Exhibit 10.1

 

EQUITY RESTRUCTURING AGREEMENT

 

by and between

 

SPECTRA ENERGY PARTNERS (DE) GP, LP

 

and

 

SPECTRA ENERGY PARTNERS, LP

 

Dated as of January 21, 2018

 

 

 

 

TABLE OF CONTENTS

 

    Page       Article I       DEFINITIONS AND TERMS 3       Section 1.1 Certain
Definitions 3 Section 1.2 Other Terms 5 Section 1.3 Calculation of Time Periods
5 Section 1.4 Other Definitional Provisions 6       Article II      
TRANSACTIONS; closing 6       Section 2.1 Closing 6 Section 2.2 Conversion of
Incentive Distribution Rights and Restructuring General Partner Interest 7
Section 2.3 Partnership Agreement Amendment 7 Section 2.4 Further Assurances 7  
    Article III       REPRESENTATIONS AND WARRANTIES of SEP 7       Section 3.1
Organization and Good Standing 7 Section 3.2 Authorization under SEP Partnership
Agreement 8 Section 3.3 Non-Contravention 8 Section 3.4 Governmental Consents
and Approvals 8 Section 3.5 Restructuring Common Units 8 Section 3.6 Securities
Law Compliance 9 Section 3.7 No Brokers or Finders 9 Section 3.8 No Other
Representations or Warranties 9       Article IV       REPRESENTATIONS AND
WARRANTIES OF SEP GP 9       Section 4.1 Organization and Good Standing 9
Section 4.2 Authorization under Organizational Documents 10 Section 4.3 Equity
Interests 10 Section 4.4 Non-Contravention 10 Section 4.5 Governmental Consents
and Approvals 10 Section 4.6 Investment Intent and Securities Law Compliance 10

 

 i 

 

 

Section 4.7 No Brokers or Finders 11 Section 4.8 No Other Representations or
Warranties 11       Article V       AGREED TAX TREATMENT 12       Section 5.1
Agreed Tax Treatment 12 Section 5.2 Tax Representations and Covenants 12      
Article VI       MISCELLANEOUS 13       Section 6.1 Notices 13 Section 6.2
Amendment; Waiver 14 Section 6.3 No Assignment or Benefit to Third Parties 14
Section 6.4 Entire Agreement 14 Section 6.5 Fulfillment of Obligations 14
Section 6.6 Expenses 14 Section 6.7 Governing Law; Submission to Jurisdiction;
Selection of Forum; Waiver of Trial by Jury 15 Section 6.8 Specific Performance
16 Section 6.9 Counterparts 16 Section 6.10 Headings 16 Section 6.11
Severability 16 Section 6.12 Action by SEP 16

 

EXHIBITS

 

Exhibit A Form of Third Amended and Restated Agreement of Limited Partnership of
Spectra Energy Partners, LP

 

 ii 

 

 

EQUITY RESTRUCTURING AGREEMENT

 

This EQUITY RESTRUCTURING AGREEMENT, dated as of January 21, 2018, is entered
into by and between Spectra Energy Partners (DE) GP, LP, a Delaware limited
partnership (“SEP GP”) (acting in its individual capacity and not in its
capacity as the general partner of SEP), and Spectra Energy Partners, LP, a
Delaware limited partnership (“SEP”).

 

WITNESSETH:

 

WHEREAS, Enbridge (U.S.) Inc. (“Enbridge US”) (an indirect, wholly owned
subsidiary of Enbridge Inc. (“ENB”)) delivered a certain non-binding offer
letter dated November 29, 2017 to SEP, with respect to an equity restructuring
of ENB’s indirect ownership interests in SEP;

 

WHEREAS (a) SEP GP (an indirect, wholly owned subsidiary of Enbridge US) is the
general partner of SEP and owns (i) all of the Incentive Distribution Rights in
SEP, (ii) all of the general partner units in SEP, which equates to a 2% General
Partner Interest in SEP, and (iii) a 15.8% limited partner interest in SEP, and
(b) SEP GP, together with certain other indirect, wholly owned subsidiaries of
ENB, owns an aggregate number of Common Units in SEP, which equates to a 72.5%
limited partner interest in SEP;

 

WHEREAS, at the Closing, on the terms and subject to the conditions set forth
herein, the Incentive Distribution Rights and the General Partner Interest will
be converted into the Restructuring Common Units and a non-economic general
partner interest in SEP (collectively, including the amendment and restatement
of the SEP Partnership Agreement as provided herein, the “Transactions”);

 

WHEREAS, the conflicts committee (the “Conflicts Committee”) of the board of
directors (the “Board”) of Spectra Energy Partners GP, LLC, a Delaware limited
liability company (“SEP GP LLC”), the general partner of SEP GP, has (i)
received the opinion of Jefferies LLC, the financial advisor to the Conflicts
Committee, to the effect that the aggregate consideration to be paid by SEP
pursuant to this Agreement is fair to SEP and the holders of SEP’s Common Units
(other than SEP GP and its Affiliates) from a financial point of view,
(ii) determined that this Agreement, the Amended Partnership Agreement and the
Transactions are in the best interest of SEP and the holders of SEP’s Common
Units (other than SEP GP and its Affiliates), (iii) approved this Agreement, the
Amended Partnership Agreement and the Transactions, which such approval
constituted “Special Approval” for purposes of the SEP Partnership Agreement,
and (iv) recommended that the Board approve this Agreement, the Amended
Partnership Agreement and the Transactions;

 

WHEREAS, (i) based upon the Conflicts Committee’s recommendation referenced
above, the Board has determined that this Agreement, the Amended Partnership
Agreement and the Transactions are fair and reasonable to, and in the best
interest of, SEP and the holders of SEP’s Common Units (other than SEP GP and
its Affiliates), (ii) the Board has determined that this Agreement, the Amended
Partnership Agreement and the Transactions are fair and reasonable to, and in
the best interest of, SEP GP, acting in its individual capacity and not as the
general partner of SEP (including in SEP GP’s capacity as the owner of the
Incentive Distribution Rights in SEP, the 2% General Partner Interest in SEP and
a portion of the issued Common Units), and (iii) the Board has determined that
this Agreement, the Amended Partnership Agreement and the Transactions are
approved, authorized and adopted in all respects;

  

 1 

 

 

WHEREAS, SEP GP, without the approval of any Limited Partners, may amend any
provision of the SEP Partnership Agreement, and execute, swear to, acknowledge,
deliver, file and record whatever documents may be required in connection
therewith, (i) pursuant to Section 13.1(d) of the SEP Partnership Agreement to
reflect a change that SEP GP determines does not adversely affect in any
material respect the Limited Partners considered as a whole or any particular
class of Partnership Interests as compared to other classes of Partnership
Interests or (ii) pursuant to Section 13.1(g) of the SEP Partnership Agreement
to reflect an amendment that SEP GP determines to be necessary or appropriate in
connection with the authorization or issuance of any class or series of
Partnership Securities pursuant to Section 5.6 of the SEP Partnership Agreement;

 

WHEREAS, SEP GP has determined that the revisions to the SEP Partnership
Agreement to be effected by adoption of the Amended Partnership Agreement (i) do
not adversely affect in any material respect the Limited Partners considered as
a whole or any particular class of Partnership Interests as compared to other
classes of Partnership Interests and (ii) are necessary or appropriate in
connection with the authorization or issuance of any class or series of
Partnership Securities pursuant to Section 5.6 of the SEP Partnership Agreement;
and

 

WHEREAS, in accordance with Sections 13.3(b) and 13.3(c) of the SEP Partnership
Agreement, SEP GP, in its individual capacity as the sole holder of the General
Partner Interest and the Incentive Distribution Rights and not in its capacity
as the general partner of SEP, has consented to and approved the Amended
Partnership Agreement in the form attached as Exhibit A hereto.

 

NOW, THEREFORE, in consideration of the promises and the mutual representations,
warranties, covenants and undertakings contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, agree as follows:

 

 2 

 

 

Article I

DEFINITIONS AND TERMS

 

Section 1.1           Certain Definitions.  As used in this Agreement, the
following capitalized terms have the meanings set forth below: 

 

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, such Person
as of the date on which, or at any time during the period for which, the
determination of affiliation is being made.  For purposes of this definition,
the term “control” (including the correlative meanings of the terms “controlled
by” and “under common control with”), as used with respect to any Person, means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person (which, in the case of a
publicly traded master limited partnership, means such power with respect to the
general partner thereof), whether through the ownership of voting securities, by
Contract or otherwise.  Notwithstanding anything in this definition to the
contrary, (a) with respect to SEP GP, “Affiliate” excludes at all times SEP and
its Subsidiaries, and (b) with respect to SEP and its Subsidiaries, “Affiliates”
excludes at all times SEP GP and any other Person that directly or indirectly
controls or is under common control with SEP GP, other than SEP and its
Subsidiaries.

 

“Agreed Tax Treatment” has the meaning set forth in Section 5.1.

 

“Agreement” means this Equity Restructuring Agreement, as it may be amended or
supplemented from time to time in accordance with the terms hereof.

 

“Amended Partnership Agreement” means the Third Amended and Restated Agreement
of Limited Partnership of Spectra Energy Partners, LP executed and delivered
pursuant to Section 2.3.

 

“Bankruptcy and Equity Exception” has the meaning set forth in Section 3.2.

 

“Board” has the meaning set forth in the Recitals.

 

“Business Day” means any day other than a Saturday, a Sunday or a statutory
holiday on which banks in the State of Texas are closed.

 

“Closing” has the meaning set forth in Section 2.1.

 

“Common Units” has the meaning set forth in the SEP Partnership Agreement.

 

“Conflicts Committee” has the meaning set forth in the Recitals.

 

“Contract” means any written or oral agreement, contract, commitment,
instrument, undertaking, lease, note, mortgage, indenture, settlement, license
or other legally binding agreement.

 

“Conversion” has the meaning set forth in Section 2.2.

 

“ENB” has the meaning set forth in the Recitals.

 

“Enbridge US” has the meaning set forth in the Recitals.

 

“Encumbrance” means any lien, pledge, charge, charging order, encumbrance,
security interest, option, mortgage or other restriction on transfers.

 

 3 

 

 

“General Partner Interest” has the meaning set forth in the SEP Partnership
Agreement.

 

“Government Entity” means any federal, state, local or foreign court, tribunal,
administrative body or other governmental or quasi-governmental or regulatory
entity, including any head of a government department, body or agency, with
competent jurisdiction.

 

“Incentive Distribution Right” has the meaning set forth in the SEP Partnership
Agreement.

 

“Law” means any law, statute, ordinance, rule, regulation, code, order,
judgment, injunction or decree enacted, issued, promulgated, enforced or entered
by any Government Entity.

 

“Liabilities” of any Person means, as of any given time, any and all
indebtedness, liabilities, commitments and obligations of any kind of such
Person, whether fixed, contingent or absolute, matured or unmatured, liquidated
or unliquidated, accrued or not accrued, asserted or not asserted, known or
unknown, determined, determinable or otherwise, whenever or however arising
(including whether arising out of any Contract or tort based on negligence or
strict liability).

 

“Limited Partner” has the meaning set forth in the SEP Partnership Agreement.

 

“NYSE” means the New York Stock Exchange.

 

“Organizational Documents” means (a) with respect to any Person that is a
corporation, its articles or certificate of incorporation or memorandum and
articles of association, as the case may be, and bylaws, (b) with respect to any
Person that is a partnership, its certificate of partnership and partnership
agreement, (c) with respect to any Person that is a limited liability company,
its certificate of formation and limited liability company or operating
agreement, (d) with respect to any Person that is a trust or other entity, its
declaration or agreement or trust or other constituent document and (e) with
respect to any other Person, its comparable organizational documents.

 

“Parties” means SEP GP and SEP, each individually referred to herein as a
“Party”.

 

“Partnership Interest” has the meaning set forth in the SEP Partnership
Agreement.

 

“Partnership Securities” has the meaning set forth in the SEP Partnership
Agreement.

 

 4 

 

 

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

 

“Representatives” means, with respect to any Person, any and all partners,
managers, members (if such Person is a member-managed limited liability
company), directors, officers, employees, consultants, financial advisors,
counsels, accountants and other agents of such Person.

 

“Restructuring Common Units” has the meaning set forth in Section 2.2.

 

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

 

“SEP” has the meaning set forth in the preamble.

 

“SEP GP” has the meaning set forth in the preamble.

 

“SEP GP LLC” has the meaning set forth in the Recitals.

 

“SEP Partnership Agreement” means the Second Amended and Restated Agreement of
Limited Partnership of SEP dated as of November 1, 2013, as amended by Amendment
No. 1 thereto, dated as of July 2, 2015, and as further amended by Amendment No.
2 thereto, dated as of November 20, 2017.

 

“Subsidiary” means, with respect to any Person, any other Person of which
(a) more than 50% of (i) the total combined voting power of all classes of
voting securities of such other Person, (ii) the total combined equity interests
or (iii) the capital or profit interests, in each case, is beneficially owned,
directly or indirectly, by such first Person or (b) the power to vote or to
direct the voting of sufficient securities to elect a majority of the board of
directors or similar governing body is held by such first Person.

 

“Transactions” has the meaning set forth in the recitals.

 

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

 

Section 1.2           Other Terms.  Other capitalized terms may be defined
elsewhere in the text of this Agreement and, unless otherwise indicated, shall
have such meaning throughout this Agreement. 

 

Section 1.3           Calculation of Time Periods.  When calculating the period
of time within which, or following which, any act is to be done or step taken
pursuant to this Agreement, the date that is the reference day in calculating
such period shall be excluded.  If the last day of the period is a non-Business
Day, the period in question shall end on the next Business Day. 

 5 

 

 

Section 1.4           Other Definitional Provisions.  Unless the express context
otherwise requires: 

 

(a)          The word “day” means calendar day;

 

(b)          the words “hereof”, “herein”, and “hereunder” and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole
and not to any particular provision of this Agreement;

 

(c)          the terms defined in the singular have a comparable meaning when
used in the plural and vice versa;

 

(d)          the terms “Dollars” and “$” mean United States Dollars;

 

(e)          references herein to a specific Article, Section, Subsection or
Exhibit shall refer, respectively, to Articles, Sections, Subsections or
Exhibits of this Agreement;

 

(f)           wherever the word “include”, “includes”, or “including” is used in
this Agreement, it shall be deemed to be followed by the words “without
limitation”;

 

(g)          references herein to any gender include the other gender;

 

(h)          references in this Agreement to the “United States” mean the United
States of America and its territories and possessions;

 

(i)           the word “extent” in the phrase “to the extent” shall mean the
degree to which a subject or other thing extends and such phrase shall not mean
simply “if”; and

 

(j)           except as otherwise specifically provided in this Agreement, any
agreement, instrument or statute defined or referred to herein means such
agreement, instrument or statute as from time to time amended, supplemented or
modified, including (i) in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and (ii) all attachments thereto and instruments incorporated therein.

 

Article II

TRANSACTIONS; closing

 

Section 2.1            Closing.  On the terms and subject to the conditions set
forth herein, on the date hereof simultaneously with the execution and delivery
of this Agreement, the Parties will consummate the Transactions (the “Closing”)
by taking the actions set forth in Section 2.2 and Section 2.3. 

 

 6 

 

 

Section 2.2           Conversion of Incentive Distribution Rights and
Restructuring General Partner Interest.  At the Closing, the Incentive
Distribution Rights held by SEP GP and the General Partner Interest shall,
effective as of the Closing, be automatically converted into 172,500,000 Common
Units (the “Restructuring Common Units”) and a non-economic general partner
interest in SEP (the “Conversion”) with such conversion being deemed to have
occurred immediately upon execution of the Amended Partnership Agreement as set
forth in Section 2.3.  Immediately upon execution of the Amended Partnership
Agreement, (i) the Incentive Distribution Rights shall be cancelled and shall
cease to exist and (ii) SEP shall direct the Transfer Agent for its Common Units
to reflect on its records to issuance of the Restructuring Common Units to SEP
GP in order to reflect the Conversion.  

 

Section 2.3           Partnership Agreement Amendment.  Simultaneously with the
Closing, the SEP Partnership Agreement shall be amended and restated in its
entirety by SEP GP (i) acting in its individual capacity as the sole holder of
the General Partner Interest and the Incentive Distribution Rights and not in
its capacity as the general partner of SEP in accordance with Sections 13.3(b)
and 13.3(c) of the SEP Partnership Agreement, and (ii) acting in its capacity as
the general partner of SEP pursuant to its authority in Sections 13.1(d) and
13.1(g) of the SEP Partnership Agreement, to read as set forth in Exhibit A to
reflect the Transactions, and as so amended and restated shall be the limited
partnership agreement of SEP (such amended and restated agreement being referred
to as the “Amended Partnership Agreement”) until duly amended in accordance with
its terms and applicable Law. 

 

Section 2.4           Further Assurances.  Each of the Parties shall execute and
deliver, or shall cause to be executed and delivered, such documents and other
instruments and shall take, or shall cause to be taken, such further actions as
may be reasonably required to carry out the provisions of this Agreement and
give effect to the Transactions. 

 

Article III

REPRESENTATIONS AND WARRANTIES of SEP

 

SEP represents and warrants to SEP GP as follows:

 

Section 3.1           Organization and Good Standing.  

 

(a)          SEP has been duly organized, is validly existing and is in good
standing under the Laws of the State of Delaware and has all requisite corporate
or similar power and authority to own and operate its properties and assets and
to carry on its business as presently conducted.

 

(b)          SEP is qualified to do business and is in good standing (with
respect to jurisdictions that recognize the concept of good standing) in each
jurisdiction where the ownership or operation of its properties or assets or
conduct of its business requires such qualification.

 

 7 

 

 

Section 3.2           Authorization under SEP Partnership Agreement.  SEP has
all requisite limited partnership power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
Transactions.  The execution and delivery of this Agreement, the performance of
SEP’s obligations hereunder and thereunder and the consummation of the
Transactions have been duly authorized by all necessary action under the SEP
Partnership Agreement.  This Agreement has been duly executed and delivered by
SEP and, assuming the due authorization, execution and delivery of this
Agreement by SEP GP, constitutes the legal, valid and binding obligation of SEP,
enforceable against SEP in accordance with their terms, as applicable, subject
to applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar Laws affecting the enforcement of creditors’ rights
generally or, as to enforceability, by general equitable principles, including
principles of good faith and fair dealing (regardless of whether such
enforceability is considered in a proceeding in equity or at Law) (the
“Bankruptcy and Equity Exception”).  

 

Section 3.3           Non-Contravention.  The execution and delivery by SEP of
this Agreement, the performance of its obligations pursuant to this Agreement
and the consummation of the Transactions will not constitute or result in (a) a
violation of the Organizational Documents of SEP, (b) a breach or violation of,
a termination of, a right of termination or default under, the creation or
acceleration of any obligations under, or the creation of an Encumbrance on any
of the assets of SEP pursuant to, any Contract to which SEP is a party (with or
without notice or lapse of time or both), or (c) a breach or violation of, or a
default under, any Law to which SEP or its Affiliates are subject, except, in
the case of the foregoing clause (b) or (c), as would not, individually or in
the aggregate, prevent or materially delay or impair the ability of SEP to
consummate the Transactions. 

 

Section 3.4           Governmental Consents and Approvals.  Subject to required
filings under federal and state securities Laws and compliance with the rules
and regulations of the NYSE, no consent, approval, waiver, authorization, notice
or filing is required to be obtained by SEP from, or to be given by SEP to, or
to be made by SEP with, any Government Entity in connection with the execution,
delivery and performance by SEP of this Agreement and the consummation of the
Transactions, except as would not, individually or in the aggregate, prevent or
materially delay or impair the ability of SEP to consummate the Transactions. 

 

Section 3.5           Restructuring Common Units.  The Restructuring Common
Units will be duly authorized and, when issued and delivered to SEP GP in
accordance with the terms hereof, will be validly issued, fully paid (to the
extent required by the SEP Partnership Agreement and Amended Partnership
Agreement) and non-assessable (subject to Sections 17-303, 17-607 and 17-804 of
the Delaware Revised Uniform Limited Partnership Act and to the extent required
by the SEP Partnership Agreement and Amended Partnership Agreement).  

 

 8 

 

 

Section 3.6           Securities Law Compliance.  Assuming the accuracy of the
representations and warranties of SEP GP contained in this Agreement, SEP is not
required to register the Restructuring Common Units under the Securities Act in
connection with the issuance of the Restructuring Common Units to SEP GP.

 

Section 3.7           No Brokers or Finders.  Except for the fees payable by SEP
to Jefferies LLC, there is no investment banker, broker, finder or other
intermediary that has been retained by or is authorized to act on behalf of SEP
or any of its Affiliates who is entitled to any fee or commission from SEP or
any of its Affiliates in connection with the Transactions.

 

Section 3.8           No Other Representations or Warranties.  Except for the
representations and warranties contained in this Article III, none of SEP, any
of its Affiliates, any of its or their respective stockholders, trustees,
members, fiduciaries or Representatives, or any other Person has made or is
making any other representation or warranty of any kind or nature whatsoever,
oral or written, express or implied, with respect to this Agreement, the
Restructuring Common Units or the Transactions.  Except for the representations
and warranties contained in this Article III, SEP disclaims, on behalf of itself
and its Affiliates, (a) any other representations or warranties, whether made by
SEP, any of its Affiliates, any of their respective equity holders, trustees,
members, fiduciaries or Representatives or any other Person and (b) all
Liabilities and responsibility for any other representation, warranty, opinion,
projection, forecast, advice, statement or information made, communicated or
furnished (orally or in writing) to SEP GP or its Affiliates.  

 

Article IV

REPRESENTATIONS AND WARRANTIES OF SEP GP

 

SEP GP (acting in its individual capacity and not in its capacity as the general
partner of SEP) represents and warrants to SEP as follows:

 

Section 4.1           Organization and Good Standing.  

 

(a)          SEP GP has been duly organized, is validly existing and is in good
standing under the Laws of the State of Delaware and has all requisite limited
liability company power and authority to own and operate its properties and
assets and to carry on its business as presently conducted.

 

(b)          SEP GP is qualified to do business and is in good standing (with
respect to jurisdictions that recognize the concept of good standing) in each
jurisdiction where the ownership or operation of its properties or assets or
conduct of its business requires such qualification.

 

 9 

 

 

Section 4.2           Authorization under Organizational Documents.  SEP GP has
all requisite limited liability company power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the Transactions.  The execution and delivery of this Agreement, the performance
of SEP GP’s obligations hereunder and the consummation of the Transactions have
been duly authorized by all necessary action under the Organizational Documents
of SEP GP.  This Agreement has been duly executed and delivered by SEP GP and,
assuming the due authorization, execution and delivery of the Agreement by SEP,
constitutes the legal, valid and binding obligation of SEP GP, enforceable
against SEP GP in accordance with its terms, subject to the Bankruptcy and
Equity Exception.

 

Section 4.3           Equity Interests.  SEP GP is the record and beneficial
owner of, and has good and valid title to, the Incentive Distribution Rights and
SEP GP Interest, free and clear of all Encumbrances (other than those arising
pursuant to this Agreement, the SEP Partnership Agreement or applicable
securities Laws, or resulting from actions of SEP or any of its
Affiliates).  There is no subscription, option, warrant, call, right, agreement
or commitment relating to the issuance, sale, delivery, repurchase or transfer
by SEP GP of the Incentive Distribution Rights or General Partner Interests,
except as set forth in the SEP Partnership Agreement.

 

Section 4.4           Non-Contravention.  The execution and delivery by SEP GP
of this Agreement, the performance of its obligations hereunder and the
consummation of the Transactions will not constitute or result in (a) a
violation of the Organizational Documents of SEP GP, (b) a breach or violation
of, a termination of, a right of termination or default under, the creation or
acceleration of any obligations under, or the creation of an Encumbrance on any
of the assets of SEP GP pursuant to, any Contract to which SEP GP is a party
(with or without notice or lapse of time or both) or (c) a breach or violation
of, or a default under, any Law to which SEP GP is subject, except, in the case
of clause (b) or (c), as would not, individually or in the aggregate, prevent or
materially delay or impair the ability of SEP GP to consummate the Transactions.

 

Section 4.5           Governmental Consents and Approvals.  Subject to required
filings under federal and state securities Laws and compliance with the rules
and regulations of the NYSE, no consent, approval, waiver, authorization, notice
or filing is required to be obtained by SEP GP from, or to be given by SEP GP
to, or be made by SEP GP with, any Government Entity in connection with the
execution, delivery and performance by SEP GP of this Agreement or the
consummation of the Transactions, except as would not, individually or in the
aggregate, prevent or materially delay or impair the ability of SEP GP to
consummate the Transactions.

 

Section 4.6           Investment Intent and Securities Law Compliance.

 

(a)          SEP GP has been given reasonable access to full and fair disclosure
of all material information regarding SEP and the Restructuring Common Units,
including reasonable access to the books and records of SEP.  SEP GP
acknowledges and agrees that it has been provided, to its full satisfaction,
with the opportunity to ask questions concerning the terms and conditions of an
investment in SEP and has knowingly and voluntarily elected instead to rely
solely on its own investigation.

 

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(b)          SEP GP understands that the Restructuring Common Units are
“restricted securities” and have not been registered under the Securities Act or
any applicable state securities Laws.  SEP GP acknowledges that the
Restructuring Common Units will bear a restrictive legend to that effect.  SEP
GP acknowledges and agrees that it must bear the economic risk of this
investment indefinitely, that the Restructuring Common Units issued to SEP GP
hereunder may not be sold or transferred or offered for sale or transfer by it
without registration under the Securities Act and an applicable state securities
or “Blue Sky” Laws or the availability of exemptions therefrom, and that SEP GP
has no present intention of registering the resale of any of such Restructuring
Common Units.

 

(c)          SEP GP has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Restructuring Common Units, and has
so evaluated the merits and risks of such investment.  SEP GP is able to bear
the economic risk of an investment in the Restructuring Common Units and, at the
present time and in the foreseeable future, is able to afford a complete loss of
such investment.

 

(d)          SEP GP understands that the Restructuring Common Units are being
offered and issued to SEP GP in reliance upon specific exemptions from the
registration requirements of United States federal and state securities Laws and
that SEP is relying upon the truth and accuracy of, and SEP GP’s compliance
with, the representations, warranties, agreements, acknowledgments and
understandings, which are true, correct and complete, of SEP GP set forth herein
in order to determine the availability of such exemptions and the eligibility of
SEP GP to acquire the Restructuring Common Units.

 

Section 4.7           No Brokers or Finders.  Except for the fees payable by an
Affiliate of SEP GP to Barclays Capital Inc., there is no investment banker,
broker, finder or other intermediary that has been retained by or is authorized
to act on behalf of SEP GP or any of its Affiliates who is entitled to any fee
or commission from SEP GP or any of its Affiliates in connection with the
Transactions for which SEP or any of its Affiliates would be liable.

 

Section 4.8           No Other Representations or Warranties.  Except for the
representations and warranties contained in this Article IV, none of SEP GP, any
of its Affiliates, any of its or their respective equity holders, trustees or
Representatives, and any other Person has made or is making any other
representation or warranty of any kind or nature whatsoever, oral or written,
express or implied, with respect to SEP GP or its Affiliates, or its or their
respective businesses, this Agreement or the Transactions.  Except for the
representations and warranties contained in this Article IV, SEP GP disclaims,
on behalf of itself and its Affiliates, (i) any other representations or
warranties, whether made by SEP GP, any of its Affiliates, any of its or their
respective equity holders, trustees or Representatives or any other Person and
(ii) all Liabilities and responsibility for any other representation, warranty,
opinion, projection, forecast, advice, statement or information made,
communicated or furnished (orally or in writing) to SEP or its Affiliates.

 

 11 

 

 

Article V

AGREED TAX TREATMENT

 

Section 5.1           Agreed Tax Treatment.  The Parties agree that the
Transactions will be reported for U.S. federal income tax purposes as set forth
in this Section 5.1 (the “Agreed Tax Treatment”). Each Party shall, and shall
cause its controlled Affiliates to, file all tax returns and other reports
consistent with the Agreed Tax Treatment, unless required by Law to do
otherwise.

 

(a)          The Transactions will be reported as (i) with respect to the
Conversion of the General Partner Interest into the non-economic general partner
interest and a portion of the Restructuring Common Units, a transaction
described in Section 721 of the Code in a manner consistent with Revenue Ruling
84-52, 1984-1 C.B. 157 and (ii) with respect to the Conversion of the Incentive
Distribution Rights held by SEP GP into the remainder of the Restructuring
Common Units, a readjustment of partnership items among existing partners of a
partnership not involving a sale or exchange. As a result, (i) no taxable gain
or loss will be reported by SEP or SEP GP and (ii) in the case of the existing
Limited Partners owning Common Units, taxable gain will be reported only to the
extent such Limited Partner’s  share of SEP’s liabilities under Section 752 of
the Code is decreased by an amount that is greater than such Limited Partner’s
adjusted tax basis in its Common Units.

 

(b)          Pursuant to Section 5.3(d) of the Amended Partnership Agreement and
in connection with the Transaction, SEP GP will make an adjustment to the
Capital Accounts (as defined in the Amended Partnership Agreement) of SEP’s
partners and the Carrying Values (as defined in the Amended Partnership
Agreement) of SEP’s properties in accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f) and Proposed Treasury Regulation Section
1.704-1(b)(2)(iv)(f)(5)(v).

 

Section 5.2           Tax Representations and Covenants.  

 

(a)          Each Party represents that it is not aware of any fact that is in
existence on the date hereof or may reasonably be expected to occur on or prior
to the Closing, or has taken or agreed to take any action, that would reasonably
be expected to prevent or impede the Transactions from qualifying for the Agreed
Tax Treatment.

 

(b)            Each Party agrees to use its reasonable best efforts to cause the
Transactions to qualify for the Agreed Tax Treatment, including by not taking or
failing to take any action which action or failure to act such party knows is
reasonably likely to prevent such qualification.

 

 12 

 

 

Article VI

MISCELLANEOUS

 

Section 6.1           Notices.  All notices, requests, consents, claims,
demands, waivers and other communications hereunder shall be in writing and
shall be deemed to have been given (a) when delivered by hand (with written
confirmation of receipt), (b) when received by the addressee if sent by a
nationally recognized overnight courier (return receipt requested), or (c) on
the date sent by when received by the addressee if sent by e-mail (with written
confirmation of receipt) if sent during normal business hours of the recipient
or on the next Business Day if sent after normal business hours of the
recipient.  Such communications must be sent to SEP and SEP GP, respectively, at
the following addresses or e-mail addresses (or at such other address or e-mail
address for SEP and SEP GP as shall be specified for such purpose in a notice
given in accordance with this Section 6.1):

 

To SEP:

 

Spectra Energy Partners, LP

c/o Spectra Energy Partners GP, LLC

5400 Westheimer Court

Houston, Texas  77056

E-Mail:  legalnotices@enbridge.com

Attn:  Chief Legal Officer

With a copy (which shall not constitute notice) to the Conflicts Committee’s
legal counsel:

 

Locke Lord LLP

600 Travis, Suite 2800

Houston, Texas 77002

E-Mail:  bswanstrom@lockelord.com and Michael.Blankenship@lockelord.com

Attn:  H. William Swanstrom and Michael Blankenship

 

To SEP GP:

 

Spectra Energy Partners (DE) GP

c/o Enbridge (U.S.) Inc.

5400 Westheimer Court

Houston, Texas  77056

E-Mail:  legalnotices@enbridge.com

Attn:  Chief Legal Officer

 

 13 

 

 

With a copy (which shall not constitute notice) to SEP GP’s legal counsel:

 

Sullivan & Cromwell LLP

125 Broad Street

New York, NY  10004

E-Mail:  SAMPASG@sullcrom.com

Attn:  George J. Sampas

 

Section 6.2           Amendment; Waiver.  Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by each Person signatory hereto, or in the
case of a waiver, by the Person against whom the waiver is to be effective.  No
failure or delay by any Person in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.  The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by Law.

 

Section 6.3           No Assignment or Benefit to Third Parties.  This Agreement
shall be binding upon and inure to the benefit of SEP and SEP GP and their
respective successors, legal representatives and permitted assigns.  No Party
may assign any of its rights or delegate any of its obligations under this
Agreement (for the avoidance of doubt, no merger or sale of securities of any
Party or any entity that directly or indirectly controls any Party shall
constitute an assignment hereunder), without the prior written consent of the
other, except as provided in Section 6.5, and any attempted or purported
assignment in violation of this Section 6.3 shall be null and void.  Nothing in
this Agreement, express or implied, is intended to confer upon any Person other
than the parties to this Agreement and their respective successors and permitted
assigns, any rights or remedies under or by reason of this Agreement.  

 

Section 6.4           Entire Agreement.  This Agreement (including all Exhibits)
contains the entire agreement between SEP GP and SEP with respect to the subject
matter hereof and thereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters.

 

Section 6.5           Fulfillment of Obligations.  Any obligation of any Person
signatory hereto to any other Person signatory hereto under this Agreement that
is performed, satisfied or fulfilled completely by an Affiliate of such Person
signatory hereto shall be deemed to have been performed, satisfied or fulfilled
by such Person signatory hereto.

 

Section 6.6           Expenses.  Except as otherwise expressly provided in this
Agreement, whether or not the Transactions are consummated, all costs and
expenses incurred in connection with this Agreement and the Transactions shall
be borne by the Person signatory hereto incurring such costs and expenses.

 

 14 

 

 

Section 6.7           Governing Law; Submission to Jurisdiction; Selection of
Forum; Waiver of Trial by Jury.

 

(a)          This Agreement shall be governed by and construed in accordance
with the substantive Laws of the State of Delaware, without regard to the
conflict of laws rules thereof.

 

(b)          Except as otherwise set forth in this Agreement, all actions, suits
or proceedings arising out of or relating to this Agreement or the consummation
of the Transactions shall be heard and determined exclusively in the Court of
Chancery in the State of Delaware, or, if such court does not have jurisdiction
over such action, suit or proceeding, such action, suit or proceeding shall be
heard and determined exclusively in any state or federal court of competent
jurisdiction in Delaware.  Consistent with the preceding sentence, each of SEP
GP and SEP hereby, on behalf of itself and its Affiliates from time to time, (i)
irrevocably submits to the exclusive jurisdiction of the Court of Chancery in
the State of Delaware, or, if such court shall not have jurisdiction, any state
or federal court sitting in the State of Delaware (and the appropriate appellate
courts therefrom) for the purpose of any action, suit or proceeding arising out
of or relating to this Agreement or the consummation of the Transactions brought
by any of them, (ii) irrevocably waives, and agrees not to assert by way of
motion, defense or otherwise, in any such action, suit or proceeding, any claim
that it is not subject personally to the jurisdiction of the above-named courts,
that its property is exempt or immune from attachment or execution, that the
action, suit or proceeding is brought in an inconvenient forum, that the venue
of the action, suit or proceeding is improper, or that this Agreement or the
Transactions may not be enforced in or by any of the above-named courts and
(iii) irrevocably consents to and grants any such court exclusive jurisdiction
over the person of such parties and over the subject matter of such action, suit
or proceeding and agrees that mailing of process or other papers in connection
with any such action, suit or proceeding in the manner provided in Section 6.1
or in such other manner as may be permitted by applicable Law shall be valid and
sufficient service thereof.

 

(c)          EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY WITH RESPECT TO ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS.  EACH PARTY HEREBY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF THE OTHERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PERSON WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT OR THE TRANSACTIONS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS Section 6.7(c).

 

 15 

 

 

Section 6.8           Specific Performance.  Each of the Parties acknowledges
that its obligations hereunder are unique and that remedies at law, including
monetary damages, will be inadequate in the event it should default in the
performance of its obligations under this Agreement.  Accordingly, in the event
of any breach of any agreement, representation, warranty or covenant set forth
in this Agreement, a Party, in the case of a breach by the other Party, shall be
entitled to equitable relief, without the proof of actual damages, including in
the form of an injunction or injunctions or orders for specific performance to
prevent breaches of this Agreement and to order the defaulting Party to
affirmatively carry out its obligations under this Agreement, and each of the
Parties hereby waives any defense to the effect that a remedy at law would be an
adequate remedy for such breach.  Such equitable relief shall be in addition to
any other remedy to which each of the Parties are entitled to at law or in
equity as a remedy for such nonperformance, breach or threatened breach.  Each
of the Parties hereby waives any requirements for the securing or posting of any
bond with such equitable remedy.  The foregoing shall not be deemed to be or
construed as a waiver or election of remedies by any of the Parties, each of
whom expressly reserves any and all rights and remedies available to it at law
or in equity in the event of any breach or default by the others under this
Agreement prior to Closing.

 

Section 6.9           Counterparts.  This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
shall constitute one and the same agreement.  A signed copy of this Agreement
delivered by facsimile, e-mail or other means of electronic transmission shall
be deemed to have the same legal effect as delivery of an original signed copy
of this Agreement.

 

Section 6.10        Headings.  The heading references herein and the table of
contents hereof are for convenience purposes only, and shall not be deemed to
limit or affect any of the provisions hereof.

 

Section 6.11        Severability.  The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.  If
any provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected by such
invalidity or unenforceability, nor shall such invalidity or unenforceability
affect the validity or enforceability of such provision, or the application
thereof, in any other jurisdiction.

 

Section 6.12        Action by SEP.  With respect to any action (including any
case where the agreement of, or selection by, SEP is required), notice, consent,
approval or waiver that is required to be taken or given or that may be taken or
given by SEP at any time (including after the Closing) with respect to, or in
connection with, this Agreement, such action, notice, consent, approval or
waiver shall not be taken or given by SEP until first approved by the Conflicts
Committee.

 

[Remainder of Page Intentionally Left Blank]

 

 16 

 

 

IN WITNESS WHEREOF, this Equity Restructuring Agreement has been duly executed
by the authorized representative of each signatory set forth below as of the
date first written above.

 

  SEP GP:       SPECTRA ENERGY PARTNERS (DE) GP, LP (acting in its individual
capacity and not in its capacity as the general partner of SEP)             By:
Spectra Energy Partners GP, LLC,     its general partner               By: /s/
William T. Yardley     Name: William T. Yardley     Title: President            
SEP:       SPECTRA ENERGY PARTNERS, LP             By: Spectra Energy Partners
(DE) GP, LP,     its general partner               By: Spectra Energy Partners
GP, LLC,       its general partner                 By: /s/ Stephen J. Neyland  
    Name: Stephen J. Neyland       Title: Vice President – Finance

 

Signature Page to Equity Restructuring Agreement

 

 

 

 

EXHIBIT A

 

FORM OF THE THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF SPECTRA ENERGY PARTNERS, LP

 

See attached.

 

 

 

 

 

EXHIBIT A

  

THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
SPECTRA ENERGY PARTNERS, LP

 

 

 

 

TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS 2 Section 1.1 Definitions 2 Section 1.2 Construction 15

 

ARTICLE II ORGANIZATION 15 Section 2.1 Formation 15 Section 2.2 Name 15
Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices
16 Section 2.4 Purpose and Business 16 Section 2.5 Powers 16 Section 2.6 Power
of Attorney 16 Section 2.7 Term 18 Section 2.8 Title to Partnership Assets 18

 

ARTICLE III RIGHTS OF LIMITED PARTNERS 18 Section 3.1 Limitation of Liability 19
Section 3.2 Management of Business 19 Section 3.3 Outside Activities of the
Limited Partners 19 Section 3.4 Rights of Limited Partners 19

 

ARTICLE IV CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS;
REDEMPTION OF PARTNERSHIP INTERESTS 20 Section 4.1 Certificates 20 Section 4.2
Mutilated, Destroyed, Lost or Stolen Certificates 20 Section 4.3 Record Holders
21 Section 4.4 Transfer Generally 22 Section 4.5 Registration and Transfer of
Limited Partner Interests 22 Section 4.6 Transfer of the General Partner’s
General Partner Interest 23 Section 4.7 Restrictions on Transfers 24 Section 4.8
Tax Certifications; Ineligible Holders; Citizenship Certificates; Non-citizen
Assignees 25 Section 4.9 Redemption of Partnership Interests of Non-citizen and
Ineligible Holders 26       ARTICLE V CAPITAL CONTRIBUTIONS AND ISSUANCE OF
PARTNERSHIP INTERESTS 28 Section 5.1 Conversion of Incentive Distribution Rights
and Economic General Partner Interest 28 Section 5.2 Interest and Withdrawal of
Capital Contributions. 28 Section 5.3 Capital Accounts 28 Section 5.4 Issuances
of Additional Partnership Securities 31 Section 5.5 Limited Preemptive Right 31
Section 5.6 Splits and Combinations 32 Section 5.7 Fully Paid and Non-Assessable
Nature of Limited Partner Interests 32

 

 i

 

 

ARTICLE VI ALLOCATIONS AND DISTRIBUTIONS 33 Section 6.1 Allocations for Capital
Account Purposes 33 Section 6.2 Allocations for Tax Purposes 36 Section 6.3
Requirement and Characterization of Distributions; Distributions to Record
Holders 38       ARTICLE VII MANAGEMENT AND OPERATION OF BUSINESS 39 Section 7.1
Management 39 Section 7.2 Certificate of Limited Partnership 41 Section 7.3
Restrictions on the General Partner’s Authority 41 Section 7.4 Reimbursement of
the General Partner 41 Section 7.5 Outside Activities 43 Section 7.6 Loans from
the General Partner; Loans or Contributions from the Partnership or Group
Members 44 Section 7.7 Indemnification 44 Section 7.8 Liability of Indemnitees
46 Section 7.9 Resolution of Conflicts of Interest; Standards of Conduct and
Modification of Duties 47 Section 7.10 Other Matters Concerning the General
Partner 49 Section 7.11 Purchase or Sale of Partnership Securities 49
Section 7.12 Registration Rights of the General Partner and its Affiliates 49
Section 7.13 Reliance by Third Parties 53       ARTICLE VIII BOOKS, RECORDS,
ACCOUNTING AND REPORTS 53 Section 8.1 Records and Accounting 53 Section 8.2
Fiscal Year 53 Section 8.3 Reports 54       ARTICLE IX TAX MATTERS 54
Section 9.1 Tax Returns and Information 54 Section 9.2 Tax Elections 54
Section 9.3 Tax Controversies 55 Section 9.4 Withholding and Other Tax Payments
by the Partnership 55       ARTICLE X ADMISSION OF PARTNERS 57 Section 10.1
Admission of Substituted Limited Partners 57 Section 10.2 Admission of Successor
General Partner 57 Section 10.3 Admission of Additional Limited Partners 58
Section 10.4 Amendment of Agreement and Certificate of Limited Partnership 58  
    ARTICLE XI WITHDRAWAL OR REMOVAL OF PARTNERS 58 Section 11.1 Withdrawal of
the General Partner 58 Section 11.2 Removal of the General Partner 60
Section 11.3 Interest of Departing General Partner and Successor General
Partner. 60 Section 11.4 Withdrawal of Limited Partners 62

 

 ii

 

 

ARTICLE XII DISSOLUTION AND LIQUIDATION 62 Section 12.1 Dissolution 62
Section 12.2 Continuation of the Business of the Partnership After Dissolution
62 Section 12.3 Liquidator 63 Section 12.4 Liquidation 63 Section 12.5
Cancellation of Certificate of Limited Partnership 64 Section 12.6 Return of
Contributions 64 Section 12.7 Waiver of Partition 64 Section 12.8 Capital
Account Restoration 65       ARTICLE XIII AMENDMENT OF PARTNERSHIP AGREEMENT;
MEETINGS; RECORD DATE 65 Section 13.1 Amendments to be Adopted Solely by the
General Partner 65 Section 13.2 Amendment Procedures 66 Section 13.3 Amendment
Requirements 67 Section 13.4 Special Meetings 67 Section 13.5 Notice of a
Meeting 67 Section 13.6 Record Date 68 Section 13.7 Adjournment 68 Section 13.8
Waiver of Notice; Approval of Meeting 68 Section 13.9 Quorum and Voting 68
Section 13.10 Conduct of a Meeting 69 Section 13.11 Action Without a Meeting 69
Section 13.12 Right to Vote and Related Matters 70       ARTICLE XIV MERGER,
CONSOLIDATION OR CONVERSION 70 Section 14.1 Authority 70 Section 14.2 Procedure
for Merger, Consolidation or Conversion 70 Section 14.3 Approval by Limited
Partners 72 Section 14.4 Certificate of Merger 73 Section 14.5 Effect of Merger,
Consolidation or Conversion 74       ARTICLE XV RIGHT TO ACQUIRE LIMITED PARTNER
INTERESTS 75 Section 15.1 Right to Acquire Limited Partner Interests 75      
ARTICLE XVI GENERAL PROVISIONS 76 Section 16.1 Addresses and Notices; Written
Communications 76 Section 16.2 Further Action 77 Section 16.3 Binding Effect 77
Section 16.4 Integration 77 Section 16.5 Creditors 77 Section 16.6 Waiver 77
Section 16.7 Third-Party Beneficiaries 77 Section 16.8 Counterparts 78
Section 16.9 Applicable Law 78 Section 16.10 Invalidity of Provisions 78
Section 16.11 Consent of Partners 78 Section 16.12 Facsimile Signatures 78

 

 iii

 

 

THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF SPECTRA ENERGY PARTNERS, LP

 

THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF SPECTRA
ENERGY PARTNERS, LP dated as of January 21, 2018 is entered into by and between
Spectra Energy Partners (DE) GP, LP, a Delaware limited partnership, as the
General Partner, and the 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:

 

WHEREAS, that certain First Amended and Restated Agreement of Limited
Partnership of the Partnership, dated as of July 2, 2007, was adopted in
connection with the initial public offering of the Partnership;

 

WHEREAS, the General Partner effected Amendment No. 1 to the First Amended and
Restated Agreement of Limited Partnership of the Partnership, dated April 11,
2008 to make certain adjustments to certain allocation provisions and the
definitions related thereto;

 

WHEREAS, that certain Second Amended and Restated Agreement of Limited
Partnership of the Partnership, dated as of November 1, 2013, was adopted in
connection with the contribution by Spectra Energy Corp. of substantially all of
its interests in certain of its subsidiaries that owned U.S. transmission and
storage and liquids assets to the Partnership;

 

WHEREAS, the General Partner effected Amendment No. 1 to the Second Amended and
Restated Agreement of Limited Partnership of the Partnership, dated as of July
2, 2015, to, among other things, amend the redemption price to be paid in the
event of the redemption of a limited partner interest of a holder that is not an
Eligible Citizen or Eligible Holder;

 

WHEREAS, the General Partner effected Amendment No. 2 to the Second Amended and
Restated Agreement of Limited Partnership of the Partnership, dated as of
November 20, 2017, in response to changes to the Code enacted by the Bipartisan
Budget Act of 2015 relating to partnership audit and adjustment procedures;

 

WHEREAS, the Partnership and the General Partner have entered into that certain
Equity Restructuring Agreement, dated as of the date hereof (the “Equity
Restructuring Agreement”), pursuant to which (i) the Incentive Distribution
Rights held by the General Partner and the General Partner Units (as defined in
the Second Amended and Restated Agreement of Limited Partnership of the
Partnership) held by the General Partner will be automatically converted into
Common Units and a non-economic General Partner Interest and (ii) the Incentive
Distribution Rights will be cancelled;

 

WHEREAS, the General Partner desires to amend and restate the Second Amended and
Restated Agreement of Limited Partnership of the Partnership, as amended, to,
among other things, reflect the transactions contemplated by the Equity
Restructuring Agreement; and

 

WHEREAS, Section 13.1(d) of the Second Amended and Restated Agreement of Limited
Partnership of the Partnership, as amended, permits the General Partner, without
the approval of any Partner, to amend the Second Amended and Restated Agreement
of Limited Partnership of the Partnership to reflect any change that, in the
discretion of the General Partner, 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.

 

 1 

 

 

NOW, THEREFORE, the General Partner, pursuant to its authority under Section
13.1(d) and the exercise of its discretion, does hereby amend and restate the
Second Amended and Restated Agreement of Limited Partnership of the Partnership,
effective as of January 21, 2018, to provide, in its entirety, 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.

 

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

 

“Additional Limited Partner” means a Person admitted to the Partnership as a
Limited Partner pursuant to Section 10.3 and who is shown as such on the books
and records of the Partnership.

 

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

 

 2 

 

 

“Adjusted Property” means any property the Carrying Value of which has been
adjusted pursuant to Section 5.3(d)(i) or Section 5.3(d)(ii).

 

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

 

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

 

“Agreed Value” of any Contributed Property means the fair market value of such
property or other consideration at the time of contribution 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 Third Amended and Restated Agreement of Limited
Partnership of Spectra Energy Partners, LP, as it may be amended, supplemented
or restated from time to time.

 

“Assignee” means a Person to whom one or more Limited Partner Interests have
been transferred in a manner permitted under this Agreement and who has executed
and delivered a Transfer Application, including a Taxation Certification, as
required by this Agreement, but who has not been admitted as a Substituted
Limited Partner.

 

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

 

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

 

(a)          the sum of (i) all cash and cash equivalents 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, less

 

 3 

 

 

(b)          the amount of any cash reserves (or the Partnership’s proportionate
share of cash reserves in the case of Subsidiaries that are not wholly owned)
established by the General Partner to (i) provide for the proper conduct of the
business of the Partnership Group (including reserves for future capital
expenditures, for anticipated future credit needs of the Partnership Group and
for refunds of collected rates reasonably likely to be refunded as a result of a
settlement or hearing relating to FERC rate proceedings) 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 in respect of any one or more of the next
four Quarters; provided, however, 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 the board of directors or managers of a corporation
or limited liability company or the board of directors or board of managers of
the general partner of a limited partnership, as applicable.

 

“Book-Tax Disparity” means with respect to any item of Contributed Property or
Adjusted Property, as of the date of any determination, the difference between
the Carrying Value of such Contributed Property or Adjusted Property and the
adjusted basis thereof for federal income tax purposes as of such date. A
Partner’s share of the Partnership’s Book-Tax Disparities in all of its
Contributed Property and Adjusted Property will be reflected by the difference
between such Partner’s Capital Account balance as maintained pursuant to
Section 5.3 and the hypothetical balance of such Partner’s Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.

 

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

 

“Capital Account” means the capital account maintained for a Partner pursuant to
Section 5.3. The “Capital Account” of a Partner in respect of a Common Unit or
any other Partnership Interest shall be the amount that such Capital Account
would be if such Common Unit or other Partnership Interest were the only
interest in the Partnership held by such Partner from and after the date on
which such Common Unit or other Partnership Interest was first issued.

 

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

 

 4 

 

 

“Capital Improvement” means any (a) addition or improvement to the capital
assets, owned by any Group Member, (b) the construction of new capital assets or
(c) capital contributions by a Group Member to a Person that is not a Subsidiary
in which a Group Member has an equity interest to fund such Group Member’s Pro
Rata share of the cost of the construction of new capital assets by such Person,
in each case if such addition, improvement, acquisition or construction is made
to increase the long-term operating capacity, asset base or income of the
Partnership Group, in the case of clauses (a) and (b), or such Person, in the
case of clause (c), from the operating capacity, asset base or income of the
Partnership Group or such Person, as the case may be, existing immediately prior
to such addition, improvement, acquisition or construction.

 

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

 

“Carrying Value” means (a) with respect to a Contributed Property, the Agreed
Value of such property reduced (but not below zero) by all depreciation,
amortization and cost recovery deductions charged to the Partners’ and
Assignees’ Capital Accounts in respect of such Contributed Property, and (b)
with respect to any other Partnership property, the adjusted basis of such
property for federal income tax purposes, all as of the time of determination.
The Carrying Value of any property shall be adjusted from time to time in
accordance with Section 5.3(d)(i) and Section 5.3(d)(ii) and to reflect changes,
additions or other adjustments to the Carrying Value for dispositions and
acquisitions of Partnership properties, as deemed appropriate by the General
Partner.

 

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

 

“Certificate” means (a) a certificate (i) substantially in the form of Exhibit A
to this Agreement, (ii) issued in global form in accordance with the rules and
regulations of the Depositary or (iii) in such other form as may be adopted by
the General Partner, issued by the Partnership evidencing ownership of one or
more Common Units or (b) a certificate, in such form as may be adopted by the
General Partner, issued by the Partnership evidencing ownership of one or more
other Partnership Securities.

 

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

 

“Citizenship Certification” means a properly completed certificate in such form
as may be specified by the General Partner by which an Assignee or a Limited
Partner certifies that he (and if he is a nominee holding for the account of
another Person, that to the best of his knowledge such other Person) is an
Eligible Citizen.

 

“claim” (as used in Section 7.12(d)) has the meaning assigned to such term in
Section 7.12(d).

 

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

 

 5 

 

 

“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, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
National Securities Exchange (other than the Nasdaq National Market) 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 (other than the Nasdaq National Market), the last
quoted price on such day or, if not so quoted, the average of the high bid and
low asked prices on such day in the over-the-counter market, as reported by the
Nasdaq National Market or such other system then in use, or, if on any such day
such Limited Partner Interests of such class are not quoted by any such
organization, the average of the closing bid and 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 Internal Revenue Code of 1986, as amended and in effect from
time to time. Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of any
successor law.

 

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

 

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

 

“Common Unit” means a Partnership Security representing a fractional part of the
Partnership Interests of all Limited Partners and Assignees, and having the
rights and obligations specified with respect to Common Units in this Agreement.

 

“Conflicts Committee” means a committee of the Board of Directors of the General
Partner composed entirely of two or more directors, each of whom (a) is not a
security holder, officer or employee of the General Partner, (b) is not an
officer, director or employee of any Affiliate of the General Partner, (c) is
not a holder of any ownership interest in the Partnership Group other than
Common Units and (d) meets the independence standards required of directors who
serve on an audit committee of a board of directors established by the
Securities Exchange Act and the rules and regulations of the Commission
thereunder and by the National Securities Exchange on which the Common Units are
listed or admitted 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 shall no longer constitute a
Contributed Property, but shall be deemed an Adjusted Property.

 

“Contribution Agreement” means that certain Contribution and Conveyance
Agreement, dated as of the Closing Date, among the General Partner, the
Partnership, the Operating Partnership and certain other parties, together with
the additional conveyance documents and instruments contemplated or referenced
thereunder, as such may be amended, supplemented or restated from time to time.

 

 6 

 

 

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

 

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

 

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

 

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

 

“Depositary” means, with respect to any Units issued in global form, The
Depository Trust Company and its successors and permitted assigns.

 

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

 

“Eligible Citizen” means a Person qualified to own interests in real property in
jurisdictions in which any Group Member does business or proposes to do business
from time to time, and whose status as a Limited Partner or Assignee the General
Partner determines does not or would not subject such Group Member to a
significant risk of cancellation or forfeiture of any of its properties or any
interest therein.

 

“Eligible Holder” means a Person that is not an Ineligible Holder.

 

“Equity Restructuring Agreement” has the meaning set forth in the recitals.

 

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

 

“FERC” means the Federal Energy Regulatory Commission.

 

“General Partner” means Spectra Energy Partners (DE) GP, LP, a Delaware limited
partnership, and its successors and permitted assigns that are admitted to the
Partnership as general partner of the Partnership, in its capacity as general
partner of the Partnership (except as the context otherwise requires).

 

“General Partner Interest” means the management interest of the General Partner
in the Partnership (in its capacity as a general partner without reference to
any Limited Partner Interest held by it), and includes any and all benefits to
which the General Partner is entitled as provided in this Agreement, together
with all obligations of the General Partner to comply with the terms and
provisions of this Agreement. The General Partner Interest does not have any
rights to ownership, profit or any rights to receive any distributions from
operations or the liquidation of the Partnership.

 

 7 

 

 

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

 

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

 

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

 

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

 

“Holder” as used in Section 7.12, has the meaning assigned to such term in
Section 7.12(a).

 

“Incentive Distribution Right” means the non-voting Limited Partner Interest
that, prior to the execution and effectiveness of the Equity Restructuring
Agreement and this Agreement, was held by the General Partner and pursuant to
which the General Partner was entitled to certain incentive distributions under
the Second Amended and Restated Agreement of Limited Partnership of the
Partnership, dated as of November 1, 2013, as amended.

 

“Indemnified Persons” has the meaning assigned to such term in Section 7.12(d).

 

“Indemnitee” means (a) the General Partner, (b) any Departing General Partner,
(c) any Person who is or was an Affiliate of the General Partner or any
Departing General Partner, (d) any Person who is or was a member, partner,
director, officer, fiduciary or trustee of any Group Member (other than any
Person who is or was a Limited Partner of the Partnership in such Person’s
capacity as such), the General Partner or any Departing General Partner or any
Affiliate of any Group Member, the General Partner or any Departing General
Partner, (e) any Person who is or was serving at the request of the General
Partner or any Departing General Partner or any Affiliate of the General Partner
or any Departing General Partner as an officer, director, member, partner,
fiduciary or trustee of another Person; provided that a Person shall not be an
Indemnitee by reason of providing, on a fee-for-services basis, trustee,
fiduciary or custodial services, and (f) any Person the General Partner
designates as an “Indemnitee” for purposes of this Agreement.

 

 8 

 

 

“Ineligible Holder” means a Person whose, or whose beneficial owners, U.S.
federal income tax status (or lack of proof of the U.S. federal income tax
status) has or is reasonably likely to have, as determined by the General
Partner, 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.

 

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

 

“Limited Partner” means, unless the context otherwise requires, (a) each Person
that is a limited partner of the Partnership at the effective time of this
Agreement, each Substituted Limited Partner, and each Additional Limited Partner
or (b) solely for purposes of Articles V, VI, VII, IX and XII, each Assignee.

 

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

 

“Limited Partner Unit” means each of the Common Units and other Units
representing fractional parts of the Partnership Interests of all Limited
Partners and Assignees.

 

“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.

 

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

 

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

 

“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 or
Assignee 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 indebtedness either assumed by such Partner or
Assignee upon such distribution or to which such property is subject at the time
of distribution, in either case, as determined under Section 752 of the Code.

 

 9 

 

 

“Net Income” means, for any taxable year, the excess, if any, of the
Partnership’s items of income and gain for such taxable year over the
Partnership’s items of loss and deduction for such taxable year. The items
included in the calculation of Net Income shall be determined in accordance with
Section 5.3(b), but shall not include any items specially allocated under
Section 6.1(c).

 

“Net Loss” means, for any taxable year, the excess, if any, of the Partnership’s
items of loss and deduction for such taxable year over the Partnership’s items
of income and gain for such taxable year. The items included in the calculation
of Net Loss shall be determined in accordance with Section 5.3(b) but shall not
include any items specially allocated under Section 6.1(c).

 

“Non-citizen Assignee” means a Person whom the General Partner has determined
does not constitute an Eligible Citizen and as to whose Partnership Interest the
General Partner has become the Substituted Limited Partner, pursuant to
Section 4.8.

 

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

 

“Nonrecourse Deductions” means any and all items of loss, deduction or
expenditure (including any expenditure described in Section 705(a)(2)(B) of the
Code) 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” has the meaning assigned to such term in
Section 15.1(b).

 

“Omnibus Agreement” means that certain Omnibus Agreement, dated as of the
Closing Date, among Spectra Energy Corp., the General Partner and the
Partnership, as such agreement may be amended, supplemented or restated from
time to time.

 

“Operating Partnership” means Spectra Energy Partners OLP, LP, a Delaware
limited partnership, and any successors thereto.

 

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

 

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

 

 10 

 

 

“Outstanding” means, with respect to Partnership Securities, all Partnership
Securities 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
Securities of any class then Outstanding, all Partnership Securities owned by
such Person or Group shall not be voted on any matter and shall not be
considered to be Outstanding when sending notices of a meeting of Limited
Partners to vote on any matter (unless otherwise required by law), calculating
required votes, determining the presence of a quorum or for other similar
purposes under this Agreement, except that Units so owned shall be considered to
be Outstanding for purposes of Section 11.1(b)(iv) (such Units shall not,
however, be treated as a separate class of Partnership Securities for purposes
of this Agreement); provided, further, that the foregoing limitation shall not
apply to (a) any Person or Group who acquired 20% or more of the Outstanding
Partnership Securities of any class then Outstanding directly from the General
Partner or its Affiliates, (b) any Person or Group who acquired 20% or more of
the Outstanding Partnership Securities of any class then Outstanding directly or
indirectly from a Person or Group described in clause (a) provided that the
General Partner shall have notified such Person or Group in writing that such
limitation shall not apply, or (c) any Person or Group who acquired 20% or more
of any Partnership Securities issued by the Partnership with the prior approval
of the Board of Directors of the General Partner.

 

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

 

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

 

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

 

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

 

“Partnership” means Spectra Energy Partners, LP, a Delaware limited partnership.

 

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

 

“Partnership Interest” means an interest in the Partnership, which shall include
the General Partner Interest and Limited Partner Interests.

 

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

 

“Partnership Security” means any class or series of equity interest in the
Partnership (but excluding any options, rights, warrants and appreciation rights
relating to an equity interest in the Partnership), including Common Units.
Partnership Security shall not include the General Partner Interest.

 

 11 

 

 

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

 

“Percentage Interest” means (a) as to any Unitholder or Assignee holding Units,
the quotient obtained by dividing (i) the number of Units held by such
Unitholder or Assignee, as the case may be, by (ii) the total number of all
Outstanding Units, and (b) as to the holders of other Partnership Securities
issued by the Partnership in accordance with Section 5.4, the percentage
established as a part of such issuance. The Percentage Interest with respect to
the General Partner Interest shall at all times be zero.

 

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

 

“Pro Rata” means (a) when used with respect to Units or any class thereof,
apportioned equally among all designated Units in accordance with their relative
Percentage Interests, and (b) when used with respect to Partners and Assignees
or Record Holders, apportioned among all Partners and Assignees or Record
Holders in accordance with their relative Percentage Interests.

 

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

 

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

 

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

 

“Record Date” means the date established by the General Partner or otherwise in
accordance with this Agreement for determining (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 the Person in whose name a Common Unit is registered on
the books of the Transfer Agent as of the opening of business on a particular
Business Day, or with respect to other Partnership Interests, the Person in
whose name any such other Partnership Interest is registered on the books that
the General Partner has caused to be kept as of the opening of business on such
Business Day.

 

 12 

 

 

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

 

“Registration Statement” means the Registration Statement on Form S-1 (File No.
333-141687) as it has been or as it may be amended or supplemented from time to
time, filed by the Partnership with the Commission under the Securities Act to
register the offering and sale of the Common Units.

 

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

 

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

 

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

 

“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.

 

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

 

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

 

“Substituted Limited Partner” means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 10.1 in place of and with all the
rights of a Limited Partner and who is shown as a Limited Partner on the books
and records of the Partnership.

 

 13 

 

 

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

 

“Taxation Certification” means a properly completed certificate in such form or
forms as may be specified by the General Partner by which a Limited Partner or
Assignee certifies that he (and if he is a nominee holding for the account of
another Person, that to the best of his knowledge such other Person) is an
Eligible Holder and includes a Transfer Application containing such a
certification.

 

“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 are listed
is open for the transaction of business or, if Limited Partner Interests of a
class are not listed on any National Securities Exchange, a day on which banking
institutions in New York City generally are open.

 

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

 

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

 

“Transfer Application” means an application and agreement for transfer of Units
in the form set forth on the back of a Certificate or in a form substantially to
the same effect in a separate instrument.

 

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

 

“Underwriting Agreement” means that certain Underwriting Agreement dated as of
June 26, 2007 among the Underwriters, the Partnership, the General Partner and
the other parties thereto, providing for the purchase of Common Units by the
Underwriters.

 

“Unit” means a Partnership Security that is designated as a “Unit” and shall
include Common Units, but shall not include the General Partner Interest.

 

“Unit Majority” means at least a majority of the Outstanding Common Units voting
as a single class.

 

“Unitholders” means the holders of Units.

 

“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)).

 

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“U.S. GAAP” means United States generally accepted accounting principles
consistently applied.

 

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

 

Section 1.2Construction.

 

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

 

ARTICLE II
ORGANIZATION

 

Section 2.1Formation.

 

The General Partner and the Organizational Limited Partner have previously
formed the Partnership as a limited partnership pursuant to the provisions of
the Delaware Act and hereby amend and restate the Second Agreement of Limited
Partnership of Spectra Energy Partners, LP in its entirety. This amendment and
restatement shall become effective on the date of this Agreement simultaneously
with the effectiveness of the transactions contemplated by the Equity
Restructuring Agreement. Except as expressly provided to the contrary in this
Agreement, the rights, duties (including fiduciary duties), liabilities and
obligations of the Partners and the administration, dissolution and termination
of the Partnership shall be governed by the Delaware Act. All Partnership
Interests shall constitute personal property of the owner thereof for all
purposes.

 

Section 2.2Name.

 

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

 

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Section 2.3Registered 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 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801, and the registered agent for
service of process on the Partnership in the State of Delaware at such
registered office shall be The Corporation Trust Company. The principal office
of the Partnership shall be located at 5400 Westheimer Court, Houston, Texas
77056, or such other place as the General Partner may from time to time
designate by notice to the Limited Partners. The Partnership may maintain
offices at such other place or places within or outside the State of Delaware as
the General Partner shall determine necessary or appropriate. The address of the
General Partner shall be 5400 Westheimer Court, Houston, Texas 77056, 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 and that lawfully may be conducted by a limited partnership
organized pursuant to the Delaware Act and, in connection therewith, to exercise
all of the rights and powers conferred upon the Partnership pursuant to the
agreements relating to such business activity, and (b) do anything necessary or
appropriate to the foregoing, including the making of capital contributions or
loans to a Group Member; provided, however, that the General Partner shall not
cause the Partnership to engage, directly or indirectly, in any business
activity that the General Partner determines would cause the Partnership to be
treated as an association taxable as a corporation or otherwise taxable as an
entity for 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 decline to propose or approve, the conduct by the Partnership of any
business free of any fiduciary duty or obligation whatsoever to the Partnership,
any Limited Partner or any Assignee 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
or appropriate 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 2.6Power of Attorney.

 

(a)            Each Limited Partner and each Assignee hereby constitutes and
appoints the General Partner and, if a Liquidator shall have been selected
pursuant to Section 12.3, the Liquidator (and any successor to the Liquidator by
merger, transfer, assignment, election or otherwise) and each of their
authorized officers and attorneys-in-fact, as the case may be, with full power
of substitution, as his true and lawful agent and attorney-in-fact, with full
power and authority in his name, place and stead, to:

 

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(i)          execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (A) all certificates, documents and other instruments
(including this Agreement and the Certificate of Limited Partnership and all
amendments or restatements hereof or thereof) that the General Partner or the
Liquidator determines to be necessary or appropriate to form, qualify or
continue the existence or qualification of the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware and in all other jurisdictions in which the
Partnership may conduct business or own property; (B) all certificates,
documents and other instruments that the General Partner or the Liquidator
determines to be necessary or appropriate to reflect, in accordance with its
terms, any amendment, change, modification or restatement of this Agreement; (C)
all certificates, documents and other instruments (including conveyances and a
certificate of cancellation) that the General Partner or the Liquidator
determines to be necessary or appropriate to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this Agreement; (D) all
certificates, documents and other instruments relating to the admission,
withdrawal, removal or substitution of any Partner pursuant to, or other events
described in, Article IV, Article X, Article XI or Article XII; (E) all
certificates, documents and other instruments relating to the determination of
the rights, preferences and privileges of any class or series of Partnership
Securities issued pursuant to Section 5.4; and (F) all certificates, documents
and other instruments (including agreements and a certificate of merger or
conversion) relating to a merger, consolidation or conversion of the Partnership
pursuant to ARTICLE XIV; and

 

(ii)         execute, swear to, acknowledge, deliver, file and record all
ballots, consents, approvals, waivers, certificates, documents and other
instruments that the General Partner or the Liquidator determines to be
necessary or appropriate to (A) make, evidence, give, confirm or ratify any
vote, consent, approval, agreement or other action that is made or given by the
Partners hereunder or is consistent with the terms of this Agreement or (B)
effectuate the terms or intent of this Agreement; provided, that when required
by Section 13.3 or any other provision of this Agreement that establishes a
percentage of the Limited Partners or of the Limited Partners of any class or
series required to take any action, the General Partner and the Liquidator may
exercise the power of attorney made in this Section 2.6(a)(ii) only after the
necessary vote, consent or approval of the Limited Partners or of the Limited
Partners of such class or series, as applicable.

 

Nothing contained in this Section 2.6(a) shall be construed as authorizing the
General Partner to amend this Agreement except in accordance with ARTICLE XIII
or as may be otherwise expressly provided for in this Agreement.

 

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(b)            The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, and it shall survive and, to
the maximum extent permitted by law, not be affected by, the subsequent death,
incompetency, disability, incapacity, dissolution, bankruptcy or termination of
any Limited Partner or Assignee and the transfer of all or any portion of such
Limited Partner’s or Assignee’s Partnership Interest and shall extend to such
Limited Partner’s or Assignee’s heirs, successors, assigns and personal
representatives. Each such Limited Partner or Assignee hereby agrees to be bound
by any representation made by the General Partner or the Liquidator acting in
good faith pursuant to such power of attorney; and each such Limited Partner or
Assignee, to the maximum extent permitted by law, hereby waives any and all
defenses that may be available to contest, negate or disaffirm the action of the
General Partner or the Liquidator taken in good faith under such power of
attorney. Each Limited Partner or Assignee shall execute and deliver to the
General Partner or the Liquidator, within 15 days after receipt of the request
therefor, such further designation, powers of attorney and other instruments as
the General Partner or the Liquidator may request in order to effectuate this
Agreement and the purposes of the Partnership.

 

Section 2.7Term.

 

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

 

Section 2.8Title 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 or Assignee, individually or collectively, shall have any
ownership interest in such Partnership assets or any portion thereof. Title to
any or all of the Partnership assets may be held in the name of the Partnership,
the General Partner, one or more of its Affiliates or one or more nominees, as
the General Partner may determine. The General Partner hereby declares and
warrants that any Partnership assets for which record title is held in the name
of the General Partner or one or more of its Affiliates or one or more nominees
shall be held by the General Partner or such Affiliate or nominee for the use
and benefit of the Partnership in accordance with the provisions of this
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 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 and the Assignees shall have no liability under this
Agreement except as expressly provided in this Agreement or the Delaware Act.

 

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Section 3.2Management of Business.

 

No Limited Partner or Assignee, in its capacity as such, shall participate in
the operation, management or control (within the meaning of the Delaware Act) of
the Partnership’s business, transact any business in the Partnership’s name or
have the power to sign documents for or otherwise bind the Partnership. Any
action taken by any Affiliate of the General Partner or any officer, director,
employee, manager, member, general partner, agent or trustee of the General
Partner or any of its Affiliates, or any officer, director, employee, manager,
member, general partner, agent or trustee of a Group Member, in its capacity as
such, shall not be deemed to be participation 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 or Assignees under this
Agreement.

 

Section 3.3Outside Activities of the Limited Partners.

 

Subject to the provisions of Section 7.5, any Limited Partner or Assignee 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 or Assignees shall have any rights by
virtue of this Agreement in any business ventures of any Limited Partner or
Assignee.

 

Section 3.4Rights of Limited Partners.

 

(a)            In addition to other rights provided by this Agreement or by
applicable law, and except as limited by Section 3.4(b), each Limited Partner
shall have the right, for a purpose reasonably related to such Limited Partner’s
interest as a Limited Partner in the Partnership, upon reasonable written demand
stating the purpose of such demand, and at such Limited Partner’s own expense:

 

(i)          to obtain true and full information regarding the status of the
business and financial condition of the Partnership;

 

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

 

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

 

(iv)        to obtain a copy of this Agreement and the Certificate of Limited
Partnership and all amendments thereto, together with 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;

 

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

 

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

 

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

 

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

 

Section 4.1Certificates.

 

Upon the Partnership’s issuance of Common Units, the Partnership shall issue,
upon the request of such Person, one or more Certificates in the name of such
Person (or, if issued in global form, in the name of the Depositary or its
nominee) evidencing the number of such Units being so issued. In addition, upon
the request of any Person owning Partnership Securities other than Common Units,
the Partnership shall issue to such Person one or more certificates evidencing
such Partnership Securities other than Common Units. Certificates shall be
executed on behalf of the Partnership by the Chairman of the Board, Chief
Executive Officer, President, Chief Financial Officer or any Vice President and
the Secretary, any Assistant Secretary, or other authorized officer or director
of the General Partner. No Common Unit Certificate shall be valid for any
purpose until it has been countersigned by the Transfer Agent; provided,
however, the Units may be certificated or uncertificated as provided in the
Delaware Act; provided, further, that if the General Partner elects to issue
Common Units in global form, the Common Unit Certificates shall be valid upon
receipt of a certificate from the Transfer Agent certifying that the Common
Units have been duly registered in accordance with the directions of the
Partnership.

 

Section 4.2Mutilated, Destroyed, Lost or Stolen Certificates.

 

(a)            If any mutilated Certificate is surrendered to the Transfer Agent
(for Common Units) or the General Partner (for Partnership Securities other than
Common Units), the appropriate officers of the General Partner on behalf of the
Partnership shall execute, and the Transfer Agent (for Common Units) or the
General Partner (for Partnership Securities other than Common Units) shall
countersign and deliver in exchange therefor, a new Certificate evidencing the
same number and type of Partnership Securities 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 (for Common Units)
shall countersign, a new Certificate in place of any Certificate previously
issued, or issue uncertificated Common Units, if the Record Holder of the
Certificate:

 

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(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 or the issuance of
uncertificated Units 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.

 

If a Limited Partner or Assignee fails to notify the General Partner within a
reasonable period of time after he 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 or Assignee 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 or
uncertificated Units.

 

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

 

 21 

 

 

Section 4.4Transfer Generally.

 

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

 

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

 

(c)            Nothing contained in this Agreement shall be construed to prevent
a disposition by any stockholder, member, partner or other owner of the General
Partner of any or all of the shares of stock, membership interests, partnership
interests or other ownership interests in the General Partner.

 

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. The Transfer Agent is hereby appointed registrar and transfer agent
for the purpose of registering Common Units and transfers of such Common Units
as herein provided. The Partnership shall not recognize transfers of
Certificates evidencing Limited Partner Interests unless such transfers are
effected in the manner described in this Section 4.5. Upon surrender of a
Certificate for registration of transfer of any Limited Partner Interests
evidenced by a Certificate, and subject to the provisions of Section 4.5(b), the
appropriate officers of the General Partner on behalf of the Partnership shall
execute and deliver, and in the case of Common Units, 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.

 

(b)            Except as otherwise provided in Section 4.8, the General Partner
shall not recognize any transfer of Limited Partner Interests until the
Certificates evidencing such Limited Partner Interests are surrendered for
registration of transfer and such Certificates are accompanied by a Transfer
Application, properly completed and including a Taxation Certification, duly
executed by the transferee (or the transferee’s attorney-in-fact duly authorized
in writing). 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. No distributions or allocations will be made in respect of
the Limited Partner Interests until a properly completed Transfer Application
has been delivered with respect to such Limited Partner Interests.

 

 22 

 

 

(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
or Certificates shall be made to the holder of Common Units entitled thereto and
the transaction shall be recorded upon the books of the Partnership.

 

(d)            Limited Partner Interests may be transferred only in the manner
described in this Section 4.5. The transfer of any Limited Partner Interests and
the admission of any new Limited Partner shall not constitute an amendment to
this Agreement.

 

(e)            Until admitted as a Substituted Limited Partner pursuant to
Section 10.1, the Record Holder of a Limited Partner Interest shall be an
Assignee in respect of such Limited Partner Interest. Limited Partners may
include custodians, nominees or any other individual or entity in its own or any
representative capacity.

 

(f)            A transferee of a Limited Partner Interest who has completed and
delivered a Transfer Application shall be deemed to have (i) requested admission
as a Substituted Limited Partner, (ii) agreed to comply with and be bound by and
to have executed this Agreement, (iii) represented and warranted that such
transferee has the right, power and authority and, if an individual, the
capacity to enter into this Agreement, (iv) granted the powers of attorney set
forth in this Agreement, and (v) given the consents and approvals and made the
waivers contained in this Agreement.

 

(g)            The General Partner and its Affiliates shall have the right at
any time to transfer their Common Units to one or more Persons.

 

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

 

(a)            Subject to Section 4.6(b) below, the General Partner may transfer
its General Partner Interest without Unitholder approval.

 

(b)            Notwithstanding anything herein to the contrary, no transfer by
the General Partner of its General Partner Interest to another Person shall be
permitted unless (i) the General Partner transfers its General Partner Interest
in whole and not in part (ii)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, (iii) the Partnership receives an Opinion of
Counsel that such transfer would not result in the loss of limited liability of
any Limited Partner under the Delaware Act or cause the Partnership to be
treated as an association taxable as a corporation or otherwise to be taxed as
an entity for federal income tax purposes (to the extent not already so treated
or taxed) and (iv) such transferee also agrees to purchase all of the
partnership or membership interest of the General Partner as the general partner
or managing member, if any, of each other Group Member. In the case of a
transfer pursuant to and in compliance with this Section 4.6, the transferee or
successor (as the case may be) shall, subject to compliance with the terms of
Section 10.2, be admitted to the Partnership as the General Partner immediately
prior to the transfer of the General Partner Interest, and the business of the
Partnership shall continue without dissolution.

 

 23 

 

 

Section 4.7Restrictions on Transfers.

 

(a)            Except as provided in Section 4.7(c) below, and notwithstanding
the other provisions of this ARTICLE IV, no transfer of any Partnership
Interests shall be made if such transfer would (i) violate the then applicable
federal or state securities laws or rules and regulations of the Commission, any
state securities commission or any other governmental authority with
jurisdiction over such transfer, (ii) terminate the existence or qualification
of the Partnership under the laws of the jurisdiction of its formation, or (iii)
cause the Partnership to be treated as an association taxable as a corporation
or otherwise to be taxed as an entity for federal income tax purposes (to the
extent not already so treated or taxed).

 

(b)            The General Partner may impose restrictions on the transfer of
Partnership Interests if it receives an Opinion of Counsel that such
restrictions are necessary to avoid a significant risk of the Partnership
becoming taxable as a corporation or otherwise becoming taxable as an entity for
federal income tax purposes. 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 ARTICLE IV, or elsewhere in this
Agreement, shall preclude the settlement of any transactions involving
Partnership Interests entered into through the facilities of any National
Securities Exchange on which such Partnership Interests are listed or admitted
to trading.

 

(d)            Each certificate evidencing Partnership Interests shall bear a
conspicuous legend in substantially the following form:

 

THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF SPECTRA ENERGY
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 SPECTRA ENERGY PARTNERS, LP UNDER THE LAWS OF THE STATE OF
DELAWARE, OR (C) CAUSE SPECTRA ENERGY 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).
SPECTRA ENERGY PARTNERS (DE) GP, LP, THE GENERAL PARTNER OF SPECTRA ENERGY
PARTNERS, LP, MAY IMPOSE ADDITIONAL RESTRICTIONS ON THE TRANSFER OF THIS
SECURITY IF IT RECEIVES AN OPINION OF COUNSEL THAT SUCH RESTRICTIONS ARE
NECESSARY TO AVOID A SIGNIFICANT RISK OF SPECTRA ENERGY PARTNERS, LP BECOMING
TAXABLE AS A CORPORATION OR OTHERWISE BECOMING TAXABLE AS AN ENTITY FOR FEDERAL
INCOME TAX PURPOSES. THE RESTRICTIONS SET FORTH ABOVE SHALL NOT PRECLUDE THE
SETTLEMENT OF ANY TRANSACTIONS INVOLVING THIS SECURITY ENTERED INTO THROUGH THE
FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE ON WHICH THIS SECURITY IS LISTED
OR ADMITTED TO TRADING.

 

 24 

 

 

Section 4.8Tax Certifications; Ineligible Holders; Citizenship Certificates;
Non-citizen Assignees.

 

(a)            If a transferee of a Limited Partner Interest fails to furnish a
properly completed Taxation Certification in a Transfer Application or if, upon
receipt of such Taxation Certification or otherwise, the General Partner
determines that such transferee is not an Eligible Holder, the Limited Partner
Interests owned by such transferee shall be subject to redemption in accordance
with the provisions of Section 4.9.

 

(b)            The General Partner may request any Limited Partner or Assignee
to furnish to the General Partner, within 30 days after receipt of such request,
an executed Taxation Certification or such other information concerning his
federal income tax status with respect to the income and loss generated by the
Partnership (or, if the Limited Partner or Assignee is a nominee holding for the
account of another Person, the federal income tax status of such Person) as the
General Partner may request. If a Limited Partner or Assignee fails to furnish
to the General Partner within the aforementioned 30-day period such Taxation
Certification or other requested information or if upon receipt of such Taxation
Certification or other requested information the General Partner determines that
a Limited Partner or Assignee is not an Eligible Holder, the Limited Partner
Interests owned by such Limited Partner or Assignee shall be subject to
redemption in accordance with the provisions of Section 4.9. In addition, the
General Partner may require that the status of any such Limited Partner or
Assignee be changed to that of an Ineligible Holder and, thereupon, such
Ineligible Holder shall cease to be a Partner and shall have no voting rights in
respect of his Limited Partner Interests. The General Partner shall be
substituted for such Ineligible Holder as the Limited Partner or Assignee in
respect of the Ineligible Holder’s Limited Partner Interests and shall vote such
Limited Partner Interests in accordance with Section 4.8(b).

 

(c)            If any Group Member is or becomes subject to any federal, state
or local law or regulation that the General Partner determines 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 or Assignee, the General Partner may request
any Limited Partner or Assignee to furnish to the General Partner, within 30
days after receipt of such request, an executed Citizenship Certification or
such other information concerning his nationality, citizenship or other related
status (or, if the Limited Partner or Assignee is a nominee holding for the
account of another Person, the nationality, citizenship or other related status
of such Person) as the General Partner may request. If a Limited Partner or
Assignee fails to furnish to the General Partner within the aforementioned
30-day period such Citizenship Certification or other requested information or
if upon receipt of such Citizenship Certification or other requested information
the General Partner determines that a Limited Partner or Assignee is not an
Eligible Citizen, the Limited Partner Interests owned by such Limited Partner or
Assignee shall be subject to redemption in accordance with the provisions of
Section 4.9. In addition, the General Partner may require that the status of any
such Limited Partner or Assignee be changed to that of a Non-citizen Assignee
and, thereupon, the General Partner shall be substituted for such Non-citizen
Assignee as the Limited Partner in respect of the Non-citizen Assignee’s Limited
Partner Interests.

 

 25 

 

 

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

 

(e)            Upon dissolution of the Partnership, a Non-citizen Assignee or
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 Non-citizen
Assignee’s or Ineligible Holder’s share of any distribution in kind. Such
payment and assignment shall be treated for Partnership purposes as a purchase
by the Partnership from the Non-citizen Assignee or Ineligible Holder of his
Limited Partner Interest (representing his right to receive his share of such
distribution in kind).

 

(f)            At any time after an Ineligible Holder can and does certify that
it has become an Eligible Holder, such Ineligible Holder may, upon application
to the General Partner, request admission as a Substituted Limited Partner with
respect to any Limited Partner Interests of such Ineligible Holder not redeemed
pursuant to Section 4.9, and upon admission of such Ineligible Holder pursuant
to Section 10.1, the General Partner shall cease to be deemed to be the Limited
Partner in respect of such Ineligible Holder’s Limited Partner Interests.

 

(g)            At any time after he can and does certify that he has become an
Eligible Citizen, a Non-citizen Assignee may, upon application to the General
Partner, request admission as a Substituted Limited Partner with respect to any
Limited Partner Interests of such Non-citizen Assignee not redeemed pursuant to
Section 4.9, and upon admission of such Non-citizen Assignee pursuant to
Section 10.1, the General Partner shall cease to be deemed to be the Limited
Partner in respect of the Non-citizen Assignee’s Limited Partner Interests.

 

Section 4.9Redemption of Partnership Interests of Non-citizen and Ineligible
Holders.

 

(a)            If at any time a Limited Partner, Assignee or transferee fails to
furnish a Citizenship Certification, Taxation Certification or other information
requested within the 30-day period specified in Section 4.8(b) or 4.8(c) or in a
Transfer Application, or if upon receipt of such Citizenship Certification,
Taxation Certification, Transfer Application or other information the General
Partner determines, with the advice of counsel, that a Limited Partner, Assignee
or transferee is not an Eligible Citizen or Eligible Holder, as the case may be,
the Partnership may, unless the Limited Partner, Assignee or transferee
establishes to the satisfaction of the General Partner that such Limited
Partner, Assignee or transferee is an Eligible Citizen or Eligible Holder, as
the case may be, or has transferred his Partnership Interests to a Person who is
an Eligible Citizen or Eligible Holder, as the case may be, and who furnishes a
Citizenship Certification or Taxation Certificate, as the case may be, to the
General Partner prior to the date fixed for redemption as provided below, redeem
the Limited Partner Interest of such Limited Partner, Assignee or transferee as
follows:

 

 26 

 

 

(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,
Assignee or transferee, at his last address designated on the records of the
Partnership or the Transfer Agent, by registered or certified mail, postage
prepaid. The notice shall be deemed to have been given when so mailed. The
notice shall specify the Redeemable Interests or, if uncertificated, upon
receipt of evidence satisfactory to the General Partner of the ownership of the
Redeemable Interests, the date fixed for redemption, the place of payment, that
payment of the redemption price will be made upon surrender of the Certificate
evidencing the Redeemable Interests and that on and after the date fixed for
redemption no further allocations or distributions to which such person would
otherwise be entitled in respect of the Redeemable Interests will accrue or be
made.

 

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

 

(iii)        Upon surrender by or on behalf of the Limited Partner, Assignee or
transferee, at the place specified in the notice of redemption, of (x) if
certificated, the Certificate evidencing the Redeemable Interests, duly endorsed
in blank or accompanied by an assignment duly executed in blank, or (y) if
uncertificated, upon receipt of evidence satisfactory to the General Partner of
the ownership of the Redeemable Interests, the Limited Partner, Assignee or
transferee or his duly authorized representative shall be entitled to receive
the payment therefor.

 

(iv)        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 or Assignee as nominee of a
Person determined to be other than an Eligible Citizen or Eligible Holder, as
the case may be.

 

(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 Citizen or Eligible Holder, as the case may be. If the transferee fails
to make such certification, such redemption shall be effected from the
transferee on the original redemption date.

 

 27 

 

 

ARTICLE V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS

 

Section 5.1Conversion of Incentive Distribution Rights and Economic General
Partner Interest.

 

As of the date hereof, pursuant to the Equity Restructuring Agreement, the
Incentive Distribution Rights held by the General Partner and the economic
general partner interest in the Partnership held by the General Partner will be
automatically converted into 172,500,000 Common Units and a non-economic General
Partner Interest. Effective immediately following the aforementioned
transactions, the Incentive Distribution Rights shall no longer exist and the
General Partner Interest shall be a noneconomic general partner interest. The
conversion of the Incentive Distribution Rights held by the General Partner and
the economic general partner interest into the Common Units and the non-economic
General Partner Interest shall be deemed to happen simultaneously, with the
effect that Spectra Energy Partners (DE) GP, LP was at all times the general
partner of the Partnership.

 

Section 5.2Interest and Withdrawal of Capital Contributions.

 

No interest shall be paid by the Partnership on Capital Contributions. No
Partner or Assignee 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 dissolution 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 or Assignee shall have
priority over any other Partner or Assignee 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 or Assignees 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 and (ii) all items of Partnership
income and gain (including 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 made
with respect to such Partnership Interest and (y) all items of Partnership
deduction and loss computed in accordance with Section 5.3(b) and allocated with
respect to such Partnership Interest pursuant to Section 6.1.

 

 28 

 

 

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

 

(i)          Solely for purposes of this Section 5.3, 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 or
governing, organizational or similar documents) of (x) all property owned by any
other Group Member that is classified as a partnership for federal income tax
purposes and (y) any other partnership, limited liability company,
unincorporated business or other entity classified as a partnership for federal
income tax purposes of which a Group Member is, directly or indirectly, a
partner.

 

(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 this Agreement or Treasury
Regulation Section 1.704-1(b)(2)(iv)(m), the computation of all items of income,
gain, loss and deduction shall be made without regard to any election under
Section 754 of the Code which 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 federal income tax purposes. To
the extent an adjustment to the adjusted tax basis of any Partnership asset
pursuant to Section 734(b) or 743(b) of the Code is required, pursuant to
Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such adjustment in the Capital
Accounts shall be treated as an item of gain or loss.

 

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

 

(vi)        In accordance with the requirements of Section 704(b) of the Code,
any deductions for depreciation, cost recovery or amortization attributable to
any Contributed Property shall be determined as if the adjusted basis of such
property on the date it was acquired by the Partnership were equal to the Agreed
Value of such property. Upon an adjustment pursuant to Section 5.3(d) to the
Carrying Value of any Partnership property subject to depreciation, cost
recovery or amortization, any further deductions for such depreciation, cost
recovery or amortization attributable to such property shall be determined as if
the adjusted basis of such property were equal to the Carrying Value of such
property immediately following such adjustment.

 

 29 

 

 

(vii)       If the Partnership’s adjusted basis in a depreciable or cost
recovery property is reduced for federal income tax purposes pursuant to Section
48(q)(1) or 48(q)(3) of the Code, the amount of such reduction shall, solely for
purposes hereof, be deemed to be an additional depreciation or cost recovery
deduction in the year such property is placed in service and shall be allocated
among the Partners pursuant to Section 6.1. Any restoration of such basis
pursuant to Section 48(q)(2) of the Code shall, to the extent possible, be
allocated in the same manner to the Partners to whom such deemed deduction was
allocated.

 

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

 

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

 

(d)            (i)          In accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f) (including Proposed Treasury Regulation Section
1.704-1(b)(2)(iv)(f)(v)), on an issuance of additional Partnership Interests for
cash, Contributed Property or the issuance of Partnership Interests as
consideration for the provision of services, or a change in the manner in which
the Partners share any item or class of items of income, gain, loss, deduction
or credit of the Partnership under this Agreement, the Capital Accounts of all
Partners and the Carrying Value of each Partnership property immediately prior
to such issuance shall be adjusted upward or downward to reflect any Unrealized
Gain or Unrealized Loss attributable to such Partnership property. In
determining such Unrealized Gain or Unrealized Loss, 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 shall be determined by the General Partner using such method of
valuation as it may adopt; provided, however, that the General Partner, in
arriving at such valuation, must take fully into account the fair market value
of the Partnership Interests of all Partners at such time. The General Partner
shall allocate such aggregate value among the assets of the Partnership (in such
manner as it determines) to arrive at a fair market value for individual
properties.

 

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

 

 30 

 

 

Section 5.4Issuances of Additional Partnership Securities.

 

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

 

(b)            Each additional Partnership Security 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 Securities), 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
Security; (v) whether such Partnership Security 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 Security
will be issued, evidenced by certificates and assigned or transferred; (vii) the
method for determining the Percentage Interest as to such Partnership Security;
and (viii) the right, if any, of each such Partnership Security to vote on
Partnership matters, including matters relating to the relative rights,
preferences and privileges of such Partnership Security.

 

(c)            The General Partner shall take all actions that it determines to
be necessary or appropriate in connection with (i) each issuance of Partnership
Securities and options, rights, warrants and appreciation rights relating to
Partnership Securities pursuant to this Section 5.4, (ii) the admission of
Additional Limited Partners and (iii) all additional issuances of Partnership
Securities. The General Partner shall determine the relative rights, powers and
duties of the holders of the Units or other Partnership Securities being so
issued. The General Partner shall do all things necessary to comply with the
Delaware Act and is authorized and directed to do all things that it determines
to be necessary or appropriate in connection with any future issuance of
Partnership Securities, 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 Securities are
listed or admitted to trading.

 

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

 

Section 5.5Limited Preemptive Right.

 

Except as provided in this Section 5.5, no Person shall have any preemptive,
preferential or other similar right with respect to the issuance of any
Partnership Security, whether unissued, held in the treasury or hereafter
created. The General Partner shall have the right, which it may from time to
time assign in whole or in part to any of its Affiliates, to purchase
Partnership Securities from the Partnership whenever, and on the same terms
that, the Partnership issues Partnership Securities to Persons other than the
General Partner and its Affiliates, to the extent necessary to maintain the
Percentage Interests of the General Partner and its Affiliates equal to any or
all of those Percentage Interests that existed immediately prior to the issuance
of such Partnership Securities.

 

 31 

 

 

Section 5.6Splits and Combinations.

 

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

 

(b)            Whenever such a Pro Rata distribution or subdivision or
combination of Partnership Securities 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 Securities 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 Securities to the Record Holders of Partnership Securities as of the
applicable Record Date representing the new number of Partnership Securities
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 Securities Outstanding, the Partnership shall require, as a
condition to the delivery to a Record Holder of such new Certificate or
uncertificated Partnership Securities, 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 this Section 5.6(d), each fractional Unit shall
be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to the
next higher Unit).

 

Section 5.7Fully 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 Sections 17-607 and 17-804 of the Delaware Act.

 

 32 

 

 

ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS

 

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
and deduction (computed in accordance with Section 5.3(b)) shall be allocated
among the Partners in each taxable year (or portion thereof) as provided herein
below.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 33 

 

 

(ii)         Chargeback of Partner Nonrecourse Debt Minimum Gain.
Notwithstanding the other provisions of this Section 6.1 (other than
Section 6.1(c)(i)), except as provided in Treasury Regulation Section
1.704-2(i)(4), if there is a net decrease in Partner Nonrecourse Debt Minimum
Gain during any Partnership taxable period, any Partner with a share of Partner
Nonrecourse Debt Minimum Gain at the beginning of such taxable period shall be
allocated items of Partnership income and gain for such period (and, if
necessary, subsequent periods) in the manner and amounts provided in Treasury
Regulation Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii), or any successor
provisions. For purposes of this Section 6.1(c), each Partner’s Adjusted Capital
Account balance shall be determined, and the allocation of income or gain
required hereunder shall be effected, prior to the application of any other
allocations pursuant to this Section 6.1(c), other than Section 6.1(c)(i) and
other than an allocation pursuant to Section 6.1(c)(vi) and Section 6.1(c)(vii),
with respect to such taxable period. This Section 6.1(c)(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. If the amount of cash or the Net Agreed Value
of any property distributed (except cash or property distributed pursuant to
Section 12.4) to any Unitholder with respect to its Units for a taxable year is
greater (on a per Unit basis) than the amount of cash or the Net Agreed Value of
property distributed to the other Unitholders with respect to their Units (on a
per Unit basis), then there shall be allocated income and gain to each
Unitholder receiving such greater cash or property distribution until the
aggregate amount of such items allocated pursuant to this Section 6.1(d)(iii)(A)
for the current taxable year and all previous taxable years is equal to the
product of (aa) the amount by which the distribution (on a per Unit basis) to
such Unitholder exceeds the distribution (on a per Unit basis) to the
Unitholders receiving the smallest distribution and (bb) the number of Units
owned by the Unitholder receiving the greater distribution.

 

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

 

(v)         Gross Income Allocations. In the event any Partner has a deficit
balance in its Capital Account at the end of any Partnership taxable period in
excess of the sum of (A) the amount such Partner is 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
income and gain in the amount of such excess as quickly as possible; provided,
that an allocation pursuant to this Section 6.1(c)(v)shall be made only if and
to the extent that such Partner would have a deficit balance in its Capital
Account as adjusted after all other allocations provided for in this Section 6.1
have been tentatively made as if this Section 6.1(c)(v) were not in this
Agreement.

 

 34 

 

 

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

 

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

 

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

 

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

 

(x)          Economic Uniformity. Upon any Revaluation Event occurring on or
after the date hereof, items of Unrealized Gain and Unrealized Loss shall be
allocated among the Partners in a manner that to the nearest extent possible
results in equal Capital Accounts maintained with respect to each Common Unit.

 

 35 

 

 

(xi)         Curative Allocation.

 

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

 

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

 

Section 6.2Allocations for Tax Purposes.

 

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

 

(b)            In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss,
depreciation, amortization and cost recovery deductions shall be allocated for
federal income tax purposes among the Partners as follows:

 

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

 

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

 

 36 

 

 

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

 

(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 for federal income tax
purposes of income (including gross income) or deductions; 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 6.2(c) only if such conventions,
allocations or amendments would not have a material adverse effect on the
Partners, the holders of any class or classes of Limited Partner Interests
issued and Outstanding or the Partnership, and if such allocations are
consistent with the principles of Section 704 of the Code.

 

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

 

(e)            In accordance with Treasury Regulation Section 1.1245-1(e), 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.

 

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

 

 37 

 

 

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

 

(h)            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.

 

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

 

(a)            Within 60 days following the end of each Quarter, an amount equal
to 100% of Available Cash with respect to such Quarter shall, subject to Section
17-607 of the Delaware Act, be distributed in accordance with this ARTICLE VI by
the Partnership to the Limited Partners as of the Record Date selected by the
General Partner in accordance with each Limited Partner’s Percentage Interest.
Notwithstanding any provision to the contrary contained in this Agreement, the
Partnership shall not make a distribution to any Partner on account of its
interest in the Partnership if such distribution would violate the Delaware Act
or any other applicable law.

 

(b)            Notwithstanding Section 6.3(a), in the event of the dissolution
and liquidation of the Partnership, all receipts received during or after the
Quarter in which the Liquidation Date occurs shall be applied and distributed
solely in accordance with, and subject to the terms and conditions of,
Section 12.4.

 

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

 

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

 

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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, all management powers over the business and affairs of the
Partnership shall be exclusively vested in the General Partner, and no Limited
Partner or Assignee shall have any management power over the business and
affairs of the Partnership. In addition to the powers now or hereafter granted a
general partner of a limited partnership under applicable law or that are
granted to the General Partner under any other provision of this Agreement, the
General Partner, subject to Section 7.3, shall have full power and authority to
do all things and on such terms as it determines to be necessary or appropriate
to conduct the business of the Partnership, to exercise all powers set forth in
Section 2.5 and to effectuate the purposes set forth in Section 2.4, including
the following:

 

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

 

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

 

(iii)        the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or exchange of any or all of the assets of the Partnership or the
merger or other combination of the Partnership with or into another Person (the
matters described in this clause (iii) being subject, however, to any prior
approval that may be required by Section 7.3 and ARTICLE XIV);

 

(iv)        the use of the assets of the Partnership (including cash on hand)
for any purpose consistent with the terms of this Agreement, including the
financing of the conduct of the operations of the Partnership Group; subject to
Section 7.6(a), the lending of funds to other Persons (including other Group
Members); the repayment or guarantee of obligations of any Group Member; and the
making of capital contributions to any Group Member;

 

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

 

(vi)        the distribution of Partnership cash;

 

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

 

 39 

 

 

(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 relationships (including the acquisition of interests in, and the
contributions of property to, any Group Member from time to time) subject to the
restrictions set forth in Section 2.4;

 

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

 

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

 

(xii)        the entering into of listing agreements with any National
Securities Exchange and the delisting of some or all of the Limited Partner
Interests from, or requesting that trading be suspended on, any such exchange
(subject to any prior approval that may be required under Section 4.7);

 

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

 

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

 

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

 

(b)            Notwithstanding any other provision of this Agreement, any Group
Member Agreement, the Delaware Act or any applicable law, rule or regulation,
each of the Partners and the Assignees and each other Person who may acquire an
interest in Partnership Securities hereby (i) approves, ratifies and confirms
the execution, delivery and performance by the parties thereto of this Agreement
and the Group Member Agreement of each other Group Member, the Underwriting
Agreement, the Omnibus Agreement, the Contribution Agreement and the other
agreements described in or filed as exhibits to the Registration Statement that
are related to the transactions contemplated by the Registration Statement; (ii)
agrees that the General Partner (on its own or through any officer of the
Partnership) was authorized to execute, deliver and perform the agreements
referred to in clause (i) of this sentence and the other agreements, acts,
transactions and matters described in or contemplated by the Registration
Statement on behalf of the Partnership without any further act, approval or vote
of the Partners or the Assignees or the other Persons who may acquire an
interest in Partnership Securities; and (iii) agrees that the execution,
delivery or performance by the General Partner, any Group Member or any
Affiliate of any of them of this Agreement or any agreement authorized or
permitted under this Agreement (including the exercise by the General Partner or
any Affiliate of the General Partner of the rights accorded pursuant to
ARTICLE XV) shall not constitute a breach by the General Partner of any duty
that the General Partner may owe the Partnership or the Limited Partners or any
other Persons under this Agreement (or any other agreements) or of any duty
stated or implied by law or equity.

 

 40 

 

 

Section 7.2Certificate of Limited Partnership.

 

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

  

Section 7.3Restrictions 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 (including by way of merger, consolidation, other
combination or sale of ownership interests of the Partnership’s Subsidiaries)
without the approval of holders of a Unit Majority; provided, however, that this
provision shall not preclude or limit the General Partner’s ability to mortgage,
pledge, hypothecate or grant a security interest in all or substantially all of
the assets of the Partnership Group and shall not apply to any forced sale of
any or all of the assets of the Partnership Group pursuant to the foreclosure
of, or other realization upon, any such encumbrance. Without the approval of
holders of a Unit Majority, the General Partner shall not, on behalf of the
Partnership, except as permitted under Section 4.6, Section 11.1 and
Section 11.2, elect or cause the Partnership to elect a successor general
partner of the Partnership.

 

Section 7.4Reimbursement of the General Partner.

 

(a)            Except as provided in this Section 7.4 and elsewhere in this
Agreement, the General Partner shall not be compensated for its services as a
general partner or managing member of any Group Member.

 

 41 

 

 

(b)            Subject to the provisions of the Omnibus Agreement, the General
Partner shall be reimbursed on a monthly basis, or such other basis as the
General Partner may determine, for (i) all direct and indirect expenses it
incurs or payments it makes on behalf of the Partnership Group (including
salary, bonus, incentive compensation and other amounts paid to any Person,
including Affiliates of the General Partner to perform services for the
Partnership Group or for the General Partner in the discharge of its duties to
the Partnership Group and including certain expenses allocated to the
Partnership by Affiliates of the General Partner), and (ii) all other expenses
allocable to the Partnership Group or otherwise incurred by the General Partner
in connection with operating the Partnership Group’s business (including
expenses allocated to the General Partner by its Affiliates). The General
Partner shall determine the expenses that are allocable to the Partnership
Group. Reimbursements pursuant to this Section 7.4 shall be in addition to any
reimbursement to the General Partner as a result of indemnification pursuant to
Section 7.7. Any allocation of expenses to the Partnership by Affiliates of the
General Partner in a manner consistent with then-applicable accounting and
allocation methodologies generally permitted by FERC for rate-making purposes
(or in the absence of then-applicable methodologies permitted by FERC,
consistent with the most-recently applicable methodologies) and past business
practices shall be deemed to be fair and reasonable to the Partnership.

 

(c)            The General Partner, without the approval of the Limited Partners
(who shall have no right to vote in respect thereof), may propose and adopt on
behalf of the Partnership employee benefit plans, employee programs and employee
practices (including plans, programs and practices involving the issuance of
Partnership Securities or options to purchase or rights, warrants or
appreciation rights or phantom or tracking interests relating to Partnership
Securities), or cause the Partnership to issue Partnership Securities in
connection with, or pursuant to, any employee benefit plan, employee program or
employee practice maintained or sponsored by the General Partner, Group Member
or any Affiliates in each case for the benefit of employees and directors of the
General Partner or any of its Affiliates, in respect of services performed,
directly or indirectly, for the benefit of the Partnership Group. The
Partnership agrees to issue and sell to the General Partner or any of its
Affiliates any Partnership Securities that the General Partner or such
Affiliates are obligated to provide to any employees and directors pursuant to
any such employee benefit plans, employee programs or employee practices.
Expenses incurred by the General Partner in connection with any such plans,
programs and practices (including the net cost to the General Partner or such
Affiliates of Partnership Securities purchased by the General Partner or such
Affiliates from the Partnership to fulfill options or awards under such plans,
programs and practices) shall be reimbursed in accordance with Section 7.4(b).
Any and all obligations of the General Partner under any employee benefit plans,
employee programs or employee practices adopted by the General Partner as
permitted by this Section 7.4(c) shall constitute obligations of the General
Partner hereunder and shall be assumed by any successor General Partner approved
pursuant to Section 11.1 or Section 11.2 or the transferee of or successor to
all of the General Partner’s General Partner Interest pursuant to Section 4.6.

 

 42 

 

 

Section 7.5Outside Activities.

 

(a)            After the Closing Date, 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 or (B) the acquiring, owning or disposing of debt or
equity securities in any Group Member.

 

(b)            Each Indemnitee (other than the General Partner) shall have the
right to engage in businesses of every type and description and other activities
for profit and to engage in and possess an interest in other business ventures
of any and every type or description, whether in businesses engaged in or
anticipated to be engaged in by any Group Member, independently or with others,
including business interests and activities in direct competition with the
business and activities of any Group Member, and none of the same shall
constitute a breach of this Agreement or any duty expressed or implied by law or
equity to any Group Member or any Partner or Assignee. None of any Group Member,
any Limited Partner or any other Person shall have any rights by virtue of this
Agreement, any Group Member Agreement, or the partnership relationship
established hereby in any business ventures of any Indemnitee. Notwithstanding
anything to the contrary in this Agreement or any duty existing at law, in
equity or otherwise, but subject to the proviso set forth in the last sentence
of this Section 7.5(b), (i) the engaging in competitive activities by any
Indemnitees (other than the General Partner) in accordance with the provisions
of this Section 7.5 is hereby approved by the Partnership and all Partners, (ii)
it shall be deemed not to be a breach of any fiduciary duty or any other
obligation of any type whatsoever of any Indemnitee for the Indemnitees (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 Indemnitees
shall have no obligation hereunder or as a result of any duty expressed or
implied by law 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
Indemnitee (including the General Partner). No Indemnitee (including the General
Partner) who acquires knowledge of a potential transaction, agreement,
arrangement or other matter that may be an opportunity for the Partnership,
shall have any duty to communicate or offer such opportunity to the Partnership,
and such Indemnitee (including the General Partner) shall not be liable to the
Partnership, to any Limited Partner or any other Person for breach of any
fiduciary or other duty by reason of the fact that such Indemnitee (including
the General Partner) pursues or acquires for itself, directs such opportunity to
another Person or does not communicate such opportunity or information to the
Partnership; provided such Indemnitee does not engage in such business or
activity as a result of or using confidential or proprietary information
provided by or on behalf of the Partnership to such Indemnitee.

 

(c)            The General Partner and each of its Affiliates may acquire Units
or other Partnership Securities in addition to those acquired on the Closing
Date and, except as otherwise provided in this Agreement, shall be entitled to
exercise, at their option, all rights relating to all Units or other Partnership
Securities acquired by them. The term “Affiliates” when used in this
Section 7.5(c) with respect to the General Partner shall not include any Group
Member.

 

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Section 7.6Loans from the General Partner; Loans or Contributions from the
Partnership or Group Members.

 

(a)            The General Partner or any of its Affiliates may lend to any
Group Member, and any Group Member may borrow from the General Partner or any of
its Affiliates, funds needed or desired by the Group Member for such periods of
time and in such amounts as the General Partner may determine; provided,
however, that in any such case the lending party may not charge the borrowing
party interest at a rate greater than the rate that would be charged the
borrowing party or impose terms less favorable to the borrowing party than would
be charged or imposed on the borrowing party by unrelated lenders on comparable
loans made on an arm’s-length basis (without reference to the lending party’s
financial abilities or guarantees), all as determined by the General Partner.
The borrowing party shall reimburse the lending party for any costs (other than
any additional interest costs) incurred by the lending party in connection with
the borrowing of such funds. For purposes of this Section 7.6(a) and
Section 7.6(b), the term “Group Member” shall include any Affiliate of a Group
Member that is controlled by the Group Member.

 

(b)            The Partnership may lend or contribute to any Group Member, and
any Group Member may borrow from the Partnership, funds on terms and conditions
determined by the General Partner. No Group Member may lend funds to the General
Partner or any of its Affiliates (other than another Group Member).

 

Section 7.7Indemnification.

 

(a)            To the fullest extent permitted by law but subject to the
limitations expressly provided in this Agreement, all Indemnitees shall be
indemnified and held harmless by the Partnership from and against any and all
losses, claims, damages, liabilities, joint or several, expenses (including
legal fees and expenses), judgments, fines, penalties, interest, settlements or
other amounts arising from any and all claims, demands, actions, suits or
proceedings, whether civil, criminal, administrative or investigative, 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; provided, that the
Indemnitee shall not be indemnified and held harmless if there has been a final
and non-appealable judgment entered by a court of competent jurisdiction
determining that, in respect of the matter for which the Indemnitee is seeking
indemnification pursuant to this Section 7.7, the Indemnitee acted in bad faith
or engaged in fraud, willful misconduct or, in the case of a criminal matter,
acted with knowledge that the Indemnitee’s conduct was unlawful; provided,
further, no indemnification pursuant to this Section 7.7 shall be available to
the General Partner or its Affiliates (other than a Group Member) with respect
to its or their obligations incurred pursuant to the Underwriting Agreement, the
Omnibus Agreement or the Contribution Agreement (other than obligations incurred
by the General Partner on behalf of the Partnership). 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.

 

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(b)            To the fullest extent permitted by law, expenses (including legal
fees and expenses) incurred by an Indemnitee who is indemnified pursuant to
Section 7.7(a) in defending any claim, demand, action, suit or proceeding shall,
from time to time, be advanced by the Partnership prior to a determination that
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 determined that the Indemnitee is not entitled to be indemnified as
authorized in this Section 7.7.

 

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

 

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

 

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

 

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

 

(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, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.

 

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

 

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Section 7.8Liability 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 Limited Partners, the Assignees or any other Persons who have
acquired interests in the Partnership Securities, for losses sustained or
liabilities incurred as a result of any act or omission of an Indemnitee unless
there has been a final and non-appealable judgment entered by a court of
competent jurisdiction determining that, in respect of the matter in question,
the Indemnitee acted in bad faith or engaged in fraud, willful misconduct or, in
the case of a criminal matter, acted with knowledge that the Indemnitee’s
conduct was criminal.

 

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

 

(c)            To the extent that, at law or in equity, an Indemnitee has duties
(including fiduciary duties) and liabilities relating thereto to the Partnership
or to the Partners, the General Partner and any other Indemnitee acting in
connection with the Partnership’s business or affairs shall not be liable to the
Partnership or to any Partner for its good faith reliance on the provisions of
this Agreement.

 

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

 

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Section 7.9Resolution of Conflicts of Interest; Standards of Conduct and
Modification of Duties.

 

(a)            Unless otherwise expressly provided in this Agreement or any
Group Member Agreement, whenever a potential conflict of interest exists or
arises between the General Partner or any of its Affiliates, on the one hand,
and the Partnership, any Group Member, any Partner or any Assignee, on the
other, any resolution or course of action by the General Partner or its
Affiliates in respect of such conflict of interest shall be permitted and deemed
approved by all Partners, and shall not constitute a breach of this Agreement,
of any Group Member Agreement, of any agreement contemplated herein or therein,
or of any duty stated or implied by law or equity, if the resolution or course
of action in respect of such conflict of interest is (i) approved by Special
Approval, (ii) approved by the vote of a majority of the Outstanding Common
Units (excluding Common Units owned by the General Partner and its Affiliates),
(iii) on terms no less favorable to the Partnership than those generally being
provided to or available from unrelated third parties or (iv) fair and
reasonable to the Partnership, taking into account the totality of the
relationships between the parties involved (including other transactions that
may be particularly favorable or advantageous to the Partnership). The General
Partner shall be authorized but not required in connection with its resolution
of such conflict of interest to seek Special Approval of such resolution, and
the General Partner may also adopt a resolution or course of action that has not
received Special Approval. If Special Approval is sought, then it shall be
presumed that, in making its decision, the Conflicts Committee acted in good
faith, and if Special Approval is not sought and 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, and
in either case, in any proceeding brought by any Limited Partner or Assignee or
by or on behalf of such Limited Partner or Assignee or any other Limited Partner
or Assignee or the Partnership challenging such approval, the Person bringing or
prosecuting such proceeding shall have the burden of overcoming such
presumption. Notwithstanding anything to the contrary in this Agreement or any
duty otherwise existing at law or equity, the existence of the conflicts of
interest described in the Registration Statement are hereby approved by all
Partners and shall not constitute a breach of this Agreement.

 

(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 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, or such
Affiliates causing it to do so, shall make such determination or take or decline
to take such other action in good faith and shall not be subject to any other or
different standards imposed by this Agreement, any Group Member Agreement, any
other agreement contemplated hereby or under the Delaware Act or any other law,
rule or regulation or at equity. Whenever the Conflicts Committee makes a
determination or takes or declines to take any other action, it shall make such
determination or take or decline to take such other action in good faith and
shall not be subject to any other or different standards imposed by this
Agreement, any Group Member Agreement, any other agreement contemplated hereby
or under the Delaware Act or any other law, rule or regulation or at equity. In
order for a determination or other action to be in “good faith” for purposes of
this Agreement, the Person or Persons making such determination or taking or
declining to take such other action must believe that the determination or other
action is in the best interests of the Partnership.

 

(c)            Whenever the General Partner makes a determination or takes or
declines to take any other action, or any of its Affiliates causes it to do so,
in its individual capacity as opposed to in its capacity as the general partner
of the Partnership, whether under this Agreement, any Group Member Agreement or
any other agreement contemplated hereby or otherwise, then the General Partner,
or such Affiliates causing it to do so, are entitled to make such determination
or to take or decline to take such other action free of any fiduciary duty or
obligation whatsoever to the Partnership, any Limited Partner or Assignee, and
the General Partner, or such Affiliates causing it to do so, 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. By
way of illustration and not of limitation, whenever the phrase, “at the option
of the General Partner,” or some variation of that phrase, is used in this
Agreement, it indicates that the General Partner is acting in its individual
capacity. For the avoidance of doubt, but subject to Section 4.6, 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. The General Partner’s organizational documents may provide
that determinations to take or decline to take any action in its individual,
rather than representative, capacity may or shall be determined by its members,
if the General Partner is a limited liability company, stockholders, if the
General Partner is a corporation, or the members or stockholders of the General
Partner’s general partner, if the General Partner is a partnership.

 

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

 

(e)            Except as expressly set forth in this Agreement, neither the
General Partner nor any other Indemnitee shall have any duties or liabilities,
including fiduciary duties, to the Partnership or any Limited Partner or
Assignee and the provisions of this Agreement, to the extent that they restrict,
eliminate or otherwise modify the duties and liabilities, including fiduciary
duties, of the General Partner or any other Indemnitee otherwise existing at law
or in equity, are agreed by the Partners to replace such other duties and
liabilities of the General Partner or such other Indemnitee.

 

(f)             The Unitholders hereby authorize the General Partner, on behalf
of the Partnership as a partner or member of a Group Member, to approve of
actions by the general partner or managing member of such Group Member similar
to those actions permitted to be taken by the General Partner pursuant to this
Section 7.9.

 

Section 7.10Other Matters Concerning the General Partner.

 

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

 

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

 

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

 

Section 7.11Purchase or Sale of Partnership Securities.

 

The General Partner may cause the Partnership to purchase or otherwise acquire
Partnership Securities. Such Partnership Securities shall be held by the
Partnership as treasury securities unless they are expressly cancelled by action
of an appropriate officer of the General Partner. As long as Partnership
Securities are held by any Group Member, such Partnership Securities 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 Securities for
its own account, subject to the provisions of Articles IV and X.

 

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
Securities 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 Securities
(the “Holder”) to dispose of the number of Partnership Securities 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 commercially reasonable efforts to cause to become effective
and remain effective for a period of not less than six months following its
effective date or such shorter period as shall terminate when all Partnership
Securities 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 Securities 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) and Section 7.12(b); and provided
further, however, that if the Conflicts Committee determines in good faith that
the requested registration would be materially detrimental to the Partnership
and its Partners because such registration would (x) materially interfere with a
significant acquisition, reorganization or other similar transaction involving
the Partnership, (y) require premature disclosure of material information that
the Partnership has a bona fide business purpose for preserving as confidential
or (z) render the Partnership unable to comply with requirements under
applicable securities laws, then the Partnership shall have the right to
postpone such requested registration for a period of not more than six months
after receipt of the Holder’s request, such right pursuant to this
Section 7.12(a) or Section 7.12(b) not to be utilized more than once in any
twelve-month period. In connection with any registration pursuant to the first
sentence of this Section 7.12(a), 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 Securities 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 Securities in such states. Except
as set forth in Section 7.12(d), 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.

 

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(b)            If any Holder holds Partnership Securities that it desires to
sell and 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 to dispose of the number of Partnership Securities 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 commercially reasonable efforts to cause to become effective and remain
effective for a period of not less than six months following its effective date
or such shorter period as shall terminate when all Partnership Securities
covered by such shelf registration statement have been sold, a “shelf”
registration statement covering the Partnership Securities specified by the
Holder on an appropriate form under Rule 415 under the Securities Act, or any
similar rule that may be adopted by the Commission; provided, however, that the
Partnership shall not be required to effect more than three registrations
pursuant to Section 7.12(a) and this Section 7.12(b); and provided further,
however, that if the Conflicts Committee determines in good faith that any
offering under, or the use of any prospectus forming a part of, the shelf
registration statement would be materially detrimental to the Partnership and
its Partners because such offering or use would (x) materially interfere with a
significant acquisition, reorganization or other similar transaction involving
the Partnership, (y) require premature disclosure of material information that
the Partnership has a bona fide business purpose for preserving as confidential
or (z) render the Partnership unable to comply with requirements under
applicable securities laws, then the Partnership shall have the right to suspend
such offering or use for a period of not more than six months after receipt of
the Holder’s request, such right pursuant to Section 7.12(a) or this
Section 7.12(b) not to be utilized more than once in any twelve-month period. In
connection with any shelf registration pursuant to this Section 7.12(b), the
Partnership shall (i) promptly prepare and file (A) such documents as may be
necessary to register or qualify the securities subject to such shelf
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 shelf registration, and (B) such
documents as may be necessary to apply for listing or to list the Partnership
Securities subject to such shelf 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 Securities in such states. Except
as set forth in Section 7.12(d), all costs and expenses of any such shelf
registration and offering (other than the underwriting discounts and
commissions) shall be paid by the Partnership, without reimbursement by the
Holder.

 

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(c)            If the Partnership shall at any time propose to file a
registration statement under the Securities Act for an offering of equity
securities of the Partnership for cash (other than an offering relating solely
to an employee benefit plan), the Partnership shall notify all Holders of such
proposal and use all reasonable efforts to include such number or amount of
securities held by the Holder in such registration statement as the Holder shall
request; provided, that the Partnership is not required to make any effort or
take any action to so include the securities of the Holder once the registration
statement is declared effective by the Commission or otherwise becomes
effective, including any registration statement providing for the offering from
time to time of securities pursuant to Rule 415 of the Securities Act. If the
proposed offering pursuant to this Section 7.12(c) shall be an underwritten
offering, then, in the event that the managing underwriter or managing
underwriters of such offering advise the Partnership and the Holder in writing
that in their opinion the inclusion of all or some of the Holder’s Partnership
Securities would adversely and materially affect the success of the offering,
the Partnership shall include in such offering only that number or amount, if
any, of securities 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(d), 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.

 

(d)            If underwriters are engaged in connection with any registration
referred to in this Section 7.12, the Partnership shall provide indemnification,
representations, covenants, opinions and other assurance to the underwriters in
form and substance reasonably satisfactory to such underwriters. Further, in
addition to and not in limitation of the Partnership’s obligation under
Section 7.7, 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(d) 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 Securities were registered under the Securities Act or any
state securities or Blue Sky laws, in any preliminary prospectus (if used prior
to the effective date of such registration statement), or in any summary or
final prospectus or any free writing prospectus or in any amendment or
supplement thereto (if used during the period the Partnership is required to
keep the registration statement current), or arising out of, based upon or
resulting from the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements made therein
not misleading; provided, however, that the Partnership shall not be liable to
any Indemnified Person to the extent that any such claim arises out of, is based
upon or results from an untrue statement or alleged untrue statement or omission
or alleged omission made in such registration statement, such preliminary,
summary or final prospectus or any free writing prospectus or such amendment or
supplement, in reliance upon and in conformity with written information
furnished to the Partnership by or on behalf of such Indemnified Person
specifically for use in the preparation thereof.

 

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(e)            The provisions of Section 7.12(a), Section 7.12(b) and
Section 7.12(c) 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 Securities 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 successive
registration statements covering the same Partnership Securities for which
registration was demanded during such two-year period. The provisions of
Section 7.12(d) shall continue in effect thereafter.

 

(f)             The rights to cause the Partnership to register Partnership
Securities 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
Securities, 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 Securities 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.

 

(g)            Any request to register Partnership Securities pursuant to this
Section 7.12 shall (i) specify the Partnership Securities intended to be offered
and sold by the Person making the request, (ii) express such Person’s present
intent to offer such Partnership Securities for distribution, (iii) describe the
nature or method of the proposed offer and sale of Partnership Securities, 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 Securities.

  

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.

 

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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 and Assignees
of Units or other Partnership Securities, books of account and records of
Partnership proceedings, may be kept on, or be in the form of, computer disks,
hard drives, punch cards, magnetic tape, photographs, micrographics or any other
information storage device; provided, that the books and records so maintained
are convertible into clearly legible written form within a reasonable period of
time. The books of the Partnership shall be maintained, for financial reporting
purposes, on an accrual basis in accordance with U.S. GAAP.

 

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 120 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 (including posting
on or accessible through the Partnership’s or the SEC’s website) to each Record
Holder of a Unit as of a date selected by the General Partner, an annual report
containing financial statements of the Partnership for such fiscal year of the
Partnership, presented in accordance with U.S. GAAP, including a balance sheet
and statements of operations, Partnership equity and cash flows, such statements
to be audited by a firm of independent public accountants selected by the
General Partner.

 

(b)            As soon as practicable, but in no event later than 90 days after
the close of each Quarter except the last Quarter of each fiscal year, the
General Partner shall cause to be mailed or made available, by any reasonable
means (including posting on or accessible through the Partnership’s or the SEC’s
website) to each Record Holder of a Unit, as of a date selected by the General
Partner, a report containing unaudited financial statements of the Partnership
and such other information as may be required by applicable law, regulation or
rule of 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.

 

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

 

Section 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(g) without regard to the actual price
paid by such transferee.

 

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

 

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Section 9.3Tax Controversies.

 

(a)            Subject to the provisions hereof, the General Partner (or its
designee) is designated as the Tax Matters Partner (as defined in Section
6231(a)(7) of the Code as in effect prior to the enactment of the Bipartisan
Budget Act of 2015), and the Partnership Representative (as defined in Section
6223 of the Code following the enactment of the Bipartisan Budget Act of 2015 or
under any applicable state or local law providing for an analogous capacity),
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. In its capacity as Partnership Representative, the General
Partner shall exercise any and all authority of the Partnership Representative,
including, without limitation, (i) binding the Partnership and its Partners with
respect to tax matters and (ii) determining whether to make any available
election under Section 6226 of the Code or an analogous election under state or
local law, which election permits the Partnership to pass any partnership
adjustment through to the Persons who were Partners of the Partnership in the
year to which the adjustment relates and irrespective of whether such Persons
are Partners of the Partnership at the time such election is made. 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 in its capacity as Tax
Matters Partner or Partnership Representative. For Partners that are not
tax-exempt entities (as defined in Section 168(h)(2) of the Code) and subject to
the General Partner’s discretion to seek modifications of an imputed
underpayment, this cooperation includes (i) filing amended federal, state or
local tax returns, paying any additional tax (including interest, penalties and
other additions to tax), and providing the General Partner with an affidavit
swearing to those facts (all within the requisite time periods), and (ii)
providing any other information requested by the General Partner in order to
seek modifications of an imputed underpayment. For Partners that are tax-exempt
entities (as defined in Section 168(h)(2) of the Code) and subject to the
General Partner’s discretion to seek modifications of an imputed underpayment,
this cooperation includes providing the General Partner with information
necessary to establish the Partner’s tax-exempt status. This agreement to
cooperate applies irrespective of whether such Persons are Partners of the
Partnership at the time of the requested cooperation.

 

(b)            Each Partner agrees that notice of or updates regarding tax
controversies shall be deemed conclusively to have been given or made by the
General Partner if the Partnership has either (i) filed the information for
which notice is required with the Commission via its Electronic Data Gathering,
Analysis and Retrieval system and such information is publicly available on such
system or (ii) made the information for which notice is required available on
any publicly available website maintained by the Partnership, whether or not
such Partner remains a Partner in the Partnership at the time such information
is made publicly available. Notwithstanding anything herein to the contrary,
nothing in this provision shall obligate the Partnership Representative to
provide notice to the Partners other than as required by the Code.

 

(c)            The General Partner may amend the provisions of this Agreement as
it determines appropriate to satisfy any requirements, conditions, or guidelines
set forth in any amendment to the provisions of Subchapter C of Chapter 63 of
Subtitle F of the Code, any analogous provisions of the laws of any state or
locality, or the promulgation of regulations or publication of other
administrative guidance thereunder.

 

Section 9.4Withholding and Other Tax Payments by the Partnership.

 

(a)            The General Partner may treat taxes paid by the Partnership on
behalf of all or less than all of the Partners as a distribution of cash to such
Partners, as a general expense of the Partnership, or as payments made by the
Partnership on behalf of the Partners or former Partners subject to the
Partners’ return obligations (as provided in Section 9.4(c)), as determined
appropriate under the circumstances by the General Partner.

 

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(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 or Assignee (including by reason of
Section 1446 of the Code), the General Partner may treat the amount withheld as
a distribution of cash pursuant to Section 6.3 or Section 12.4(c) in the amount
of such withholding from such Partner.

 

(c)            If the Partnership pays an imputed underpayment under Section
6225 of the Code and/or any analogous provision of the laws of any state or
locality, the General Partner may require that some or all of the Partners of
the Partnership in the year to which the underpayment relates return to the
Partnership all or a portion of the distributions received by the Partner from
the Partnership equal to the Partner’s allocable share of that underpayment
(including interest, penalties and other additions to tax). This obligation to
return distributions made by the Partnership shall not apply to a Partner to the
extent that (i) the Partnership received a modification of the imputed
underpayment under Section 6225(c)(2) of the Code (or any analogous provision of
state or local law) due to the Partner’s filing of amended tax returns and
payment of any resulting tax (including interest, penalties and other additions
to tax), (ii) the Partner is a tax-exempt entity (as defined in Section
168(h)(2) of the Code) and either the Partnership received a modification of the
imputed underpayment under Section 6225(c)(3) of the Code (or any analogous
provision of state or local law) because of such Partner’s status as a
tax-exempt entity or the Partnership did not make a good faith effort to obtain
a modification of the imputed underpayment due to such Partner’s status as a
tax-exempt entity, or (iii) the Partnership received a modification of the
imputed underpayment under Section 6225(c)(4)-(6) of the Code (or any analogous
provision of state or local law) as a result of other information that was
either provided by the Partner or otherwise available to the Partnership with
respect to the Partner. This obligation to return distributions made by the
Partnership imposed on Partners, including former Partners, applies irrespective
of whether such Persons are Partners of the Partnership at the time the
Partnership pays the imputed underpayment and shall not be treated as a Capital
Contribution or otherwise impact the Partner’s Capital Account.

 

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ARTICLE X
ADMISSION OF PARTNERS

 

Section 10.1Admission of Substituted Limited Partners.

 

By transfer of a Limited Partner Interest in accordance with ARTICLE IV, the
transferor shall be deemed to have given the transferee the right to seek
admission as a Substituted Limited Partner subject to the conditions of, and in
the manner permitted under, this Agreement. A transferor of a Certificate
representing a Limited Partner Interest shall, however, only have the authority
to convey to a purchaser or other transferee who does not execute and deliver a
Transfer Application (a) the right to negotiate such Certificate to a purchaser
or other transferee and (b) the right to transfer the right to request admission
as a Substituted Limited Partner to such purchaser or other transferee in
respect of the transferred Limited Partner Interests. No transferor of a Limited
Partner Interest or other Person shall have any obligation or responsibility to
provide a Transfer Application or Taxation Certification to a transferee or
assist or participate in any way with respect to the completion or delivery
thereof. Each transferee of a Limited Partner Interest (including any nominee
holder or an agent acquiring such Limited Partner Interest for the account of
another Person) who executes and delivers a properly completed Transfer
Application, containing a Taxation Certification, shall, by virtue of such
execution and delivery, be an Assignee. Such Assignee shall automatically be
admitted to the Partnership as a Substituted Limited Partner with respect to the
Limited Partner Interests so transferred to such Person at such time as such
transfer is recorded in the books and records of the Partnership, and until so
recorded, such transferee shall be an Assignee. The General Partner shall
periodically, but no less frequently than on the first Business Day of each
calendar quarter, cause any unrecorded transfers of Limited Partner Interests
with respect to which a properly completed, duly executed Transfer Application
has been received to be recorded in the books and records of the Partnership. An
Assignee shall have an interest in the Partnership equivalent to that of a
Limited Partner with respect to allocations and distributions, including
liquidating distributions, of the Partnership. With respect to voting rights
attributable to Limited Partner Interests that are held by Assignees, the
General Partner shall be deemed to be the Limited Partner with respect thereto
and shall, in exercising the voting rights in respect of such Limited Partner
Interests on any matter, vote such Limited Partner Interests at the written
direction of the Assignee who is the Record Holder of such Limited Partner
Interests. If no such written direction is received, such Limited Partner
Interests will not be voted. An Assignee shall have no other rights of a Limited
Partner.

 

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 11.2 or the transfer
of the General Partner Interest pursuant to Section 4.6, provided, however, that
no such successor shall be admitted to the Partnership until compliance with the
terms of Section 4.6 has occurred and such successor has executed and delivered
such other documents or instruments as may be required to effect such admission.
Any such successor shall, subject to the terms hereof, carry on the business of
the members of the Partnership Group without dissolution.

 

Section 10.3Admission of Additional Limited Partners.

 

(a)            A Person (other than the General Partner, a Limited Partner or a
Substituted Limited Partner) who makes a Capital Contribution to the Partnership
in accordance with this Agreement shall be admitted to the Partnership as an
Additional Limited Partner only upon furnishing to the General Partner:

 

(i)          evidence of acceptance in form satisfactory to the General Partner
of all of the terms and conditions of this Agreement, including the power of
attorney granted in Section 2.6,

 

(ii)         a properly completed Taxation Certification; and

 

(iii)        such other documents or instruments as may be required by the
General Partner to effect such Person’s admission as an Additional Limited
Partner.

 

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(b)          Notwithstanding anything to the contrary in this Section 10.3, no
Person shall be admitted as an Additional Limited Partner without the consent of
the General Partner. The admission of any Person as an Additional Limited
Partner shall become effective on the date upon which the name of such Person is
recorded as such in the books and records of the Partnership, following the
consent of the General Partner to such admission.

 

Section 10.4Amendment 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, and the General Partner may for this
purpose, among others, exercise the power of attorney granted pursuant to
Section 2.6.

 

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 rights as General Partner
pursuant to Section 4.6;

 

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

 

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

 

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

 

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

 

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

 

(b)            Withdrawal of the General Partner from the Partnership upon the
occurrence of an Event of Withdrawal shall not constitute a breach of this
Agreement under the following circumstances: (i) 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; (ii) 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 (iii) at any time
that the General Partner voluntarily withdraws by giving at least 90 days’
advance notice of its intention to withdraw to the Limited Partners, such
withdrawal to take effect on the date specified in the notice, if at the time
such notice is given one Person and its Affiliates (other than the General
Partner and its Affiliates) own beneficially or of record or control at least
50% of the Outstanding Units. The withdrawal of the General Partner from the
Partnership upon the occurrence of an Event of Withdrawal shall also constitute
the withdrawal of the General Partner as general partner or managing member, if
any, to the extent applicable, of the other Group Members. If the General
Partner gives a notice of withdrawal pursuant to Section 11.1(a)(i), the holders
of a Unit Majority, may, prior to the effective date of such withdrawal, elect a
successor General Partner. The Person so elected as successor General Partner
shall automatically become the successor general partner or managing member, to
the extent applicable, of the other Group Members of which the General Partner
is a general partner or a managing member. If, prior to the effective date of
the General Partner’s withdrawal, a successor is not 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. Any
successor General Partner elected in accordance with the terms of this
Section 11.1 shall be subject to the provisions of Section 10.2.

 

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

 

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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 departure of such Departing General Partner, to require
its successor to purchase its General Partner Interest and its general partner
interest (or equivalent interest), if any, in the other Group Members
(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 departure. 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 departure 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 of the Departing
General Partner. In either event, the Departing General Partner shall be
entitled to receive all reimbursements due such Departing General Partner
pursuant to Section 7.4, including any employee-related liabilities (including
severance liabilities), incurred in connection with the termination of any
employees employed by the Departing General Partner or its Affiliates (other
than any Group Member) for the benefit of the Partnership or the other Group
Members.

 

For purposes of this Section 11.3(a), the fair market value of the Departing
General Partner’s Combined Interest shall be determined by agreement between the
Departing General Partner and its successor or, failing agreement within 30 days
after the effective date of such Departing General Partner’s departure, 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
departure, then the Departing General Partner shall designate an independent
investment banking firm or other independent expert, the Departing General
Partner’s successor shall designate an independent investment banking firm or
other independent expert, and such firms or experts shall mutually select a
third independent investment banking firm or independent expert, which third
independent investment banking firm or other independent expert shall determine
the fair market value of the Combined Interest of the Departing General Partner.
In making its determination, such third independent investment banking firm or
other independent expert may consider the then current trading price of Units on
any National Securities Exchange on which Units are then listed or admitted to
trading, the value of the Partnership’s assets, the rights and obligations of
the Departing General Partner and other factors it may deem relevant.

 

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(b)            If the Combined Interest is not purchased in the manner set forth
in Section 11.3(a), the Departing General Partner (or its transferee) shall
become a Limited Partner and its Combined Interest shall be converted into
Common Units pursuant to a valuation made by an investment banking firm or other
independent expert selected pursuant to Section 11.3(a), without reduction in
such Partnership Interest (but subject to proportionate dilution by reason of
the admission of its successor). Any successor General Partner shall indemnify
the Departing General Partner (or its transferee) as to all debts and
liabilities of the Partnership arising on or after the date on which the
Departing General Partner (or its transferee) becomes a Limited Partner. For
purposes of this Agreement, conversion of the Combined Interest of the Departing
General Partner to Common Units will be characterized as if the Departing
General Partner (or its transferee) contributed its Combined Interest to the
Partnership in exchange for the newly issued Common Units.

 

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 Substituted Limited
Partners or Additional Limited Partners or by the admission of a successor
General Partner in accordance with the terms of this Agreement. Upon the removal
or other event of 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 shall
continue the business of the Partnership. The Partnership shall dissolve, and
(subject to Section 12.2) its affairs shall be wound up, upon:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(iii)        the successor General Partner shall be admitted to the Partnership
as General Partner, effective as of the Event of Withdrawal, by agreeing in
writing to be bound by this Agreement;

 

provided, that the right of the holders of a Unit Majority to approve a
successor General Partner and to continue the business of the Partnership shall
not exist and may not be exercised unless the Partnership has received an
Opinion of Counsel that (x) the exercise of the right would not result in the
loss of limited liability of any Limited Partner and (y) neither the Partnership
nor any Group Member would be treated as an association taxable as a corporation
or otherwise be taxable as an entity for federal income tax purposes upon the
exercise of such right to continue (to the extent not already so treated or
taxed).

 

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Section 12.3Liquidator.

 

Upon dissolution of the Partnership, the General Partner shall select one or
more Persons to act as Liquidator. The Liquidator (if other than the General
Partner) shall be entitled to receive such compensation for its services as may
be approved by holders of at least a Unit Majority. The Liquidator (if other
than the General Partner) shall agree not to resign at any time without 15 days’
prior notice and may be removed at any time, with or without cause, by notice of
removal approved by holders of at least a Unit Majority. Upon dissolution,
removal or resignation of the Liquidator, a successor and substitute Liquidator
(who shall have and succeed to all rights, powers and duties of the original
Liquidator) shall within 30 days thereafter be approved by holders of at least a
Unit Majority. The right to approve a successor or substitute Liquidator in the
manner provided herein shall be deemed to refer also to any such successor or
substitute Liquidator approved in the manner herein provided. Except as
expressly provided in this ARTICLE XII, the Liquidator approved in the manner
provided herein shall have and may exercise, without further authorization or
consent of any of the parties hereto, all of the powers conferred upon the
General Partner under the terms of this Agreement (but subject to all of the
applicable limitations, contractual and otherwise, upon the exercise of such
powers, other than the limitation on sale set forth in Section 7.3) necessary or
appropriate to carry out the duties and functions of the Liquidator hereunder
for and during the period of time required to complete the winding up and
liquidation of the Partnership as provided for herein.

 

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 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 year of the Partnership during which
the liquidation of the Partnership occurs (with such date of occurrence being
determined pursuant to Treasury Regulation Section 1.704-1(b)(2)(ii)(g)), and
such distribution shall be made by the end of such taxable year (or, if later,
within 90 days after said date of such occurrence).

 

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Section 12.5Cancellation 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 12.7          Waiver of Partition.

 

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

 

Section 12.8Capital 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 year of
the Partnership during which such liquidation occurs, or, if later, within 90
days after the date of such liquidation.

 

ARTICLE XIII
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE

 

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

 

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

 

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

 

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

 

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

 

(d)            a change that the General Partner determines, (i) does not
adversely affect in any material respect the Limited Partners considered as a
whole or any particular class of Partnership Interests as compared to other
classes of Partnership Interests, (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 year of the Partnership
and any other changes that the General Partner determines to be necessary or
appropriate as a result of a change in the fiscal year or taxable year of the
Partnership including, if the General Partner shall so determine, a change in
the definition of “Quarter” and the dates on which distributions are to be made
by the Partnership;

 

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

 

(g)            an amendment that the General Partner determines to be necessary
or appropriate in connection with the authorization of issuance of any class or
series of Partnership Securities 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;

 

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(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.

 

Except as provided in Section 13.1 and Section 13.3, all amendments to this
Agreement shall be made in accordance with the requirements contained in this
Section 13.2. Amendments to this Agreement may be proposed only by the General
Partner; provided, however, to the full extent permitted by law, that the
General Partner shall have no duty or obligation to propose any amendment to
this Agreement and may decline to do so free of any fiduciary duty or obligation
whatsoever to the Partnership, any Limited Partner or Assignee and, in declining
to propose 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. A
proposed amendment shall be effective upon its approval by the General Partner
and the holders of 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 such
proposed amendments.

 

Section 13.3Amendment Requirements.

 

(a)            Notwithstanding the provisions of Section 13.1 and Section 13.2,
no provision of this Agreement that establishes a percentage of Outstanding
Units (including Units deemed owned by the General Partner) required to take any
action shall be amended, altered, changed, repealed or rescinded in any respect
that would have the effect of reducing such voting 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.

 

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

 

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(c)            Except as provided in Section 14.3, and without limitation of the
General Partner’s authority to adopt amendments to this Agreement without the
approval of any Partners or Assignees as contemplated in Section 13.1, any
amendment that would have a material adverse effect on the rights or preferences
of any class of Partnership Interests in relation to other classes of
Partnership Interests must be approved by the holders of not less than a
majority of the Outstanding Partnership Interests of the class affected.

 

(d)            Notwithstanding any other provision of this Agreement, except for
amendments pursuant to Section 13.1 and except as otherwise provided by
Section 14.3(b), no amendments shall become effective without the approval of
the holders of at least 90% of the Outstanding Units voting as a single class
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 law.

 

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

 

Section 13.4Special 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 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 at least 10 days in advance of such meeting. 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.

 

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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, in which case the rule, regulation, guideline or
requirement of such National Securities Exchange shall govern) or (b) in the
event that approvals are sought without a meeting, the date by which Limited
Partners are requested in writing by the General Partner to give such approvals.
If the General Partner does not set a Record Date, then 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.

 

When a meeting is adjourned to another time or place, notice need not be given
of the adjourned meeting and a new Record Date need not be fixed, if the time
and place thereof are announced at the meeting at which the adjournment is
taken, unless such adjournment shall be for more than 45 days. At the adjourned
meeting, the Partnership may transact any business which might have been
transacted at the original meeting. If the adjournment is for more than 45 days
or if a new Record Date is fixed for the adjourned meeting, a notice of the
adjourned meeting shall be given in accordance with this ARTICLE XIII.

 

Section 13.8Waiver of Notice; Approval of Meeting.

 

The transactions of any meeting of Limited Partners, however called and noticed,
and whenever held, shall be as valid as if it had occurred at a meeting duly
held after regular call and notice, if a quorum is present either in person or
by proxy. Attendance of a Limited Partner at a meeting shall constitute a waiver
of notice of the meeting, except when the Limited Partner attends the meeting
for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened; and except that attendance at a meeting is not a waiver of any right
to disapprove the consideration of matters required to be included in the notice
of the meeting, but not so included, if the disapproval is expressly made at the
meeting.

 

Section 13.9Quorum and Voting.

 

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

 

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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.

 

Section 13.11Action Without a Meeting.

 

If authorized by the General Partner, any action that may be taken at a meeting
of the Limited Partners may be taken without a meeting if an approval in writing
setting forth the action so taken is signed by Limited Partners owning not less
than the minimum percentage of the Outstanding Units (including Units deemed
owned by the General Partner) that would be necessary to authorize or take such
action at a meeting at which all the Limited Partners were present and voted
(unless such provision conflicts with any rule, regulation, guideline or
requirement of any National Securities Exchange on which the Units are listed or
admitted to trading, in which case the rule, regulation, guideline or
requirement of such National Securities Exchange shall govern). Prompt notice of
the taking of action without a meeting shall be given to the Limited Partners
who have not approved in writing. The General Partner may specify that any
written ballot submitted to Limited Partners for the purpose of taking any
action without a meeting shall be returned to the Partnership within the time
period, which shall be not less than 20 days, specified by the General Partner.
If a ballot returned to the Partnership does not vote all of the Units held by
the Limited Partners, the Partnership shall be deemed to have failed to receive
a ballot for the Units that were not voted. If approval of the taking of any
action by the Limited Partners is solicited by any Person other than by or on
behalf of the General Partner, the written approvals shall have no force and
effect unless and until (a) they are deposited with the Partnership in care of
the General Partner, (b) approvals sufficient to take the action proposed are
dated as of a date not more than 90 days prior to the date sufficient approvals
are deposited with the Partnership and (c) an Opinion of Counsel is delivered to
the General Partner to the effect that the exercise of such right and the action
proposed to be taken with respect to any particular matter (i) will not cause
the Limited Partners to be deemed to be taking part in the management and
control of the business and affairs of the Partnership so as to jeopardize the
Limited Partners’ limited liability, and (ii) is otherwise permissible under the
state statutes then governing the rights, duties and liabilities of the
Partnership and the Partners.

 

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Section 13.12Right to Vote and Related Matters.

 

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

 

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

 

ARTICLE XIV
MERGER, CONSOLIDATION OR CONVERSION

 

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 the United States
of America, pursuant to a written plan of merger or consolidation (“Merger
Agreement”) or a written plan of conversion (“Plan of Conversion”), as the case
may be, in accordance with this ARTICLE XIV.

 

Section 14.2Procedure for Merger, Consolidation or Conversion.

 

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

 

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

 

(i)          name and state of domicile of each of the business entities
proposing to merge or consolidate;

 

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

 

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

 

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

 

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

 

(vi)        the effective time of the merger, which may be the date of the
filing of the certificate of merger pursuant to Section 14.4 or a later date
specified in or determinable in accordance with the Merger Agreement (provided,
that if the effective time of the merger is to be later than the date of the
filing of such certificate of merger, the effective time shall be fixed at a
date or time certain at or prior to the time of the filing of such certificate
of merger and stated therein); and

 

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

 

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(c)            If the General Partner shall determine to consent to the
conversion, the General Partner shall approve the Plan of Conversion, which
shall set forth:

 

(i)          the name of the converting entity and the converted entity;

 

(ii)         a statement that the Partnership is continuing its existence in the
organizational form of the converted entity;

 

(iii)        a statement as to the type of entity that the converted entity is
to be and the state or country under the laws of which the converted entity is
to be incorporated, formed or organized;

 

(iv)        the manner and basis of exchanging or converting the equity
securities of each constituent business entity for, or into, cash, property or
interests, rights, securities or obligations of the converted entity;

 

(v)         in an attachment or exhibit, the certificate of limited partnership
of the Partnership; and

 

(vi)        in an attachment or exhibit, the certificate of limited partnership,
articles of incorporation, or other organizational documents of the converted
entity;

 

(vii)       the effective time of the conversion, which may be the date of the
filing of the articles of conversion or a later date specified in or
determinable in accordance with the Plan of Conversion (provided, that if the
effective time of the conversion is to be later than the date of the filing of
such articles of conversion, the effective time shall be fixed at a date or time
certain at or prior to the time of the filing of such articles of conversion and
stated therein); and

 

(viii)      such other provisions with respect to the proposed conversion that
the General Partner determines to be necessary or appropriate.

 

Section 14.3Approval by Limited Partners.

 

(a)            Except as provided in Sections 14.3(d) and 14.3(c), the General
Partner, upon its approval of the Merger Agreement or the Plan of Conversion, as
the case may be, shall direct that the Merger Agreement or the Plan of
Conversion, as applicable, be submitted to a vote of Limited Partners, whether
at a special meeting or by written consent, in either case in accordance with
the requirements of ARTICLE XIII. A copy or a summary of the Merger Agreement or
the Plan of Conversion, as the case may be, shall be included in or enclosed
with the notice of a special meeting or the written consent.

 

(b)            Except as provided in Sections 14.3(d) and 14.3(c), the Merger
Agreement or Plan of Conversion, as the case may be, shall be approved upon
receiving the affirmative vote or consent of the holders of a Unit Majority.

 

(c)            Except as provided in Sections 14.3(d) and 14.3(c), after such
approval by vote or consent of the Limited Partners, and at any time prior to
the filing of the certificate of merger or articles of conversion pursuant to
Section 14.4, the merger, consolidation or conversion may be abandoned pursuant
to provisions therefor, if any, set forth in the Merger Agreement or Plan of
Conversion, as the case may be.

 

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(d)            Notwithstanding anything else contained in this ARTICLE XIV or in
this Agreement, the General Partner is permitted, without Limited Partner
approval, to convert the Partnership or any Group Member into a new limited
liability entity, to merge the Partnership or any Group Member into, or convey
all of the Partnership’s assets to, another limited liability entity that shall
be newly formed and shall have no assets, liabilities or operations at the time
of such conversion, merger or conveyance other than those it receives from the
Partnership or other Group Member if (i) the General Partner has received an
Opinion of Counsel that the conversion, merger or conveyance, as the case may
be, would not result in the loss of the limited liability of any Limited Partner
or cause the Partnership to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity for federal income tax
purposes (to the extent not previously treated as such), (ii) the sole purpose
of such conversion, merger, or conveyance is to effect a mere change in the
legal form of the Partnership into another limited liability entity and (iii)
the governing instruments of the new entity provide the Limited Partners and the
General Partner with 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 Opinion of Counsel
that the merger or consolidation, as the case may be, would not result in the
loss of the limited liability of any Limited Partner or cause the Partnership to
be treated as an association taxable as a corporation or otherwise to be taxed
as an entity for federal income tax purposes (to the extent not previously
treated as such), (B) the merger or consolidation would not result in an
amendment to the Partnership 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 Unit outstanding immediately
prior to the effective date of the merger or consolidation is to be an identical
Unit of the Partnership after the effective date of the merger or consolidation,
and (E) the number of Partnership Securities to be issued by the Partnership in
such merger or consolidation do not exceed 20% of the Partnership Securities
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 or the Plan of Conversion, as the case may be, a certificate of
merger or articles of conversion, as applicable, shall be executed and filed
with the Secretary of State of the State of Delaware in conformity with the
requirements of the Delaware Act.

 

 73 

 

 

Section 14.5Effect of Merger, Consolidation or Conversion.

 

(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.

 

(b)            At the effective time of the articles of conversion:

 

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

 

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

 

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

 

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

 

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

 

 74 

 

 

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

 

ARTICLE 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 Affiliates hold more than 90% of the total
Limited Partner Interests of any class then Outstanding, the General Partner
shall then have the right, which right it may assign and transfer in whole or in
part to the Partnership or any Affiliate of the General Partner, exercisable at
its option, to purchase all, but not less than all, of such Limited Partner
Interests of such class then Outstanding held by Persons other than the General
Partner and its Affiliates, at the greater of (x) the Current Market Price as of
the date three days prior to the date that the notice described in
Section 15.1(b) is mailed and (y) the highest price paid by the General Partner
or any of its Affiliates for any such Limited Partner Interest of such class
purchased during the 90-day period preceding the date that the notice described
in Section 15.1(b) is mailed.

 

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

 

 75 

 

 

(c)            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 or Assignee 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 or Assignee at the address described below. Any
notice, payment or report to be given or made to a Partner or Assignee 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 Securities 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 Securities by reason of any assignment or otherwise. An
affidavit or certificate of making of any notice, payment or report in
accordance with the provisions of this Section 16.1 executed by the General
Partner, the Transfer Agent or the mailing organization shall be prima facie
evidence of the giving or making of such notice, payment or report. If any
notice, payment or report addressed to a Record Holder at the address of such
Record Holder appearing on the books and records of the Transfer Agent or the
Partnership is returned by the United States Postal Service marked to indicate
that the United States Postal Service is unable to deliver it, such notice,
payment or report and any subsequent notices, payments and reports shall be
deemed to have been duly given or made without further mailing (until such time
as such Record Holder or another Person notifies the Transfer Agent or the
Partnership of a change in his address) if they are available for the Partner or
Assignee 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 and Assignees. Any notice to the Partnership shall be deemed
given if received by the General Partner at the principal office of the
Partnership designated pursuant to Section 2.3. The General Partner may rely and
shall be protected in relying on any notice or other document from a Partner,
Assignee or other Person if believed by it to be genuine.

 

 76 

 

 

(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 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.

 

 77 

 

 

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 Unit, upon accepting
the certificate evidencing such Unit or executing and delivering a Transfer
Application as herein described, independently of the signature of any other
party.

 

Section 16.9Applicable Law.

 

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.

 

Section 16.10Invalidity of Provisions.

 

If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

 

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 Signatures.

 

The use of facsimile signatures affixed in the name and on behalf of the
transfer agent and registrar of the Partnership on certificates representing
Common Units is expressly permitted by this Agreement.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

 

 78 

 

 

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

 

  GENERAL PARTNER       SPECTRA ENERGY PARTNERS (DE) GP, LP         By: SPECTRA
ENERGY PARTNERS GP, LLC, its general partner         By:       Name: Stephen J.
Neyland     Title: Vice President – Finance         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.         SPECTRA ENERGY
PARTNERS (DE) GP, LP         By: SPECTRA ENERGY PARTNERS GP, LLC, its general
partner         By:       Name: Stephen J. Neyland     Title: Vice President –
Finance

 

[Signature Page — Third Amended & Restated Agreement

of Limited Partnership of Spectra Energy Partners, LP]

 

 

 

 

Exhibit A
to the Third Amended and Restated
Agreement of Limited Partnership of
Spectra Energy Partners, LP

 

Certificate Evidencing Common Units
Representing Limited Partner Interests in
Spectra Energy Partners, LP

 

No.Common Units

 

In accordance with Section 4.1 of the Third Amended and Restated Agreement of
Limited Partnership of Spectra Energy Partners, LP, as amended, supplemented or
restated from time to time (the “Partnership Agreement”), Spectra Energy
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 and accompanied
by a properly executed application for transfer of the Common Units represented
by this Certificate. The rights, preferences and limitations of the Common Units
are set forth in, and this Certificate and the Common Units represented hereby
are issued and shall in all respects be subject to the terms and provisions of,
the Partnership Agreement. Copies of the Partnership Agreement are on file at,
and will be furnished without charge on delivery of written request to the
Partnership at, the principal office of the Partnership located at 5400
Westheimer Court, Houston, Texas, 77056. Capitalized terms used herein but not
defined shall have the meanings given them in the Partnership Agreement.

 

The Holder, by accepting this Certificate, is deemed to have (i) requested
admission as, and agreed to become, a Limited Partner and to have agreed to
comply with and be bound by and to have executed the Partnership Agreement, (ii)
represented and warranted that the Holder has all right, power and authority
and, if an individual, the capacity necessary to enter into the Partnership
Agreement, (iii) granted the powers of attorney provided for in the Partnership
Agreement and (iv) made the waivers and given the consents and approvals
contained in the Partnership Agreement.

 

THE HOLDER OF THIS SECURITY ACKNOWLEDGES FOR THE BENEFIT OF SPECTRA ENERGY
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 SPECTRA ENERGY PARTNERS, LP UNDER THE LAWS OF THE STATE OF
DELAWARE, OR (C) CAUSE SPECTRA ENERGY 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).
SPECTRA ENERGY PARTNERS (DE) GP, LP, THE GENERAL PARTNER OF SPECTRA ENERGY
PARTNERS, LP, MAY IMPOSE ADDITIONAL RESTRICTIONS ON THE TRANSFER OF THIS
SECURITY IF IT RECEIVES AN OPINION OF COUNSEL THAT SUCH RESTRICTIONS ARE
NECESSARY TO AVOID A SIGNIFICANT RISK OF SPECTRA ENERGY PARTNERS, LP BECOMING
TAXABLE AS A CORPORATION OR OTHERWISE BECOMING TAXABLE AS AN ENTITY FOR FEDERAL
INCOME TAX PURPOSES. THE RESTRICTIONS SET FORTH ABOVE SHALL NOT PRECLUDE THE
SETTLEMENT OF ANY TRANSACTIONS INVOLVING THIS SECURITY ENTERED INTO THROUGH THE
FACILITIES OF ANY NATIONAL SECURITIES EXCHANGE ON WHICH THIS SECURITY IS LISTED
OR ADMITTED TO TRADING.

 

A-1 

 

 

This Certificate shall not be valid for any purpose unless it has been
countersigned and registered by the Transfer Agent and Registrar.

 

Dated:   Spectra Energy Partners, LP Countersigned and Registered by:        
By: Spectra Energy Partners (DE) GP, LP, its General Partner           By:
Spectra Energy Partners GP, LLC, its General Partner                 as Transfer
Agent and Registrar   By:       Name:           By:     By:   Authorized
Signature     Secretary

 

[Reverse of Certificate]

 

ABBREVIATIONS

 

The following abbreviations, when used in the inscription on the face of this
Certificate, shall be construed as follows according to applicable laws or
regulations:

 

TEN COM —  as tenants in common   UNIF GIFT/TRANSFERS MIN ACT TEN ENT —  as
tenants by the entireties   ____________________ Custodian    
____________________     (Cust) (Minor) JT TEN —     as joint tenants with right
of survivorship and not as tenants in common   under Uniform Gifts/Transfers to
CD Minors Act (State)

 

A-2 

 

 

Additional abbreviations, though not in the above list, may also be used.

 

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 Spectra
Energy 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)    

No transfer of the Common Units evidenced hereby will be registered on the books
of the Partnership, unless the Certificate evidencing the Common Units to be
transferred is surrendered for registration or transfer and an Application for
Transfer of Common Units has been properly completed and executed by a
transferee either (i) on the form set forth below or (ii) on a separate
application that the Partnership will furnish on request without charge. A
transferor of the Common Units shall have no duty to the transferee with respect
to execution of the Application for Transfer of Common Units in order for such
transferee to obtain registration of the transfer of the Common Units.

 

A-3 

 

 

APPLICATION FOR TRANSFER OF COMMON UNITS

 

Transferees of Common Units must execute and deliver this application to Spectra
Energy Partners, LP, c/o Spectra Energy Partners (DE) GP, LP, 5400 Westheimer
Court, Houston, Texas, 77056; Attn: CFO, to be admitted as limited partners to
Spectra Energy Partners, LP.

 

The undersigned (“Assignee”) hereby applies for transfer to the name of the
Assignee of the Common Units evidenced hereby and hereby certifies to Spectra
Energy Partners, LP (the “Partnership”) that the Assignee (including to the best
of Assignee’s knowledge, any person for whom the Assignee will hold the Common
Units) is not an Ineligible Holder as of the date of this application.(1)

 

The Assignee (i) requests admission as a Substituted Limited Partner and agrees
to comply with and be bound by, and hereby executes, the Third Amended and
Restated Agreement of Limited Partnership of Spectra Energy Partners, LP, as
amended, supplemented or restated to the date hereof (the “Partnership
Agreement”), (ii) represents and warrants that the Assignee has all right, power
and authority and, if an individual, the capacity necessary to enter into the
Partnership Agreement, (iii) appoints the General Partner of the Partnership
and, if a Liquidator shall be appointed, the Liquidator of the Partnership as
the Assignee’s attorney-in-fact to execute, swear to, acknowledge and file any
document, including the Partnership Agreement and any amendment thereto and the
Certificate of Limited Partnership of the Partnership and any amendment thereto,
necessary or appropriate for the Assignee’s admission as a Substituted Limited
Partner and as a party to the Partnership Agreement, (iv) gives the powers of
attorney provided for in the Partnership Agreement, and (v) makes the waivers
and gives the consents and approvals contained in the Partnership Agreement.
Capitalized terms not defined herein have the meanings assigned to such terms in
the Partnership Agreement. This application constitutes a Taxation
Certification, as defined in the Partnership Agreement.

 

 

 

Date:

 

 

 

Social Security or other identifying number

 

 

 

Signature of Assignee

 

 

 

Purchase Price including commissions, if any

 

 

 

Name and Address of Assignee

 

 

 

Type of Entity (check one):

 

A-4 

 

 

¨ Individual ¨ Partnership ¨ Corporation
¨ Trust ¨ Other (specify)

 

 

(1)The term “Ineligible Holder” means a Person whose, or whose beneficial
owners, U.S. federal income tax status (or lack of proof of the U.S. federal
income tax status) has or is reasonably likely to have, as determined by the
General Partner, 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. The term “Eligible Holder” means a Limited Partner that is not a
Ineligible Holder. Schedule I hereto contains a list of various types of
investors that are categorized and identified as either “Eligible Holders” or
“Ineligible Holders.”

 

If not an Individual (check one):

 

¨ the entity is subject to United States federal income taxation on the income
generated by the Partnership;

 

¨ the entity is not subject to United States federal income taxation, but it is
a pass-through entity and all of its beneficial owners are subject to United
States federal income tax on the income generated by the Partnership;

 

¨ the entity is not subject to United States federal income taxation and it is
(a) not a pass-through entity or (b) a pass-through entity, but not all of its
beneficial owners are subject to United States federal income taxation on the
income generated by the Partnership.

 

Nationality (check one):

 

¨ U.S. Citizen, Resident or Domestic Entity ¨ Non-resident Alien

 

¨ Foreign Corporation

 

If the U.S. Citizen, Resident or Domestic Entity box is checked, the following
certification must be completed.

 

Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the
“Code”), the Partnership must withhold tax with respect to certain transfers of
property if a holder of an interest in the Partnership is a foreign person. To
inform the Partnership that no withholding is required with respect to the
undersigned interestholder’s interest in it, the undersigned hereby certifies
the following (or, if applicable, certifies the following on behalf of the
interestholder).

 

Complete Either A or B:

 

A.Individual Interestholder

 

1.I am not a non-resident alien for purposes of U.S. income taxation.

 

2.My U.S. taxpayer identification number (Social Security Number) is        .

 

A-5 

 

 

3.My home address is        .

 

B.Partnership, Corporation or Other Interestholder

 

1.is not a foreign corporation, foreign partnership, foreign trust (Name of
Interestholder) or foreign estate (as those terms are defined in the Code and
Treasury Regulations).

 

2.The interestholder’s U.S. employer identification number is        .

 

3.The interestholder’s office address and place of incorporation (if applicable)
is        .

 

The interestholder agrees to notify the Partnership within sixty (60) days of
the date the interestholder becomes a foreign person.

 

The interestholder understands that this certificate may be disclosed to the
Internal Revenue Service and the Federal Energy Regulatory Commission by the
Partnership and that any false statement contained herein could be punishable by
fine, imprisonment or both.

 

Under penalties of perjury, I declare that I have examined this certification
and, to the best of my knowledge and belief, it is true, correct and complete
and, if applicable, I further declare that I have authority to sign this
document on behalf of:

 

 

Name of Interestholder

 

 

 

Signature and Date

 

 

 

Title (if applicable)

 

Note: If the Assignee is a broker, dealer, bank, trust company, clearing
corporation, other nominee holder or an agent of any of the foregoing, and is
holding for the account of any other person, this application should be
completed by an officer thereof or, in the case of a broker or dealer, by a
registered representative who is a member of a registered national securities
exchange or a member of the Financial Industry Regulatory Authority, or, in the
case of any other nominee holder, a person performing a similar function. If the
Assignee is a broker, dealer, bank, trust company, clearing corporation, other
nominee owner or an agent of any of the foregoing, the above certification as to
any person for whom the Assignee will hold the Common Units shall be made to the
best of the Assignee’s knowledge.

 

A-6 

 

 

Schedule I

(as of January 21, 2018)

 

The Partnership’s General Partner may change its determination of what types of
persons or entities are considered Eligible Holders at any time. An updated
version of the Transfer Application is available from the Partnership’s website
at http://www.spectraenergypartners.com.

 

Eligible Holders

 

The following are currently considered Eligible Holders:

 

·Individuals (U.S. or non-U.S.)

 

·C corporations (U.S. or non-U.S.)

 

·Tax exempt organizations subject to tax on unrelated business taxable income or
“UBTI,” including IRAs, 401(k) plans and Keough accounts

 

·S corporations with shareholders that are individuals, trusts or tax exempt
organizations subject to tax on UBTI

 

·Mutual funds

 

Potentially Eligible Holders

 

The following are currently considered Eligible Holders, unless the information
in parenthesis applies:

 

·S corporations (unless they have ESOP shareholders*)

 

·Partnerships (unless their partners include mutual funds, real estate
investment trusts or “REITs,” governmental entities and agencies, S corporations
with ESOP shareholders* or other partnerships with such partners)

 

·Trusts (unless beneficiaries are not subject to tax)

 

Eligible Holders

 

The following are currently not considered Eligible Holders:

 

·REITs

 

·Governmental entities and agencies

 

·S corporations with ESOP shareholders*

 

·“S corporations with ESOP shareholders” are S corporations with shareholders
that include employee stock ownership plans.

 

A-7