not be issued a Common Unit
Certificate pursuant to Section 4.1 and shall not be permitted to transfer its
converted Preferred Units to a Person that is not an Affiliate of the holder
until such time as the General Partner determines, based on advice of counsel,
that upon transfer, each such converted Preferred Unit should have intrinsic
economic and U.S. federal income tax characteristics to the transferee, in all
material respects, that are the same as the intrinsic economic and U.S. federal
income tax characteristics that a Common Unit (other than a converted Preferred
Unit) would have to such transferee upon transfer, provided that in all events
such determination shall be made within 5 Business Days of the date of
conversion or receipt by the Partnership of the notice of transfer, as
applicable. The General Partner shall act in good faith and shall make the
determinations set forth in this Section 6.9(b) as soon as practicable following
a Preferred Conversion Date or as earlier provided herein.

Article VII
MANAGEMENT AND OPERATION OF BUSINESS

Section 7.1Management.

(a)The General Partner shall conduct, direct and manage all activities of the
Partnership.  Except as otherwise expressly provided in this Agreement,
including without limitation Section 5.10, but without limitation on the ability
of the General Partner to delegate its rights and powers to other Persons, all
management powers over the business and affairs of the Partnership shall be
exclusively vested in the General Partner, and no 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 5.10 and 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;

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(iii)the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation,
grant of a security interest in 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);

(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;

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

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

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

(b)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, each Transaction Agreement
and the other agreements described in or filed as exhibits to the Registration
Statement (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 or assume the
agreements referred to in clause (i) of this sentence and the other agreements,
acts, transactions and matters described in or contemplated by the Registration
Statement on behalf of the Partnership without any further act, approval or vote
of the Partners, the other Persons who acquire an interest in a Partnership
Interest and the Persons who are otherwise bound by this Agreement; and
(iii) agrees that the execution, delivery, performance or assumption 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 an interest in a Partnership
Interest or the Persons who are otherwise bound by this Agreement.

Section 7.2Replacement of Fiduciary Duties.    

(a)Each Limited Partner and any other Person who acquires an interest in a
Partnership Interest or any other Person who is bound by this Agreement, hereby
agrees that (i) all fiduciary duties that would or could otherwise be owed to
such Persons or to the Partnership by the General Partner, any of its Affiliates
or by any Indemnitee under the Delaware Act or any other applicable law are
hereby eliminated and (ii) the only duties owed by the General Partner, any of
its Affiliates or any Indemnitee to the Partnership, the Limited Partners, any
other Person who acquires an interest in any Partnership Interest or any other
Person who is bound by this Agreement shall be the duties expressly provided
under this Agreement and any duties provided under the Delaware Act or other
applicable law that cannot be eliminated by agreement.

(b)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

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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, restriction or elimination, 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 7.3Certificate of Limited Partnership.  The General Partner shall use
all reasonable efforts to cause to be filed such certificates or documents that
the General Partner determines to be necessary or appropriate for the formation,
continuation, qualification and operation of a limited partnership (or a
partnership in which the limited partners have limited liability) in the State
of Delaware or any other state in which the Partnership may elect to do business
or own property.  To the extent the General Partner determines such action to be
necessary or appropriate, the General Partner shall file amendments to and
restatements of the Certificate of Limited Partnership and do all things to
maintain the Partnership as a limited partnership (or a partnership or other
entity in which the limited partners have limited liability) under the laws of
the State of Delaware or of any other state in which the Partnership may elect
to do business or own property.  Subject to the terms of Section 3.4(a), the
General Partner shall not be required, before or after filing, to deliver or
mail a copy of the Certificate of Limited Partnership, any qualification
document or any amendment thereto to any Partner.

Section 7.4Restrictions on the General Partner’s Authority.  Except as provided
in Article XII and Article XIV, the General Partner may not sell, exchange or
otherwise dispose of all or substantially all of the assets of the Partnership
Group, taken as a whole, in a single transaction or a series of related
transactions 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, encumber, hypothecate or grant a security interest in all or
substantially all of the assets of the Partnership Group and shall not apply to
any forced sale of any or all of the assets of the Partnership Group pursuant to
the foreclosure of, or other realization upon, any such encumbrance.

Section 7.5Reimbursement of the General Partner.

(a)The General Partner and its Affiliates, without duplication, shall be
reimbursed on a monthly basis, or such other basis as the General Partner may
determine, for (i) all direct and indirect expenses it incurs or payments it
makes on behalf of the Partnership Group (including salary, bonus, incentive
compensation and other amounts paid to any Person (including Affiliates of the
General Partner), to perform services for the Partnership Group or for the
General Partner in the discharge of its duties to the Partnership Group,
including the fees and expenses payable by the Partnership pursuant to the
Transaction Agreements), 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 in
good faith 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 management fee to the extent
necessary to allow the

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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 except and to the extent required under
the rules of a National Securities Exchange to which the Partnership or its
securities are subject), may propose and adopt on behalf of the Partnership
benefit plans, programs and practices (including the LTIP and other plans,
programs and practices involving the issuance of Partnership Interests), or
cause the Partnership to issue Partnership Interests (or other awards under the
LTIP) 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 or 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 7.6Outside Activities.

(a)The General Partner, for so long as it is the General Partner of the
Partnership (i) agrees that its sole business will be to act as a general
partner or managing member, as the case may be, of the Partnership and any other
partnership or limited liability company of which the Partnership is, directly
or indirectly, a partner or member and to undertake activities that are
ancillary or related thereto (including being a Limited Partner in the
Partnership) and (ii) shall not engage in any business or activity or incur any
debts or liabilities except in connection with or incidental to (A) its
performance as general partner or managing member, if any, of one or more Group
Members or as described in or contemplated by the Registration Statement,
(B) the acquisition, ownership or disposition of debt securities or equity
interests in any Group Member or (C) the guarantee of, and mortgage, pledge, or
encumbrance of any or all of its assets in connection with, any indebtedness of
any Group Member.

(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

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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.

(c)Subject to the terms of Section 7.6(a) and Section 7.6(b), but otherwise
notwithstanding anything to the contrary in this Agreement, (i) the engaging in
competitive activities by any Unrestricted Person (other than the General
Partner) in accordance with the provisions of this Section 7.6 is hereby
approved by the Partnership and all Partners, (ii) it shall be deemed not to be
a breach of any fiduciary or any other duty existing at law, in equity or
otherwise, or obligation of any type whatsoever of the General Partner or any
other Unrestricted Person for the Unrestricted Persons (other than the General
Partner) to engage in such business interests and activities in preference to or
to the exclusion of the Partnership and (iii) the Unrestricted Persons shall
have no obligation hereunder or as a result of any duty otherwise existing at
law, in equity or otherwise, to present business opportunities to the
Partnership.  Notwithstanding anything to the contrary in this Agreement, 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 an interest in 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, or
obligation of any type whatsoever 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 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 or before the Conversion
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 7.7Indemnification.

(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 pursuant to this Agreement if there has been a final and
non-appealable judgment entered by a court of competent jurisdiction determining
that, in respect of the matter for

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which the Indemnitee is seeking indemnification pursuant to this Agreement, the
Indemnitee acted in bad faith or, in the case of a criminal matter, acted with
knowledge that the Indemnitee’s conduct was unlawful.  Any indemnification
pursuant to this Section 7.7 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 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, or
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.

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

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

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

Section 7.8Liability 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, 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.

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Section 7.9Standards 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 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; provided, that
if the Board of Directors of the General Partner is making a determination or
taking or declining to take an action pursuant to clause (iii) or clause (iv) of
the first sentence of Section 7.9(c), then in lieu thereof, such determination
or other action or inaction will be deemed to be in good faith for all purposes
of this Agreement unless the Board of Directors of the General Partner believed
such determination, other action or inaction did not meet the standard set forth
in clause (iii) or (iv) of the first sentence of Section 7.9(c), as applicable;
provided,  further, that if the Board of Directors of the General Partner is
making a determination that a director satisfies the eligibility requirements to
be a member of a Conflicts Committee, then in lieu thereof, such determination
will be deemed to be in good faith for all purposes of this Agreement unless the
Board of Directors of the General Partner believed that the director did not
satisfy the eligibility requirements to be a member of the Conflicts
Committee.  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 duty
(fiduciary or otherwise) hereunder or 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

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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)Unless otherwise expressly provided in this Agreement or any Group Member
Agreement, whenever a potential conflict of interest exists or arises between
the General Partner or any 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, any resolution or course of action by the General Partner or its
Affiliates in respect of such conflict of interest shall be permitted and deemed
approved by all Partners, and shall not constitute a breach of this Agreement,
of any Group Member Agreement, of any agreement contemplated herein or therein,
or of any duty stated or implied by law or equity, if the resolution or course
of action in respect of such conflict of interest is (i) approved by Special
Approval, (ii) approved by the vote of the holders of a majority of the
Outstanding Common Units (excluding Common Units owned by the General Partner
and its Affiliates), (iii) determined by the Board of Directors of the General
Partner to be on terms no less favorable to the Partnership than those generally
being provided to or available from unrelated third parties or (iv) determined
by the Board of Directors of the General Partner to be fair and reasonable to
the Partnership, taking into account the totality of the relationships between
the parties involved (including other transactions that may be particularly
favorable or advantageous to the Partnership).  The General Partner shall be
authorized but not required in connection with its resolution of such conflict
of interest to seek Special Approval or Unitholder approval of such resolution,
and the General Partner may also adopt a resolution or course of action that has
not received Special Approval or Unitholder approval.  Unless otherwise
expressly provided in this Agreement or any Group Member Agreement, whenever the
General Partner makes a determination to refer any potential conflict of
interest to the Conflicts Committee for Special Approval, seek Unitholder
Approval or adopt a resolution or course of action that has not received Special
Approval or Unitholder Approval, then the General Partner shall be entitled, to
the fullest extent permitted by law, to make such determination or to take or
decline to take such other action free of any duty or obligation whatsoever to
the Partnership or any Limited Partner, and the General Partner shall not, to
the fullest extent permitted by law, be required to act in good faith or
pursuant to any other standard imposed by this Agreement, any Group Member
Agreement, any other agreement contemplated hereby or under the Delaware Act or
any other law, rule or regulation or at equity, and the General Partner in
making such determination or taking or declining to take such other action shall
be permitted to do so in its sole discretion.  If Special Approval is sought,
then it shall be presumed that, in making its decision, the Conflicts Committee
acted in good faith, and if the Board of Directors of the General Partner
determines that the resolution or course of action taken with respect to a
conflict of interest satisfies either of the standards set forth in clauses
(iii) or (iv) above, then it shall be presumed that, in making its decision, the
Board of Directors of the General Partner acted in good faith.  In any
proceeding brought by any Limited Partner or by or on behalf of such Limited
Partner or any other Limited Partner or the Partnership challenging any action
by the Conflicts Committee with respect to any matter referred to the Conflicts
Committee for Special Approval by the General Partner, any action by the Board
of Directors of the General Partner in determining whether the resolution or
course of action taken with respect to a conflict of interest satisfies either
of the standards set forth in clauses (iii) or (iv) above or whether a director
satisfies the eligibility requirements to be a member of the Conflicts
Committee, the Person bringing or prosecuting such proceeding shall have the
burden of overcoming the presumption that the

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Conflicts Committee or the Board of Directors of the General Partner, as
applicable, acted in good faith; in all cases subject to the provisions for
conclusive determination in Section 7.10(b).  Notwithstanding anything to the
contrary in this Agreement or any duty otherwise existing at law or equity, the
existence of the conflicts of interest described in the Registration Statement
are hereby approved by all Partners and shall not constitute a breach of this
Agreement or of any duty hereunder or existing at law, in equity or otherwise.

(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.

(f)For the avoidance of doubt, whenever the Board of Directors, any committee of
the Board of Directors (including the Conflicts Committee), the officers of the
General Partner or any Affiliates of the General Partner make a determination on
behalf of the General Partner, or cause the General Partner to take or omit to
take any action, whether in the General Partner’s capacity as the General
Partner or in its individual capacity, the standards of care applicable to the
General Partner shall apply to such Persons, and such Persons shall be entitled
to all benefits and rights of the General Partner hereunder, including waivers
and modifications of duties, protections and presumptions, as if such Persons
were the General Partner hereunder.

(g)The Limited Partners expressly acknowledge and agree that none of the General
Partner, the Board of Directors or any committee thereof is under any obligation
to consider the separate interests of the Limited Partners (including, without
limitation, the tax consequences to Limited Partners) in deciding whether to
cause the Partnership to take (or decline to take) any actions, and that none of
the General Partner or any other Indemnitee shall be liable to the Limited
Partners for monetary damages or equitable relief or losses sustained,
liabilities incurred or benefits not derived by Limited Partners in connection
with such decisions.

Section 7.10Other Matters Concerning the General Partner and Indemnitees.

(a)The General Partner, the Board of Directors (or any committee thereof) and
any other Indemnitee may rely upon, and shall be protected from liability to the
Partnership, any Partner, any Person who acquires an interest in a Partnership
Interest, and any other Person bound by this Agreement in acting or refraining
from acting upon, any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, debenture or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties.

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(b)The General Partner, the Board of Directors (or any committee thereof) and
any other Indemnitee may consult with legal counsel, accountants, appraisers,
management consultants, investment bankers and other consultants and advisers
(collectively, “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 or such Indemnitee 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.  In furtherance of the foregoing, the
Partners, each Person who acquires an interest in a Partnership Interest or is
otherwise bound by this Agreement, hereby agrees that so long as the advice or
opinion (including an Opinion of Counsel) referenced above is of an Adviser as
to matters that the General Partner reasonably believes to be within such
Person’s professional or expert competence, the conclusive good faith
presumption will apply irrespective of the matters included in or omitted from
any 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 7.11Purchase or Sale of Partnership Interests.  The General Partner may
cause the Partnership to purchase or otherwise acquire Partnership Interests or
options, rights, warrants, appreciation rights, phantom or tracking interests
relating to 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 X.  Notwithstanding any other
provision of this Agreement or otherwise applicable provision of law or equity,
any Partnership Interests or options, rights, warrants, appreciation rights,
phantom or tracking interests relating to Partnership Interests that are
purchased or otherwise acquired by the Partnership or any Group Member may, in
the sole discretion of the General Partner, be canceled or held by the
Partnership in treasury and, if so held in treasury, shall no longer be deemed
to be Outstanding for any purpose. For the avoidance of doubt, Partnership
Interests or Derivative Instruments that are canceled or held by the Partnership
in treasury (a) shall not be allocated Net Income (Loss) pursuant to Article VI,
(b)  shall not be entitled to distributions pursuant to Article VI, and (c)
shall neither be entitled to vote nor be counted for quorum purposes.

Section 7.12Registration Rights of the General Partner and its Affiliates.

(a)If (i) the General Partner or any Affiliate of the General Partner (including
for purposes of this Section 7.12, any Person that is an Affiliate of the
General Partner at the date hereof notwithstanding that it may later cease to be
an Affiliate of the General Partner) holds Partnership Interests that it desires
to sell and (ii) Rule 144 of the Securities Act (or any successor rule or
regulation to Rule 144) or another exemption from registration is not available
to enable such holder of Partnership Interests (the “Holder”) to dispose of the
number of Partnership Interests it desires to sell at the time it desires to do
so without registration under the Securities Act, then at the option and upon
the request of the Holder, the Partnership shall file with the Commission as
promptly as practicable after receiving such request, and use all commercially
reasonable efforts to cause to become effective and remain effective for a
period of not less than

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six months following its effective date or such shorter period as shall
terminate when all Partnership Interests covered by such registration statement
have been sold, a registration statement under the Securities Act registering
the offering and sale of the number of Partnership Interests specified by the
Holder; provided,  however, that the Partnership shall not be required to effect
more than three registrations pursuant to this Section 7.12(a); provided,
further, that if the General Partner determines that a postponement of the
requested registration would be in the best interests of the Partnership and its
Partners due to a pending transaction, investigation or other event, the filing
of such registration statement or the effectiveness thereof may be deferred for
up to six months, but not thereafter.  In connection with any registration
pursuant to the immediately preceding sentence, the Partnership shall
(i) promptly prepare and file (A) such documents as may be necessary to register
or qualify the securities subject to such registration under the securities laws
of such states as the Holder shall reasonably request; provided,  however, that
no such qualification shall be required in any jurisdiction where, as a result
thereof, the Partnership would become subject to general service of process or
to taxation or qualification to do business as a foreign corporation or
partnership doing business in such jurisdiction solely as a result of such
registration, and (B) such documents as may be necessary to apply for listing or
to list the Partnership Interests subject to such registration on such National
Securities Exchange as the Holder shall reasonably request, and (ii) do any and
all other acts and things that may be necessary or appropriate to enable the
Holder to consummate a public sale of such Partnership Interests in such
states.  Except as set forth in Section 7.12(c), all costs and expenses of any
such registration and offering (other than the underwriting discounts and
commissions) shall be paid by the Partnership, without reimbursement by the
Holder.

(b)If the Partnership shall at any time propose to file a registration statement
under the Securities Act for an offering of Partnership Interests for cash
(other than an offering relating solely to a benefit plan), the Partnership
shall use all commercially reasonable efforts to include such number or amount
of Partnership Interests held by any Holder in such registration statement as
the Holder shall request; provided,  however, that the Partnership is not
required to make any effort or take any action to so include the Partnership
Interests of the Holder once the registration statement becomes or is declared
effective by the Commission, including any registration statement providing for
the offering from time to time of Partnership Interests pursuant to Rule 415 of
the Securities Act.  If the proposed offering pursuant to this Section 7.12(b)
shall be an underwritten offering, then, in the event that the managing
underwriter or managing underwriters of such offering advise the Partnership and
the Holder that in their opinion the inclusion of all or some of the Holder’s
Partnership Interests would adversely and materially affect the timing or
success of the offering, the Partnership shall include in such offering only
that number or amount, if any, of Partnership Interests held by the Holder that,
in the opinion of the managing underwriter or managing underwriters, will not so
adversely and materially affect the offering.  Except as set forth in Section
7.12(c), all costs and expenses of any such registration and offering (other
than the underwriting discounts and commissions) shall be paid by the
Partnership, without reimbursement by the Holder.  During the two-year period
set forth in Section 7.12(d), the Partnership shall not grant to any other
Person registration rights similar to the rights set forth in this Section
7.12(b) that are superior to such rights without the consent of the General
Partner (and any of its Affiliates) that holds rights pursuant to this Section
7.12(b).

(c)If underwriters are engaged in connection with any registration referred to
in this Section 7.12, the Partnership shall provide indemnification,
representations, covenants, opinions

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and other assurance to the underwriters in form and substance reasonably
satisfactory to such underwriters.  Further, in addition to and not in
limitation of the Partnership’s obligation under Section 7.7, the Partnership
shall, to the fullest extent permitted by law, indemnify and hold harmless the
Holder, its officers, directors and each Person who controls the Holder (within
the meaning of the Securities Act) and any agent thereof (collectively,
“Indemnified Persons”) from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including legal fees and expenses),
judgments, fines, penalties, interest, settlements or other amounts arising from
any and all claims, demands, actions, suits or proceedings, whether civil,
criminal, administrative or investigative, in which any Indemnified Person may
be involved, or is threatened to be involved, as a party or otherwise, under the
Securities Act or otherwise (hereinafter referred to in this Section 7.12(c) as
a “claim” and in the plural as “claims”) based upon, arising out of or resulting
from any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which any Partnership Interests
were registered under the Securities Act or any state securities or Blue Sky
laws, in any preliminary prospectus (if used prior to the effective date of such
registration statement), or in any summary or final prospectus or issuer free
writing prospectus or in any amendment or supplement thereto (if used during the
period the Partnership is required to keep the registration statement current),
or arising out of, based upon or resulting from the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements made therein not misleading; provided, however, that the
Partnership shall not be liable to any Indemnified Person to the extent that any
such claim arises out of, is based upon or results from an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, such preliminary, summary or final prospectus or free
writing prospectus or such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Partnership by or on behalf
of such Indemnified Person specifically for use in the preparation thereof.

(d)The provisions of Section 7.12(a) and Section 7.12(b) shall continue to be
applicable with respect to the General Partner (and any of the General Partner’s
Affiliates) after it ceases to be a general partner of the Partnership, during a
period of two years subsequent to the effective date of such cessation and for
so long thereafter as is required for the Holder to sell all of the Partnership
Interests with respect to which it has requested during such two-year period
inclusion in a registration statement otherwise filed or that a registration
statement be filed; provided, however, that the Partnership shall not be
required to file after such two-year period successive registration statements
covering the same Partnership Interests for which registration was demanded
during such two-year period.  The provisions of Section 7.12(c) shall continue
in effect thereafter.

(e)The rights to cause the Partnership to register Partnership Interests
pursuant to this Section 7.12 may be assigned (but only with all related
obligations) by a Holder to a transferee or assignee of such Partnership
Interests, provided (i) the Partnership is, within a reasonable time after such
transfer, furnished with written notice of the name and address of such
transferee or assignee and the Partnership Interests with respect to which such
registration rights are being assigned; and (ii) such transferee or assignee
agrees in writing to be bound by and subject to the terms set forth in this
Section 7.12.

(f)Any request to register Partnership Interests pursuant to this Section 7.12
shall (i) specify the Partnership Interests intended to be offered and sold by
the Person making the

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request, (ii) express such Person’s present intent to offer such Partnership
Interests for distribution, (iii) describe the nature or method of the proposed
offer and sale of Partnership Interests, and (iv) contain the undertaking of
such Person to provide all such information and materials and take all action as
may be required in order to permit the Partnership to comply with all applicable
requirements in connection with the registration of such Partnership Interests.

(g)The Partnership may enter into separate registration rights agreements with
the General Partner or any of its Affiliates.

Section 7.13Reliance 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 8.1Records 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, by making such adjustments to its

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accrual basis books to account for non-cash items and other adjustments as the
General Partner determines to be necessary or appropriate.

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

Section 8.3Reports.

(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.

(c)The General Partner shall be deemed to have made a report available to each
Record Holder as required by this Section 8.3 if it has either (i) filed such
report with the Commission via its Electronic Data Gathering, Analysis and
Retrieval system and such report is publicly available on such system or
(ii) made such report available on any publicly available website maintained by
the Partnership.

Article IX
TAX MATTERS

Section 9.1Tax 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; provided that,
if the 90th day is not a Business Day, then the 90th day shall be deemed to be
the next Business Day.  The

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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 9.2Tax 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(h) without regard to the actual price
paid by such transferee.

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

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

Section 9.4Withholding; 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.

(c)If any Partner (or any of its direct or indirect owners or Affiliates) is
required to join in the filing of a combined group tax return for Texas
franchise tax purposes with any member of the Partnership Group, the Partnership
shall prepare such combined group return or reimburse such Partner for the cost
of preparing such combined group return, and if such Partner (or any of its
direct or indirect owners or Affiliates) pays the Texas franchise tax due with
respect to such

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combined group return, the Partnership shall promptly reimburse the Partner in
an amount equal to the incremental amount of Texas franchise tax due to the
State of Texas (or any agency or instrumentality thereof) from such Partner (or
any of its direct or indirect owners or Affiliates).  No amounts reimbursed
pursuant hereto shall be treated as a distribution to the Partner with respect
to its Partnership Interest (and instead will be treated as a reimbursement of
Partnership expenses paid by the Partner or its Affiliates).  The Partnership
and the Partners shall cooperate in the preparation and filing of any such tax
returns, including sharing of information reasonably necessary to the
preparation of such tax returns.

Article X
ADMISSION OF PARTNERS

Section 10.1Admission 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.  A Person may become a Record Holder of a Unit without the consent or
approval of any of the Partners.  A Person may not become a Limited Partner
without acquiring a Limited Partner Interest and until such Person is reflected
in the books and records of the Partnership as the Record Holder of such Limited
Partner Interest.  The rights and obligations of a Person who is an Ineligible
Holder shall be determined in accordance with Section 4.8.    Upon the
conversion of Predecessor Units and Converted Units into Common Units on the
Conversion Date as described in Article V, the holders thereof were
automatically admitted to the Partnership as Limited Partners in respect of the
Common Units issued to them.

(b)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.

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

Section 10.2Admission 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 Section 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

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shall, subject to the terms hereof, carry on the business of the members of the
Partnership Group without dissolution.

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

Article XI
WITHDRAWAL OR REMOVAL OF PARTNERS

Section 11.1Withdrawal of the General Partner.

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

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

(ii)The General Partner transfers all of its General Partner Interest pursuant
to Section 4.6;

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

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

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

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

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or adjudication of incompetency; and (E) otherwise upon the termination of the
General Partner.

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

(b)Withdrawal of the General Partner from the Partnership upon the occurrence of
an Event of Withdrawal shall not constitute a breach of this Agreement under the
following circumstances: (i) at any time during the period beginning on the
Closing Date and ending at 11:59 pm, prevailing Eastern Standard Time, on
September 30, 2024, the General Partner voluntarily withdraws by giving at least
90 days’ advance notice of its intention to withdraw to the Limited Partners;
provided, that prior to the effective date of such withdrawal, the withdrawal is
approved by Unitholders holding at least a majority of the Outstanding Common
Units (excluding Common Units held by the General Partner and its Affiliates)
and the General Partner delivers to the Partnership an Opinion of Counsel
(“Withdrawal Opinion of Counsel”) that such withdrawal (following the selection
of the successor General Partner) would not result in the loss of the limited
liability under the Delaware Act of any Limited Partner or cause any Group
Member to be treated as an association taxable as a corporation or otherwise to
be taxed as an entity for U.S. federal income tax purposes (to the extent not
already so treated or taxed); (ii) at any time after 11:59 pm, prevailing
Eastern Standard Time, on September 30, 2024, the General Partner voluntarily
withdraws by giving at least 90 days’ advance notice to the Unitholders, such
withdrawal to take effect on the date specified in such notice; (iii) at any
time that the General Partner ceases to be the General Partner pursuant to
Section 11.1(a)(ii) or is removed pursuant to Section 11.2; or
(iv) notwithstanding clause (i) of this sentence, at any time that the General
Partner voluntarily withdraws by giving at least 90 days’ advance notice of its
intention to withdraw to the Limited Partners, such withdrawal to take effect on
the date specified in the notice, if at the time such notice is given one Person
and its Affiliates (other than the General Partner and its Affiliates) own
beneficially or of record or control at least 50% of the Outstanding Units.  The
withdrawal of the General Partner from the Partnership upon the occurrence of an
Event of Withdrawal shall also constitute the withdrawal of the General Partner
as general partner or managing member, if any, to the extent applicable, of the
other Group Members.  If the General Partner gives a notice of withdrawal
pursuant to Section 11.1(a)(i), a Unit Majority, may, prior to the effective
date of such withdrawal, elect a successor General Partner.  The Person so
elected as successor General Partner shall automatically become the successor
general partner or managing member, to the extent applicable, of the other Group
Members of which the General Partner is a general partner or a managing member,
and is hereby authorized to carry on the business of the Partnership and the
other Group Members.  If, prior to the effective date of the General Partner’s
withdrawal pursuant to Section 11.1(a)(i), a successor is not selected by the
Unitholders as provided herein or the Partnership does not receive a Withdrawal
Opinion of Counsel, the Partnership shall be dissolved in accordance with
Section 12.1 unless the business of the Partnership is continued pursuant to
Section 12.2.  Any successor General Partner elected in accordance with the
terms of this Section 11.1 shall be subject to the provisions of Section 10.2.

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Section 11.2Removal of the General Partner.  The General Partner may be removed
if such removal is approved by the Unitholders holding at least 66 2/3% of the
Outstanding Units (including Units held by the General Partner and its
Affiliates) voting as a single class.  Any such action by such holders for
removal of the General Partner must also provide for the election of a successor
General Partner by a Unit Majority (including Common Units held by the General
Partner and its Affiliates).  Such removal shall be effective immediately
following the admission of a successor General Partner pursuant to Section
10.2.  The removal of the General Partner shall also automatically constitute
the removal of the General Partner as general partner or managing member, to the
extent applicable, of the other Group Members of which the General Partner is a
general partner or a managing member.  If a Person is elected as a successor
General Partner in accordance with the terms of this Section 11.2, such Person
shall, upon admission pursuant to Section 10.2, automatically become a successor
general partner or managing member, to the extent applicable, of the other Group
Members of which the General Partner is a general partner or a managing member,
and is hereby authorized to carry on the business of the Partnership and the
other Group Members.  The right of the holders of Outstanding Units to remove
the General Partner shall not exist or be exercised unless the Partnership has
received an opinion opining as to the matters covered by a Withdrawal Opinion of
Counsel.  Any successor General Partner elected in accordance with the terms of
this Section 11.2 shall be subject to the provisions of Section 10.2.

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

(a)In the event of (i) withdrawal of the General Partner under circumstances
where such withdrawal does not violate this Agreement or (ii) removal of the
General Partner by the holders of Outstanding Units under circumstances where
Cause does not exist, if the successor General Partner is elected in accordance
with the terms of Section 11.1 or Section 11.2, the Departing General Partner
shall have the option, exercisable prior to the effective date of the withdrawal
or removal of such Departing General Partner, to require its successor to
purchase its General Partner Interest and its or its Affiliates’ general partner
interest (or equivalent interest), if any, in the other Group Members and all of
its or its Affiliates’ Incentive Distribution Rights (collectively, the
“Combined Interest”) in exchange for an amount in cash equal to the fair market
value of such Combined Interest, such amount to be determined and payable as of
the effective date of its withdrawal or removal.  If the General Partner is
removed by the Unitholders under circumstances where Cause exists or if the
General Partner withdraws under circumstances where such withdrawal violates
this Agreement, and if a successor General Partner is elected in accordance with
the terms of Section 11.1 or Section 11.2 (or if the business of the Partnership
is continued pursuant to Section 12.2 and the successor General Partner is not
the former General Partner), such successor shall have the option, exercisable
prior to the effective date of the withdrawal or removal of such Departing
General Partner (or, in the event the business of the Partnership is continued,
prior to the date the business of the Partnership is continued), to purchase the
Combined Interest for such fair market value of such Combined Interest.  In
either event, the Departing General Partner shall be entitled to receive all
reimbursements due such Departing General Partner pursuant to Section 7.5,
including any employee-related liabilities (including severance liabilities),
incurred in connection with the termination of any employees employed by the
Departing General Partner or its Affiliates (other than any Group Member) for
the benefit of the Partnership or the other Group Members.

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For purposes of this Section 11.3(a), the fair market value of the Combined
Interest (which shall, for the avoidance of doubt, include a value for the
non-economic General Partner Interest) shall be determined by agreement between
the Departing General Partner and its successor or, failing agreement within 30
days after the effective date of such Departing General Partner’s withdrawal or
removal, by an independent investment banking firm or other independent expert
selected by the Departing General Partner and its successor, which, in turn, may
rely on other experts, and the determination of which shall be conclusive as to
such matter.  If such parties cannot agree upon one independent investment
banking firm or other independent expert within 45 days after the effective date
of such withdrawal or removal, then the Departing General Partner shall
designate an independent investment banking firm or other independent expert,
the Departing General Partner’s successor shall designate an independent
investment banking firm or other independent expert, and such firms or experts
shall mutually select a third independent investment banking firm or independent
expert, which third independent investment banking firm or other independent
expert shall determine the fair market value of the Combined Interest.  In
making its determination, such third independent investment banking firm or
other independent expert may consider the value of the Units, including the then
current trading price of Units on any National Securities Exchange on which
Units are then listed or admitted to trading, the value of the Partnership’s
assets, the rights and obligations of the Departing General Partner, the value
of the Incentive Distribution Rights and the General Partner Interest and other
factors it may deem relevant.

(b)If the Combined Interest is not purchased in the manner set forth in Section
11.3(a), the Departing General Partner (and its Affiliates, if applicable) shall
become a Limited Partner and the Combined Interest shall be converted into
Common Units pursuant to a valuation made by an investment banking firm or other
independent expert selected pursuant to Section 11.3(a), without reduction in
such Partnership Interest and taking into account both the value of the
Incentive Distribution Rights and the non-economic General Partner
Interest.  Any successor General Partner shall indemnify the Departing General
Partner as to all debts and liabilities of the Partnership arising on or after
the date on which the Departing General Partner becomes a Limited Partner.  For
purposes of this Agreement, conversion of the Combined Interest to Common Units
will be characterized as if the Departing General Partner (and its Affiliates,
if applicable) contributed the Combined Interest to the Partnership in exchange
for the newly issued Common Units.

(c)If a successor General Partner is elected in accordance with the terms of
Section 11.1 or Section 11.2 (or if the business of the Partnership is continued
pursuant to Section 12.2 and the successor General Partner is not the former
General Partner) and the option described in Section 11.3(a) is not exercised by
the party entitled to do so, the successor General Partner shall, at the
effective date of its admission to the Partnership, contribute to the
Partnership cash in the amount equal to the product of (x) the quotient obtained
by dividing (A) the Percentage Interest of the General Partner Interest of the
Departing General Partner by (B) a percentage equal to 100% less the Percentage
Interest of the General Partner Interest of the Departing General Partner and
(y) the Net Agreed Value of the Partnership’s assets on such date.  In such
event, such successor General Partner shall, subject to the following sentence,
be entitled to its Percentage Interest of all Partnership allocations and
distributions to which the Departing General Partner was entitled.  In addition,
the successor General Partner shall cause this Agreement to be amended to
reflect that, from and after the date of such successor General Partner’s
admission, the successor General Partner’s interest in all Partnership
distributions and allocations shall be its Percentage Interest.

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Section 11.4Withdrawal of Limited Partners.  No Limited Partner shall have any
right to withdraw from the Partnership; provided, however, that when a
transferee of a Limited Partner’s Limited Partner Interest becomes a Record
Holder of the Limited Partner Interest so transferred, such transferring Limited
Partner shall cease to be a Limited Partner with respect to the Limited Partner
Interest so transferred.

Article XII
DISSOLUTION AND LIQUIDATION

Section 12.1Dissolution.  The Partnership shall not be dissolved by the
admission of additional Limited Partners or by the admission of a successor
General Partner in accordance with the terms of this Agreement.  Upon the
removal or withdrawal of the General Partner, if a successor General Partner is
elected pursuant to Section 11.1, Section 11.2 or Section 12.2, the Partnership
shall not be dissolved and such successor General Partner is hereby authorized
to, and shall, continue the business of the Partnership.  Subject to Section
12.2, the Partnership shall dissolve, and its affairs shall be wound up, upon:

(a)an Event of Withdrawal of the General Partner as provided in Section 11.1(a)
(other than Section 11.1(a)(ii)), unless a successor is elected and such
successor is admitted to the Partnership pursuant to this Agreement;

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

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

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

(e)any other dissolution event as required by the Delaware Act.

Section 12.2Continuation of the Business of the Partnership After Dissolution.
 Upon (a) an Event of Withdrawal caused by the withdrawal or removal of the
General Partner as provided in Section 11.1(a)(i) or Section 11.1(a)(iii) and
the failure of the Partners to select a successor to such Departing General
Partner pursuant to Section 11.1 or Section 11.2, then within 90 days
thereafter, or (b) an event constituting an Event of Withdrawal as defined in
Section 11.1(a)(iv), Section 11.1(a)(v) or Section 11.1(a)(vi), then, to the
maximum extent permitted by law, within 180 days thereafter, a Unit Majority may
elect to continue the business of the Partnership on the same terms and
conditions set forth in this Agreement by appointing as a successor General
Partner a Person approved by a Unit Majority.  Unless such an election is made
within the applicable time period as set forth above, the Partnership shall
conduct only activities necessary to wind up its affairs.  If such an election
is so made, then:

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

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

(iii)the successor General Partner shall be admitted to the Partnership as
General Partner, effective as of the Event of Withdrawal, by agreeing in writing
to be bound by this Agreement; provided, that the right of a Unit Majority to
approve a successor General Partner and to continue the business of the
Partnership shall not exist and may not be exercised unless the Partnership has
received an Opinion of Counsel that (x) the exercise of the right would not
result in the loss of limited liability under the Delaware Act of any Limited
Partner and (y) neither the Partnership nor any Group Member would be treated as
an association taxable as a corporation or otherwise be taxable as an entity for
U.S. federal income tax purposes upon the exercise of such right to continue (to
the extent not already so treated or taxed).

Section 12.3Liquidator.  Upon dissolution of the Partnership, unless the
business of the Partnership is continued pursuant to Section 12.2, the General
Partner shall select one or more Persons to act as Liquidator.  The Liquidator
(if other than the General Partner) shall be entitled to receive such
compensation for its services as may be approved by a Unit Majority.  The
Liquidator (if other than the General Partner) shall agree not to resign at any
time without 15 days’ prior notice and may be removed at any time, with or
without cause, by notice of removal approved by a Unit Majority.  Upon
dissolution, removal or resignation of the Liquidator, a successor and
substitute Liquidator (who shall have and succeed to all rights, powers and
duties of the original Liquidator) shall within 30 days thereafter be approved
by a Unit Majority.  The right to approve a successor or substitute Liquidator
in the manner provided herein shall be deemed to refer also to any such
successor or substitute Liquidator approved in the manner herein
provided.  Except as expressly provided in this Article XII, the Liquidator
approved in the manner provided herein shall have and may exercise, without
further authorization or consent of any of the parties hereto, all of the powers
conferred upon the General Partner under the terms of this Agreement (but
subject to all of the applicable limitations, contractual and otherwise, upon
the exercise of such powers, other than the limitation on sale set forth in
Section 7.4) necessary or appropriate to carry out the duties and functions of
the Liquidator hereunder for and during the period of time required to complete
the winding up and liquidation of the Partnership as provided for herein.

Section 12.4Liquidation.  The Liquidator shall proceed to dispose of the assets
of the Partnership, discharge its liabilities, and otherwise wind up its affairs
in such manner and over such period as determined by the Liquidator, subject to
Section 17-804 of the Delaware Act and the following:

(a)The assets may be disposed of by public or private sale or by distribution in
kind to one or more Partners on such terms as the Liquidator and such Partner or
Partners may agree.  If any property is distributed in kind, the Partner
receiving the property shall be deemed for purposes of Section 12.4(c) to have
received cash equal to its fair market value; and contemporaneously therewith,
appropriate cash distributions must be made to the other Partners.  The
Liquidator may defer liquidation or distribution of the Partnership’s assets for
a reasonable time if it determines that an immediate sale or distribution of all
or some of the Partnership’s assets would be impractical or would cause undue
loss to the Partners.  The Liquidator may distribute the

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Partnership’s assets, in whole or in part, in kind if it determines that a sale
would be impractical or would cause undue loss to the Partners.

(b)Liabilities of the Partnership include amounts owed to the Liquidator as
compensation for serving in such capacity (subject to the terms of Section 12.3)
and amounts to Partners otherwise than in respect of their distribution rights
under Article VI.  With respect to any liability that is contingent, conditional
or unmatured or is otherwise not yet due and payable, the Liquidator shall
either settle such claim for such amount as it thinks appropriate or establish a
reserve of cash or other assets to provide for its payment.  When paid, any
unused portion of the reserve shall be distributed as additional liquidation
proceeds.

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

Section 12.5Cancellation of Certificate of Limited Partnership.  Upon the
completion of the distribution of Partnership cash and property as provided in
Section 12.4 in connection with the liquidation of the Partnership, the
Certificate of Limited Partnership and all qualifications of the Partnership as
a foreign limited partnership in jurisdictions other than the State of Delaware
shall be canceled and such other actions as may be necessary to terminate the
Partnership shall be taken.

Section 12.6Return of Contributions.  The General Partner shall not be
personally liable for, and shall have no obligation to contribute or loan any
monies or property to the Partnership to enable it to effectuate, the return of
the Capital Contributions of the Limited Partners or Unitholders, or any portion
thereof, it being expressly understood that any such return shall be made solely
from Partnership assets.

Section 12.7Waiver of Partition.  To the maximum extent permitted by law, each
Partner hereby waives any right to partition of the Partnership property.

Section 12.8Capital 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.

Article XIII
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE

Section 13.1Amendments to be Adopted Solely by the General Partner.  Each
Partner agrees that the General Partner, without the approval of any Partner,
may amend any provision of

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this Agreement and execute, swear to, acknowledge, deliver, file and record
whatever documents may be required in connection therewith, to reflect:

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

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

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

(d)subject to Section 5.10(e), a change that the General Partner determines
(i) does not adversely affect the Limited Partners (including any particular
class of Partnership Interests as compared to other classes of Partnership
Interests) in any material respect, (ii) to be necessary or appropriate to
(A) satisfy any requirements, conditions or guidelines contained in any opinion,
directive, order, ruling or regulation of any federal or state agency or
judicial authority or contained in any federal or state statute (including the
Delaware Act) or (B) facilitate the trading of the Units (including the division
of any class or classes of Outstanding Units into different classes to
facilitate uniformity of tax consequences within such classes of Units) or
comply with any rule, regulation, guideline or requirement of any National
Securities Exchange on which the Units are or will be listed or admitted to
trading, (iii) to be necessary or appropriate in connection with action taken by
the General Partner pursuant to Section 5.6 or (iv) is required to effect the
intent expressed in the Registration Statement or the intent of the provisions
of this Agreement or is otherwise contemplated by this Agreement;

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

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

(g)subject to Section 5.10(e), an amendment that the General Partner determines
to be necessary or appropriate in connection with the creation, authorization or
issuance of any class or

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series of Partnership Interests or options, rights, warrants and appreciation
rights relating to the Partnership Interests pursuant to Section 5.4;

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

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

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

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

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

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

Section 13.3Amendment Requirements.

(a)Notwithstanding the provisions of Section 13.1 and Section 13.2, no provision
of this Agreement (other than Section 11.2 or Section 13.4) that establishes a
percentage of

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Outstanding Units (including Units deemed owned by the General Partner) or
requires a vote or approval of Partners (or a subset of Partners) holding a
specified Percentage Interest required to take any action shall be amended,
altered, changed, repealed or rescinded in any respect that would have the
effect of reducing such percentage, unless such amendment is approved by the
written consent or the affirmative vote of holders of Outstanding Units whose
aggregate Outstanding Units constitute not less than the voting requirement
sought to be reduced or the affirmative vote of Partners whose aggregate
Percentage Interests constitute not less than the voting requirement sought to
be reduced, as applicable.

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

(c)Except as provided in Section 14.3 or Section 13.1, any amendment that would
have a material adverse effect on the rights or preferences of any class of
Partnership Interests in relation to other classes of Partnership Interests must
be approved by the holders of not less than a majority of the Outstanding
Partnership Interests of the class affected.  If the General Partner determines
an amendment does not satisfy the requirements of Section 13.1(d)(i) because it
adversely affects one or more classes of Partnership Interests, as compared to
other classes of Partnership Interests, in any material respect, such amendment
shall only be required to be approved by the adversely affected class or
classes.

(d)Notwithstanding any other provision of this Agreement, except for amendments
pursuant to Section 13.1 and except as otherwise provided by Section 14.3(b), no
amendments shall become effective without the approval of the holders of at
least 90% of the Percentage Interests of all Limited Partners voting as a single
class unless the Partnership obtains an Opinion of Counsel to the effect that
such amendment will not affect the limited liability of any Limited Partner
under applicable partnership law of the state under whose laws the Partnership
is organized.

(e)Except as provided in Section 13.1, the approval of Limited Partners
(including the General Partner and its Affiliates) holding at least 75% of the
Percentage Interests of all Limited Partners shall be required to alter, amend
or adopt any provision inconsistent with or repeal this Section 13.3, Section
13.4, Section 13.5, Section 13.9 and Section 13.11.

Section 13.4Special Meetings.  All acts of Limited Partners to be taken pursuant
to this Agreement shall be taken in the manner provided in this Article
XIII.  Special meetings of the Limited Partners may be called by the General
Partner or by Limited Partners owning 20% or more of the Outstanding Units of
the class or classes for which a meeting is proposed.  Limited Partners shall
call a special meeting by delivering to the General Partner one or more requests
in writing stating that the signing Limited Partners wish to call a special
meeting and indicating the general or specific purposes for which the special
meeting is to be called.  Within 60 days after receipt of

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such a call from Limited Partners or within such greater time as may be
reasonably necessary for the Partnership to comply with any statutes, rules,
regulations, listing agreements or similar requirements governing the holding of
a meeting or the solicitation of proxies for use at such a meeting, the General
Partner shall send a notice of the meeting to the Limited Partners either
directly or indirectly through the Transfer Agent.  A meeting shall be held at a
time and place determined by the General Partner on a date not less than 10 days
nor more than 60 days after the time notice of the meeting is given as provided
in Section 16.1.  Limited Partners shall not vote on matters that would cause
the Limited Partners to be deemed to be taking part in the management and
control of the business and affairs of the Partnership so as to jeopardize the
Limited Partners’ limited liability under the Delaware Act or the law of any
other state in which the Partnership is qualified to do business.

Section 13.5Notice of a Meeting.  Notice of a meeting called pursuant to Section
13.4 shall be given to the Record Holders of the class or classes of Units for
which a meeting is proposed in writing by mail or other means of written
communication in accordance with Section 16.1.  The notice shall be deemed to
have been given at the time when deposited in the mail or sent by other means of
written communication.

Section 13.6Record Date.  For purposes of determining the Limited Partners
entitled to notice of or to vote at a meeting of the Limited Partners or to give
approvals without a meeting as provided in Section 13.11 the General Partner may
set a Record Date, which shall not be less than 10 nor more than 60 days before
(a) the date of the meeting (unless such requirement conflicts with any rule,
regulation, guideline or requirement of any National Securities Exchange on
which the Units are listed or admitted to trading or U.S. federal securities
laws, in which case the rule, regulation, guideline or requirement of such
National Securities Exchange or U.S. federal securities laws shall govern) or
(b) in the event that approvals are sought without a meeting, the date by which
Limited Partners are requested in writing by the General Partner to give such
approvals.  If the General Partner does not set a Record Date, then (a) the
Record Date for determining the Limited Partners entitled to notice of or to
vote at a meeting of the Limited Partners shall be the close of business on the
day next preceding the day on which notice is given, and (b) the Record Date for
determining the Limited Partners entitled to give approvals without a meeting
shall be the date the first written approval is deposited with the Partnership
in care of the General Partner in accordance with Section 13.11.

Section 13.7Adjournment.  Any meeting may be adjourned by the chairman of the
meeting one or more times for any reason, including the failure of a quorum to
be present at the meeting with respect to any proposal or the failure of any
proposal to receive sufficient votes for approval. No Limited Partner vote shall
be required for any adjournment. A meeting may be adjourned by the chairman of
the meeting as to one or more proposals regardless of whether action has been
taken on other matters.  If a quorum is present with respect to any one or more
proposals, the chairman of the meeting may, but shall not be required to, cause
a vote to be taken with respect to any such proposal or proposals which vote can
be certified as final and effective notwithstanding the adjournment of the
meeting with respect to any other proposal or proposals. When a meeting is
adjourned to another time or place, notice need not be given of the adjourned
meeting and a new Record Date need not be fixed, if the time and place thereof
are announced at the meeting at which the adjournment is taken, unless such
adjournment shall be for more than 45 days.  At the adjourned meeting, the
Partnership may transact any business which might have been transacted

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at the original meeting.  If the adjournment is for more than 45 days or if a
new Record Date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given in accordance with this Article XIII.

Section 13.8Waiver of Notice; Approval of Meeting; Approval of Minutes.  The
transaction of business at any meeting of Limited Partners, however called and
noticed, and whenever held, shall be as valid as if it had occurred at a meeting
duly held after regular call and notice, if a quorum is present either in person
or by proxy.  Attendance of a Limited Partner at a meeting shall constitute a
waiver of notice of the meeting, except when the Limited Partner attends the
meeting for the express purpose of objecting, at the beginning of the meeting,
to the sufficiency of notice, in which case, if notice to such Limited Partner
is not in compliance with this Agreement, then attendance by such Limited
Partner shall not constitute waiver of notice.

Section 13.9Quorum and Voting.  The holders of a majority, by Percentage
Interest, of Partnership Interests of the class or classes for which a meeting
has been called (including Partnership Interests deemed owned by the General
Partner) represented in person or by proxy shall constitute a quorum at a
meeting of Partners of such class or classes unless any such action by the
Partners requires approval by holders of a greater Percentage Interest, in which
case the quorum shall be such greater Percentage Interest.  The Limited Partners
holding Outstanding Common Units shall be entitled to one vote per Unit on all
matters submitted to the Limited Partners for approval.  At any meeting of the
Partners at which a quorum is present, the act of Partners holding Partnership
Interests that, in the aggregate, represent a majority of the Percentage
Interest of those present in person or by proxy at such meeting shall be deemed
to constitute the act of all Partners, unless a greater or different percentage
is required with respect to such action under the provisions of this Agreement,
in which case the act of the Partners holding Partnership Interests that in the
aggregate represent at least such greater or different percentage shall be
required; provided, however, that if, as a matter of law or amendment to this
Agreement, approval by plurality vote of Partners (or any class thereof) is
required to approve any action, no minimum quorum shall be required.  The
Partners present at a duly called or held meeting at which a quorum is present
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough Partners to leave less than a quorum, if any action taken
(other than adjournment) is approved by Partners holding the required Percentage
Interest specified in this Agreement.

Section 13.10Conduct of a Meeting.  The General Partner shall have full power
and authority concerning the manner of conducting any meeting of the Limited
Partners or solicitation of approvals in writing, including the determination of
Persons entitled to vote, the existence of a quorum, the satisfaction of the
requirements of Section 13.4, the conduct of voting, the validity and effect of
any proxies and the determination of any controversies, votes or challenges
arising in connection with or during the meeting or voting.  The General Partner
shall designate a Person to serve as chairman of any meeting and shall further
designate a Person to take the minutes of any meeting.  All minutes shall be
kept with the records of the Partnership maintained by the General Partner.  The
General Partner may make such other regulations consistent with applicable law
and this Agreement as it may deem advisable concerning the conduct of any
meeting of the Limited Partners or solicitation of approvals in writing,
including regulations in regard to the appointment of proxies, the appointment
and duties of inspectors of votes and approvals, the submission and examination
of proxies and other evidence of the right to vote, and the revocation of
approvals in writing.  A proxy purporting to be executed by or on behalf of a
Limited Partner shall be deemed

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valid unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger.  Subject to the provisions of the
Delaware Act or this Agreement, the General Corporation Law of the State of
Delaware relating to proxies, and judicial interpretations thereunder, shall
govern all matters concerning the giving, voting or validity of proxies, as if
the Partnership were a Delaware corporation and the Limited Partners were
stockholders of a Delaware corporation.

Section 13.11Action Without a Meeting.  Any action that may be taken at a
meeting of the Limited Partners may be taken without a meeting, without a vote
and without prior notice, if an approval in writing setting forth the action so
taken is signed by Limited Partners owning not less than the minimum percentage,
by Percentage Interest, of the Partnership Interests of the class or classes for
which a meeting has been called (including Partnership Interests deemed owned by
the General Partner), as the case may be, that would be necessary to authorize
or take such action at a meeting at which all the Limited Partners entitled to
vote at such meeting were present and voted (unless such provision conflicts
with any rule, regulation, guideline or requirement of any National Securities
Exchange on which the Units are listed or admitted to trading, in which case the
rule, regulation, guideline or requirement of such National Securities Exchange
shall govern).  Prompt notice of the taking of action without a meeting shall be
given to the Limited Partners who have not approved in writing.  The General
Partner may specify that any written ballot, if any, submitted to Limited
Partners for the purpose of taking any action without a meeting shall be
returned to the Partnership within the time period, which shall be not less than
20 days, specified by the General Partner.  If a ballot returned to the
Partnership does not vote all of the Units held by the Limited Partners, the
Partnership shall be deemed to have failed to receive a ballot for the Units
that were not voted.  If approval of the taking of any action by the Limited
Partners is solicited by any Person other than by or on behalf of the General
Partner, the written approvals shall have no force and effect unless and until
(a) they are deposited with the Partnership in care of the General Partner and
(b) an Opinion of Counsel is delivered to the General Partner to the effect that
the exercise of such right and the action proposed to be taken with respect to
any particular matter (i) will not cause the Limited Partners to be deemed to be
taking part in the management and control of the business and affairs of the
Partnership so as to jeopardize the Limited Partners’ limited liability, and
(ii) is otherwise permissible under the state statutes then governing the
rights, duties and liabilities of the Partnership and the Partners.  Nothing
contained in this Section 13.11 shall be deemed to require the General Partner
to solicit all Limited Partners in connection with a matter approved by the
holders of the requisite percentage of Units acting by written consent without a
meeting.

Section 13.12Right to Vote and Related Matters.

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

(b)With respect to Units that are held for a Person’s account by another Person
(such as a broker, dealer, bank, trust company or clearing corporation, or an
agent of any of the

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foregoing), in whose name such Units are registered, such other Person shall, in
exercising the voting rights in respect of such Units on any matter, and unless
the arrangement between such Persons provides otherwise, vote such Units in
favor of, and at the direction of, the Person who is the beneficial owner, and
the Partnership shall be entitled to assume it is so acting without further
inquiry.  The provisions of this Section 13.12(b) (as well as all other
provisions of this Agreement) are subject to the provisions of Section 4.3.

Section 13.13Voting of Incentive Distribution Rights.

(a)For so long as a majority of the Incentive Distribution Rights are held by
the General Partner and its Affiliates, the holders of the Incentive
Distribution Rights shall not be entitled to vote such Incentive Distribution
Rights on any Partnership matter except as may otherwise be required by law and
the holders of the Incentive Distribution Rights, in their capacity as such,
shall be deemed to have approved any matter approved by the General Partner.

(b)Notwithstanding anything set forth in this Agreement to the contrary, if less
than a majority of the Incentive Distribution Rights are held by the General
Partner and its Affiliates, the Incentive Distribution Rights will be entitled
to vote on all matters submitted to a vote of the holders of Common Units, other
than amendments and other matters that the General Partner determines do not
adversely affect the holders of the Incentive Distribution Rights as a whole in
any material respect.  On any matter in which the holders of Incentive
Distribution Rights are entitled to vote, such holders will vote together with
the Common Units as a single class, except as otherwise required by Section
13.3(c), and such Incentive Distribution Rights shall be treated in all respects
as Common Units when sending notices of a meeting of Limited Partners to vote on
any matter (unless otherwise required by law), calculating required votes,
determining the presence of a quorum or for other similar purposes under this
Agreement.  The relative voting power of the Incentive Distribution Rights and
the Common Units will be set in the same proportion as cumulative cash
distributions, if any, in respect of the Incentive Distribution Rights for the
four consecutive Quarters prior to the record date for the vote bears to the
cumulative cash distributions in respect of such class of Units for such four
Quarters.

(c)In connection with any equity financing, or anticipated equity financing, by
the Partnership of an Expansion Capital Expenditure, the General Partner may,
without the approval of the holders of the Incentive Distribution Rights,
temporarily or permanently reduce the amount of Incentive Distributions that
would otherwise be distributed to such holders, provided that in the judgment of
the General Partner, such reduction will be in the long-term best interest of
such holders.

Article XIV
MERGER OR CONSOLIDATION

Section 14.1Authority.  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

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the United States of America, pursuant to a written plan of merger or
consolidation (“Merger Agreement”) or plan of conversion in accordance with this
Article XIV.

Section 14.2Procedure for Merger or Consolidation.

(a)Merger or consolidation of the Partnership pursuant to this Article XIV
requires the prior consent of the General Partner; provided,  however, that, to
the fullest extent permitted by law, the General Partner shall have no duty or
obligation to consent to any merger or consolidation of the Partnership and may
decline to do so free of any duty (fiduciary or otherwise) 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.

(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 14.4 or a later date specified in or
determinable in

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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 14.3Approval by Limited Partners.

(a)Except as provided in Section 14.3(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, whether at a special meeting or by written consent, in either
case in accordance with the requirements of Article XIII.  A copy or a summary
of the Merger Agreement, as the case may be, shall be included in or enclosed
with the notice of a special meeting or the written consent.

(b)Except as provided in Section 14.3(d) and Section 14.3(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 Section 14.3(d) and Section 14.3(e), after such
approval by vote or consent of the Limited Partners, and at any time prior to
the filing of the certificate of merger pursuant to Section 14.4, the merger or
consolidation may be abandoned pursuant to provisions therefor, if any, set
forth in the Merger Agreement.

(d)Notwithstanding anything else contained in this Article XIV or in this
Agreement, the 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 XIV or
in this Agreement, the General Partner is permitted, without Limited Partner
approval, to merge or consolidate the Partnership with or into another entity if
(A) the General Partner has received an

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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
13.1, (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 Incentive Distribution Rights) Outstanding
immediately prior to the effective date of such merger or consolidation.

(f)Pursuant to Section 17-211(g) of the Delaware Act, an agreement of merger or
consolidation approved in accordance with this Article XIV may (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 14.3 shall be effective at
the effective time or date of the merger or consolidation.

Section 14.4Certificate 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 14.5Effect 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.

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Article XV
RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS

Section 15.1Right to Acquire Limited Partner Interests.

(a)Notwithstanding any other provision of this Agreement, if at any time the
General Partner and its controlled Affiliates hold more than 80% of the total
Limited Partner Interests of any class then Outstanding, the General Partner
shall then have the right, which right it may assign and transfer in whole or in
part to the Partnership or any controlled Affiliate of the General Partner,
exercisable in its sole discretion, to purchase all, but not less than all, of
such Limited Partner Interests of such class then Outstanding held by Persons
other than the General Partner and its controlled Affiliates, at the greater of
(x) the Current Market Price as of the date three days prior to the date that
the notice described in Section 15.1(b) is mailed and (y) the highest price paid
by the General Partner or any of its controlled Affiliates for any such Limited
Partner Interest of such class purchased during the 90-day period preceding the
date that the notice described in Section 15.1(b) is mailed.

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

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Interests evidenced by Certificates, and such Limited Partner Interests shall
thereupon be deemed to be transferred to the General Partner or its controlled
Affiliate, as the case may be, on the record books of the Transfer Agent and the
General Partner or its controlled Affiliate, as the case may be, shall be deemed
to be the owner of all such Limited Partner Interests from and after the
Purchase Date and shall have all rights as the owner of such Limited Partner
Interests.

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

Article XVI
GENERAL PROVISIONS

Section 16.1Addresses 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 or any method approved by the National
Securities Exchange on which the Partnership Interests are listed.  Any notice,
payment or report to be given or made to a Partner hereunder shall be deemed
conclusively to have been given or made, and the obligation to give such notice
or report or to make such payment shall be deemed conclusively to have been
fully satisfied, upon sending of such notice, payment or report to the Record
Holder of such Partnership Interests at his address as shown on the records of
the Transfer Agent or as otherwise shown on the records of the Partnership,
regardless of any claim of any Person who may have an interest in such
Partnership Interests by reason of any assignment or otherwise.  Notwithstanding
the foregoing, if (i) a Partner shall consent to receiving notices, demands,
requests, reports or proxy materials via electronic mail or by the Internet or
(ii) the rules of the Commission shall permit any report or proxy materials to
be delivered electronically or made available via the Internet, any such notice,
demand, request, report or proxy materials shall be deemed given or made when
delivered or made available via such mode of delivery.  An affidavit or
certificate of making of any notice, payment or report in accordance with the
provisions of this Section 16.1 executed by the General Partner, the Transfer
Agent or the mailing organization shall be prima facie evidence of the giving or
making of such notice, payment or report.  If any notice, payment or report
given or made in accordance with the provisions of this Section 16.1 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

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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 16.2Further Action.  The parties shall execute and deliver all
documents, provide all information and take or refrain from taking action as may
be necessary or appropriate to achieve the purposes of this Agreement.

Section 16.3Binding Effect.  This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns.

Section 16.4Integration.  This Agreement constitutes the entire agreement among
the parties hereto pertaining to the subject matter hereof and supersedes all
prior agreements and understandings pertaining thereto.

Section 16.5Creditors.  None of the provisions of this Agreement shall be for
the benefit of, or shall be enforceable by, any creditor of the Partnership.

Section 16.6Waiver.  No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach of any other covenant, duty, agreement or
condition.

Section 16.7Third-Party Beneficiaries.  Each Partner agrees that (a) any
Indemnitee shall be entitled to assert rights and remedies hereunder as a
third-party beneficiary hereto with respect to those provisions of this
Agreement affording a right, benefit or privilege to such Indemnitee and (b) any
Unrestricted Person shall be entitled to assert rights and remedies hereunder as
a third-party beneficiary hereto with respect to those provisions of this
Agreement affording a right, benefit or privilege to such Unrestricted Person.

Section 16.8Counterparts.  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 16.9Applicable Law; Forum, Venue and Jurisdiction.

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

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

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(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;

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

(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;

(vi)IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY SUCH CLAIM, SUIT,
ACTION OR PROCEEDING; and

(vii)agrees that if such Partner or Person does not obtain a judgment on the
merits that substantially achieves, in substance and amount, the full remedy
sought in any such claim, suit, action or proceeding, then such Partner or
Person shall be obligated to reimburse the Partnership and its Affiliates for
all fees, costs and expenses of every kind and description, including but not
limited to all reasonable attorneys’ fees and other

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litigation expenses, that the parties may incur in connection with such claim,
suit, action or proceeding.

Section 16.10Invalidity 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 part 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 16.11Consent of Partners.  Each Partner hereby expressly consents and
agrees that, whenever in this Agreement it is specified that an action may be
taken upon the affirmative vote or consent of less than all of the Partners,
such action may be so taken upon the concurrence of less than all of the
Partners and each Partner shall be bound by the results of such action.

Section 16.12Facsimile and Email Signatures.  The use of facsimile signatures
and signatures delivered by email in portable document format (.pdf) affixed in
the name and on behalf of the transfer agent and registrar of the Partnership on
Certificates representing Units is expressly permitted by this Agreement.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

 

 

 

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IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date
first set forth above.

 

 

 

 

 

 

GENERAL PARTNER:

 

 

 

 

 

 

SANCHEZ PRODUCTION PARTNERS GP LLC

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

Charles C. Ward

 

 

Title:

Chief Financial Officer

 

 

 

 

 

 

LIMITED PARTNERS:

 

 

 

 

 

 

All Limited Partners now and hereafter admitted as Limited Partners of the
Partnership, pursuant to powers of attorney now and hereafter executed in favor
of, and granted and delivered to, the General Partner.

 

 

 

 

 

 

SANCHEZ PRODUCTION PARTNERS GP LLC,

 

 

as general partner

 

 

 

 

 

 

By:

 

 

 

Name:

Charles C. Ward

 

 

Title:

Chief Financial Officer

 

 

 

 

 

 

HOLDER OF INCENTIVE DISTRIBUTION RIGHTS AND SOLE MEMBER OF THE GENERAL PARTNER:

 

 

 

 

 

 

SP HOLDINGS, LLC

 

 

 

 

 

 

By:

SP Capital Holdings, LLC, its manager

 

 

 

 

 

 

By:

 

 

 

Name:

Antonio R. Sanchez, III

 

 

Title:

Manager

 

 

 

Signature Page to the

Second Amended and Restated Agreement of Limited Partnership

of

Sanchez Production Partners LP

 

 

 

 

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

 

 

EXHIBIT A
to the Second Amended and Restated Agreement of Limited Partnership of
Sanchez Production Partners LP

Certificate Evidencing Common Units
Representing Limited Partner Interests in
Sanchez Production Partners LP

 

 

 

 

 

 

No.

 

 

 

 

Common Units

 

In accordance with Section 4.1 of the Agreement of Limited Partnership of
Sanchez Production Partners LP, as amended, supplemented or restated from time
to time (the “Partnership Agreement”), Sanchez Production Partners LP, a
Delaware limited partnership (the “Partnership”), hereby certifies that
__________________________ (the “Holder”) is the registered owner of
_______________ Common Units representing limited partner interests in the
Partnership (the “Common Units”) transferable on the books of the Partnership,
in person or by duly authorized attorney, upon surrender of this Certificate
properly endorsed.  The rights, preferences and limitations of the Common Units
are set forth in, and this Certificate and the Common Units represented hereby
are issued and shall in all respects be subject to the terms and provisions of,
the Partnership Agreement.  Copies of the Partnership Agreement are on file, and
will be furnished without charge on delivery of written request to the
Partnership, at the principal office of the Partnership located at 1000 Main
Street, Suite 3000, Houston, Texas 77002.  Capitalized terms used herein but not
defined shall have the meanings given them in the Partnership Agreement.

THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF SANCHEZ PRODUCTION
PARTNERS LP THAT THIS SECURITY MAY NOT BE SOLD, OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED IF SUCH TRANSFER WOULD (A) VIOLATE THE THEN APPLICABLE
FEDERAL OR STATE SECURITIES LAWS OR RULES AND REGULATIONS OF THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER GOVERNMENTAL
AUTHORITY WITH JURISDICTION OVER SUCH TRANSFER, (B) TERMINATE THE EXISTENCE OR
QUALIFICATION OF SANCHEZ PRODUCTION PARTNERS LP UNDER THE LAWS OF THE STATE OF
DELAWARE, OR (C) CAUSE SANCHEZ PRODUCTION PARTNERS LP TO BE TREATED AS AN
ASSOCIATION TAXABLE AS A CORPORATION OR OTHERWISE TO BE TAXED AS AN ENTITY FOR
FEDERAL INCOME TAX PURPOSES (TO THE EXTENT NOT ALREADY SO TREATED OR
TAXED).  SANCHEZ PRODUCTION PARTNERS GP LLC, THE GENERAL PARTNER OF SANCHEZ
PRODUCTION PARTNERS LP, MAY IMPOSE ADDITIONAL RESTRICTIONS ON THE TRANSFER OF
THIS SECURITY IF IT DETERMINES, WITH THE ADVICE OF COUNSEL, THAT SUCH
RESTRICTIONS ARE NECESSARY OR ADVISABLE (i) TO AVOID A SIGNIFICANT RISK OF
SANCHEZ PRODUCTION PARTNERS LP BECOMING TAXABLE AS A CORPORATION OR OTHERWISE
BECOMING TAXABLE AS AN ENTITY FOR U.S. FEDERAL INCOME TAX PURPOSES OR (ii) TO
PRESERVE THE ECONOMIC UNIFORMITY OF THE LIMITED PARTNER INTERESTS (OR ANY CLASS
OR CLASSES THEREOF).  THE RESTRICTIONS SET FORTH ABOVE SHALL NOT PRECLUDE THE
SETTLEMENT OF ANY TRANSACTIONS INVOLVING THIS SECURITY

A-1

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ENTERED INTO THROUGH THE FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE ON WHICH
THIS SECURITY IS LISTED OR ADMITTED TO TRADING.

The Holder, by accepting this Certificate, (i) shall be admitted to the
Partnership as a Limited Partner with respect to the Limited Partner Interests
so transferred to such person when any such transfer or admission is reflected
on the books and records of the Partnership and such Limited Partner becomes the
Record Holder of the Limited Partner Interests so transferred, (ii) shall become
bound by the terms of the Partnership Agreement, (iii) represents that the
transferee has the capacity, power and authority to enter into the Partnership
Agreement and (iv) makes the consents, acknowledgements and waivers contained in
the Partnership Agreement, with or without the execution of the Partnership
Agreement by the Holder.

This Certificate shall not be valid for any purpose unless it has been
countersigned and registered by the Transfer Agent and Registrar.

 

 

 

 

 

 

Dated:

 

 

 

 

Sanchez Production Partners LP

 

 

 

 

 

Countersigned and Registered by:

 

 

By:

Sanchez Production Partners GP LLC,
its General Partner

 

 

 

 

 

Computershare Trust Company, N.A.

 

 

 

 

As Transfer Agent and Registrar

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

A-2

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[Reverse of Certificate]

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as follows according to applicable laws or
regulations:

-as tenants by the entireties

-as joint tenants with right of survivorship and not as tenants in common

 

 

 

 

 

 

 

TEN COM  -  as tenants in common

TEN ENT    -  as tenants by the entireties

JT TEN        -  as joint tenants with right of survivorship and not as tenants
in common

 

UNIF GIFT/TRANSFERS MIN ACT

____________Custodian___________

(Cust)                                  (Minor)

Under Uniform Gifts/Transfers to CD Minors Act

(State)

 

Additional abbreviations, though not in the above list, may also be used.

ASSIGNMENT OF COMMON UNITS OF
SANCHEZ PRODUCTION PARTNERS LP

FOR VALUE RECEIVED, __________ hereby assigns, conveys, sells and transfers unto

 

 

 

 

 

 

(Please print or typewrite name and address of assignee)

 

(Please insert Social Security or other identifying number of assignee)

 

______ Common Units representing limited partner interests evidenced by this
Certificate, subject to the Partnership Agreement, and does hereby irrevocably
constitute and appoint __________________ as its attorney-in-fact with full
power of substitution to transfer the same on the books of Sanchez Production
Partners LP.

 

 

 

 

 

Date:___________________________

 

NOTE: The signature to any endorsement hereon must correspond with the name as
written upon the face of this Certificate in every particular. without
alteration, enlargement or change.

 

 

THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C.  RULE
17Ad-15

 

 

 

(Signature)

 

 

 

 

 

 

(Signature)

 

 

A-3

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EXHIBIT B

FORM OF NOTICE OF PARTNERSHIP OPTIONAL CONVERSION

To the Holders of Class A Preferred Units:

 

Please take notice that Sanchez Production Partners LP (the “Partnership”) has
irrevocably elected to convert all of the outstanding Class A Preferred Units
(the “Class A Preferred Units”) into Common Units of the Partnership.  The
conversion will be effective at 5:00 p.m., New York time on [_________].  The
conversion rate will be calculated as set forth in Section 5.9(b)(i) of the
Second Amended and Restated Agreement of Limited Partnership of the Partnership.

 

B-1

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EXHIBIT C

FORM OF NOTICE OF CLASS B PREFERRED UNIT REDEMPTION

The undersigned hereby gives notice that the number of Class B Preferred Units
(“Class B Preferred Units”) of Sanchez Production Partners LP indicated below
will be redeemed for cash according to the conditions hereof, as of the date set
forth below.

 

Redemption calculations:

 

 

Date to Effect Redemption:

 

 

 

Number of Class B Preferred Units to be Redeemed:

 

 

 

Amount of Cash to be paid to Holder:

 

 

 

 

SANCHEZ PRODUCTION PARTNERS LP

 

 

 

 

By:

Sanchez Production Partners GP LLC, its general partner

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

C-1

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Final Form
Exhibit D

EXHIBIT D

FORM OF BOARD REPRESENTATION AND STANDSTILL AGREEMENT

 

BOARD REPRESENTATION AND STANDSTILL AGREEMENT

This BOARD REPRESENTATION AND STANDSTILL AGREEMENT, dated as of September [___],
2015 (this “Agreement”), is entered into by and among Sanchez Production
Partners GP LLC, a Delaware limited liability company (the “General Partner”),
Sanchez Production Partners LP, a Delaware limited partnership (the
“Partnership” and,  together with the General Partner, the “Sanchez Entities”),
and Stonepeak Catarina Holdings LLC (the “Purchaser”).  The Sanchez Entities and
the Purchaser are herein referred to as the “Parties.”  Capitalized terms used
but not defined herein shall have the meaning assigned to such term in the Class
B Preferred Unit Purchase Agreement, dated as of September [___], 2015, by and
between the Partnership and the Purchaser (the “Purchase Agreement”).

Recitals

WHEREAS, pursuant to, and subject to the terms and conditions of, the Purchase
Agreement, the Partnership has agreed to issue and sell Class B Preferred Units
(“Preferred Units”) to the Purchaser;

WHEREAS, to induce the Parties to enter into the transactions evidenced by the
Purchase Agreement, each of the Parties is required to deliver this Agreement,
duly executed by each of the Parties, contemporaneously with the Closing of the
transactions contemplated by the Purchase Agreement;

WHEREAS, concurrently with or prior to the Closing, the General Partner executed
and delivered the Second Amended and Restated Agreement of Limited Partnership
of the Partnership (the “Partnership Agreement”);

WHEREAS, the Purchaser’s investment in the Partnership pursuant to the Purchase
Agreement is expected to benefit the Partnership;

WHEREAS, the Purchaser will receive valuable consideration as a result of the
investment in the Partnership pursuant to the Purchase Agreement;

WHEREAS, the General Partner, in its individual capacity and in its capacity as
the general partner of the Partnership, has determined it to be in the best
interests of Partnership to provide the Purchaser with certain designation
rights and obligations in respect of the board of directors of the General
Partner (or such other governing body thereof) (the “Board”), pursuant to the
terms of this Agreement; and

WHEREAS, the Purchaser is willing to provide the Sanchez Entities with certain
standstill rights, pursuant to the terms of this Agreement.

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

 

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Agreement

Section 1.Board Designation Rights.

(a)Each of the Sanchez Entities shall take all actions necessary or advisable to
cause (i) two directors serving on the Board to be designated by the Purchaser,
in its sole discretion (each, a “Purchaser Designated Director”), at all times
from the date of this Agreement until the occurrence of (A) the First
Designation Right Termination Event (as defined below), at which time the right
of the Purchaser under this Agreement to designate one member of such Board
shall terminate and (B) the Second Designation Right Termination Event (as
defined below), at which time the right of the Purchaser under this Agreement to
designate one member of such Board shall terminate and (ii) three independent
directors serving on the Board to be designated by the Purchaser, in its sole
discretion (each director designated by the Purchaser pursuant to this Section
1(a), a “Purchaser Designated Director”), at all times during the Redemption
Designation Period (as defined below); provided, however, that each such
Purchaser Designated Director shall (1) in the reasonable judgment of the
General Partner, have the requisite skill and experience to serve as a director
of a public company, (2) not be prohibited or disqualified from serving as a
director of the General Partner by any rule or regulation of the Commission, the
National Securities Exchange (as defined in the Partnership Agreement) on which
the Common Units are listed or applicable Law and (3) otherwise be reasonably
acceptable to the General Partner.  Prior to a Designation Right Termination
Event (as defined below) or during the Redemption Designation Period, any
Purchaser Designated Director may be removed by the Purchaser at any time and
may be removed by a majority of the other directors then serving on the Board
for “cause” (as defined below); and any vacancy in such positions shall be
filled solely by the Purchaser.  As used herein, “cause” means that a Purchaser
Designated Director (w) is prohibited from serving as a director of the General
Partner under any rule or regulation of the Commission or the National
Securities Exchange (as defined in the Partnership Agreement) on which the
Common Units are listed; (x) has been convicted of a felony or misdemeanor
involving moral turpitude; (y) has engaged in acts or omissions against the
General Partner or the Partnership constituting dishonesty, breach of fiduciary
obligation, or intentional wrongdoing or misfeasance; or (z) has acted
intentionally or in bad faith in a manner that results in a material detriment
to the assets, business or prospects of the General Partner or the
Partnership.  None of the Sanchez Entities shall take any action which would, or
would be reasonably likely to, adversely affect the Purchaser’s right to appoint
Purchaser Designated Directors; provided, however, that the Sanchez Entities
shall not be prohibited from taking such action that the Board determines is
necessary to comply with any rule or regulation of the Commission or the
National Securities Exchange (as defined in the Partnership Agreement) on which
the Common Units are listed or applicable Law. 

(b)Prior to the occurrence of a Designation Right Termination Event, the General
Partner shall invite the Purchaser Designated Directors to attend all meetings
of each committee of the Board (other than the Audit Committee, the Conflicts
Committee, any pricing committee established for an offering of securities by
the Partnership and any committee established to deal with conflicts with the
Purchaser or its Affiliates) in a nonvoting observer capacity and, in this
respect, shall give the Purchaser Designated Directors copies of all notices,
minutes, consents and other materials that it provides to the other members of
such committee; provided, however, that during the Redemption Designation
Period, the Purchaser Designated

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Directors designated pursuant to clause (ii) of Section 1(a) shall serve on all
committees of the Board in a voting capacity.

(c)Commencing as of the Closing, the Purchaser Designated Directors are Jack
Howell and Luke Taylor.

(d)Any action by the Purchaser to designate, remove or replace a Purchaser
Designated Director shall be evidenced in writing and furnished to the General
Partner no later than one Business Day after the taking of such action, shall
include a statement that the action has been approved by the requisite vote of
the Purchaser and shall be executed by or on behalf of the Purchaser.  The
Purchaser agrees to cause each Purchaser Designated Director to timely provide
the Partnership with accurate and complete information relating to the Purchaser
and such Purchaser Designated Director that may be required to be disclosed by
the Partnership under the Exchange Act.  In addition, at the Partnership’s
reasonable request, the Purchaser shall cause each Purchaser Designated Director
to complete and execute the Partnership’s standard director and officer
questionnaire prior to being admitted to the Board.

(e)Upon the occurrence of a Designation Right Termination Event or the end of
the Redemption Designation Period, as applicable, the right of the Purchaser to
designate a Purchaser Designated Director shall terminate and the Purchaser
Designated Director then serving as such a member of the Board, promptly upon
(and in any event within two Business Days following) receipt of a request from
a majority of the other director(s) then serving on the Board or the owner(s) of
a majority of the equity interests of the General Partner, shall resign as a
member of the Board.  If the Purchaser Designated Director does not resign upon
such request, then a majority of the other director(s) then serving on the Board
or the owner(s) of a majority of the equity interests of the General Partner,
may remove the Purchaser Designated Director as a member of the Board.

(f)For the purposes of this Agreement, the “First Designation Right Termination
Event” shall occur on the date on which the Purchaser and its Affiliates hold
fewer than 25% of the number of Class B Preferred Units initially issued to the
Purchaser pursuant to the Purchase Agreement, as adjusted for any subdivisions,
splits, reverse unit splits, reclassification, reorganization or other similar
transaction by the Partnership affecting the Class B Preferred Units.  For the
purposes of this Agreement, the “Second Designation Right Termination Event”
shall occur on the date on which Purchaser and its Affiliates no longer hold any
Class B Preferred Units.  Each of the First Designation Right Termination Event
and the Second Designation Right Termination Event are referred to herein as a
“Designation Right Termination Event.” For the purposes of this Agreement, the
“Redemption Designation Period” shall commence on January 1, 2022 if any Class B
Preferred Units remain outstanding on such date and shall continue until the
date on which all Class B Preferred Units have been redeemed pursuant to the
provisions of the Partnership Agreement or have been converted into Common
Units.

Section 2.Limitation of Liability; Indemnification; Business Opportunities. 

(a)At all times while each Purchaser Designated Director is serving as a member
of the Board, and following any such Purchaser Designated Director’s death,
resignation, removal or other cessation as a director in such former Purchaser
Designated Director’s capacity as a

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former director, such Purchaser Designated Director shall be entitled to (i) the
same modification and restriction of traditional fiduciary duties, (ii) the same
safe harbors for resolving conflicts of interest transactions and (iii) all
rights to indemnification and exculpation, in each case, as are then made
available to any other member of the Board.

(b)At all times while each Purchaser Designated Director is serving as a member
of the Board, such Purchaser Designated Director, the Purchaser and their
respective Affiliates may engage in, possess an interest in, or trade in the
securities of, other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Sanchez Entities, and the Sanchez Entities, the Board and their Affiliates shall
have no rights by virtue of this Agreement or otherwise in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Sanchez
Entities, shall not be deemed wrongful or improper.  None of the Purchaser
Designated Directors, the Purchaser or their respective Affiliates shall be
obligated to present any investment opportunity to the Sanchez Entities even if
such opportunity is of a character that the Sanchez Entities or any of their
respective Affiliates might reasonably be deemed to have pursued or had the
ability or desire to pursue if granted the opportunity to do so, and each of the
Purchaser Designated Directors, the Purchaser and their respective Affiliates
shall have the right to take for such Person’s own account (individually or as a
partner, fiduciary or otherwise) or to recommend to others any such investment
opportunity.  Notwithstanding the foregoing, the Purchaser shall cause each
Purchaser Designated Director to maintain the confidentiality of all information
and proceedings of the Board.

(c)The Sanchez Entities shall purchase and maintain (or reimburse each Purchaser
Designated Director for the cost of) insurance (“D&O Insurance”), on behalf of
such Purchaser Designated Director, in an amount and scope of coverage
commensurate with that provided to an independent member of the Board, with
respect to liabilities that may be asserted against, or expense that may be
incurred by, such Purchaser Designated Director in connection with the Sanchez
Entities’ activities or such Purchaser Designated Director’s activities on
behalf of the Sanchez Entities, regardless of whether the Sanchez Entities would
have the power to indemnify such Purchaser Designated Director against such
liability under the provisions of the Partnership Agreement or the Limited
Liability Company Agreement of the General Partner, as amended (the “GP LLC
Agreement”).

(d)For the avoidance of doubt, each Purchaser Designated Director shall
constitute an “Indemnitee,” as such term is defined under the Partnership
Agreement and the GP LLC Agreement.

Section 3.Standstill.

(a)During the period commencing on the Closing Date and ending on the earlier of
(x) March 31, 2019 and (y) the date on which the Permitted Holders (as defined
below), collectively, cease to own, directly or indirectly, more than 50% of the
equity interests of the General Partner or cease to control (as defined in the
definition of “Affiliate” contained in the Partnership Agreement), directly or
indirectly, the General Partner, without the prior written consent of the Board
(provided that such consent shall not be required in the event of fraud or gross
negligence on the part of the Partnership or the General Partner), the Purchaser
shall not, and

4

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shall cause its Affiliates not to, directly or indirectly (whether with respect
to the General Partner, the Partnership or any Affiliate or Subsidiary thereof):

(i)acquire beneficial ownership of additional Common Units, Class A Preferred
Units, Class B Preferred Units or other Partnership Interests (as defined in the
Partnership Agreement);

(ii)acquire any debt or assets of the Partnership or its Subsidiaries;

(iii)engage in any hostile or takeover activities with respect to the
Partnership or the General Partner (including by means of a tender offer or
soliciting proxies or written consents for purposes of any hostile or takeover
activities, other than as recommended by the Board), including any merger,
consolidation, recapitalization, business combination, partnership, joint
venture, acquisition or similar transaction involving the Partnership or the
General Partner or any of their Affiliates or their properties (excluding
Sanchez Energy Corporation and its subsidiaries and its and their properties);

(iv)enter into any transaction the effect of which would be to “short” any
securities of the Partnership;

(v)form, join or participate in a “group” (within the meaning of Section 13(d)
of the Exchange Act) with respect to any voting securities of the Partnership or
any of its Affiliates in respect of any action otherwise prohibited pursuant to
this Section 3(a);

(vi)call (or participate in a group calling of) a meeting of the limited
partners of the Partnership for the purpose of removing (or approving the
removal of) the General Partner as the general partner of the Partnership and/or
electing a successor general partner of the Partnership;

(vii)“solicit” any “proxies” (as such terms are used in the rules and
regulations of the Commission) or votes for or in support of (A) the removal of
the General Partner as the general partner of the Partnership or (B) the
election of any successor general partner of the Partnership, or take any action
the direct effect or purpose of which would be to induce limited partners of the
Partnership to vote or provide proxies that may be voted in favor of any action
contemplated by either of sub-clauses (A) or (B) of this Section 3(a)(vii);

(viii)seek to advise or influence any person (within the meaning of Section
13(d)(3) of the Exchange Act) with respect to the voting of any Partnership
Interest in connection with the removal (or approving the removal) of the
General Partner as the general partner of the Partnership and/or the election of
a successor general partner of the Partnership;

(ix)issue, induce or assist in the publication of any press release, media
report or other publication in connection with the potential or proposed removal
of the

5

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General Partner as the general partner of the Partnership and/or the election of
a successor general partner of the Partnership;

(x)propose to remove Sanchez Production Partners GP LLC as the general partner
of the Partnership or vote to remove Sanchez Production Partners GP LLC as the
general partner of the Partnership;

(xi)advise, assist or encourage any third party to do any of the foregoing; or

(xii)if the General Partner is removed as the general partner of the
Partnership, participate in any way in the management, ownership and/or control
of the successor general partner or the successor general partner’s operation of
the Partnership, other than participation by any Purchaser Designated Director,
as described in Section 1 of this Agreement.

(b)Notwithstanding anything to the contrary in this Agreement, the foregoing
shall not in any way limit the right of the Purchaser or its Affiliates to:

(i)privately communicate with, including making any offer or proposal to, the
Board, directly or through any Purchaser Designated Director;

(ii)to the extent permitted by the Partnership Agreement, vote Partnership
Interests in the Partnership at any meeting of limited partners of the
Partnership so long as there has been no breach of Section 3(a) of this
Agreement;

(iii)restrict the manner in which any Purchaser Designated Director (A) may vote
on any matter submitted to the Board, (B) participate in deliberations or
discussions of the Board (including making suggestions or raising issues to the
Board) in his or her capacity as a member of the Board, or (C) may take actions
required by his or her exercise of legal duties and obligations as a member of
the Board or refrain from taking any action prohibited by his or her legal
duties and obligations as a member of the Board;

(iv)restrict the Purchaser or its Affiliates from selling or transferring any of
their Partnership Interests, subject to any restrictions relating thereto
contained in the Partnership Agreement; or

(v)restrict the Purchaser or its Affiliates from receiving any (A) Class B
Preferred PIK Units (as defined in the Partnership Agreement) as distributions
on Class B Preferred Units pursuant to the Partnership Agreement or (B)
Partnership Interests pursuant to a unit split, reverse unit split,
reclassification, reorganization or other transaction by the Partnership
affecting any class of Partnership Interests generally or a dividend of units or
other pro rata distribution by the Partnership to holders of Partnership
Interests.

(c)No Purchaser Designated Director shall be limited in any manner by Section
3(a) in its ability to act in its capacity as a member of the Board, including
the manner in

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which such Purchaser Designated Director (A) may vote on any matter submitted to
the Board, (B) participates in deliberations or discussions of the Board
(including making suggestions or raising issues to the Board) in his or her
capacity as a member of the Board, or (C) may take actions required by his or
her exercise of legal duties and obligations as a member of the Board or refrain
from taking any action prohibited by his or her legal duties and obligations as
a member of the Board.

(d)For the purposes of this Agreement, the term “Permitted Holders” means (i)
Antonio R. Sanchez, III, Eduardo A. Sanchez, Patricio D. Sanchez, Ana Lee
Sanchez Jacobs, and A.R. Sanchez, Jr., (ii) any spouse or descendant of any
individual named in (i), (iii) any other natural person who is related to, or
who has been adopted by, any such individual or such individual’s spouse
referenced in (i)-(ii) above within the second degree of kinship, (iv) any
member of SP Holdings, LLC a Delaware limited liability company and (v) any
Person controlled by any one or more of the foregoing.

(e)For the purposes of Section 3(a), Purchaser’s Affiliates shall not include
(i) any portfolio company of Purchaser that is not controlled (as defined in the
definition of “Affiliate” contained in the Partnership Agreement) by Purchaser,
unless such portfolio company is a holder of Class B Preferred Units, or (ii)
any employee, officer or director of a portfolio company that is not an
employee, officer or director of Purchaser.

Section 4.Miscellaneous.

(a)Entire Agreement.  This Agreement is intended by the Parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the Parties hereto in respect of
the subject matter contained herein.  There are no restrictions, promises,
warranties or undertakings other than those set forth or referred to herein with
respect to the rights granted by the Sanchez Entities or any of their Affiliates
or the Purchaser or any of its Affiliates set forth herein.  This Agreement
supersedes all prior agreements and understandings between the Parties with
respect to the subject matter hereof.

(b)Notices.  All notices and demands provided for in this Agreement shall be in
writing and shall be given as provided in Section 6.07 of the Purchase
Agreement.

(c)Interpretation.  Section references in this Agreement are references to the
corresponding Section to this Agreement, unless otherwise specified.  All
references to instruments, documents, contracts and agreements are references to
such instruments, documents, contracts and agreements as the same may be
amended, supplemented and otherwise modified from time to time, unless otherwise
specified.  The word “including” shall mean “including but not limited to” and
shall not be construed to limit any general statement that it follows to the
specific or similar items or matters immediately following it.  Whenever any
determination, consent or approval is to be made or given by a Party, such
action shall be in such Party’s sole discretion, unless otherwise specified in
this Agreement.  If any provision in this Agreement is held to be illegal,
invalid, not binding or unenforceable, (i) such provision shall be fully
severable and this Agreement shall be construed and enforced as if such illegal,
invalid, not binding or unenforceable provision had never comprised a part of
this Agreement, and the remaining provisions shall remain in full force and
effect and (ii) the Parties hereto shall negotiate in good faith to modify this

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Agreement so as to effect the original intent of the Parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.  When calculating the period of time before which, within which or
following which any act is to be done or step taken pursuant to this Agreement,
the date that is the reference date in calculating such period shall be
excluded, and if the last day of such period is a non-Business Day, the period
in question shall end on the next succeeding Business Day.  Any words imparting
the singular number only shall include the plural and vice versa.  The words
such as “herein,” “hereinafter,” “hereof” and “hereunder” refer to this
Agreement as a whole and not merely to a subdivision in which such words appear
unless the context otherwise requires.  The division of this Agreement into
Sections and other subdivisions and the insertion of headings are for
convenience of reference only and shall not affect or be utilized in construing
or interpreting this Agreement.

(d)Governing Law; Submission to Jurisdiction.  This Agreement, and all claims or
causes of action (whether in contract or tort) that may be based upon, arise out
of or relate to this Agreement or the negotiation, execution or performance of
this Agreement (including any claim or cause of action based upon, arising out
of or related to any representation or warranty made in or in connection with
this Agreement), will be construed in accordance with and governed by the Laws
of the State of Delaware without regard to principles of conflicts of Laws.  Any
action against any Party relating to the foregoing shall be brought in any
federal or state court of competent jurisdiction located within the State of
Delaware, and the Parties hereto hereby irrevocably submit to the non-exclusive
jurisdiction of any federal or state court located within the State of Delaware
over any such action.  Each of the Parties hereby irrevocably waives, to the
fullest extent permitted by applicable Law, any objection that it may now or
hereafter have to the laying of venue of any such dispute brought in such court
or any defense of inconvenient forum for the maintenance of such dispute.  Each
of the Parties hereto agrees that a judgment in any such dispute may be enforced
in other jurisdictions by suit on the judgment or in any other manner provided
by Law.

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

(f)No Waiver; Modifications in Writing. 

8

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

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

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

(h)Binding Effect; Assignment.  This Agreement will be binding upon and inure to
the benefit of the Parties hereto and their respective successors and permitted
assigns, but will not be assignable or delegable by any Party hereto without the
prior written consent of each of the other Parties.

(i)Independent Counsel.  Each of the Parties acknowledges that it has been
represented by independent counsel of its choice throughout all negotiations
that have preceded the execution of this Agreement and that it has executed the
same with consent and upon the advice of said independent counsel.  Each Party
and its counsel cooperated in the drafting and preparation of this Agreement and
the documents referred to herein, and any and all drafts relating thereto will
be deemed the work product of the Parties and may not be construed against any
Party by reason of its preparation.  Accordingly, any rule of Law or any legal
decision that would require interpretation of any ambiguities in this Agreement
against the Party that drafted it is of no application and is hereby expressly
waived. 

(j)Specific Enforcement.  Each of the Parties acknowledges and agrees that
monetary damages would not adequately compensate an injured Party for the breach
of this Agreement by any Party, that this Agreement shall be specifically
enforceable and that any breach or threatened breach of this Agreement shall be
the proper subject of a temporary or permanent injunction or restraining order
without a requirement of posting bond.  Furthermore, each Party

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hereto waives any claim or defense that there is an adequate remedy at law for
such breach or threatened breach.

(k)Transfer of Board Rights; Aggregation. The right to appoint a Purchaser
Designated Director granted to the Purchaser under Section 1 of this Agreement
may be transferred or assigned by the Purchaser to one or more of its
Affiliates, subject to the transfer restrictions provided in Section 4.7(e) of
the Partnership Agreement; provided, however, that (a) the Partnership is given
written notice prior to any said transfer or assignment, stating the name and
address of each of the transferee or assignee and identifying the securities
with respect to which such rights are being transferred or assigned, (b) each
such transferee or assignee assumes in writing responsibility for its portion of
the obligations of the Purchaser under this Agreement and (c) to the extent such
right is transferred or assigned to more than one Person, such right shall be
exercised by those Persons holding a majority of the Class B Preferred Units,
acting collectively.

(l)Further Assurances.  Each of the Parties hereto shall, from time to time and
without further consideration, execute such further instruments and take such
other actions as any other Party hereto shall reasonably request in order to
fulfill its obligations under this Agreement to effectuate the purposes of this
Agreement.

[Signature Page Follows]

 

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

 

 

 

 

Sanchez Production Partners GP LLC

 

 

 

 

 

By:

 

 

Name:

Charles C. Ward

 

Title:

Chief Financial Officer

 

 

 

 

 

 

SANCHEZ PRODUCTION PARTNERS LP

 

 

 

By:

Sanchez Production Partners GP LLC,
its general partner

 

 

By:

 

 

Name:

Charles C. Ward

 

Title:

Chief Financial Officer

 

 

 

 

 

purchaser:

 

 

 

[STONEPEAK]

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

[Signature Page to Board Representation and Standstill Agreement]

 

 

 

 

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Final Form

Exhibit E

 

EXHIBIT E

FORM OF REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT

BY AND AMONG

SANCHEZ PRODUCTION PARTNERS LP

AND

THE PURCHASERS NAMED ON SCHEDULE A HERETO

 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of September [___], 2015, by and among Sanchez Production Partners LP, a
Delaware limited partnership (the “Partnership”), and each of the Persons set
forth on Schedule A to this Agreement (each, a “Purchaser” and collectively, the
“Purchasers”).

WHEREAS, this Agreement is made in connection with the closing of the issuance
and sale of the Class B Preferred Units pursuant to the Class B Preferred Unit
Purchase Agreement, dated as of September [___], 2015 (the date of such closing,
the “Closing Date”), by and among the Partnership and the Purchasers (the
“Preferred Unit Purchase Agreement”); and

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

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

Article I
DEFINITIONS

Section 1.01Definitions. Capitalized terms used herein without definition shall
have the meanings given to them in the Preferred Unit Purchase Agreement. The
terms set forth below are used herein as so defined:

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly through one or more intermediaries controls, is controlled by or is
under common control with, the Person in question. As used herein, the term
“control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise. For avoidance of
doubt, for purposes of this Agreement, the Partnership, on the one hand, and the
Purchasers, on the other hand, shall not be considered Affiliates.

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

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

 

 

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

“Class A Holders” has the meaning specified therefor in Section 2.02(b) of this
Agreement.

“Class A Registrable Securities” has the meaning specified therefor in Section
2.02(b) of this Agreement.

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

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

“Common Unit Price” means the volume-weighted average closing price of the
Common Units on the principal market on which the Common Units are then traded
during the ten (10) Trading Days (as defined in the Amended Partnership
Agreement) prior to the date of measurement.

“Common Units” has the meaning specified therefor in Article I of the Amended
Partnership Agreement.

“Effectiveness Period” means the period from the date that the Shelf
Registration Statement becomes or is declared effective until the date as of
which all Registrable Securities are sold by the Purchasers.

“Exchange Act” means the Securities and Exchange Act of 1934, as amended.

“Existing Class A Preferred Registration Rights Agreements” means that certain
(a) Registration Rights Agreement dated as of March 31, 2015 between the
Partnership and the purchasers named therein and (b) Registration Rights
Agreement dated as of April 15, 2015 between the Partnership and the purchasers
named therein.

“General Partner” means Sanchez Production Partners GP LLC, a Delaware limited
liability company.

“Governmental Authority” means any federal, state, local or foreign government,
or other governmental, regulatory or administrative authority, agency or
commission or any court, tribunal, or judicial or arbitral body.

“Holder” means the record holder of any Registrable Securities. For the
avoidance of doubt, in accordance with Section 3.05 of this Agreement, for
purposes of determining the availability of any rights and applicability of any
obligations under this Agreement, including calculating the amount of
Registrable Securities held by a Holder, a Holder’s Registrable Securities shall
be aggregated together with all Registrable Securities held by other Holders who
are Affiliates of such Holder.

“Holder Underwriter Registration Statement” has the meaning specified therefor
in Section 2.05(p) of this Agreement.

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“In-Kind LD Amount” has the meaning specified therefor in Section 2.01(b) of
this Agreement.

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

“Launch” has the meaning specified therefor in Section 2.04 of this Agreement.

“Law” means any statute, law, ordinance, regulation, rule, order, code,
governmental restriction, decree, injunction or other requirement of law, or any
judicial or administrative interpretation thereof,  of any Governmental
Authority.

“LD Period” has the meaning specified therefor in Section 2.01(b) of this
Agreement.

“LD Termination Date” has the meaning specified therefor in Section 2.01(b) of
this Agreement.

“Liquidated Damages” has the meaning specified therefor in Section 2.01(b) of
this Agreement.

“Liquidated Damages Multiplier” means the product of the Common Unit Price times
the number of Common Units held by such Holder that may not be sold without
restriction and without the need for current public information pursuant to any
section of Rule 144 (or any successor or similar provision adopted by the
Commission then in effect) under the Securities Act.

“Losses” has the meaning specified therefor in Section 2.09(a) of this
Agreement.

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

“NYSE MKT” means the NYSE MKT LLC.

“Opt-Out Notice” has the meaning specified therefor in Section 2.02(a) of this
Agreement.

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

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

“PIK Units” means the “Class B Preferred PIK Units” (as defined in the Amended
Partnership Agreement).

“Post-Launch Withdrawing Selling Holders” has the meaning specified therefor in
Section 2.04 of this Agreement.

“Preferred Units” means Class B Preferred Units (including PIK Units)
representing limited partner interests of the Partnership, as described in the
Amended Partnership Agreement

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and issued pursuant to the Preferred Unit Purchase Agreement or the Amended
Partnership Agreement, as the case may be.

“Preferred Unit Purchase Agreement” has the meaning specified therefor in the
recitals of this Agreement.

“Purchaser” and “Purchasers” have the meanings specified therefor in the
introductory paragraph of this Agreement.

“Registrable Securities” means (i) the Common Units issued or issuable upon the
conversion of the Preferred Units (including PIK Units) acquired by the
Purchasers pursuant to the Preferred Unit Purchase Agreement or, in the case of
PIK Units, pursuant to the Amended Partnership Agreement, (ii) any Common Units
issued as Liquidated Damages pursuant to Section 2.01(b) of this Agreement, and
includes any type of interest issued to the Holder as a result of Section 3.04
of this Agreement and (iii) until such time as the applicable Purchaser owns
less than an aggregate of 20% of the Common Units, any other Common Unit issued
to or acquired by the Purchasers after the date hereof.

“Registrable Securities Amount” means the calculation based on the product of
the Common Unit Price times the number of Registrable Securities.

“Registration Expenses” has the meaning specified therefor in Section 2.08(c) of
this Agreement.

“Registration Threshold” has the meaning specified therefor in Section 2.01(a)
of this Agreement.

“Securities Act” means the Securities Act of 1933, as amended.

“Selling Expenses” has the meaning specified therefor in Section 2.08(c) of this
Agreement.

“Selling Holder” means a Holder who is selling Registrable Securities pursuant
to a registration statement.

“Selling Holder Indemnified Persons” has the meaning specified therefor in
Section 2.09(a) of this Agreement.

“Shelf Registration Statement” has the meaning specified therefor in Section
2.01(a) of this Agreement.

“Stonepeak Holder” means Stonepeak Catarina Holdings LLC.

“Target Effective Date” has the meaning specified therefor in Section 2.01(a) of
this Agreement.

“Threshold Amount” means $20,000,000 (calculated based on the Registrable
Securities Amount).

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

“Underwritten Offering Notice” has the meaning specified therefor in Section
2.04 of this Agreement.

“Walled-Off Person” has the meaning specified therefor in Section 2.07 of this
Agreement.

Section 1.02Registrable Securities. Any Registrable Security will cease to be a
Registrable Security (a) when a registration statement covering such Registrable
Security becomes or has been declared effective by the Commission and such
Registrable Security has been sold or disposed of pursuant to such effective
registration statement; (b) when such Registrable Security has been sold or
disposed of (excluding transfers or assignments by a Holder to an Affiliate or
to another Holder or any of its Affiliates or to any assignee or transferee to
whom the rights under this Agreement have been transferred pursuant to Section
2.11) pursuant to Rule 144 (or any successor or similar provision adopted by the
Commission then in effect) under the Securities Act under circumstances in which
all of the applicable conditions of such Rule (then in effect) are met; (c) when
such Registrable Security is held by the Partnership or one of its subsidiaries
or Affiliates; provided, however, that none of the Purchasers or their
Affiliates shall be considered an Affiliate of the Partnership; or (d) when such
Registrable Security has been sold or disposed of in a private transaction in
which the transferor’s rights under this Agreement are not assigned to the
transferee of such securities pursuant to Section 2.11 hereof.

Article II
REGISTRATION RIGHTS

Section 2.01Registration. 

(a)Demand Rights.  A Holder has the option and right, exercisable by providing
written notice to the Partnership, to require the Partnership to prepare and
file a registration statement under the Securities Act to permit the public
resale of all Registrable Securities from time to time as permitted by Rule 415
(or any successor or similar provision adopted by the Commission then in effect)
under the Securities Act, on the terms and conditions specified in this Section
2.01 (a “Shelf Registration Statement”); provided, however, that the right of a
Holder (other than the Stonepeak Holder and its Affiliates) to request such
filing shall expire at any time that such Holder and its Affiliates beneficially
own less than $5,000,000 of Registrable Securities (calculated based on the
Current Market Price (as defined in the Amended Partnership Agreement)) (the
“Registration Threshold”).  A Shelf Registration Statement filed pursuant to
this Section 2.01 shall be on such registration form of the Commission as is
permissible under the Securities Act; provided, however, that the Partnership
shall not be required to file a Shelf Registration Statement on Form S-1 unless
a Holder either delivers to the Partnership an Underwritten Offering Notice or
an irrevocable election to convert Class B Preferred Units into Common Units in
an amount not less than the Registration Threshold.  The Partnership shall use
commercially reasonable efforts to cause the Shelf Registration Statement filed
pursuant to this Section 2.01(a) to become or be declared effective as soon as
practicable thereafter, but in no event

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later than 210 calendar days after the notice is provided pursuant to the first
sentence of this Section 2.01(a) (the “Target Effective Date”).  The Shelf
Registration Statement shall provide for the resale pursuant to any method or
combination of methods legally available to, and requested by, the Holders
covered by such Shelf Registration Statement, including by way of an
Underwritten Offering.  As soon as practicable following the date on which the
Shelf Registration Statement becomes effective, but in any event within two (2)
Business Days of such date, the Partnership will notify the Holders of the
effectiveness of such Shelf Registration Statement.  During the Effectiveness
Period, the Partnership shall use commercially reasonable efforts to cause such
Shelf Registration Statement filed pursuant to this Section 2.01(a) to remain
effective, and to be supplemented and amended to the extent necessary to ensure
that such Shelf Registration Statement is available or, if not available, that
another registration statement is available for the resale of the Registrable
Securities until all Registrable Securities have ceased to be Registrable
Securities. 

When effective, a Shelf Registration Statement (including the documents
incorporated therein by reference) will comply as to form in all material
respects with all applicable requirements of the Securities Act and the Exchange
Act and will not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading (in the case of any prospectus contained in
such Shelf Registration Statement, in the light of the circumstances under which
a statement is made).  The Partnership shall not include in a Shelf Registration
Statement contemplated by this Section 2.01(a) any securities which are not
Registrable Securities, other than Common Units that are to be offered and sold
for the Partnership’s own account pursuant to an Underwritten Offering, without
the prior written consent of the Stonepeak Holder, which consent shall not be
unreasonably withheld or delayed.

(b)Failure to Go Effective. If a Shelf Registration Statement required by
Section 2.01(a) is not declared effective by the Target Effective Date, then
each Holder shall be entitled to a payment (with respect to the Registrable
Securities of each such Holder subject to such Shelf Registration Statement), as
liquidated damages and not as a penalty, of 0.25% of the Liquidated Damages
Multiplier per 30-day period, that shall accrue daily, for the first 60 days
following such Target Effective Date, increasing by an additional 0.25% of the
Liquidated Damages Multiplier per 30-day period, that shall accrue daily, for
each subsequent 60 days (i.e., 0.5% for 61-120 days, 0.75% for 121-180 days and
1.0% thereafter), up to a maximum of 1.00% of the Liquidated Damages Multiplier
per 30-day period (the “Liquidated Damages”). The Liquidated Damages payable
pursuant to the immediately preceding sentence shall be payable within ten
(10) Business Days after the end of each such 30-day period.  Any Liquidated
Damages shall be paid to each Holder in immediately available funds; provided,
however, that if the Partnership certifies that it is unable to pay Liquidated
Damages in cash because such payment would result in a breach under a credit
facility or other debt instrument filed as an exhibit to the Partnership’s
periodic reports filed with the Commission, then the Partnership shall pay such
Liquidated Damages using as much cash as permitted without breaching any such
credit facility or other debt instrument and shall pay the balance of such
Liquidated Damages (the “In-Kind LD Amount”) in kind in the form of the issuance
of additional Common Units.  Upon any issuance of Common Units as Liquidated
Damages, the Partnership shall promptly (i) prepare and file an amendment to
such Shelf Registration Statement prior to its effectiveness adding such Common
Units to such Shelf Registration Statement as additional Registrable Securities
and (ii) prepare and file a supplemental

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listing application with the NYSE MKT (or such other market on which the
Registrable Securities are then listed and traded) to list such additional
Common Units. The determination of the number of Common Units to be issued as
Liquidated Damages shall be equal to the In-Kind LD Amount divided by the volume
weighted average closing price of the Common Units (as reported on the NYSE MKT
or the principal securities market on which the Common Units are then traded)
for the consecutive ten (10) trading day period ending on the close of trading
on the trading day immediately preceding the date on which the Liquidated
Damages payment is due, less a discount to such average closing price of 2.00%.
The accrual of Liquidated Damages to a Holder shall cease (a “LD Termination
Date,” and, each such period beginning on a Target Effective Date and ending on
a LD Termination Date being, a “LD Period”) at the earlier of (i) such Shelf
Registration Statement becoming effective and (ii) when such Holder no longer
holds Registrable Securities.  Any amount of Liquidated Damages shall be
prorated for any period of less than 30 calendar days accruing during a LD
Period.  If the Partnership is unable to cause a Shelf Registration Statement to
go effective by the Target Effective Date as a result of an acquisition, merger,
reorganization, disposition or other similar transaction, then the Partnership
may request a waiver of the Liquidated Damages, and each Holder may individually
grant or withhold its consent to such request in its discretion.  For the
avoidance of doubt, nothing in this Section 2.01(b) shall relieve the
Partnership from its obligations under Section 2.01(a). 

Section 2.02Piggyback Rights. 

(a)Participation. If the Partnership proposes to file during the Effectiveness
Period (i) a shelf registration statement other than a Shelf Registration
Statement contemplated by Section 2.01(a), (ii) a prospectus supplement to an
effective shelf registration statement, other than a Shelf Registration
Statement contemplated by Section 2.01(a) and Holders may be included in such
Underwritten Offering without the filing of a post-effective amendment thereto,
or (iii) a registration statement, other than a shelf registration statement, in
each case, for the sale of Common Units in an Underwritten Offering for its own
account or that of another Person, or both, then as soon as practicable
following the selection of the Managing Underwriter for such Underwritten
Offering, the Partnership shall give notice (including, but not limited to,
notification by electronic mail) of such Underwritten Offering to each Holder
(together with its Affiliates) holding at least the Threshold Amount of the
then-outstanding Registrable Securities and such notice shall offer such Holders
the opportunity to include in such Underwritten Offering such number of
Registrable Securities (the “Included Registrable Securities”) as each such
Holder may request in writing; provided, however, that (A) the Partnership shall
not be required to provide such opportunity to any such Holder that does not
offer a minimum of the Threshold Amount of Registrable Securities, and (B) if
the Partnership has been advised by the Managing Underwriter that the inclusion
of Registrable Securities for sale for the benefit of the Holders will have an
adverse effect on the price, timing or distribution of the Common Units in the
Underwritten Offering, then (i) if no Registrable Securities can be included in
the Underwritten Offering in the opinion of the Managing Underwriter, the
Partnership shall not be required to offer such opportunity to the Holders or
(ii) if any Registrable Securities can be included in the Underwritten Offering
in the opinion of the Managing Underwriter, then the amount of Registrable
Securities to be offered for the accounts of Holders shall be determined based
on the provisions of Section 2.02(b). Any notice required to be provided
pursuant to this Section 2.02(a) to Holders shall be provided on a Business Day
and receipt of such notice shall be confirmed by the Holder. Each such Holder
shall then have two (2) Business Days (or one (1) Business Day in connection
with

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any overnight or bought Underwritten Offering) after notice has been delivered
to request in writing the inclusion of Registrable Securities in the
Underwritten Offering. If no written request for inclusion from a Holder is
received within the specified time, each such Holder shall have no further right
to participate in such Underwritten Offering. If, at any time after giving
written notice of its intention to undertake an Underwritten Offering and prior
to the closing of such Underwritten Offering, the Partnership shall determine
for any reason not to undertake or to delay such Underwritten Offering, the
Partnership may, at its election, give written notice of such determination to
the Selling Holders and, (x) in the case of a determination not to undertake
such Underwritten Offering, shall be relieved of its obligation to sell any
Included Registrable Securities in connection with such terminated Underwritten
Offering, and (y) in the case of a determination to delay such Underwritten
Offering, shall be permitted to delay offering any Included Registrable
Securities as part of such Underwritten Offering for the same period as the
delay in the Underwritten Offering. Any Selling Holder shall have the right to
withdraw such Selling Holder’s request for inclusion of such Selling Holder’s
Registrable Securities in such Underwritten Offering by giving written notice to
the Partnership of such withdrawal at or prior to the time of pricing of such
Underwritten Offering. Any Holder may deliver written notice (an “Opt-Out
Notice”) to the Partnership requesting that such Holder not receive notice from
the Partnership of any proposed Underwritten Offering; provided, however, that
such Holder may later revoke any such Opt-Out Notice in writing.  Following
receipt of an Opt-Out Notice from a Holder (unless subsequently revoked), the
Partnership shall not be required to deliver any notice to such Holder pursuant
to this Section 2.02(a) and such Holder shall no longer be entitled to
participate in Underwritten Offerings by the Partnership pursuant to this
Section 2.02(a). 

(b)Priority. Other than situations outlined in Section 2.01 of this Agreement,
if the Managing Underwriter of any proposed Underwritten Offering involving
Included Registrable Securities advises the Partnership, or the Partnership
reasonably determines, that the total amount of Common Units that the Selling
Holders and any other Persons intend to include in such offering exceeds the
number that can be sold in such offering without being likely to have an adverse
effect on the price, timing or distribution of the Common Units offered or the
market for the Common Units, then the Common Units to be included in such
Underwritten Offering shall include the number of Registrable Securities that
such Managing Underwriter advises the Partnership can be sold without having
such adverse effect, with such number to be allocated (i) first, to the
Partnership or other party requesting such registration, (ii) second, pro rata
among the Selling Holders who have requested participation in such Underwritten
Offering and any “Holders” (as defined in the Existing Class A Preferred
Registration Rights Agreements) under the Existing Class A Preferred
Registration Rights Agreements (“Class A Holders”) requesting such registration,
based on the percentage derived by dividing (x) the number of Registrable
Securities proposed to be sold by such Selling Holder and the number of
“Registrable Securities” (as defined in the Existing Class A Preferred
Registration Rights Agreements) (“Class A Registrable Securities”) proposed to
be sold by the Class A Holders by (y) the aggregate number of Registrable
Securities proposed to be sold by all Selling Holders and Class A Registrable
Securities proposed to be sold by all Class A Holders and (iii) third, to any
other holder of securities of the Partnership having rights of registration that
are neither expressly senior nor subordinated to the Holders in respect of the
Registrable Securities, allocated among such holders in such manner as they may
agree. 

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(c)Termination of Piggyback Registration Rights. Each Holder’s rights under
Section 2.02 shall terminate upon such Holder (together with its Affiliates)
ceasing to hold at least the Threshold Amount of Registrable Securities.

Section 2.03Delay Rights.  

Notwithstanding anything to the contrary contained herein, the Partnership may,
upon written notice to any Selling Holder whose Registrable Securities are
included in a Shelf Registration Statement or other registration statement
contemplated by this Agreement, suspend such Selling Holder’s use of any
prospectus which is a part of such Shelf Registration Statement or other
registration statement (in which event the Selling Holder shall discontinue
sales of the Registrable Securities pursuant to such Shelf Registration
Statement or other registration statement contemplated by this Agreement but may
settle any previously made sales of Registrable Securities) if (i) the
Partnership is pursuing an acquisition, merger, reorganization, disposition or
other similar transaction and the Partnership determines in good faith that the
Partnership’s ability to pursue or consummate such a transaction would be
materially adversely affected by any required disclosure of such transaction in
such Shelf Registration Statement or other registration statement or (ii) the
Partnership has experienced some other material non-public event the disclosure
of which at such time, in the good faith judgment of the Partnership, would
materially adversely affect the Partnership; provided, however, that in no event
shall the Selling Holders be suspended from selling Registrable Securities
pursuant to such Shelf Registration Statement or other registration statement
for a period that exceeds an aggregate of 60 calendar days in any 180-calendar
day period or 105 calendar days in any 365-calendar day period, in each case,
exclusive of days covered by any lock-up agreement executed by a Selling Holder
in connection with any Underwritten Offering. Upon disclosure of such
information or the termination of the condition described above, the Partnership
shall provide prompt notice to the Selling Holders whose Registrable Securities
are included in such Shelf Registration Statement and shall promptly terminate
any suspension of sales it has put into effect and shall take such other
reasonable actions to permit registered sales of Registrable Securities as
contemplated in this Agreement.

If (i) the Selling Holders shall be prohibited from selling their Registrable
Securities under a Shelf Registration Statement or other registration statement
contemplated by this Agreement as a result of a suspension pursuant to the
immediately preceding paragraph in excess of the periods permitted therein or
(ii) a Shelf Registration Statement or other registration statement contemplated
by this Agreement is filed and declared effective but, during the Effectiveness
Period, shall thereafter cease to be effective or fail to be usable for its
intended purpose without being succeeded within 20 Business Days by a
post-effective amendment thereto, a supplement to the prospectus or a report
filed with the Commission pursuant to Section 13(a), 13(c), 14 or l5(d) of the
Exchange Act, then, until the suspension is lifted or a post-effective
amendment, supplement or report is filed with the Commission, but not including
any day on which a suspension is lifted or such amendment, supplement or report
is filed and declared effective, if applicable, the Partnership shall pay the
Selling Holders an amount equal to the Liquidated Damages, following the earlier
of (x) the date on which the suspension period exceeded the permitted period and
(y) the twenty-first (21st) Business Day after such Shelf Registration Statement
or other registration statement contemplated by this Agreement ceased to be
effective or failed to be useable for its intended purposes, as liquidated
damages and not as a penalty (for purposes of calculating Liquidated Damages,
the date in (x) or (y) above shall be deemed the “90th day,” as used in the

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definition of Liquidated Damages).  For purposes of this paragraph, a suspension
shall be deemed lifted with respect to a Selling Holder on the date that notice
that the suspension has been terminated is delivered to such Selling
Holder.  Liquidated Damages shall cease to accrue pursuant to this paragraph
upon the earlier of (i) a suspension being deemed lifted and (ii) when such
Selling Holder no longer holds Registrable Securities included in such Shelf
Registration Statement.

Section 2.04Underwritten Offerings.

In the event that one or more Holders elects to include, other than pursuant to
Section 2.02 of this Agreement, at least the Threshold Amount of the
then-outstanding Registrable Securities under a Shelf Registration Statement
pursuant to an Underwritten Offering, the Partnership shall, upon request by
such Holders (such request, an “Underwritten Offering Notice”), retain
underwriters in order to permit such Holders to effect such sale through an
Underwritten Offering; provided, however, that the Holders shall have the option
and right, to require the Partnership to effect not more than three (3)
Underwritten Offerings, pursuant to and subject to the conditions of this
Section 2.04 of this Agreement.  Upon delivery of such Underwritten Offering
Notice to the Partnership, the Partnership shall as soon as practicable (but in
no event later than one (1) calendar day following the date of delivery of the
Underwritten Offering Notice to the Partnership) deliver notice of such
Underwritten Offering Notice to all other Holders who shall then have two (2)
calendar days from the date that such notice is given to them to notify the
Partnership in writing of the number of Registrable Securities held by such
Holder that they want to be included in such Underwritten Offering.  For the
avoidance of doubt, any Holders notified about an Underwritten Offering by the
Partnership after the Partnership has received the corresponding Underwritten
Offering Notice may participate in such Underwritten Offering, but shall not
count toward the Threshold Amount of Registrable Securities necessary to request
an Underwritten Offering pursuant to an Underwritten Offering Notice. In
connection with any Underwritten Offering under this Agreement, the Holders of a
majority of the Registrable Securities being disposed of pursuant to the
Underwritten Offering shall be entitled to select the Managing Underwriter or
Underwriters for such Underwritten Offering, subject to the reasonable consent
of the Partnership. In connection with an Underwritten Offering contemplated by
this Agreement in which a Selling Holder participates, each Selling Holder and
the Partnership shall be obligated to enter into an underwriting agreement that
contains such representations, covenants, indemnities and other rights and
obligations as are customary in underwriting agreements for firm commitment
offerings of securities. No Selling Holder may participate in such Underwritten
Offering unless such Selling Holder agrees to sell its Registrable Securities on
the basis provided in such underwriting agreement and completes and executes all
questionnaires, powers of attorney, indemnities and other documents reasonably
required under the terms of such underwriting agreement. Each Selling Holder
may, at its option, require that any or all of the representations and
warranties by, and the other agreements on the part of, the Partnership to and
for the benefit of such underwriters also be made to and for such Selling
Holder’s benefit and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement also be
conditions precedent to its obligations. No Selling Holder shall be required to
make any representations or warranties to or agreements with the Partnership or
the underwriters other than representations, warranties or agreements regarding
such Selling Holder, its authority to enter into such underwriting agreement and
to sell, and its ownership of, the securities whose offer and resale will be
registered, on its behalf, its intended method of distribution and any other
representation required by Law. If any Selling Holder disapproves of the terms
of an underwriting, such Selling

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Holder may elect to withdraw therefrom by notice to the Partnership and the
Managing Underwriter; provided, however, that any such withdrawal must be made
no later than the time of pricing of such Underwritten Offering. If all Selling
Holders withdraw from an Underwritten Offering prior to the pricing of such
Underwritten Offering, the events will not be considered an Underwritten
Offering and will not decrease the number of available Underwritten Offerings
the Selling Holders have the right and option to request under this Section
2.04.  No such withdrawal or abandonment shall affect the Partnership’s
obligation to pay Registration Expenses; provided, however, that if (i) certain
Selling Holders withdraw from an Underwritten Offering after the public
announcement at launch (the “Launch”) of such Underwritten Offering (such
Selling Holders, the “Post-Launch Withdrawing Selling Holders”), and (ii) all
Selling Holders withdraw from such Underwritten Offering prior to pricing, then
the Post-Launch Withdrawing Selling Holders shall pay for all reasonable
Registration Expenses incurred by the Partnership during the period from the
Launch of such Underwritten Offering until the time all Selling Holders withdraw
from such Underwritten Offering.

Section 2.05Sale Procedures. 

In connection with its obligations under this Article II, the Partnership will,
as expeditiously as possible:

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

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

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

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sale or other disposition of the Registrable Securities covered by such Shelf
Registration Statement or other registration statement;

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

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

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

(g)upon request and subject to appropriate confidentiality obligations, furnish
to each Selling Holder copies of any and all transmittal letters or other
correspondence with the Commission or any other governmental agency or
self-regulatory body or other body having

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jurisdiction (including any domestic or foreign securities exchange) relating to
such offering of Registrable Securities;

(h)in the case of an Underwritten Offering, use commercially reasonable efforts
to furnish upon request, (i) an opinion of counsel for the Partnership dated the
date of the closing under the underwriting agreement and (ii) a “cold comfort”
letter, dated the pricing date of such Underwritten Offering and a letter of
like kind dated the date of the closing under the underwriting agreement, in
each case, signed by the independent public accountants who have certified the
Partnership’s financial statements included or incorporated by reference into
the applicable registration statement, and each of the opinion and the “cold
comfort” letter shall be in customary form and covering substantially the same
matters with respect to such registration statement (and the prospectus and any
prospectus supplement included therein) as have been customarily covered in
opinions of issuer’s counsel and in accountants’ letters delivered to the
underwriters in Underwritten Offerings of securities by the Partnership and such
other matters as such underwriters and Selling Holders may reasonably request;

(i)otherwise use commercially reasonable efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement, covering a
period of twelve months beginning within three months after the effective date
of such Shelf Registration Statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder;

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

(k)use commercially reasonable efforts to cause all such Registrable Securities
registered pursuant to this Agreement to be listed on each securities exchange
or nationally recognized quotation system on which the Common Units issued by
the Partnership are then listed;

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

(m)provide a transfer agent and registrar for all Registrable Securities covered
by such registration statement not later than the effective date of such
registration statement;

(n)enter into customary agreements and take such other actions as are reasonably
requested by the Selling Holders or the underwriters, if any, in order to
expedite or facilitate the disposition of such Registrable Securities
(including, making appropriate officers of the General Partner available to
participate in any “road show” presentations before analysts, and other
customary marketing activities (including one-on-one meetings with prospective
purchasers of the

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Registrable Securities)), provided, however, that in the event the Partnership,
using commercially reasonable efforts, is unable to make such appropriate
officers of the General Partner available to participate in connection with any
“road show” presentations and other customary marketing activities (whether in
person or otherwise), the Partnership shall make such appropriate officers
available to participate via conference call or other means of communication in
connection with no more than one (1) “road show” presentation per Underwritten
Offering);

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

(p)If any Holder could reasonably be deemed to be an “underwriter,” as defined
in Section 2(a)(11) of the Securities Act, in connection with the Shelf
Registration Statement and any amendment or supplement thereof (a “Holder
Underwriter Registration Statement”), then the Partnership will reasonably
cooperate with such Holder in allowing such Holder to conduct customary
“underwriter’s due diligence” with respect to the Partnership and satisfy its
obligations in respect thereof.  In addition, at any Holder’s request, the
Partnership will furnish to such Holder, on the date of the effectiveness of the
Holder Underwriter Registration Statement and thereafter from time to time on
such dates as such Holder may reasonably request (provided that such request
shall not be more frequently than on an annual basis unless such Holder is
offering Registrable Securities pursuant to a Holder Underwriter Registration
Statement), (i) a “cold comfort” letter, dated such date, from the Partnership’s
independent certified public accountants in form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering, addressed to such Holder, (ii) an opinion, dated
as of such date, of counsel representing the Partnership for purposes of the
Holder Underwriter Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, including standard “10b-5”
negative assurance for such offering, addressed to such Holder and (iii) a
standard officer’s certificate from the chief executive officer or chief
financial officer, or other officers serving such functions, of the general
partner of the Partnership addressed to the Holder.  The Partnership will also
permit legal counsel to such Holder to review and comment upon any such Holder
Underwriter Registration Statement at least five Business Days prior to its
filing with the Commission and all amendments and supplements to any such Holder
Underwriter Registration Statement with a reasonable number of days prior to
their filing with the Commission and not file any Holder Underwriter
Registration Statement or amendment or supplement thereto in a form to which
such Holder’s legal counsel reasonably objects.  Each Selling Holder, upon
receipt of notice from the Partnership of the happening of any event of the kind
described in subsection (f) of this Section 2.05, shall forthwith discontinue
offers and sales of the Registrable Securities until such Selling Holder’s
receipt of the copies of the supplemented or amended prospectus contemplated by
subsection (f) of this Section 2.05 or until it is advised in writing by the
Partnership that the use of the prospectus may be resumed and has received
copies of any additional or supplemental filings incorporated by reference in
the prospectus, and, if so directed by the Partnership, such Selling Holder
will, or will request the managing underwriter or

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underwriters, if any, to deliver to the Partnership (at the Partnership’s
expense) all copies in their possession or control, other than permanent file
copies then in such Selling Holder’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.

Notwithstanding anything to the contrary in this Section 2.05, the Partnership
will not name a Holder as an underwriter as defined in Section 2(a)(11) of the
Securities Act in any Shelf Registration Statement or Holder Underwriter
Registration Statement, as applicable, without such Holder’s consent. If the
staff of the Commission requires the Partnership to name any Holder as an
underwriter as defined in Section 2(a)(11) of the Securities Act, and such
Holder does not consent thereto, then such Holder’s Registrable Securities shall
not be included on such Shelf Registration Statement or the Holder Underwriter
Registration Statement, as applicable, such Holder shall no longer be entitled
to receive Liquidated Damages under this Agreement with respect to such Holder’s
Registrable Securities, and the Partnership shall have no further obligations
hereunder with respect to Registrable Securities held by such Holder, unless
such Holder has not had an opportunity to conduct customary underwriter’s due
diligence as set forth in subsection (p) of this Section 2.05 with respect to
the Partnership at the time such Holder’s consent is sought.

Each Selling Holder, upon receipt of notice from the Partnership of the
happening of any event of the kind described in subsection (f) of this Section
2.05, shall forthwith discontinue offers and sales of the Registrable Securities
by means of a prospectus or prospectus supplement until such Selling Holder’s
receipt of the copies of the supplemented or amended prospectus contemplated by
subsection (f) of this Section 2.05 or until it is advised in writing by the
Partnership that the use of the prospectus may be resumed and has received
copies of any additional or supplemental filings incorporated by reference in
the prospectus, and, if so directed by the Partnership, such Selling Holder
will, or will request the Managing Underwriter, if any, to deliver to the
Partnership (at the Partnership’s expense) all copies in their possession or
control, other than permanent file copies then in such Selling Holder’s
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice.

Section 2.06Cooperation by Holders.  

The Partnership shall have no obligation to include Registrable Securities of a
Holder in a Shelf Registration Statement or in an Underwritten Offering pursuant
to Section 2.02(a) who has failed to timely furnish such information that the
Partnership determines, after consultation with its counsel, is reasonably
required in order for the registration statement or prospectus supplement, as
applicable, to comply with the Securities Act.

Section 2.07Restrictions on Public Sale by Holders of Registrable Securities. 

Each Holder of Registrable Securities agrees to enter into a customary letter
agreement with underwriters providing such Holder will not effect any public
sale or distribution of Registrable Securities during the 60 calendar day period
beginning on the date of a prospectus or prospectus supplement filed with the
Commission with respect to the pricing of any Underwritten Offering, provided
that (i) the duration of the foregoing restrictions shall be no longer than the
duration of the shortest restriction imposed by the underwriters on the
Partnership or the officers, directors or any other Affiliate of the Partnership
or the General Partner on whom a restriction is

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imposed and (ii) the restrictions set forth in this Section 2.07 shall not apply
to any Registrable Securities that are included in such Underwritten Offering by
such Holder. In addition, this Section 2.07 shall not apply to any Holder that
is not entitled to participate in such Underwritten Offering, whether because
such Holder delivered an Opt-Out Notice prior to receiving notice of the
Underwritten Offering or because such Holder (together with its Affiliates)
holds less than the Threshold Amount of the then-outstanding Registrable
Securities or because the Registrable Securities held by such Holder may be
disposed of without restriction pursuant to any section of Rule 144 (or any
successor or similar provision adopted by the Commission then in effect) under
the Securities Act.  Subject to such Holder’s compliance with its obligations
under the U.S. federal securities laws and its internal policies:  (a) Holder,
for purposes hereof, shall not be deemed to include any employees, subsidiaries
or Affiliates that are effectively walled off by appropriate “Chinese Wall”
information barriers approved by Holder’s legal or compliance department (and
thus have not been privy to any information concerning this transaction) (a
“Walled-Off Person”) and (b) the foregoing covenants in this paragraph shall not
apply to any transaction by or on behalf of Holder that was effected by a
Walled-Off Person in the ordinary course of trading without the advice or
participation of Holder or receipt of confidential or other information
regarding this transaction provided by Holder to such entity.

Section 2.08Expenses. 

(a)Expenses (b). The Partnership will pay all reasonable Registration Expenses
as determined in good faith, including, in the case of an Underwritten Offering,
whether or not any sale is made pursuant to such Underwritten Offering. Each
Selling Holder shall pay its pro rata share of all Selling Expenses in
connection with any sale of its Registrable Securities hereunder. For the
avoidance of doubt, each Selling Holder’s pro rata allocation of Selling
Expenses shall be the percentage derived by dividing (i) the number of
Registrable Securities sold by such Selling Holder in connection with such sale
by (ii) the aggregate number of Registrable Securities sold by all Selling
Holders in connection with such sale. In addition, except as otherwise provided
in Section 2.08 and Section 2.09 hereof, the Partnership shall not be
responsible for legal fees incurred by Holders in connection with the exercise
of such Holders’ rights hereunder.

(c)Certain Definitions. “Registration Expenses” means all expenses incident to
the Partnership’s performance under or compliance with this Agreement to effect
the registration of Registrable Securities on a Shelf Registration Statement
pursuant to Section 2.01(a) or an Underwritten Offering covered under this
Agreement, and the disposition of such Registrable Securities, including,
without limitation, all registration, filing, securities exchange listing and
NYSE MKT fees, all registration, filing, qualification and other fees and
expenses of complying with securities or blue sky laws, fees of the Financial
Industry Regulatory Authority, Inc., fees of transfer agents and registrars, all
word processing, duplicating and printing expenses, any transfer taxes, the fees
and disbursements of counsel and independent public accountants for the
Partnership, including the expenses of any special audits or “cold comfort”
letters required by or incident to such performance and compliance.  “Selling
Expenses” means all underwriting fees, discounts and selling commissions or
similar fees or arrangements allocable to the sale of the Registrable
Securities, and fees and disbursements of counsel to the Selling Holders.

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Section 2.09Indemnification. 

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

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

(c)Notice. Promptly after receipt by an indemnified party hereunder of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be

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made against the indemnifying party hereunder, notify the indemnifying party in
writing thereof, but the omission so to notify the indemnifying party shall not
relieve it from any liability that it may have to any indemnified party other
than under this Section 2.09. In any action brought against any indemnified
party, it shall notify the indemnifying party of the commencement thereof. The
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 2.09 for any legal expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation and of liaison with counsel so selected;
provided, however, that (i) if the indemnifying party has failed to assume the
defense or employ counsel reasonably acceptable to the indemnified party or
(ii) if the defendants in any such action include both the indemnified party and
the indemnifying party and (A) counsel to the indemnified party shall have
concluded that there may be reasonable defenses available to the indemnified
party that are different from or additional to those available to the
indemnifying party or (B) if the interests of the indemnified party reasonably
may be deemed to conflict with the interests of the indemnifying party, then, in
each case, the indemnified party shall have the right to select a separate
counsel and to assume such legal defense and otherwise to participate in the
defense of such action, with the reasonable expenses and fees of such separate
counsel and other reasonable expenses related to such participation to be
reimbursed by the indemnifying party as incurred. Notwithstanding any other
provision of this Agreement, no indemnifying party shall settle any action
brought against any indemnified party with respect to which such indemnified
party is entitled to indemnification hereunder without the consent of the
indemnified party, unless the settlement thereof imposes no liability or
obligation on, and includes a complete and unconditional release from all
liability of, the indemnified party.

(d)Contribution. If the indemnification provided for in this Section 2.09 is
held by a court or government agency of competent jurisdiction to be unavailable
to any indemnified party or is insufficient to hold them harmless in respect of
any Losses, then each such indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Loss in such proportion as is appropriate
to reflect the relative fault of the indemnifying party on the one hand and of
such indemnified party on the other in connection with the statements or
omissions that resulted in such Losses, as well as any other relevant equitable
considerations; provided, however, that in no event shall such Selling Holder be
required to contribute an aggregate amount in excess of the dollar amount of
proceeds (net of Selling Expenses) received by such Selling Holder from the sale
of Registrable Securities giving rise to such indemnification. The relative
fault of the indemnifying party on the one hand and the indemnified party on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact has been made by, or relates to, information
supplied by such party, and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if
contributions pursuant to this paragraph were to be determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to herein. The amount paid by an
indemnified party as a result of the Losses referred to in the first sentence of
this paragraph shall be deemed to include any legal and other expenses
reasonably incurred by such indemnified party in connection with investigating,
defending or

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resolving any Loss that is the subject of this paragraph. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who is not
guilty of such fraudulent misrepresentation.

(e)Other Indemnification. The provisions of this Section 2.09 shall be in
addition to any other rights to indemnification or contribution that an
indemnified party may have pursuant to law, equity, contract or otherwise.

Section 2.10Rule 144 Reporting.

With a view to making available the benefits of certain rules and regulations of
the Commission that may permit the sale of the Registrable Securities to the
public without registration, the Partnership agrees to use its commercially
reasonable efforts to:

(a)make and keep public information regarding the Partnership available, as
those terms are understood and defined in Rule 144 (or any successor or similar
provision adopted by the Commission then in effect) under the Securities Act, at
all times from and after the date hereof;

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

(c)so long as a Holder owns any Registrable Securities, furnish, unless
otherwise available electronically at no additional charge via the Commission’s
EDGAR system, to such Holder forthwith upon request a copy of the most recent
annual or quarterly report of the Partnership, and such other reports and
documents as such Holder may reasonably request in availing itself of any rule
or regulation of the Commission allowing such Holder to sell any such securities
without registration.

Section 2.11Transfer or Assignment of Registration Rights. 

The rights to cause the Partnership to register Registrable Securities under
this Article II may be transferred or assigned by any Purchaser to one or more
transferees or assignees of Registrable Securities, subject to the transfer
restrictions provided in Section 4.7 of the Amended Partnership Agreement,
provided, however, that (a) the Partnership is given written notice prior to any
said transfer or assignment, stating the name and address of each of the
transferee or assignee and identifying the Registrable Securities with respect
to which such registration rights are being transferred or assigned and (b) each
such transferee or assignee assumes in writing responsibility for its portion of
the obligations of such Purchaser under this Agreement.

Section 2.12Limitation on Subsequent Registration Rights.

From and after the date hereof, the Partnership shall not, without the prior
written consent of the Holders of at least a majority of the then outstanding
Registrable Securities, enter into any agreement with any current or future
holder of any securities of the Partnership that would allow such current or
future holder to require the Partnership to include securities in any
registration statement filed by the Partnership on a basis that is superior or
pari passu to the rights of the Holders of Registrable Securities hereunder.

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Article III
MISCELLANEOUS

Section 3.01Communications.  

All notices and other communications provided for or permitted hereunder shall
be made in writing by facsimile, electronic mail, courier service or personal
delivery:

(a)if to a Purchaser:

To the respective address listed in the Preferred Unit Purchase Agreement

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

Sidley Austin LLP

1000 Louisiana Street, Suite 6000

Houston TX 77002

Attention: Tim Langenkamp
Facsimile: 713-495-7799

Email: tlangenkamp@sidley.com

 

(b)if to a transferee of a Purchaser, to such Holder at the address provided
pursuant to Section 2.11 above; and

(c)if to the Partnership:

Sanchez Production Partners LP

1000 Main Street, Suite 3000

Houston, TX 7702

Attention: Charles C. Ward

Email: cward@sanchezpp.com

 

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

 

Andrews Kurth LLP

600 Travis, Suite 4200

Houston, TX 77002

Attention: Scott Olson

Facsimile: 713.238.7410

Email: solson@andrewskurth.com

All such notices and communications shall be deemed to have been received at the
time delivered by hand, if personally delivered; when receipt acknowledged, if
sent via facsimile or sent via Internet electronic mail; and when actually
received, if sent by courier service.

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Section 3.02Successor and Assigns.  

This Agreement shall inure to the benefit of and be binding upon the successors
and permitted assigns of each of the parties, including subsequent Holders of
Registrable Securities to the extent permitted herein.

Section 3.03Assignment of Rights.  

All or any portion of the rights and obligations of any Purchaser under this
Agreement may be transferred or assigned by such Purchaser only in accordance
with Section 2.11 hereof.

Section 3.04Recapitalization, Exchanges, Etc. Affecting the Units. 

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

Section 3.05Aggregation of Registrable Securities. 

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

Section 3.06Specific Performance.  

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

Section 3.07Counterparts.  

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

Section 3.08Headings.  

The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

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Section 3.09Governing Law.  

THIS AGREEMENT, INCLUDING ALL ISSUES AND QUESTIONS CONCERNING ITS APPLICATION,
CONSTRUCTION, VALIDITY, INTERPRETATION AND ENFORCEMENT, SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK.

Section 3.10Severability of Provisions.  

Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting or impairing the validity or enforceability of
such provision in any other jurisdiction.

Section 3.11Entire Agreement.  

This Agreement is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the rights granted by the Partnership set forth herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

Section 3.12Amendment.  

This Agreement may be amended only by means of a written amendment signed by the
Partnership and the Holders of a majority of the then outstanding Registrable
Securities (or the Stonepeak Holder, to the extent that no Registrable
Securities have been issued); provided, however, that no such amendment shall
materially and adversely affect the rights of any Holder hereunder without the
consent of such Holder.

Section 3.13No Presumption.  

If any claim is made by a party relating to any conflict, omission or ambiguity
in this Agreement, no presumption or burden of proof or persuasion shall be
implied by virtue of the fact that this Agreement was prepared by or at the
request of a particular party or its counsel.

Section 3.14Obligations Limited to Parties to Agreement.  

Each of the parties hereto covenants, agrees and acknowledges that no Person
other than the Purchasers (and their permitted transferees and assignees) and
the Partnership shall have any obligation hereunder. Notwithstanding that one or
more of the Purchasers may be a corporation, partnership or limited liability
company, no recourse under this Agreement or under any documents or instruments
delivered in connection herewith or therewith shall be had against any former,
current or future director, officer, employee, agent, general or limited
partner, manager, member, stockholder or Affiliate of any of the Purchasers or
any former, current or future director, officer, employee, agent, general or
limited partner, manager, member, stockholder or Affiliate

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thereof, whether by the enforcement of any assessment or by any legal or
equitable proceeding, or by virtue of any applicable Law, it being expressly
agreed and acknowledged that no personal liability whatsoever shall attach to,
be imposed on or otherwise be incurred by any former, current or future
director, officer, employee, agent, general or limited partner, manager, member,
stockholder or Affiliate of any of the Purchasers or any former, current or
future director, officer, employee, agent, general or limited partner, manager,
member, stockholder or Affiliate thereof, as such, for any obligations of the
Purchasers under this Agreement or any documents or instruments delivered in
connection herewith or therewith or for any claim based on, in respect of or by
reason of such obligation or its creation, except in each case for any
transferee or assignee of a Purchaser hereunder.

Section 3.15Independent Nature of Purchaser’s Obligations.  

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

Section 3.16Interpretation.  

Article, Section and Schedule references are to this Agreement, unless otherwise
specified. All references to instruments, documents, contracts and agreements
are references to such instruments, documents, contracts and agreements as the
same may be amended, supplemented and otherwise modified from time to time,
unless otherwise specified. The words “include,” “includes” and “including” or
words of similar import shall be deemed to be followed by the words “without
limitation.” Whenever any determination, consent or approval is to be made or
given by an Purchaser under this Agreement, such action shall be in such
Purchaser’s sole discretion unless otherwise specified. Unless expressly set
forth or qualified otherwise (e.g., by “Business” or “trading”), all references
herein to a “day” are deemed to be a reference to a calendar day.

 

[SIGNATURE PAGES FOLLOW]

 

 

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

 

 

 

 

 

 

SANCHEZ PRODUCTION PARTNERS LP

 

 

 

 

 

By:

Sanchez Production Partners GP LLC,

 

 

its general partner

 

 

 

By:

 

 

 

Name:

Charles C. Ward

 

 

Title:

Chief Financial Officer

 

 

[Signature page to Registration Rights Agreement]

 

 

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STONEPEAR CATARINA HOLDINGS LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature page to Registration Rights Agreement]

 

 

 

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Schedule A

Purchasers

 

 

Stonepeak Catarina Holdings LLC

 

 

 

 

 

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Final Form

Exhibit F

 

EXHIBIT F

FORM OF GP LLC AGREEMENT AMENDMENT

 

AMENDMENT NO. 2

TO

LIMITED LIABILITY COMPANY AGREEMENT
OF
SANCHEZ PRODUCTION PARTNERS GP LLC

This Amendment No. 2 to Limited Liability Company Agreement (as amended,
restated, supplemented and otherwise modified from time to time, this
“Amendment”) of Sanchez Production Partners GP LLC, a Delaware limited liability
company (the “Company”), is made and entered into as of September [___], 2015,
by SP Holdings, LLC, a Texas limited liability company (“Holdings”), as the sole
Member of the Company.

RECITALS

WHEREAS, on March 2, 2015, Holdings entered into that certain Limited Liability
Company Agreement of the Company, as amended by Amendment No. 1 thereto dated
May 8, 2015 (the “Original LLC Agreement”); and

WHEREAS, Holdings desires to amend the Original LLC Agreement as set forth
herein;

NOW, THEREFORE, for and in consideration of the premises, the covenants and
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Holdings, as the sole
Member of the Company, hereby enters into this Amendment in its entirety as
follows:

1.Amendments.

a.Section 1.1 of the Original LLC Agreement is hereby amended by inserting the
following as new definitions therein in applicable alphabetical order:

“Additional Indebtedness” means any indebtedness for borrowed money or any
indebtedness evidenced by bonds, bankers’ acceptances, debentures, notes,
letters of credit or other similar instruments, including any security or other
interest convertible or exchangeable for any such instrument or redeemable for
any consideration other than Junior Securities, except, in each case, the
Existing Credit Facility or a Refinanced Credit Facility.

“Board Representation Agreement” means that certain Board Representation and
Standstill Agreement dated as of September [___], 2015, by and among the
Partnership, the Company and the purchasers party thereto.

“Change in Control” means the occurrence of any of the following events: (i) the
Company withdraws or is removed as the general partner of the Partnership, (ii)
the Company transfers any portion of its general partner interest in the
Partnership to any Person other than an Affiliate of the

 

 

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Company, (iii) any merger, consolidation or other transaction involving the
Partnership or the Company and another Person (other than an Affiliate thereof),
whether in one or a series of related transactions, which results in one or more
Persons directly or indirectly acquiring control over more than 50% of the
equity interests of the Partnership or the Company, as applicable, (iv) the
direct or indirect sale, transfer, conveyance or other disposition, in one or a
series of related transactions, of all or substantially all of the assets of the
Partnership, (v) any dissolution or liquidation of the Partnership or the
Company (other than in connection with a bankruptcy proceeding or a statutory
winding up); (vi) any other transaction pursuant to which the Company or any
Affiliate controlled by the Company exercises its rights to purchase all of the
Common Units (as defined in the Partnership Agreement) pursuant to Section 15.1
of the Partnership Agreement or (vii) the Partnership’s common units are no
longer publicly traded on any National Securities Exchange.

“Common Units” has the meaning set forth in the Partnership Agreement.

“Existing Credit Facility” means the Third Amended and Restated Credit
Agreement, dated as of March 31, 2015 among the Partnership, as borrower, Royal
Bank of Canada, as administrative agent, and the lenders from time to time party
thereto, as amended by that certain Amendment and Waiver of Third Amended and
Restated Credit Agreement, dated as of August 12, 2015 and that certain Joinder,
Assignment and Second Amendment to Third Amended and Restated Credit Agreement,
dated as of September [___], 2015, as the same may be further amended, restated,
amended and restated or otherwise modified from time to time, provided that the
credit facility provided under the Existing Credit Facility shall be, at all
times, a revolving credit facility provided by commercial banks and/or
affiliates of commercial banks.

“First Designation Right Termination Event” has the meaning set forth in the
Board Representation Agreement.

“Junior Securities” has the meaning set forth in the Partnership Agreement.

“Purchaser Designated Director” is defined in Section 6.2(a)(i).

“Refinanced Credit Facility” means any original, amended or amended and restated
revolving bank facility of the Partnership that replaces or refinances the
Existing Credit Facility, provided that the credit facility provided under any
Refinanced Credit Facility shall be, at all times, a revolving credit facility
provided by commercial banks and/or affiliates of commercial banks.

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“Second Amendment Effective Date” means September [___], 2015.

“Second Designation Right Termination Event” has the meaning set forth in the
Board Representation Agreement. 

“Special Approval” means approval by the Board of the following actions before
they are undertaken by the Partnership or the Company:

(a)the incurrence by the Partnership of any loan, letter of credit or similar
obligation under the Existing Credit Facility or a Refinanced Credit Facility
unless, after giving pro forma effect thereto, the ratio of (I) Total Net Debt
(as defined in the Existing Credit Facility as in effect on the Second Amendment
Effective Date) of the Partnership and its Consolidated Subsidiaries (as defined
in the Existing Credit Facility as in effect on the Second Amendment Effective
Date) to (II) Adjusted EBITDA (as defined in the Existing Credit Facility as in
effect on the Second Amendment Effective Date) for the period of four
consecutive fiscal quarters of the Partnership most recently ended for which
financial statements are available, does not exceed (A) prior to the date that
the Partnership has issued the Common Units required pursuant to Section 5.10(f)
of the Partnership Agreement, 2.25 to 1.00, and (B) on and after the date that
such Common Units have been issued, 3.00 to 1.00;

(b)the Partnership entering into or permitting any modification or amendment of,
consenting to any deviation from the terms and conditions of or obtaining any
consent of the administrative agent or the lenders under the Existing Credit
Facility or Refinanced Credit Facility that would (I) have the effect of
amending or modifying any covenant limiting dividends or distributions by the
Partnership to the holders of the Class B Preferred Units (as defined in the
Partnership Agreement) in any manner that is more restrictive than as set forth
in the Existing Credit Facility, (II) result in the interest rate margin under
the Existing Credit Facility or any Refinanced Credit Facility (x) with respect
to any interest rate based on the LIBO rate, to be greater than 5.00% per annum
or (y) with respect to any other interest rate, to be greater than 4.00% per
annum or (III) impose an interest rate floor greater than 0% per annum;

(c)the Partnership creating (by reclassification or otherwise) or otherwise
incurring any Additional Indebtedness;

(d)a Change in Control of the Company or the Partnership; or

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(e)any amendment, restatement, amendment and restatement, modification or other
change to this Agreement in a manner that would adversely affect the rights or
privileges hereunder of any Purchaser Designated Director, including, without
limitation, the right to consent to items requiring Special Approval as set
forth in this Amendment.

“Stonepeak” means Stonepeak Catarina Holdings LLC, a Delaware limited liability
company.

 

b.Section 1.1 of the Original LLC Agreement is hereby further amended to insert
the following as a new sentence at the end of the definition of “Affiliate”
contained therein:

For avoidance of doubt, for purposes of this Agreement, neither the Company nor
the Partnership, on the one hand, and the Class B Preferred Unit Holders (as
defined in the Partnership Agreement), on the other hand, shall be considered
Affiliates solely by virtue of such Class B Preferred Unit Holders holding Class
B Preferred Units (as defined in the Partnership Agreement) or the right to
appoint a Purchaser Designated Director or as Affiliates of such Purchaser
Designated Director.

c.Section 6.1(a) of the Original LLC Agreement is hereby amended to add the
following new sentence at the end thereof. “Notwithstanding anything to the
contrary in this Section 6.1, neither the Company, nor the Officers acting on
behalf of the Company, shall, or shall cause or permit the Partnership to, take
any action that would require the Special Approval of a Purchaser Designated
Director hereunder without first obtaining Special Approval pursuant to Section
6.2(c)(iii) or Section 6.2(a)(iv).”

d.Section 6.2(a)(i) of the Original LLC Agreement is hereby amended and restated
in its entirety to read as follows:

(i)The Members shall appoint all of the Directors of the Board; provided,
however, that (A) prior to the First Designation Right Termination Event, two
Directors (each, a “Purchaser Designated Director”) shall be appointed, elected
or approved pursuant to the Board Representation Agreement; (B) from and after
the First Designation Right Termination Event until the Second Designation Right
Termination Event, one Purchaser Designated Director shall be appointed, elected
or approved pursuant to the Board Representation Agreement, with each such
Purchaser Designated Director serving until his or her death, resignation or
removal from office or until his or her successors are elected and qualified, as
provided in the Board Representation Agreement; and (C) during the Redemption
Designation Period, three Independent Directors shall be appointed, elected or
approved pursuant to the Board Representation Agreement, with each

4

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such Independent Director serving until his or her death, resignation or removal
from office or until his or her successor is elected and qualified, as provided
in the Board Representation Agreement; provided further, that upon the
occurrence of (A) the First Designation Right Termination Event, one of the
Purchaser Designated Directors shall be appointed, elected or approved, and may
be removed by, and will resign upon the request of, the Members or the
determination of a majority of the other Directors; (B) the Second Designation
Right Termination Event, both of the Purchaser Designated Directors shall be
appointed, elected or approved, and may be removed by, and will resign upon the
request of, the Members or the determination of a majority of the other
Directors and (C) at the end of the Redemption Designation Period, the three
Independent Directors previously appointed, elected or approved pursuant to the
Board Representation Agreement shall be appointed, elected or approved, and may
be removed by, and will resign upon the request of, the Members or the
determination of a majority of the other Directors.   

e.Section 6.2(a)(iv) of the Original LLC Agreement is hereby amended and
restated in its entirety to read as follows: 

(iv)Any action required or permitted to be taken by the Board may be taken
without a meeting if such action is evidenced in writing and signed (including
by an email response or other electronic transmission) by a majority of the
Directors, (A) one of whom must be the Chairman of the Board and (B) with
respect to those matters requiring Special Approval, prior to the Second
Designation Right Termination Event, one of whom must include a Purchaser
Designated Director.

f.The fourth sentence of Section 6.2(b) of the Original LLC Agreement is hereby
amended by inserting the following proviso at the end thereof immediately before
the period:  “; provided, however, that (i) except as provided in Section
6.2(a)(i) with respect to one Purchaser Designated Director after the First
Designation Right Termination Event, any vacancy by a Purchaser Designated
Director prior to the Second Designation Right Termination Event shall be filled
only as provided in the Board Representation Agreement and (ii) any vacancy by
an Independent Director appointed during the Redemption Designation Period shall
be filled only as provided in the Board Representation Agreement”.

g.The last sentence of Section 6.2(b) of the Original LLC Agreement is hereby
amended by inserting the following proviso at the end thereof immediately before
the period:  “; provided, however, that (i) except as provided in Section
6.2(a)(i) with respect to one Purchaser Designated Director after the First
Designation Right Termination Event, a Purchaser Designated Director shall be
removed prior to the Second Designation Right Termination Event only as provided
in the Board Representation Agreement and (ii) an Independent Director appointed
during the Redemption Designation Period shall be removed prior to the end of
the Redemption Designation Period only as provided in the Board Representation
Agreement”.

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h.Section 6.2(c)(iii) of the Original LLC Agreement is hereby amended by
inserting the following proviso at the end thereof immediately before the
period:  “; provided, however, that prior to the Second Designation Right
Termination Event, the consent of at least one Purchaser Designated Director
shall be required for those matters requiring Special Approval”.

i.Section 6.9 of the Original LLC Agreement is hereby amended to add the
following as a new clause (e) thereof:

(e)Notwithstanding anything in this Section 6.9 to the contrary, a majority of
the non-Purchaser Designated Directors, acting in good faith, shall have the
right to exclude any Purchaser Designated Director who is not an employee,
partner, member or officer of Stonepeak or any of its Affiliates from
deliberations of the Board to the extent such deliberations primarily concern
proprietary and confidential information regarding the Partnership’s business
and operations if such Purchaser Designated Director is a director, officer,
employee, agent or equityholder of greater than 5% of any Person that competes
with the Partnership with respect to such business and operations.  If any
Purchaser Designated Director is excluded from deliberations pursuant to this
clause (e), Stonepeak may designate another Person who is an employee, partner,
member or officer of Stonepeak or any of its Affiliates or any other Person
reasonably acceptable to a majority of the remaining directors of the Board to
attend such deliberations in an observer capacity. Such designated observer
shall not be entitled to vote on, or consent to, any matters presented to the
Board.  For the avoidance of doubt, at any time at which a Purchaser Designated
Director is excluded pursuant to this clause (e), the Board shall not take any
action, consent to or vote on any matter before the Board until such Purchaser
Designated Director is once again included.

j.Section 10.2 of the Original LLC Agreement is hereby amended to add the
following as a new clause (e) thereof:

(e)Prior to the Second Designation Right Termination Event, any Transfer
resulting in a Change in Control of the Company or the Partnership shall have
received the consent of at least one Purchaser Designated Director.  For
purposes of this Section 10.2(e), the term “Transfer” shall include a merger
involving the Company, notwithstanding the definition of “Transfer”.

2.Directors.  As of the date of this Amendment, the Directors of the Company are
the following:  Antonio R. Sanchez, III, Gerald F. Willinger, Richard S.
Langdon, Alan S. Bigman, Patricio S. Sanchez, Eduardo D. Sanchez, G.M. Byrd
Larberg, Jack Howell and Luke Taylor and Exhibit B shall be deemed to be amended
accordingly.

3.Agreement in Effect.  Except as hereby amended, the Original LLC Agreement
shall remain in full force and effect.

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4.Applicable Law.  This Amendment shall be construed in accordance with and
governed by the laws of the State of Delaware, without regard to principles of
conflicts of laws.

5.Severability.  Each provision of this Amendment shall be considered severable
and if for any reason any provision or provisions herein are determined to be
invalid, unenforceable or illegal under any existing or future law, such
invalidity, unenforceability or illegality shall not impair the operation of or
affect those portions of this Amendment that are valid, enforceable and legal.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Member has executed this Agreement as of the date first
set forth above.

 

 

SP HOLDINGS, LLC

 

 

 

By:

SP Capital Holdings, LLC, its manager

 

 

 

 

 

By:

 

 

Name:

Antonio R. Sanchez, III

 

Title:

Manager

 

 

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